Nuveen Exchange-Traded Funds
Providing tax-free income to help you live your dreams.
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC.
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC.
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND
ANNUAL REPORT/AUGUST 31, 1995
Photographic image of man seated at breakfast table with wife standing behind
him.
<PAGE>
Photographic image of Nuveen Research Department. Four people around a table
working.
Research: a foundation
Your financial plan is in place. You and your adviser have made asset
allocation decisions. For the tax-free portion of your portfolio, you want
dependable income, safety of principal, and diversification. Solid, reliable
Nuveen research helps to keep your tax-free investments on the path you have
chosen.
Paul Williams, Vice President and Manager of Investment Strategies and
Research, emphasizes fundamental research as a strategy for finding value.
<PAGE>
The strength of Nuveen's Research Department is illustrated by the numerous
awards and press coverage we receive. Annual industry polls consistently
recognize the quality and depth of Nuveen Research.
Photographic image of a grouping of awards/statuettes.
At Nuveen, we believe that attention to detail combined with years of
experience is the foundation for sound research. Sound research means finding
quality bonds that deliver timely and dependable income over many decades.
Beyond this, it means adding value by identifying bonds whose credit strengths
are not yet understood by the market.
USING RESEARCH TO TRACK QUALITY AND VALUE
With tens of thousands of bonds available for investment today, the municipal
market is one of the nation's largest--and most complex--securities markets.
At the same time, the number of analysts devoted to researching the municipal
market is comparatively small. While more than 12,000 analysts at nearly 2,000
firms and investment organizations research the 7,500 common stocks available
in the equity market, approximately 1,000 analysts at 400 firms and rating
agencies cover 60,000 municipal bond issues.
Selecting those bonds that will outperform the market and help you achieve
your investment goals depends upon an ability to analyze and understand
complexities ranging from the demand for a new highway or airport to the
impact of an industry closure on the financial position of a town's water and
sewer system.
At Nuveen, we can provide this depth because we have the largest research
staff in the investment banking industry devoted exclusively to the analysis
of municipal bonds. Our award-winning team of more than 30 research
professionals provides invaluable support to our portfolio managers, assisting
them in careful analysis of bond issues considered for purchase--even those
rated AAA.
On a daily basis, our research analysts prepare credit reviews to assist in
the selection of bonds that offer the best combination of yield and security,
monitor the continued creditworthiness of portfolio holdings, and analyze
economic, political, and demographic trends affecting the markets.
The scope of this analysis is broad. We understand the beneficial insights
that can be obtained by assessing the impact of local elections in small towns
or gaining an understanding of the global wood pulp market to accurately
evaluate a municipal issue in Alaska. Recently a financial adviser noticed a
large number of clippings on salmon fishing on one Nuveen analyst's desk. The
analyst explained that the articles provided information on salmon spawning, a
conservation issue having a major impact on public hydroelectric projects in
the Pacific Northwest. With the largest research staff in the industry, we can
analyze subtle but essential details such as this--and apply our findings to
enhance the performance of your portfolio.
<PAGE>
BENEFITING OUR INVESTORS
The Nuveen Research Department supports the investment goals of fund investors
through three major activities:
Primary research and surveillance
Every year, our research staff reviews thousands of tax-exempt issues valued
at more than $100 billion to help our portfolio managers select the most
appropriate bonds based on current yield, price, credit quality, and future
prospects.
A recent example of the way Nuveen Research benefits our shareholders was
our successful investment in Philadelphia water and sewer bonds. When the city
decided to issue bonds to fund badly needed capital improvements, the city's
fiscal difficulties resulted in an issue that was priced below that of other
cities for similar bonds, generating higher income. However, Nuveen's own
research performed independently from the rating agencies indicated that the
city water and sewer system was economically sound and that adequate legal
safeguards would be in place to protect the investment. Following the
completion of the improvements, the prices of these bonds resulted in a
sizable portfolio gain to our shareholders.
Research reports
Just as you rely on your financial adviser for seasoned, prudent advice,
financial advisers depend on Nuveen's research reports to keep current on
market developments. Reports cover issues ranging from credit analysis of
specific states to comprehensive examinations of tax-free investment
strategies and the impact of national and state elections on municipal issues.
(For a list of research reports currently available to you and your adviser,
please refer to the attached reply card.)
Investor interests
We take our responsibility to our shareholders seriously by actively
representing their interests before the industry and government groups that
oversee and regulate the markets. We testified before a U.S. Senate
subcommittee to support better disclosure of financial information by bond
issuers. Our analysis of the effect of the Orange County bankruptcy on other
California issuers helped a California Senate subcommittee understand the
importance of fiscal conservatism and prudent policy decisions. By providing
informed opinions backed by years of experience, we help to define and set
policy that benefits you.
At Nuveen, quality research is one of the core elements of our disciplined
approach to providing you with dependable income, credit quality, and
diversification--key elements of a successful investment program.
Nuveen's research reports are often used by the press as background when
covering the municipal market in depth.
Photographic image of a grouping of research reports and newspapers.
<PAGE>
Photographic image of man seated at breakfast table with wife standing behind
him.
CONTENTS
6 Municipal market perspective
7 Dear shareholder
9 Answering your questions
13 Fund performance
15 Commonly used terms
17 Portfolio of investments
25 Statement of net assets
26 Statement of operations
27 Statement of changes in net assets
29 Notes to financial statements
38 Financial highlights
40 Report of independent auditors
41 Nuveen Exchange-Traded Funds
dividend reinvestment program
<PAGE>
Municipal market perspective
The start of 1995 brought with it a turnaround in the bond market, concluding
one of the worst periods in recent bond market history. This rebound reflects
a general consensus that the pace of the economy may be back on track,
following the efforts of the Federal Reserve Board to control inflation
through an unprecedented series of seven interest rate hikes over a
twelve-month period.
In early July, the Federal Reserve reacted to the slowing economy by making a
much-anticipated move to ease the short-term rate, the first such reduction in
nearly three years. Subsequent meetings of the Fed's Open Market Committee,
which controls interest rate decisions, have not resulted in further rate
cuts.
In the municipal bond market, prospects of another Fed easing and solid yields
helped municipals gain momentum, despite an exceptionally strong stock market
and continued debate about potential tax reform legislation. Economic
indicators and technical issues point to the continuation of a favorable
climate for these bonds in coming months.
<PAGE>
Dear shareholder
Photographic image of Richard Franke, Chairman of Nuveen.
"Over time, municipal bonds have proven to be a valuable and dependable
component of successful investment programs."
Since the beginning of 1995, we have enjoyed a welcome rebound in the bond
markets, as we put 1994--a dismal period in bond market history--behind us.
This year serves as a reminder that weathering the ups and downs of the market
is a normal part of the investment process. It helps to put things in
perspective if we remember one of the basic principles of investing: A
financial plan that focuses on your long-term goals minimizes the impact of
any short-term market volatility.
Municipal bond funds continue to be one of the best ways to invest for the
long term, offering diversification across market sectors and steady income.
Throughout this period, we have kept our sights focused on successfully
meeting these objectives, providing you with a source of stable current
income, credit quality, and enhanced share price relative to the market as a
whole.
As of August 31, 1995, current yields on share prices for the funds covered
in this report ranged from 6.16% to 6.87%. To match these yields, an investor
in the 42.5% combined California and federal income tax bracket would have had
to earn at least 10.71% on taxable equivalents. As we all know, taxable yields
of this level are difficult to achieve in today's markets.
Each of the funds shown in this report also posted gains in net asset value
over August 31, 1994. The 12-month total returns on net asset value,
reflecting share price gains plus reinvested dividend income, were impressive,
ranging from 8.80% to 11.68%, which translates to 13.51% to 16.27% on a
tax-equivalent basis. These performance results remind us of the important
role that municipal bonds--and the tax-free income they provide--can play as
part of an investment strategy focused on diversification and long-term
performance. Over time, municipal bonds have proven to be a valuable and
dependable component of successful investment programs.
<PAGE>
The value and dependability of your municipal bond investments are enhanced
by the fact that you have chosen tax-free exchange-traded funds managed by
Nuveen. We offer a combination of professional management, award-winning
research, and shareholder service that distinguishes Nuveen as a fund manager.
We use a disciplined approach to security selection and portfolio
construction designed to deliver above-market performance by emphasizing
securities that are underpriced or undervalued by the market. This approach is
supported by the strength of Nuveen Research, which provides the insights and
experience to assist portfolio managers in identifying and selecting bonds
with strong credit quality. Our research professionals continually monitor the
value of all our holdings in order to alert portfolio managers of changes that
will affect quality.
Nuveen also prides itself on its superior service to shareholders. Through
annual and semiannual reports, regular statements, and our toll-free
information lines, our communication programs help us stay in touch with your
needs and concerns. We also provide support to financial advisers across the
nation by supplying them with the information they need to answer your
questions and ensure that products are selected to meet your needs.
As you review the following pages detailing the performance of your fund, I
hope you come away with the feeling that these results, coupled with Nuveen's
continued pledge of superior service, add up to a rewarding investing
experience. We look forward to serving your tax-free investment needs in the
future.
Sincerely,
Richard J. Franke
Chairman of the Board
October 16, 1995
<PAGE>
Answering your questions
Photographic image of montage of letters received by Nuveen.
Tom Spalding, head of Nuveen's portfolio management team, offers insights into
our approach to fund management and the outlook for Nuveen's Exchange-Traded
Funds
What does Nuveen mean by "value investing"?
At Nuveen, we define value investing as a disciplined approach to security
selection and portfolio construction designed to deliver above-market
performance by emphasizing securities that are underpriced or undervalued by
the market. Our value investing approach avoids predictions about the
direction of the markets or the economy in general, concentrating instead on
identifying individual bonds with current yields, prices, credit quality, and
future prospects that are exceptionally attractive in relation to other bonds
in the market.
While the concept sounds simple, successful value investing must be based on
sound research that supports the selection of quality bonds. It also requires
an ability to recognize value by gaining insights into individual issuers as
well as specific bonds--information that often goes beyond that which is
readily available to the market in general. Having the largest research staff
in the investment management industry dedicated exclusively to gathering this
type of information on municipal bonds is reflected in the long-term results
of our value investing approach.
We believe that value investing gives us an important edge in the management
of municipal bond funds, an edge that translates to helping you meet your
goals and expectations.
How does the work done by Nuveen's Research Department help support the value
of my funds?
At Nuveen, we believe that attention to detail combined with years of
experience is the foundation for sound research. And sound research is one of
the core elements of our disciplined approach to providing you with dependable
income, credit quality, and diversification--key elements of a successful
fixed income investment program.
Our award-winning team of more than 30 research professionals provides
invaluable support to our portfolio managers, assisting them in careful
analysis of bond issues considered for purchase--even those rated AAA by the
rating agencies.
On a daily basis, our research analysts prepare credit reviews to assist in
the selection of bonds that offer the best combination of yield and security,
monitor the continued creditworthiness of portfolio holdings, and analyze
economic, political, and demographic trends affecting the markets. This daily
surveillance of events and trends in the credit markets assists us in
monitoring the underlying value of our holdings.
This combination of in depth research and review helps your tax-free
municipal investments to meet your expectations for dependable income and
credit safety.
<PAGE>
What impact have interest rates had on bond portfolios?
Between February 1994 and February 1995, the Federal Reserve Board moved an
unprecedented seven times to raise short-term interest rates. Board chairman
Greenspan justified the hikes in short-term rates on the basis that the
increases would cause the economy to slow enough in the future to relieve any
inflationary pressures and avoid a significant increase in the rate of
inflation. These increases in short-term rates reduced demand for long-term
bonds, which had the complementary effects of lowering bond prices and raising
bond yields.
On July 6, 1995, after much anticipation, the Federal Reserve Board
cautiously declared victory for this policy, making its first move to ease
rates in nearly three years. Long-term bond yields had already fallen
substantially, in anticipation of the Fed's move. In subsequent meetings, the
Fed has held off on any further action, sending the message that it believes
the economy is on the right track.
Photographic image of Tom Spalding, Portfolio Manager at Nuveen.
Tom Spalding, head of Nuveen's portfolio management team,
answers investors' questions on developments in the municipal market.
What is the current outlook for municipal bonds?
With the rebound in the bond market at the beginning of 1995 and some
consensus that inflation is under control, economic indicators are favorable
for municipal bonds. Technical issues also point to a more favorable climate.
One technical issue that affects bond prices is the supply and demand
situation. While supplies of municipal bonds had been lagging over the past
few quarters, new issue supply rose sharply in the second quarter of 1995.
Demand, however, has been somewhat subdued by extraordinary market volatility
over the past 18 months and by the mounting discussion of the ramifications of
proposed reforms in the federal tax laws.
We anticipate that demand will gain strength over time based on the fact
that municipal bonds continue to be a fundamentally sound and attractive
investment option, offering one of the few remaining tax-advantaged
alternatives. Once investors are more confident that the interest rate
environment has stabilized, we expect to see the demand for municipal
investments resume its long-term upward trend.
<PAGE>
<TABLE>
NUVEEN INSURED CALIFORNIA PREMIUM
INCOME MUNICIPAL FUND, INC.
NPC
While dividend income remained attractive compared with other funds, the
dividend was reduced during the 12 months because older, higher coupon bonds
were called and replaced with today's lower-yielding bonds.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
9/94 $0.0715
10/94 $0.0715
11/94 $0.0715
12/94 $0.0715
1/95 $0.0715
2/95 $0.0675
3/95 $0.0675
4/95 $0.0675
5/95 $0.0675
6/95 $0.0675
7/95 $0.0675
8/95 $0.0655
<CAPTION>
FUND HIGHLIGHTS 8/31/95
<S> <C>
Yield 6.16%
Taxable-equivalent yield 10.71%
Annual total return on NAV 11.68%
Taxable-equivalent total return 16.27%
Combined state and federal tax rate 42.50%
Share price $12.75
NAV $14.41
The price, net asset value and dividend history used in this chart constitute
past performance and do not necessarily predict the future price, net asset
value or dividends of the Fund or of any other Nuveen Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN INSURED CALIFORNIA PREMIUM
INCOME MUNICIPAL FUND 2, INC.
NCL
As older, higher coupon bonds were called and replaced with today's
lower-yielding bonds, the Fund's dividend was adjusted to reflect reduced
earnings.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
9/94 $0.0670
10/94 $0.0670
11/94 $0.0670
12/94 $0.0670
1/95 $0.0670
2/95 $0.0650
3/95 $0.0650
4/95 $0.0650
5/95 $0.0650
6/95 $0.0650
7/95 $0.0650
8/95 $0.0620
<CAPTION>
FUND HIGHLIGHTS 8/31/95
<S> <C>
Yield 6.47%
Taxable-equivalent yield 11.25%
Annual total return on NAV 8.80%
Taxable-equivalent total return 13.51%
Combined state and federal tax rate 42.50%
Share price $11.50
NAV $13.01
The price, net asset value and dividend history used in this chart constitute
past performance and do not necessarily predict the future price, net asset
value or dividends of the Fund or of any other Nuveen Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN CALIFORNIA PREMIUM
INCOME MUNICIPAL FUND
NCU
The Fund's monthly dividend was adjusted in May to more closely reflect the
current earnings of the Fund. Shareholders enjoyed more than eight months of
steady dividends at the previous level.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
9/94 $0.0650
10/94 $0.0650
11/94 $0.0650
12/94 $0.0650
1/95 $0.0650
2/95 $0.0650
3/95 $0.0650
4/95 $0.0650
5/95 $0.0615
6/95 $0.0615
7/95 $0.0615
8/95 $0.0615
<CAPTION>
FUND HIGHLIGHTS 8/31/95
<S> <C>
Yield 6.87%
Taxable-equivalent yield 11.95%
Annual total return on NAV 10.53%
Taxable-equivalent total return 15.40%
Combined state and federal tax rate 42.50%
Share price $10.75
NAV $12.43
The price, net asset value and dividend history used in this chart constitute
past performance and do not necessarily predict the future price, net asset
value or dividends of the Fund or of any other Nuveen Fund.
</TABLE>
<PAGE>
Commonly used terms
Yield
An exchange-traded fund's annualized monthly dividend on a given date (in the
case of this report, August 31, 1995) divided by its closing price per share
on that date.
Taxable equivalent yield
The return an investor subject to a given federal and state income tax rate
would need to obtain from a fully taxable investment to equal the fund's
stated annualized yield on share price. In this report, the combined tax rate
is assumed to be 42.5% for California shareholders, based on incomes of
$117,950-$256,500 for investors filing singly, $143,600-$256,500 for those
filing jointly.
Net Asset Value (NAV)
The market value of all securities and other assets held by an exchange-traded
fund, minus any liabilities. The NAV per share is the fund's net assets, less
the value of its preferred shares, divided by the total number of common
shares outstanding.
Total return on NAV
The percentage change in a fund's NAV per common share for a given period,
assuming reinvestment of all dividends and capital gains distributions, if
any.
Taxable equivalent total return
The total return an investor subject to a given state and federal income tax
rate would need to obtain from a fully taxable investment to equal the Fund's
stated total return on NAV.
Leverage
A technique used to enhance the income produced for common shareholders by a
long-term municipal bond fund through the issuance of short-term preferred
shares. The proceeds from the sale of the preferred shares can be used to
purchase additional long-term bonds, thus increasing the portfolio's income
stream. Changes in net asset value per share, both up and down, are also
magnified by leverage.
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the 12-month period ended August 31, 1995. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC. (NPC)
Nuveen Exchange-Traded Funds Annual Report August 31, 1995
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 3,725,000 California Housing Finance Agency, Multi-Unit
Rental, Alternative Minimum Tax, 6.625%, 2/01/24 2/03 at 102 A1 $ 3,783,296
4,000,000 California Pollution Control Finance Authority
(Southern California Edison Company), Alternative
Minimum Tax, 6.400%, 12/01/24 12/02 at 102 Aaa 4,058,000
4,000,000 California Statewide Community Development
Authority (Sutter Health), 6.125%, 8/15/22 8/02 at 102 Aaa 4,012,120
4,000,000 Chula Vista (San Diego Gas and Electric Company),
Alternative Minimum Tax, 6.400%, 12/01/27 12/02 at 102 A1 4,027,200
2,000,000 Cucamonga County Water District, Certificates of
Participation, 6.300%, 9/01/12 9/01 at 102 Aaa 2,064,560
3,000,000 Culver City Redevelopment Finance Authority, Tax
Allocation, 4.600%, 11/01/20 11/03 at 102 Aaa 2,431,230
6,000,000 Huntington Park Redevelopment Agency, Single
Family Mortgage, 8.000%, 12/01/19 No Opt. Call Aaa 7,724,880
1,000,000 Los Angeles Convention and Exhibition Center
Authority, Certificates of Participation,
7.375%, 8/15/18 (Pre-refunded to 8/15/99) 8/99 at 101 1/2 Aaa 1,127,690
2,300,000 Los Angeles Department of Water and Power,
Electric Plant, 6.000%, 2/01/28 2/02 at 102 Aa 2,259,543
3,000,000 Los Angeles Department of Water and Power,
Waterworks, 6.000%, 7/15/32 7/02 at 102 Aa 2,977,680
4,000,000 Los Angeles FHA-Insured (Section 8), 6.300%, 1/01/25 7/02 at 102 Aaa 4,038,880
Los Angeles Wastewater System:
3,250,000 4.700%, 11/01/17 11/03 at 102 Aaa 2,707,608
11,000,000 4.700%, 11/01/19 11/03 at 102 Aaa 9,089,520
4,000,000 7.100%, 2/01/21 (Pre-refunded to 2/01/99) 2/99 at 102 Aaa 4,436,200
3,750,000 6.700%, 12/01/21 (Pre-refunded to 12/01/00) 12/00 at 102 Aaa 4,221,038
4,000,000 Los Angeles County Metropolitan Transportation
Authority, 5.000%, 7/01/21 7/03 at 100 Aaa 3,463,640
5,000,000 Los Angeles County Metropolitan Transit Authority,
Sales Tax, 4.750%, 7/01/13 7/03 at 102 Aaa 4,315,950
4,000,000 Norco Redevelopment Agency, Tax Allocation,
6.250%, 3/01/19 3/02 at 102 Aaa 4,067,720
5,135,000 Palmdale Community Redevelopment Agency,
8.000%, 3/01/16 No Opt. Call Aaa 6,596,626
3,500,000 Riverside Redevelopment Agency, Tax Allocation,
5.625%, 8/01/23 8/02 at 102 Aaa 3,323,040
6,220,000 Riverside County, Single Family Mortgage (GNMA),
Alternative Minimum Tax, 9.000%, 5/01/21 No Opt. Call Aaa 9,091,774
Sacramento Municipal Utility District:
2,000,000 5.750%, 8/15/13 8/02 at 100 Aaa 1,986,660
5,000,000 4.750%, 9/01/21 9/03 at 100 Aaa 4,136,700
2,135,000 San Buenaventura Certificates of Participation,
5.500%, 1/01/17 1/03 at 100 Aaa 1,992,702
4,000,000 San Francisco Airports Commission, Alternative
Minimum Tax, 6.200%, 5/01/20 5/03 at 102 Aaa 4,028,440
4,375,000 San Francisco Bay Area Rapid Transit District,
5.500%, 7/01/15 7/05 at 101 Aaa 4,156,906
9,500,000 San Jose Redevelopment Agency, Tax Allocation,
4.750%, 8/01/24 2/04 at 102 Aaa 7,789,050
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 1,485,000 San Jose Single Family, 9.500%, 10/01/13 No Opt. Call Aaa $ 2,177,723
3,400,000 Santa Maria Certificates of Participation, 5.500%, 8/01/21 8/02 at 102 Aaa 3,169,242
5,440,000 Santa Monica Wastewater (Hyperion Project),
4.500%, 1/01/15 1/04 at 102 Aaa 4,486,150
2,000,000 Suisun City Redevelopment Agency, Tax Allocation,
5.500%, 10/01/23 10/03 at 102 Aaa 1,849,620
2,670,000 University of California, 4.750%, 9/01/21 9/03 at 102 Aaa 2,208,998
3,425,000 Woodland Wastewater System, Certificates of
Participation, 5.500%, 3/01/18 3/03 at 100 Aaa 3,191,073
$132,310,000 Total Investments - (cost $124,810,996) - 95.4% 130,991,459
============
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 3.5%
$ 200,000 California Health Facilities Financing Authority
(St. Joseph Health System), Series A, Variable Rate
Demand Bonds, 3.300%, 7/01/13t VMIG-1 200,000
3,400,000 California Health Facilities Financing Authority
(St. Joseph Health System), Series B, Variable Rate
Demand Bonds, 3.200%, 7/01/13t VMIG-1 3,400,000
1,200,000 California Health Facilities Financing Authority
(St. Francis Memorial Hospital), Series 1993B,
Variable Rate Demand Bonds, 3.350%, 11/01/19t P-1 1,200,000
$ 4,800,000 Total Temporary Investments - 3.5% 4,800,000
Other Assets Less Liabilities - 1.1% 1,532,024
Net Assets - 100% $137,323,483
============
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 29 $117,943,740 90%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 2 5,237,223 4
PORTFOLIO OF A+ A1 2 7,810,496 6
INVESTMENTS
(EXCLUDING
TEMPORARY
INVESTMENTS):
TOTAL 33 $130,991,459 100%
<FN>
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities to ensure the timely payment of principal and interest.
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later
dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
t The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security.
The rate disclosed is that currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC. (NCL)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 3,250,000 California Educational Facilities Authority
(Pepperdine University), Pooled College and
University, 5.500%, 6/01/19 6/03 at 102 Aaa $ 3,037,548
5,500,000 California General Obligation, 5.750%, 11/01/17 11/02 at 102 Aaa 5,280,055
4,600,000 California Health Facilities Financing Authority
(Children's Hospital of San Diego), 5.750%, 7/01/23 7/03 at 102 Aaa 4,397,002
California Public Works Board, Department of
Corrections (State Prisons):
5,000,000 7.000%, 9/01/09 (Pre-refunded to 9/01/00) 9/00 at 102 Aaa 5,667,900
3,000,000 5.000%, 12/01/19 No Opt. Call Aaa 2,650,290
7,985,000 Alameda County (Santa Rita Jail Project), Certificates
of Participation, 5.700%, 12/01/14 12/03 at 102 Aaa 7,748,245
5,200,000 Azusa Public Financing Authority, Water System,
5.500%, 7/01/20 7/03 at 102 Aaa 4,828,096
2,200,000 Bakersfield (Adventist Health System/West),
5.500%, 3/01/19 3/03 at 102 Aaa 2,046,682
2,000,000 Barstow Wastewater Reclamation, Certificates of
Participation, 5.250%, 10/01/18 10/04 at 102 Aaa 1,804,520
5,565,000 Burbank Redevelopment Agency, Tax Allocation,
5.500%, 12/01/23 12/03 at 102 Aaa 5,173,669
3,530,000 Castaic Lake Water Agency, Certificates of Participation,
8.000%, 8/01/04 No Opt. Call Aaa 4,286,973
3,000,000 Central Unified School District, General Obligation,
5.625%, 3/01/18 3/03 at 102 Aaa 2,840,850
4,000,000 Compton Community Redevelopment Agency, Tax
Allocation, 6.500%, 8/01/13 8/05 at 102 Aaa 4,199,560
6,000,000 Contra Costa Water Authority, 5.750%, 10/01/20 10/02 at 102 Aaa 5,813,940
10,950,000 Galt Community Facility District, 7.700%, 9/01/19
(Pre-refunded to 9/01/98) 9/98 at 102 AAA 12,173,553
<PAGE>
1,000,000 Industry General Obligation, 5.500%, 7/01/15 7/03 at 101 1/2 Aaa 941,270
1,000,000 Kern High School District, General Obligation,
5.600%, 8/01/15 8/03 at 102 Aaa 950,470
2,000,000 Los Angeles Convention and Exhibition Center Authority,
5.375%, 8/15/18 8/03 at 102 Aaa 1,842,880
5,720,000 Los Angeles Wastewater System, 5.800%, 6/01/21 6/03 at 102 Aaa 5,548,457
2,550,000 Los Angeles County (Correctional Facilities), Certificates
of Participation, 6.000%, 9/01/15 9/00 at 102 Aaa 2,532,380
5,400,000 Los Angeles County Metropolitan Transportation
Authority, 5.000%, 7/01/21 7/03 at 100 Aaa 4,675,914
6,745,000 Marysville (Fremont-Reideout Health System),
5.650%, 1/01/19 1/04 at 102 Aaa 6,345,291
13,000,000 Metropolitan Water District, 5.750%, 7/01/21 7/05 at 102 Aaa 12,657,840
Northern California Power Agency, Hydroelectric
Project No. 1:
4,000,000 5.000%, 7/01/16 7/03 at 102 Aaa 3,795,440
2,250,000 5.500%, 7/01/23 7/02 at 100 Aaa 2,104,223
2,200,000 Northern California Transmission Agency,
5.500%, 5/01/14 5/03 at 102 Aaa 2,093,850
Orange County (John Wayne Airport), Alternative
Minimum Tax:
4,900,000 6.625%, 7/01/18 7/97 at 100 A1 4,718,357
3,575,000 5.500%, 7/01/18 7/03 at 102 Aaa 3,263,010
2,500,000 Oxnard Financing Authority, Wastewater System,
5.500%, 6/01/14 6/03 at 100 Aaa 2,379,050
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 9,000,000 Redlands Certificates of Participation, 5.800%, 9/01/17 9/03 at 102 Aaa $ 8,738,910
Redlands Unified School District, General Obligation:
4,280,000 5.500%, 7/01/14 7/03 at 101 Aaa 4,035,484
4,430,000 5.500%, 7/01/18 7/03 at 101 Aaa 4,140,500
4,320,000 Riverside County Single Family Mortgage (GNMA),
Alternative Minimum Tax, 8.625%, 5/01/16 No Opt. Call AAA 5,861,851
5,500,000 Sacramento Municipal Utility District, 5.750%, 5/15/22 5/03 at 102 Aaa 5,324,605
6,290,000 San Francisco General Obligation, 5.500%, 6/15/11 6/01 at 102 Aaa 6,146,777
1,000,000 San Francisco Airports Commission, Alternative
Minimum Tax, 6.200%, 5/01/20 5/03 at 102 Aaa 1,007,110
9,000,000 San Francisco Airports Commission, 6.100%, 5/01/20 5/04 at 101 Aaa 9,116,460
San Francisco City and County Sewer System:
2,900,000 5.500%, 10/01/15 10/02 at 102 Aaa 2,754,565
2,500,000 6.500%, 10/01/21 (Pre-refunded to 10/01/99) 10/99 at 102 Aaa 2,758,750
2,000,000 5.375%, 10/01/22 10/02 at 102 Aaa 1,843,580
3,750,000 San Jose Airport Alternative Minimum Tax,
5.700%, 3/01/18 3/03 at 102 Aaa 3,532,763
7,400,000 Santa Cruz County Housing Authority GNMA
Collateralized (Meadowview Apartments),
6.125%, 5/20/28 5/03 at 102 Aaa 7,383,572
1,930,000 Santa Margarita/Dana Point Authority, 7.250%, 8/01/05 No Opt. Call Aaa 2,249,724
South Orange County Public Finance Authority
(Foothill Area):
4,000,000 8.000%, 8/15/08 No Opt. Call Aaa 4,977,080
3,680,000 8.000%, 8/15/09 No Opt. Call Aaa 4,576,301
4,000,000 South San Joaquin Irrigation District, 5.500%, 1/01/15 1/03 at 102 Aaa 3,772,560
6,500,000 Stockton Wastewater System, Certificates of
Participation, 5.750%, 9/01/23 9/03 at 101 Aaa 6,213,090
5,000,000 Stockton Housing, GNMA (O'Connor Woods),
5.600%, 3/20/28 3/03 at 102 AAA 4,608,300
7,500,000 Suisun City Redevelopment Agency, Tax Allocation,
5.900%, 10/01/23 10/03 at 102 Aaa 7,318,725
1,840,000 Torrance (Little Company of Mary Hospital),
7.100%, 12/01/15 (Pre-refunded to 12/01/05) 12/05 at 100 AAA 2,095,998
1,500,000 Tulare Sewer System, 5.700%, 11/15/18 11/03 at 102 Aaa 1,438,425
11,750,000 Turlock Irrigation District, 5.750%, 1/01/18 7/02 at 100 Aaa 11,446,380
4,900,000 University of California Housing System,
5.500%, 11/01/18 11/03 at 102 Aaa 4,606,636
6,350,000 University of California, 5.000%, 9/01/12 9/03 at 102 Aaa 5,773,546
5,000,000 Washington Township Hospital District, 5.250%, 7/01/23 7/03 at 102 Aaa 4,445,850
$254,940,000 Total Investments - (cost $255,349,483) - 97.4% 251,964,857
============
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 1.2%
$ 3,000,000 California Health Facilities Financing Authority
(St. Joseph Health System) Series 1991B, Variable
Rate Demand Bonds, 3.200%, 7/01/09t VMIG-1 3,000,000
Other Assets Less Liabilities - 1.4% 3,662,915
Net Assets - 100% $258,627,772
============
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 54 $247,246,500 98%
RATINGS** A+ A1 1 4,718,357 2
PORTFOLIO OF
INVESTMENTS
(EXCLUDING
TEMPORARY
INVESTMENTS):
TOTAL 55 $251,964,857 100%
<FN>
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities to ensure the timely payment of principal and interest.
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later
dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
t The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security.
The rate disclosed is that currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND (NCU)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 3,500,000 California Educational Facilities Authority,
6.750%, 10/01/15 10/99 at 102 Aa $ 3,727,185
California General Obligation:
2,000,000 6.250%, 9/01/12 No Opt. Call A1 2,094,240
2,000,000 5.150%, 10/01/19 10/03 at 102 A1 1,734,520
1,750,000 California Health Facilities Authority (Kaiser Permanente),
5.450%, 10/01/13 10/01 at 101 Aa2 1,611,943
3,500,000 California Health Facilities Financing Authority (Downey
Community Hospital), 5.750%, 5/15/15 5/03 at 102 A- 3,287,795
1,000,000 California Housing Finance Agency, Alternative Minimum
Tax, 6.550%, 8/01/26 8/04 at 102 Aa 1,024,200
2,455,000 California Housing Finance Agency, 5.650%, 8/01/14 (DD) 2/04 at 102 Aa 2,308,265
2,000,000 California Pollution Control Finance Authority (Pacific
Gas and Electric), Alternative Minimum Tax,
5.875%, 6/01/23 6/03 at 102 A2 1,879,020
2,000,000 California Pollution Control Finance Authority (San Diego
Gas and Electric Company), Alternative Minimum Tax,
5.850%, 6/01/21 6/03 at 102 A1 1,888,260
1,000,000 California Pollution Control Finance Authority (Pacific
Gas and Electric Company), 5.850%, 12/01/23 12/03 at 102 A2 947,130
3,200,000 California State Public Works Board (California State
University), 6.375%, 10/01/14 10/04 at 102 A 3,223,776
4,000,000 California Statewide Communities Development
Authority (Cedars-Sinai Medical Center),
6.500%, 8/01/15 8/02 at 102 A1 4,040,080
1,500,000 ABAG Finance Authority for Nonprofit Corporations
(Stanford University Hospital), Certificates of
Participation, 5.250%, 11/01/20 11/03 at 102 AA- 1,342,215
2,090,000 Anaheim Public Finance Authority (San Juan Unit 4
Project), 5.750%, 10/01/22 4/03 at 102 Aaa 2,023,057
Carson Redevelopment Agency Tax Allocation:
1,760,000 5.625%, 10/01/08 10/03 at 102 Baa1 1,659,557
2,000,000 5.875%, 10/01/09 10/03 at 102 Baa 1,980,060
1,000,000 Eastern Municipal Water District, Certificates of
Participation, 6.300%, 7/01/20 7/01 at 101 Aaa 1,017,800
1,175,000 Elsinore Valley Municipal Water District, 5.750%, 7/01/19 7/02 at 102 Aaa 1,133,570
2,000,000 Garden Grove Agency for Community Development,
Tax Allocation, 5.875%, 10/01/23 10/03 at 102 A 1,851,540
3,000,000 Imperial Irrigation District, Certificates of Participation,
6.000%, 11/01/15 11/04 at 102 Aaa 3,016,680
2,000,000 Loma Linda (Loma Linda University Medical Center),
6.000%, 12/01/06 12/03 at 102 BBB 2,022,660
2,160,000 Los Angeles Community Redevelopment Agency,
Multi-Family Housing, Alternative Minimum Tax,
5.750%, 12/01/13 6/03 at 102 A 2,001,089
3,000,000 Los Angeles Convention and Exhibition Center Authority,
5.375%, 8/15/18 8/03 at 102 Aaa 2,764,320
2,000,000 Los Angeles Department of Water and Power, Electric
Plant, 5.375%, 9/01/23 9/03 at 102 Aaa 1,823,900
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 1,000,000 Los Angeles Wastewater System, 5.200%, 11/01/21 11/03 at 102 Aaa $ 891,350
2,000,000 Los Angeles County Transportation Commission,
Sales Tax Revenue, 5.625%, 7/01/18 7/03 at 102 Aaa 1,907,220
2,000,000 Metropolitan Water District of Southern California,
5.500%, 7/01/19 7/02 at 102 Aa 1,866,680
5,500,000 Moulton Niguel Water District, Certificates of Participation,
5.300%, 9/01/23 9/03 at 102 Aaa 4,960,285
3,560,000 Northern California Power Agency, 10.000%, 7/01/03 No Opt. Call Aaa 4,720,667
500,000 Northern California Power Agency, Hydroelectric
Project No. 1, 5.500%, 7/01/23 7/02 at 100 Aaa 467,605
3,150,000 Northern California Transmission Agency, 5.250%, 5/01/20 5/03 at 102 Aaa 2,851,317
2,000,000 Orange County Water District, Certificates of Participation,
5.000%, 8/15/18 8/03 at 100 Aa 1,661,260
3,250,000 Oxnard Financing Authority, Wastewater System,
5.250%, 6/01/20 6/03 at 100 Aaa 2,925,878
1,355,000 Palomar Pomerado Health System, 5.000%, 11/01/13 11/03 at 102 Aaa 1,217,278
1,500,000 Pasadena Electric Works, 7.000%, 8/01/09 8/00 at 102 Aa 1,655,550
1,600,000 Rancho Cucamonga Redevelopment Agency,
5.500%, 9/01/23 3/04 at 102 Aaa 1,488,048
1,000,000 Riverside Water System, 9.000%, 10/01/01 No Opt. Call Aa 1,228,720
2,100,000 Sacramento City Finance Authority, 5.400%, 11/01/20 No Opt. Call Aa 1,911,924
Sacramento Municipal Utility District:
1,095,000 5.700%, 5/15/12 5/03 at 102 A 1,074,096
1,370,000 5.250%, 11/15/20 11/03 at 102 Aaa 1,232,288
900,000 San Diego Industrial Development (San Diego Gas and
Electric Company), 7.625%, 7/01/21 7/96 at 102 Aa3 936,306
2,750,000 San Francisco Airports Commission, Alternative
Minimum Tax, 6.500%, 5/01/24 5/04 at 102 Aaa 2,815,533
3,100,000 San Francisco City and County Sewer System,
5.375%, 10/01/16 10/02 at 102 Aaa 2,890,781
3,500,000 San Joaquin County, Certificates of Participation,
4.750%, 11/15/19 11/03 at 102 Aaa 2,913,680
1,005,000 Santa Monica Wastewater Enterprise, 12.000%, 1/01/04 No Opt. Call Aaa 1,485,621
1,150,000 Santa Monica-Malibu Unified School District,
General Obligation, 5.500%, 8/01/18 8/03 at 102 Aa 1,072,053
Southern California Public Power Authority:
1,975,000 5.500%, 7/01/20 7/02 at 100 Aa 1,821,858
1,250,000 5.250%, 7/01/20 7/03 at 102 Aaa 1,125,174
3,000,000 Torrance (Little Company of Mary Hospital),
7.100%, 12/01/15 (Pre-refunded to 12/01/05) 12/05 at 100 AAA 3,417,390
1,500,000 University of California Certificates of Participation,
(UCLA Center Chiller Cogeneration), 5.600%, 11/01/20 11/03 at 102 Aa 1,377,000
University of California Research Facilities:
2,000,000 5.750%, 9/01/18 9/01 at 102 A- 1,835,580
2,000,000 5.800%, 9/01/23 9/01 at 102 A- 1,830,100
2,225,000 University of California Housing System, 5.500%, 11/01/18 11/03 at 102 Aaa 2,091,788
2,000,000 Walnut Creek Certificates of Participation, (John Muir
Medical Center), 5.000%, 2/15/16 2/04 at 102 Aaa 1,763,920
2,000,000 Washington Township Hospital District, 5.250%, 7/01/23 7/03 at 102 A 1,689,020
$115,425,000 Total Investments - (cost $114,486,918) - 97.6% 111,528,832
============
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 1.7%
$ 800,000 California Health Facilities Financing Authority (St. Francis
Memorial Hospital), Series 1993B, Variable Rate
Demand Bonds, 3.350%, 11/01/19t P-1 $ 800,000
700,000 California Pollution Control Finance Authority (Shell Oil
Company), Variable Rate Demand Bonds,
3.300%, 10/01/11t VMIG-1 700,000
500,000 Santa Ana Health Facilities Authority (Town and Country),
Variable Rate Demand Bonds, 3.250%, 10/01/20t A-1 500,000
$ 2,000,000 Total Temporary Investments - 1.7% 2,000,000
Other Assets Less Liabilities - 0.7% 774,973
Net Assets - 100% $114,303,805
============
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 24 $ 52,945,150 47%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 14 23,545,159 21
PORTFOLIO OF A+ A1 4 9,757,100 9
INVESTMENTS A, A- A, A2, A3 10 19,619,146 18
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 3 5,662,277 5
TEMPORARY
INVESTMENTS):
TOTAL 55 $111,528,832 100%
<FN>
* Optional Call Provisions (not covered by the report of independent
auditors): Dates (month and year) and prices of the earliest optional call or
redemption. There may be other call provisions at varying prices at later
dates.
** Ratings (not covered by the report of independent auditors): Using the
higher of Standard & Poor's or Moody's rating.
(DD) Portion of security purchased on a delayed delivery basis.
t The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security.
The rate disclosed is that currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
ASSETS
Investments in municipal securities, at market value (note 1) $130,991,459 $251,964,857 $111,528,832
Temporary investments in short-term municipal securities,
at amortized cost (note 1) 4,800,000 3,000,000 2,000,000
Cash 67,087 1,130,357 274,403
Receivables:
Interest 2,051,565 4,282,992 1,984,749
Investments sold -- 1,141,109 --
Other assets 24,441 17,063 --
----------- ----------- -----------
Total assets 137,934,552 261,536,378 115,787,984
----------- ----------- -----------
Liabilities
Payable for investments purchased -- 1,821,010 938,608
Accrued expenses:
Management fees (note 6) 74,396 138,787 62,032
Other 109,727 133,863 116,086
Preferred share dividends payable 7,396 35,128 14,690
Common share dividends payable 419,550 779,818 352,763
----------- ----------- -----------
Total liabilities 611,069 2,908,606 1,484,179
----------- ----------- -----------
Net assets (note 7) $137,323,483 $258,627,772 $114,303,805
============ ============ ============
Preferred shares, at liquidation value $ 45,000,000 $ 95,000,000 $ 43,000,000
============ ============ ============
Preferred shares outstanding 1,800 3,800 1,720
============ ============ ============
Common shares outstanding 6,405,350 12,577,707 5,735,977
============ ============ ============
Net asset value per Common share outstanding (net assets less
Preferred shares at liquidation value, divided by Common
shares outstanding) $ 14.41 $ 13.01 $ 12.43
============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Year ended August 31, 1995
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Investment Income
Tax-exempt interest income (note 1) $ 7,913,635 $14,906,465 $ 6,287,285
----------- ----------- -----------
Expenses:
Management fees (note 6) 856,940 1,611,540 665,628
Preferred shares--auction fees 112,500 237,500 100,048
Preferred shares--dividend disbursing agent fees 15,000 30,000 27,205
Shareholders' servicing agent fees and expenses 16,823 15,794 13,712
Custodian's fees and expenses 47,217 64,321 44,577
Directors'/Trustees' fees and expenses (note 6) 1,843 1,959 2,404
Professional fees 19,927 20,678 56,496
Shareholders' reports--printing and mailing expenses 29,501 53,337 108,086
Stock exchange listing fees 17,961 25,394 14,327
Investor relations expense 14,077 17,985 12,209
Portfolio insurance expense 19,439 6,136 --
Other expenses 21,790 28,502 34,349
----------- ----------- -----------
Total expenses 1,173,018 2,113,146 1,079,041
----------- ----------- -----------
Net investment income 6,740,617 12,793,319 5,208,244
----------- ----------- -----------
Realized and Unrealized Gain (Loss)
from Investments
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) (269,095) (3,934,343) (2,548,807)
Net change in unrealized appreciation or depreciation
of investments 4,914,208 7,676,617 9,505,079
----------- ----------- -----------
Net gain from investments 4,645,113 3,742,274 6,956,272
----------- ----------- -----------
Net increase in net assets from operations $11,385,730 $16,535,593 $12,164,516
============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
NPC NCL
Year ended Year ended Year ended Year ended
8/31/95 8/31/94 8/31/95 8/31/94
<S> <C> <C> <C> <C>
Operations
Net investment income $ 6,740,617 $ 6,816,739 $ 12,793,319 $ 12,814,174
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (269,095) (2,336,303) (3,934,343) (3,896,131)
Net change in unrealized appreciation or depreciation
of investments 4,914,208 (7,955,729) 7,676,617 (19,281,476)
------------ ------------ ------------ ------------
Net increase (decrease) in net assets from operations 11,385,730 (3,475,293) 16,535,593 (10,363,433)
------------ ------------ ------------ ------------
Distributions to Shareholders (note 1)
From undistributed net investment income:
Common shareholders (5,302,260) (5,416,885) (9,896,794) (10,264,081)
Preferred shareholders (1,644,081) (1,280,025) (3,358,809) (2,155,064)
In excess of accumulated net realized gains from
investment transactions:
Common shareholders -- -- -- --
Preferred shareholders -- -- -- --
------------ ------------ ------------ ------------
Decrease in net assets from distributions to shareholders (6,946,341) (6,696,910) (13,255,603) (12,419,145)
------------ ------------ ------------ ------------
Capital Share Transactions (note 2)
Net proceeds from shares issued in acquisition of NCV,
as applicable (note 1) -- -- -- --
Net proceeds from Common shares issued to shareholders due to
reinvestment of distributions from net investment income
and from net realized gains from investment transactions 78,498 166,287 103,296 78,755
Preferred shares, net proceeds from sale of shares -- -- -- --
------------ ------------ ------------ ------------
Net increase in net assets derived from capital share transactions 78,498 166,287 103,296 78,755
------------ ------------ ------------ ------------
Net increase (decrease) in net assets 4,517,887 (10,005,916) 3,383,286 (22,703,823)
Net assets at beginning of year 132,805,596 142,811,512 255,244,486 277,948,309
------------ ------------ ------------ ------------
Net assets at end of year $137,323,483 $132,805,596 $258,627,772 $255,244,486
============ ============ ============ ============
Balance of undistributed net investment income at end of year $ 121,512 $ 327,236 $ 331,076 $ 793,360
============ ============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
NCU
Year ended Year ended
8/31/95 8/31/94
<S> <C> <C>
Operations
Net investment income $ 5,208,244 $ 3,459,879
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (2,548,807) (1,794,556)
Net change in unrealized appreciation or depreciation
of investments 9,505,079 (6,342,505)
------------ -----------
Net increase (decrease) in net assets from operations 12,164,516 (4,677,182)
------------ -----------
Distributions to Shareholders (note 1)
From undistributed net investment income:
Common shareholders (3,968,924) (2,899,201)
Preferred shareholders (1,443,761) (598,618)
In excess of accumulated net realized gains from
investment transactions:
Common shareholders -- (82,885)
Preferred shareholders -- (14,774)
------------ -----------
Decrease in net assets from distributions to shareholders (5,412,685) (3,595,478)
------------ -----------
Capital Share Transactions (note 2)
Net proceeds from shares issued in acquisition of NCV,
as applicable (note 1) 37,803,999 --
Net proceeds from Common shares issued to shareholders due to
reinvestment of distributions from net investment income
and from net realized gains from investment transactions 37,810 79,976
Preferred shares, net proceeds from sale of shares -- 26,416,000
------------ -----------
Net increase in net assets derived from capital share transactions 37,841,809 26,495,976
------------ -----------
Net increase (decrease) in net assets 44,593,640 18,223,316
Net assets at beginning of year 69,710,165 51,486,849
------------ -----------
Net assets at end of year $114,303,805 $69,710,165
============ ===========
Balance of undistributed net investment income at end of year $ 166,535 $ 245,598
============ ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
At August 31, 1995, the California Funds (the "Funds") covered in this
report and their corresponding stock exchange symbols are Nuveen Insured
California Premium Income Municipal Fund, Inc. (NPC), Nuveen Insured
California Premium Income Municipal Fund 2, Inc. (NCL), and Nuveen California
Premium Income Municipal Fund (NCU). NPC and NCL are traded on the New York
Stock Exchange while NCU is traded on the American Stock Exchange.
The Funds are registered under the Investment Company Act of 1940 as
closed-end, diversified management investment companies.
On November 7, 1994, NCU acquired all of the net assets of Nuveen
California Premium Income Municipal Fund 2 (NCV) pursuant to a plan of
reorganization approved by the shareholders of the Funds on October 21, 1994.
The acquisition was accomplished by a tax-free exchange of 2,175,061 shares of
NCU for the 2,233,987 shares of NCV outstanding on November 7, 1994. NCV's net
assets at that date of $37,803,999 included $7,676,463 of unrealized
depreciation and $16,000,000 of preferred shares at liquidation value which
was combined with that of NCU. The combined net assets of NCU immediately
after the acquisition was $100,464,481.
The following is a summary of significant accounting policies followed by
the Funds in the preparation of their financial statements in accordance with
generally accepted accounting principles.
Securities Valuation
Portfolio securities for which market quotations are readily available are
valued at the mean between the quoted bid and asked prices or the yield
equivalent. Portfolio securities for which market quotations are not readily
available are valued at fair value by consistent application of methods
determined in good faith by the Board of Directors/Trustees. Temporary
investments in securities that have variable rate and demand features
qualifying them as short-term securities are traded and valued at amortized
cost.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery
basis may be settled a month or more after the transaction date. The
securities so purchased are subject to market fluctuation during this period.
The Funds have instructed the custodian to segregate assets in a separate
account with a current value at least equal to the amount of their purchase
commitments. At August 31, 1995, NCU had outstanding purchase commitments that
amounted to $938,608. There were no such purchase commitments in either NPC or
NCL.
Interest Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt
securities when required for federal income tax purposes.
<PAGE>
Income Taxes
The Funds intend to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies by distributing all of their net
investment income, in addition to any significant amounts of net realized
gains from investments, to shareholders. The Funds currently consider
significant net realized gains as amounts in excess of $.01 per Common share.
Furthermore, each Fund intends to satisfy conditions which will enable
interest from municipal securities, which is exempt from regular federal and
California state income taxes, to retain such tax-exempt status when
distributed to shareholders of the Funds. All income dividends paid during the
fiscal year ended August 31, 1995, have been designated Exempt Interest
Dividends.
Dividends and Distributions to Shareholders
Net investment income is declared as a dividend monthly and payment is made or
reinvestment is credited to shareholder accounts after month-end. Net realized
gains from securities transactions are distributed to shareholders not less
frequently than annually only to the extent they exceed available capital loss
carryovers.
Distributions to shareholders of net investment income and net realized gains
are recorded on the ex-dividend date. The amount and timing of such
distributions are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
Accordingly, temporary over-distributions as a result of these differences may
result and will be classified as either distributions in excess of net
investment income or distributions in excess of accumulated net realized
gains, if applicable.
<PAGE>
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in one or more Series. The dividend
rate on each Series may change every seven days, as set by the Auction Agent.
The number of shares outstanding, by Series and in total, at August 31, 1995,
for each Fund is as follows:
<TABLE>
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Number of shares:
Series M -- -- 1,720
Series T 1,800 1,900 --
Series Th -- 1,900 --
----- ----- -----
Total 1,800 3,800 1,720
===== ===== =====
</TABLE>
<PAGE>
Insurance
NPC and NCL invest in municipal securities which are covered by insurance
guaranteeing the timely payment of principal and interest thereon or are
backed by an escrow or trust account containing sufficient U.S. Government or
U.S. Government agency securities to ensure the timely payment of principal
and interest. Each insured municipal security is covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance. Such insurance
does not guarantee the market value of the municipal securities or the value
of the Funds' shares. Original Issue Insurance and Secondary Market Insurance
remain in effect as long as the municipal securities covered thereby remain
outstanding and the insurer remains in business, regardless of whether the
Funds ultimately dispose of such municipal securities. Consequently, the
market value of the municipal securities covered by Original Issue Insurance
or Secondary Market Insurance may reflect value attributable to the Insurance.
Portfolio Insurance is effective only while the municipal securities are held
by the Funds. Accordingly, neither the prices used in determining the market
value of the underlying municipal securities nor the net asset value of the
Funds' shares include value, if any, attributable to the Portfolio Insurance.
Each policy of the Portfolio Insurance does, however, give the Funds the right
to obtain permanent insurance with respect to the municipal security covered
by the Portfolio Insurance policy at the time of its sale.
Derivative Financial Instruments
In October 1994, the Financial Accounting Standards Board (FASB) issued
Statement of Instruments Financial Accounting Standards No. 119 Disclosure
about Derivative Financial Instruments and Fair Value of Financial Instruments
which prescribes disclosure requirements for transactions in certain
derivative financial instruments including futures, forward, swap, and option
contracts, and other financial instruments with similar characteristics.
Although the Funds are authorized to invest in such financial instruments, and
may do so in the future, they did not make any such investments during the
fiscal year ended August 31, 1995, other than occasional purchases of high
quality synthetic money market securities which were held temporarily pending
the re-investment in long-term portfolio securities.
<PAGE>
<TABLE>
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
<CAPTION>
NPC NCL
Year ended Year ended Year ended Year ended
8/31/95 8/31/94 8/31/95 8/31/94
<S> <C> <C> <C> <C>
Common shares:
Shares issued in acquisition of NCV, as applicable (note 1) -- -- -- --
Shares issued to shareholders due to reinvestment of
distributions from net investment income and from
net realized gains from investment transactions 6,408 11,512 9,285 13,598
----- ------ ----- ------
Net increase 6,408 11,512 9,285 13,598
===== ====== ===== ======
Preferred shares sold -- -- -- --
===== ====== ===== ======
Preferred shares acquired from NCV, as applicable (note 1) -- -- -- --
===== ====== ===== ======
<CAPTION>
NCU
Year ended Year ended
8/31/95 8/31/94
<S> <C> <C>
Common shares:
Shares issued in acquisition of NCV, as applicable (note 1) 2,175,061 --
Shares issued to shareholders due to reinvestment of
distributions from net investment income and from
net realized gains from investment transactions 3,601 197
--------- -----
Net increase 2,178,662 197
========= =====
Preferred shares sold -- 1,080
========= =====
Preferred shares acquired from NCV, as applicable (note 1) 640 --
========= =====
</TABLE>
<PAGE>
<TABLE>
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the fiscal year ended
August 31, 1995, were as follows:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
PURCHASES
Investments in municipal securities $30,696,460 $56,552,586 $25,456,356
Investments in municipal securities in acquisition of
NCV, as applicable (note 1) -- -- 44,829,011
Temporary municipal investments 31,900,000 67,095,000 21,100,000
SALES AND MATURITIES
Investments in municipal securities 34,287,014 58,398,055 25,954,670
Temporary municipal investments 27,800,000 64,895,000 19,900,000
=========== =========== ===========
At August 31, 1995, the identified cost of investments owned for federal
income tax purposes was the same as the cost for financial reporting purposes
for each Fund.
At August 31, 1995, the following Funds had unused capital loss carryovers
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryovers will expire as follows:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Expiration year:
2001 $ 10,001 $ -- $ --
2002 -- -- 1,175,783*
2003 2,373,250 3,896,131 1,893,938
---------- ---------- ----------
Total $2,383,251 $3,896,131 $3,069,721
========== ========== ==========
<FN>
* Due to the acquisition of NCV by NCU (note 1), NCV had net realized losses
from investment transactions of $1,175,783 which were carried forward by NCU,
as permitted under applicable tax regulations.
</TABLE>
<PAGE>
<TABLE>
4. DISTRIBUTIONS TO COMMON SHAREHOLDERS
On September 1, 1995, the Funds declared Common share dividend distributions
from their ordinary income which were paid October 2, 1995, to shareholders of
record on September 15, 1995, as follows:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Dividend per share $.0655 $.0620 $.0615
====== ====== ======
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at August 31, 1995, were as follows:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Gross unrealized:
Appreciation $6,947,044 $1,935,623 $1,445,109
Depreciation (766,581) (5,320,249) (4,403,195)
----------- ------------ ------------
Net unrealized appreciation (depreciation) $6,180,463 $(3,384,626) $(2,958,086)
========== ============ ============
</TABLE>
<PAGE>
<TABLE>
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), each Fund pays to the Adviser an annual management fee,
payable monthly, at the rates set forth below, which are based upon the
average daily net asset value of each Fund:
<CAPTION>
Average daily net asset value Management fee
<S> <C>
For the first $125,000,000 .65 of 1%
For the next $125,000,000 .6375 of 1
For the next $250,000,000 .625 of 1
For the next $500,000,000 .6125 of 1
For the next $1,000,000,000 .6 of 1
For net assets over $2,000,000,000 .5875 of 1
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those Directors/Trustees who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
</TABLE>
<PAGE>
<TABLE>
7. COMPOSITION OF NET ASSETS
At August 31, 1995, net assets consisted of:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Preferred shares, $25,000 stated value per share, at
liquidation value $ 45,000,000 $ 95,000,000 $ 43,000,000
Common shares, $.01 par value per share 64,054 125,777 57,360
Paid-in surplus 88,572,854 174,386,019 79,656,267
Balance of undistributed net investment income 121,512 331,076 166,535
Accumulated net realized gain (loss) from investment transactions (2,615,400) (7,830,474) (5,618,271)
Net unrealized appreciation or depreciation of investments 6,180,463 (3,384,626) (2,958,086)
----------- ----------- -----------
Net assets $137,323,483 $258,627,772 $114,303,805
============ ============ ============
Authorized shares:
Common 200,000,000 200,000,000 Unlimited
Preferred 1,000,000 1,000,000 Unlimited
============ ============ ============
</TABLE>
<PAGE>
<TABLE>
8. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which include general obligation,
escrowed and revenue bonds. At August 31, 1995, the revenue sources by
municipal purpose for these investments, expressed as a percent of total
investments, were as follows:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Revenue Bonds:
Water / Sewer Facilities 21% 21% 14%
Electric Utilities 6 10 15
Health Care Facilities 3 7 15
Lease Rental Facilities 2 9 14
Educational Facilities 2 5 13
Transportation 3 9 3
Housing Facilities 6 5 3
Pollution Control Facilities 6 -- 5
Other 24 13 11
General Obligation Bonds -- 10 4
Escrowed Bonds 27 11 3
----- ----- -----
100% 100% 100%
===== ===== =====
Certain long-term and intermediate-term investments owned by the Funds are
covered by insurance issued by several private insurers or are backed by an
escrow or trust containing U.S. Government or U.S. Government agency
securities, either of which ensure the timely payment of principal and
interest in the event of default (100% for NPC, 100% for NCL, and 48% for
NCU). Such insurance or escrow, however, does not guarantee the market value
of the municipal securities or the value of any of the Funds' shares, as more
fully discussed in note 1.
All of the temporary investments in short-term municipal securities have
credit enhancements (letters of credit, guarantees or insurance) issued by
third party domestic or foreign banks or other institutions.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS
FOLLOWS:
<CAPTION>
Dividends from net
Operating performance investment income
Net
realized and
Net asset unrealized
value Net gain (loss)
beginning investment from To Common To Preferred
of period income investments** shareholders shareholderstt
NPC
<S> <C> <C> <C> <C> <C>
Year ended 8/31,
1995 $13.720 $1.053 $ .722 $(.828) $(.257)
1994 15.310 1.066 (1.609) (.847) (.200)
11/19/92 to
8/31/93 14.050 .640 1.445 (.500) (.108)
<CAPTION>
NCL
<S> <C> <C> <C> <C> <C>
Year ended 8/31,
1995 12.750 1.017 .297 (.787) (.267)
1994 14.570 1.020 (1.851) (.817) (.172)
3/18/93 to
8/31/93 14.050 .247 .655 (.192) (.023)
<CAPTION>
NCU
<S> <C> <C> <C> <C> <C>
Year ended 8/31,
1995 12.010 1.002 .460 (.766) (.276)
1994 14.470 .973 (2.259) (.815) (.168)
6/18/93 to
8/31/93 14.050 .080 .438 -- --
<PAGE>
<CAPTION>
Distributions from capital gains
Organization Per
and offering Common
costs and share
Preferred share Net asset market
To Common To Preferred underwriting value end value end
shareholders shareholderstt discounts of period of period
NPC
<S> <C> <C> <C> <C> <C>
Year ended 8/31,
1995 $ -- $ -- $ -- $14.410 $12.750
1994 -- -- -- 13.720 13.000
11/19/92 to
8/31/93 -- -- (.217) 15.310 15.500
<CAPTION>
NCL
<S> <C> <C> <C> <C> <C>
Year ended 8/31,
1995 -- -- -- 13.010 11.500
1994 -- -- -- 12.750 11.875
3/18/93 to
8/31/93 -- -- (.167) 14.570 14.875
<CAPTION>
NCU
<S> <C> <C> <C> <C> <C>
Year ended 8/31,
1995 -- -- -- 12.430 10.750
1994 (.023)ttt (.004)ttt (.164) 12.010 11.125
6/18/93 to
8/31/93 -- -- (.098) 14.470 14.875
<CAPTION>
Ratios/Supplemental data
Ratio
Total of net
investment Total Ratio of investment
return return Net assets expenses to income Portfolio
on market on net asset end of period average net to average turnover
valuet valuet (in thousands) assets*** net assets*** rate
NPC
<S> <C> <C> <C> <C> <C> <C>
Year ended 8/31,
1995 4.67% 11.68% $137,323 .89% 5.10% 24%
1994 (10.88) (4.99) 132,806 .85 4.94 29
11/19/92 to
8/31/93 6.80 12.73 142,812 .88* 4.45* 20
<CAPTION>
NCL
<S> <C> <C> <C> <C> <C> <C>
Year ended 8/31,
1995 3.55 8.80 258,628 .84 5.11 24
1994 (15.01) (7.07) 255,244 .84 4.80 24
3/18/93 to
8/31/93 .49 5.11 277,948 .86* 3.46* --
<CAPTION>
NCU
<S> <C> <C> <C> <C> <C> <C>
Year ended 8/31,
1995 3.65 10.53 114,304 1.05 5.08 26
1994 (20.07) (11.51) 69,710 .95 4.79 40
6/18/93 to
8/31/93 (.83) 2.99 51,487 1.19* 3.33* --
<FN>
* Annualized.
** Net of taxes, if applicable (note 1).
*** Ratios do not reflect the effect of dividend payments to Preferred
shareholders.
t Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distribution, if any, and changes in
stock price per share. Total Return on Net Asset Value is the combination of
reinvested dividend income, reinvested capital gains distributions, if any,
and changes in net asset value per share.
tt The amounts shown are based on Common share equivalents.
ttt The amounts shown reflect distributions in excess of capital gains.
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Boards of Directors, Trustees and Shareholders
Nuveen Insured California Premium Income Municipal Fund, Inc.
Nuveen Insured California Premium Income Municipal Fund 2, Inc.
Nuveen California Premium Income Municipal Fund
We have audited the accompanying statements of net assets, including the
portfolios of investments, of Nuveen Insured California Premium Income
Municipal Fund, Inc., Nuveen Insured California Premium Income Municipal Fund
2, Inc. and Nuveen California Premium Income Municipal Fund as of August 31,
1995, and the related statements of operations, changes in net assets and the
financial highlights for the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements. Our procedures included confirmation of investments
owned as of August 31, 1995, by correspondence with the custodian and brokers.
An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Insured California Premium Income Municipal Fund, Inc., Nuveen Insured
California Premium Income Municipal Fund 2, Inc. and Nuveen California Premium
Income Municipal Fund at August 31, 1995, and the results of their operations,
changes in their net assets and financial highlights for the periods indicated
therein in conformity with generally accepted accounting principles.
Signature: Ernst & Young L.L.P.
Chicago, Illinois
October 13, 1995
<PAGE>
Build your wealth automatically
Photographic image of Customer Service Rep at Nuveen.
Managing your portfolio takes skill, experience, and informed judgment, but
our efforts to help you build your wealth don't stop there. At Nuveen, we
offer a number of convenient ways to build your tax-free portfolio and earn
the tax-free income you need to achieve your financial goals.
Nuveen Exchange-traded fund Dividend Reinvestment Plan
Your Nuveen exchange-traded fund allows you to conveniently reinvest dividends
and/or capital gains distributions in additional fund shares. If you do not
elect to reinvest distributions, all distributions are paid by check, or can
be deposited directly into your bank or brokerage account.
By choosing to reinvest, you'll be able to set aside money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Income or capital gains taxes may be payable on dividends or
distributions that are reinvested. You'll also benefit from dollar-cost
averaging, a technique of investing at regular intervals, which allows you to
build a high-quality, tax-free portfolio conveniently and cost effectively
over time. All reinvestments are invested in full and fractional shares and
are kept in non-certificated form by the Plan Agent, Chase Manhattan Bank.
To make recordkeeping easy and convenient, each month you'll receive a
statement showing your total dividends and distributions, the date of
investment, the shares acquired and the price per share, and the total number
of shares you own.
The shares you acquire by reinvesting will either be purchased on the open
market or be newly issued by the Fund. If the shares are trading at or above
net asset value at the time of valuation,the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will be
invested within 30 days of the dividend payment date; no interest will be paid
on dividends and distributions awaiting reinvestment. Because the market price
of shares may increase before purchases are completed, the average purchase
price per share may exceed the market price at the time of valuation resulting
in the acquisition of fewer shares than if the dividend or distribution had
been paid in shares issued by the Fund. A pro rata portion of any applicable
brokerage commissions on open market purchases will be paid by Plan
participants. These commissions usually will be lower than those charged on
individual transactions.
<PAGE>
You may, of course, change your distribution option or withdraw from the
Plan at any time, should your needs or situation change. Should you withdraw,
you can receive a certificate for all whole shares credited to your
reinvestment account and cash payment for fractional shares, or cash payment
for all reinvestment account shares, less brokerage commissions and a $2.50
service fee.
You also can reinvest if your shares are registered in the name of a
brokerage firm, bank, or other nominee. Just ask your investment adviser if
the firm will participate on your behalf. If not, it's easy to have the shares
registered in your name and to apply for a reinvestment account directly.
Participants whose shares are registered in the name of one firm may not be
able to transfer the shares to another
firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time.
Although, the Fund reserves the right to amend the Plan to include a service
charge payable by the participants, there is no direct service charge to
participants in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll
in or withdraw from the Plan, speak with your investment adviser or call us
toll-free at 1.800.257.8787.
Photographic image of Customer Service Rep at Nuveen.
"When it comes to financial planning, your investment adviser knows your
situation best. And when we can give you the account information you need, our
motto is simple: We're here to help."
Photographic image of Customer Service Rep at Nuveen.
"At Nuveen, we make reinvesting easy. A phone call is all it takes to set up
your reinvestment account."
<PAGE>
Photographic image of Customer Service Rep at Nuveen.
"When questions come up about your investment, we're happy to provide the
up-to-date information you and your adviser need."
Useful information
Nuveen Shareholder Services:
1.800.257.8787
Call Monday through Friday, 9 a.m. to 6 p.m., EST for information on your
Nuveen Fund's current account balance, yield, dividend, net asset value,
closing price, and general information.
Dividend Reinvestment:
1.800.257.8787
Monday through Friday, 9 a.m. to 6 p.m., EST
Taking Stock Newsletter:
1.800.257.8787
Call Monday through Friday, 9 a.m. to 6 p.m., EST if you're not currently
getting our quarterly shareholder newsletter and would like to do so. We will
be happy to add your name to our mailing list.
Photographic image of woman seated and man standing behind her representing
Nuveen investors.
Many conservative investors are comfortable with Nuveen's emphasis on long
term value. That's why they depend on Nuveen for the tax-free income they need
to reach their goals.
<PAGE>
Your investment partner
Photographic image of John Nuveen, Sr., founder of Nuveen.
For nearly 100 years, Nuveen has earned its reputation as a tax-free income
specialist by focusing on municipal bonds.
Since 1898, John Nuveen & Co. Incorporated has worked to bring together the
various participants in the municipal bond industry and build strong
partnerships that benefit all concerned. Investors, financial advisers,
municipal officials, investment bankers--Nuveen believes that forging
relationships with these groups based on trust and value is the key to
successful investing.
As the oldest and largest municipal bond specialist in the United States,
Nuveen's investment bankers work with issuers to understand and meet their
needs in structuring and selling their bond issues.
Nuveen also works closely with financial advisers around the country,
including brokerage firms, banks, insurance companies, and independent
financial planners, to bring the benefits of tax-free investing to you. These
advisers are experts at identifying your needs and recommending the best
solutions for your situation. Together we make a powerful team, helping you
create a successful investment plan that meets your needs today and in the
future.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
ETF6-OCT 95
