Nuveen Exchange- Traded Funds
Providing tax-free income
to help you live your dreams
PREMIUM INCOME (NPI)
PREMIUM INCOME 2 (NPM)
PREMIUM INCOME 4 (NPT)
ANNUAL REPORT/OCTOBER 31, 1996
Photographic image of couple walking on beach.
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Photographic image of financial adviser reviewing financial statements/plans
with older couple.
Tax-informed investing
An important part of any successful investment program is gauging how well your
investments have performed and measuring your progress toward your long-term
goals.
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<TABLE>
<CAPTION>
Taxes dramatically alter the relative returns of the five asset classes shown
at right.
Graph showing after-tax returns, 1976-1996.
<S> <C>
Municipals 8.26
Treasuries 5.62
Corporates 6.11
Stocks 10.51
Treasury Bills 3.87
</TABLE>
Traditionally, the most common way to measure performance has been to compare
pre-tax rates of return for different investments across similar time periods.
The rationale behind this method is that each investor is taxed at a different
rate, making pre-tax comparisons the seemingly logical way to ensure you are
comparing apples to apples.
This, however, is precisely the rationale that can make a pre-tax
performance assessment misleading. When returns are presented on a pre-tax
basis, you may lose sight of the major impact taxes can have on your earnings,
and fail to get the complete picture of your progress toward your investment
goals. At Nuveen, we've built our reputation help ing investors realize that
it's not what you earn, it's what you keep.
TAX-INFORMED INVESTING: THE KEY
TO MEASURING LONG-TERM RESULTS
The true measure of an investment is its performance on an after-tax basis.
Analyzing after-tax returns gains added significance when you realize that the
taxes you pay can never be regained. Once that money is "lost," it can't be
put to work through compounding, earning additional dollars for you.
To better illustrate the ways that taxes can affect the amount you keep
versus the amount you earn, Nuveen Research recently studied 20 years of
investment returns, both pre-tax and after-tax, to determine the impact of
taxes on various asset classes. We were particularly interested in the results
for municipal bonds, an asset class that is commonly excluded from the top
performance rankings when only pre-tax returns are considered.
MEASURING WHAT YOU KEEP
The study showed that, once the impact of taxes was figured into the equation,
municipal bonds offered a distinct advantage over other fixed income
investments. Over the study period, municipal bonds outperformed both
corporate and Treasury bonds (see accompanying tables), as high tax rates and
the loss of compounding income took their toll on corporate and Treasury
results.
As investors are well aware, performance over the long term--and the
purchasing power of their earnings--can be eroded by inflation as well as
taxes. The study showed that, over the past 20 years, only municipal bonds and
stocks provided significant after-tax gains over the Consumer Price Index, the
most recognized measure of inflation.
ABOUT THE STUDY
The study, "Measuring What You Keep: Historical After-Tax Returns," compared
pre-tax and after-tax total returns over the past 20 years for five asset
classes: municipal bonds, Treasury bonds, Treasury bills, corporate bonds, and
large company stocks. Returns for each asset class were represented by the
returns on commonly used market indexes compiled by Lehman Brothers and
Ibbotson Associates.
<PAGE>
A hypothetical investment of $100,000 was made in each of these asset classes
at the beginning of 1976, with all dividends and interest reinvested through
the end of 1995. In addition, the after-tax proceeds of an assumed annual 20%
turnover rate were reinvested. The study assumed that taxes were paid annually
at the applicable federal income tax rates for an investor earning the
equivalent of $100,000 in 1995. Of course, this hypothetical investment
performance neither reflects past performance nor predicts future results of
any Nuveen investment.
INCORPORATING TAX-INFORMED
INVESTING IN YOUR PORTFOLIO
The Nuveen study confirms what many investors have known for years: that
municipal bonds can play a critical role in the long-term financial strategies
of tax-informed investors.
Balancing short-term and long-term investments
Combining shorter- and longer-term tax-free investments may help you manage
cumulative risk in your portfolio while still capturing the potential for
attractive overall rates. Shorter-term investments can help reduce the current
volatility of your portfolio and provide a source of investable funds to take
advantage of additional investment opportunities as they arise. Longer-term
leveraged exchange-traded funds have provided attractive yields and offer
trading flexibility that allows quick and easy portfolio adjustments.
Dividend reinvestment
Studies indicate that weathering market cycles by maintaining an investment
plan with long-term goals can help shield investors in the event of a
declining market. The purchase of additional shares on a regular schedule,
such as through dividend reinvestment, is another strategy for navigating
market changes. Dividend reinvestment is an easy and convenient way to set
aside dollars on a regular basis, helping you take advantage of dollar-cost
averaging while gaining the benefits of tax-free compounding.
CONSISTENT AFTER-TAX PERFORMANCE
For the long-term investor, performance--even after the impact of taxes and
inflation--is the true meas ure of an investment's merit. While most investors
choose municipal bonds for their tax-free income advantage, the positive news
about their after-tax returns reinforces their potential value as part of a
tax-informed investment strategy designed to meet long-term objectives.
Understanding the impact of taxes can mean that you keep more of what you
earn, and municipal bonds can help you do just that.
Only municipals and equities generated signif icant increases in purchasing
power over the twenty-year period, with after-tax and inflation-adjusted
returns in excess of 2.75% annually.
<TABLE>
<CAPTION>
ANNUAL AFTER-TAX REAL RETURNS, 1976-1995
<S> <C> <C> <C> <C> <C>
1976-1985 .69% -3.32% -2.14% 2.75% -2.67%
1986-1995 5.15 4.21 3.91 7.31 0.13
1976-1995 2.88% 0.37% 0.84% 5.02% -1.30%
</TABLE>
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Photographic image of couple walking on beach.
CONTENTS
6 Municipal market perspective
7 Dear shareholder
9 Answering your questions
13 Fund performance
15 Commonly used terms
17 Shareholder meeting report
18 Portfolio of investments
44 Statement of net assets
45 Statement of operations
46 Statement of changes in net assets
48 Notes to financial statements
54 Financial highlights
56 Report of independent auditors
57 Nuveen Exchange-Traded Funds
dividend reinvestment program
<PAGE>
Municipal
market perspective
Over the past year the bond market has been relatively stable compared with
recent years, despite some fluctuations. While 1994 represented the worst
period in recent bond market history and 1995 the best in a decade, 1996 ended
the year about where it began, rebounding from a mid-year decline. Following a
strong start, a succession of mixed reports affecting interest rate and
inflation forecasts caused investors to view the markets alternatively with
enthusiasm, then uncertainty. In the third quarter, evidence of an economic
slowdown, the strong U.S. dollar, and lack of inflationary pressures combined
to allay investor fears, sparking a rally in bonds that continued through the
post-election period. Throughout the year, the municipal market continued to
reward investors with solid returns, dependable income, and opportunities to
purchase bonds with strong credit quality.
A look at the current economy shows a positive tone, reflecting a combination
of factors that historically bode well for the bond market, especially
long-term issues. Yields remain attractive, as inflation maintains the same
modest pace that it has demonstrated over the past five years, giving every
indication of being well under control. At the same time, the economy
continues to moderate, as evidenced by the lack of price pressure at the
consumer and producer levels, steady employment statistics, low labor costs,
and a stable money supply.
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Dear
shareholder
Photographic image of head shot of Chairman and Chief Executive Officer of
Nuveen.
"Municipal bonds continue to play an important role in meeting the
investment goals of conservative investors."
As I begin my duties as the new chairman and chief executive officer of John
Nuveen & Co. Incorporated and chairman of the board of the Nuveen
exchange-traded funds, I am pleased to have this opportunity to report to you
on the performance of your funds. My experience at Nuveen over the past 19
years has shaped my commitment to maintaining Nuveen's tradition of value
investing and prudent management. We continue to focus on building shareholder
value, providing research-oriented management, and delivering dependable
performance, in the belief that this focus will contribute to many more years
of investment success for our fund shareholders.
Municipal bonds continue to play an important role in meeting the investment
goals of conservative investors. The performance of the exchange-traded funds
covered in this report demonstrates the ability of quality investments to
provide extremely attractive tax-free income. As of October 31, 1996, the
current annual yield on share price for these funds ranged from 6.43% to
6.58%. To match these yields, an investor in the 36% federal income tax
bracket would have had to earn at least 10.05% on taxable alternatives.
Without question, taxable yields at this level on investments of comparable
quality can be difficult to obtain in today's markets.
The net asset value of one of these funds declined slightly over the 12
months ended October 31, reflecting the mid-1996 uncertainty that drove prices
lower and yields higher. Yet returns remained attractive. For the funds
covered in this report, total returns, representing changes in net asset value
and reinvestment of all dividends and capital gains, if any, ranged from 5.92%
to 8.28%, equivalent to taxable investments with total returns of 9.63% to
11.89%. As concerns about the effects of a potential flat tax evaporated and
the Federal Reserve continued to stand firm on interest rates, confidence in
the bond market was restored in November following the fiscal year ends of
these funds.
I would like to take this opportunity to share with you the news of some
recent developments that will give Nuveen the flexibility to meet expanded
investor needs for capital preservation, current income, and future growth.
In November, we introduced the Nuveen Growth and Income Stock Fund, the
first of three Nuveen equity-based mutual funds designed to provide a
high-quality complement to our current municipal bond funds. These new funds
will be offered in affiliation with Institutional Capital Corporation (ICAP),
an institutional equity management firm located in Chicago that shares
Nuveen's values and investment management style. Tailor-made to address the
needs of many Nuveen investors, these funds can play a critical role in
achieving a balanced strategy for investors who expect their investments to
provide a core element of their financial security.
In another move that will increase the range of investment solutions for
investors, Nuveen is acquiring Flagship Resources, Inc., a fixed income mutual
fund specialist based in Dayton, Ohio. Flagship is a firm that shares our
views on the importance of research and emphasizes a conservative, value-
oriented approach to portfolio management. In January 1997, the tax-exempt
mutual fund activities of Flagship and Nuveen will be merged, resulting in
more than 40 municipal funds, the broadest selection available in the U.S.
We are excited about these recent developments, and we are pleased to be
bringing Nuveen investors expanded options for achieving wealth preservation,
dependable income, and long-term asset growth. We thank you for your continued
confidence in Nuveen.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
December 16, 1996
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Answering your questions
Photographic image of montage of letters received by Nuveen.
Tom Spalding, head of Nuveen's portfolio management team, discusses the
current environment in the municipal market and aspects of Nuveen's management
approach
Did the November elections have any impact on the municipal market?
No. While both the stock and bond markets have enjoyed post-election rallies,
the markets had substantially anticipated the outcome of the elections, that
is, the re-election of a Democratic President and the continued Republican
majority in Congress. Maintaining the status quo of the past four years should
have little effect on the municipal market.
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What is the current mood of the municipal market?
The overall tone of the municipal market today is very positive. Over the past
year, we have seen municipals perform well in comparison to Treasuries. Adding
to the general optimism is the fact that the election has ended all talk of a
flat tax for now, eliminating one source of uncertainty regarding municipal
value. Based on these factors, we expect market sentiment to stay on the
positive side in the coming months.
Are there areas of the market that look especially attractive?
Regionally, the Midwest has turned in strong performance over the past year.
This is due to the fact that the economies of Illinois, Michigan, and Ohio
have done very well recently, with bonds from issuers in these states
benefiting from price appreciation relative to the market.
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
Do the Nuveen funds currently hold many bonds from Midwestern issuers?
Historically, Nuveen's national funds have always been slightly overweighted
in bonds from Midwestern issuers. Two main reasons account for this:
o Because interest from Illinois-issued municipal bonds generally is not
deductible when calculating state taxes, these bonds often provide more
attractive yields and prices than bonds from other states. Therefore,
at certain times, we tend to hold more bonds from this Midwestern state.
o Because of our long history in Chicago, we are particularly well
acquainted with credits in this part of the country.
We believe that much of the recent relative price appreciation opportunity
in Midwest bonds may have been realized, with many of these bonds now reaching
what we would consider full value.
Does the portfolio management approach differ between older and newer Nuveen
funds?
While all of our funds are managed using the same philosophy and approach to
security selection and portfolio construction, each fund has a unique history
and set of circumstances that create different opportunities. Adding to this
diversity is the fact that each portfolio manager has an individual style.
These differences manifest themselves in slight variations. For example, one
manager might identify more frequent opportunities to change portfolio holdings
over the course of a year, while another manager might choose to buy more of a
certain issue or sell at a different time.
However, all of our portfolio managers use the same fundamental value
approach in the search for bonds that we believe are positioned to outperform
their peers. This means that we generally focus on the same types of credits
and same time horizons, and we try to maintain the same geographical and
sector diversification. Our management approach involves a team atmosphere,
even though each manager is overseeing separate portfolios.
Can you comment on the overall credit quality of the Nuveen funds?
Over the course of 1996, the market has seen more upgrades than downgrades in
bond credit ratings, and our portfolios generally reflect this overall market
trend. As opportunity allowed, Nuveen portfolio managers maintained or
upgraded bonds in their portfolios to increase value and extend call protection.
What is the status of bond calls in Nuveen's older portfolios?
Our funds--especially the older state and national funds--have been dealing
with the issue of bond calls and pre-refundings for years. Although this has
put pressure on dividends, all of our funds have performed very well through
this period. Generally, we don't expect bond calls and pre-refundings to play
as major a role over the next few years as they have recently. While some of
our funds still have pre-refunded and current call risk, others have
restructured their portfolios and have virtually no call exposure.
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NUVEEN PREMIUM INCOME MUNICIPAL FUND, INC.
NPI
Shareholders have enjoyed several years of above-market dividends despite
modest reductions due to bond calls. In general, bond calls are tapering off
as many of the older securities have been replaced with newer bonds.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
11/13/95 $0.0830
12/13/95 $0.0830 .0495
01/10/96 $0.0830
02/13/96 $0.0795
03/13/96 $0.0795
04/11/96 $0.0795
05/13/96 $0.0795
06/12/96 $0.0795
07/11/96 $0.0795
08/13/96 $0.0795
09/11/96 $0.0795
10/10/96 $0.0795
<CAPTION>
FUND HIGHLIGHTS 10/31/96
<S> <C>
Yield 6.58%
Taxable-equivalent yield 10.28%
Annual total return on NAV 5.92%
Taxable-equivalent total return 9.63%
Share price $14.50
NAV $14.96
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>
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NUVEEN PREMIUM INCOME MUNICIPAL FUND 2, INC.
NPM
In keeping with the Fund's goal of providing attractive, dependable tax-free
income, shareholders enjoyed a dividend increase in February. This Fund has
strong call protection, which helps to sustain the earnings rate and the
dividend.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
11/13/95 $0.0765
12/13/95 $0.0765
01/10/96 $0.0765
02/13/96 $0.0775
03/13/96 $0.0775
04/11/96 $0.0775
05/13/96 $0.0775
06/12/96 $0.0775
07/11/96 $0.0775
08/13/96 $0.0775
09/11/96 $0.0775
10/10/96 $0.0775
<CAPTION>
FUND HIGHLIGHTS 10/31/96
<S> <C>
Yield 6.58%
Taxable-equivalent yield 10.28%
Annual total return on NAV 8.28%
Taxable-equivalent total return 11.89%
Share price $14.125
NAV $15.16
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>
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<TABLE>
NUVEEN PREMIUM INCOME MUNICIPAL FUND 4, INC.
NPT
In keeping with the Fund's goal of providing attractive, dependable tax-free
income, share holders enjoyed 12 months of steady dividends. This Fund has
strong call protection, which helps to sustain the earnings rate and the
dividend.
<CAPTION>
12 MONTH DIVIDEND HISTORY
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
11/13/95 $0.0680
12/13/95 $0.0680
01/10/96 $0.0680
02/13/96 $0.0680
03/13/96 $0.0680
04/11/96 $0.0680
05/13/96 $0.0680
06/12/96 $0.0680
07/11/96 $0.0680
08/13/96 $0.0680
09/11/96 $0.0680
10/10/96 $0.0680
<CAPTION>
FUND HIGHLIGHTS 10/31/96
<S> <C>
Yield 6.43%
Taxable-equivalent yield 10.05%
Annual total return on NAV 7.53%
Taxable-equivalent total return 10.93%
Share price $12.688
NAV $14.07
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>
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Commonly used terms
Yield
An exchange-traded fund's annualized monthly dividend on a given date (in the
case of this report, October 31, 1996) divided by its closing price per share
on that date.
Taxable equivalent yield
The return an investor subject to a given federal 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 tax rate is assumed to be
36% for shareholders, based on incomes of $121,300-$263,750 for investors
filing singly, $147,700-$263,750 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 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 October 31, 1996. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
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<CAPTION>
SHAREHOLDER MEETING REPORT
On July 24, 1996, the following Nuveen Exchange-Traded Funds held an Annual Meeting of
Shareholders. At the meeting, shareholders voted to elect directors of the Funds and
to ratify selection of Ernst & Young L.L.P. as the auditors for the Funds. The
directors elected at the meeting include: Lawrence H. Brown, Anthony T. Dean, Royce A.
Hoyle, Anne E. Impellizzeri, and Peter R. Sawers.
NPI NPM NPT
<S> <C> <C> <C>
APPROVAL OF THE DIRECTORS
WAS REACHED AS FOLLOWS:
Lawrence H. Brown
For 55,256,622 37,351,800 35,282,856
Abstain 1,061,613 516,523 564,516
---------- ---------- ----------
Total 56,318,235 37,868,323 35,847,372
========== ========== ==========
Anthony T. Dean
For 55,260,503 37,361,611 35,300,682
Abstain 1,057,732 506,712 546,690
---------- ---------- ----------
Total 56,318,235 37,868,323 35,847,372
========== ========== ==========
Royce A. Hoyle
For 55,250,393 N/A N/A
Abstain 1,067,842 N/A N/A
---------- ---------- ----------
Total 56,318,235 N/A N/A
========== ========== ==========
Anne E. Impellizzeri
For 55,257,266 37,359,893 35,286,261
Abstain 1,060,969 508,430 561,111
---------- ---------- ----------
Total 56,318,235 37,868,323 35,847,372
========== ========== ==========
Peter R. Sawers
For 55,262,625 37,353,806 35,293,305
Abstain 1,055,610 514,517 554,067
---------- ---------- ----------
Total 56,318,235 37,868,323 35,847,372
========== ========== ==========
RATIFICATION OF AUDITORS
WAS REACHED AS FOLLOWS:
For 55,135,079 37,225,441 35,339,373
Against 330,743 176,883 105,361
Abstain 852,413 465,999 402,638
---------- ---------- ----------
Total 56,318,235 37,868,323 35,847,372
========== ========== ==========
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<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN PREMIUM INCOME MUNICIPAL FUND, INC. (NPI)
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ALASKA - 0.8%
$ 1,950,000 Alaska Housing Finance Corporation, Insured Mortgage
Program Bonds, 1990 First Series, 7.800%, 12/01/30 Aa1 12/00 at 102 $ 1,983,950
1,470,000 Alaska State Housing Finance Corporation, Collateralized
Home Mortgage Bonds, 1987 Series B, 8.750%, 12/01/16 Aaa 6/98 at 102 1,522,141
6,000,000 North Slope Borough, Alaska, General Obligation Refunding Bonds of
1988, Series G, 8.350%, 6/30/98 A- No Opt. Call 6,383,220
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ARIZONA - 1.6%
3,160,000 The Industrial Development Authority of the City of Phoenix, Arizona,
Home Purchase Mortgage Revenue Bonds (GNMA Mortgage-Backed
Securities Program), Series 1988B, 8.200%, 4/01/22 (Alternative
Minimum Tax) AAA 10/98 at 102 3,315,061
12,510,000 The Industrial Development Authority of the County of Pima (Arizona),
Industrial Development Lease Obligation Refunding Revenue Bonds,
1988 Series A (Irvington Project), 7.250%, 7/15/10 Aaa 1/02 at 103 13,870,337
4,035,000 The Industrial Development Authority of the County of Pima, Single
Family Mortgage Revenue Bonds (GNMA Mortgage-Backed Securities
Program), Series 1988, 8.125%, 9/01/20 (Alternative Minimum Tax) AAA 3/99 at 102 4,228,599
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CALIFORNIA - 15.8%
17,000,000 California Health Facilities Financing Authority, Kaiser Permanente,
Medical Care Program, Semiannual Tender Revenue Bonds, 1985 Tender
Bonds, 5.550%, 8/15/25 AA 2/02 at 101 16,235,510
14,650,000 California Health Facilities Financing Authority, Hospital Revenue
Bonds (Children's Hospital of Los Angeles), 1991
Series A, 7.125%, 6/01/21 (Pre-refunded to 6/01/01) Aaa 6/01 at 102 16,507,181
26,725,000 State Public Works Board of the State of California, Lease Revenue
Refunding Bonds (The Regents of the University of California),
1993 Series A (Various University of California Projects),
5.500%, 6/01/21 A1 6/03 at 102 25,295,747
11,395,000 State Public Works Board of the State of California, Lease Revenue
Bonds (Department of Corrections), 1993 Series E (California
State Prison - Madera County (II)), 5.500%, 6/01/15 A No Opt. Call 11,205,729
15,975,000 State of California Department of Transportation, East Bay State
Building Authority, Certificates of Participation, Series 1991A,
6.500%, 3/01/16 A 3/01 at 102 16,640,519
13,000,000 State of California, Various Purpose General Obligation Refunding
Bonds, 5.150%, 10/01/19 A1 10/03 at 102 12,020,580
15,285,000 Los Angeles Convention and Exhibition Center Authority, Lease
Revenue Bonds, 1993 Refunding Series A, The City of Los
Angeles, California, 5.375%, 8/15/18 Aaa 8/03 at 102 14,585,711
12,250,000 Los Angeles County Transportation Commission, California, Sales
Tax Revenue Refunding Bonds, Series 1991-B, 5.750%, 7/01/18 AA- 7/01 at 100 12,121,743
1,285,000 City of Martinez, California, Home Mortgage Revenue Bonds, 1983
Issue A, 10.750%, 2/01/16 Aaa No Opt. Call 1,962,709
4,125,000 Redevelopment Agency of the City of Moorpark, Moorpark
Redevelopment Project, 1993 Tax Allocation Bonds, 6.125%, 10/01/18 A- 10/03 at 102 4,133,168
20,000,000 City of Pomona, California, Single Family Mortgage Revenue
Refunding Bonds (GNMA and FNMA Mortgage-Backed Securities),
Series 1990A, 7.600%, 5/01/23 Aaa No Opt. Call 23,700,200
3,955,000 City of Redlands, California, Refunding Certificates of
Participation (Loma Linda University Medical Center
Project), Series 1993-D, 5.000%, 12/01/22 Aaa 12/03 at 102 3,554,082
5,000,000 Sacramento, California, Municipal Utility District, Electric
Revenue Refunding Bonds, 1993 Series D, 5.250%, 11/15/20 Aaa 11/03 at 102 4,679,450
San Bernardino Joint Powers Financing Authority, Tax Allocation
Refunding Bonds, Series 1995A:
6,675,000 5.750%, 10/01/15 Aaa 10/05 at 102 6,704,170
12,500,000 5.750%, 10/01/25 Aaa 10/05 at 102 12,490,500
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<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
CALIFORNIA (CONTINUED)
$ 3,000,000 Redevelopment Agency of the City and County of San Francisco,
Multifamily Housing Refunding Revenue Bonds, Series 1994 (GNMA
Collateralized - South Beach Marina Project), 5.700%, 3/01/29 Aaa 3/04 at 102 $ 2,930,460
6,455,000 The Regents of the University of California, Refunding Revenue
Bonds (Multiple Purpose Projects), Series C, 5.000%, 9/01/11 Aaa 9/03 at 102 6,152,131
17,540,000 The Regents of the University of California, Refunding Revenue
Bonds (Multiple Purpose Projects), Series B, 4.750%, 9/01/21 Aaa 9/03 at 102 15,203,497
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COLORADO - 2.9%
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991D:
9,325,000 7.750%, 11/15/13 (Alternative Minimum Tax) Baa No Opt. Call 11,101,226
8,250,000 7.750%, 11/15/21 (Alternative Minimum Tax) Baa 11/01 at 102 9,142,155
3,500,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B, 7.250%, 11/15/23 (Alternative Minimum Tax) Baa 11/02 at 102 3,772,370
8,700,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992C, 6.750%, 11/15/22 (Alternative Minimum Tax) Baa 11/02 at 102 9,024,075
3,465,000 Colorado Local Single Family Mortgage Revenue Bonds, City and County
of Denver, Colorado, GNMA Mortgage-Backed Securities Program,
Series 1988A, 8.125%, 12/01/20 (Alternative Minimum Tax) AAA 12/98 at 102 3,621,549
1,083,276 El Paso County, Colorado, Single Family Mortgage Revenue Tax-Exempt
Refunding Bonds, Series 1992A Class A-2, 8.750%, 6/01/11 Aaa No Opt. Call 1,175,247
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 2.1%
11,040,000 District of Columbia, Hospital Revenue Refunding Bonds (Providence
Hospital Issue), Series 1988A, 7.875%, 12/01/15 Aa 12/98 at 102 11,910,504
14,800,000 District of Columbia Housing Finance Agency, Collateralized Single
Family Mortgage Revenue Bonds, Series 1988E-4, 6.375%, 6/01/26
(Alternative Minimum Tax) AAA 12/04 at 103 15,087,564
- ---------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 4.5%
10,250,000 Florida Housing Finance Agency, GNMA Collateralized Home Ownership
Mortgage Revenue Bonds, 1988 Series G1 Bonds, 8.300%, 6/01/20
(Alternative Minimum Tax) Aaa 12/98 at 103 10,695,875
9,290,000 State of Florida, Full Faith and Credit, Department of Transportation
Right-of-Way Acquisition and Bridge Construction Bonds, Series 1995,
5.800%, 7/01/21 Aa 7/05 at 101 9,374,632
Greater Orlando Aviation Authority, Airport Facilities
Revenue Bonds, Series 1988 of the City of Orlando,
Florida:
1,470,000 8.375%, 10/01/16 (Alternative Minimum Tax) (Pre-refunded to 10/01/98) A1 10/98 at 102 1,610,414
13,530,000 8.375%, 10/01/16 (Alternative Minimum Tax) A1 10/98 at 102 14,637,566
City of Pensacola Health Facilities Authority, Health
Facilities Revenue Refunding Bonds, Series 1988
(Daughters of Charity National Health System Sacred Heart
Hospital of Pensacola Florida):
11,655,000 7.875%, 1/01/08 (Pre-refunded to 1/01/98) Aaa 1/98 at 101 1/2 12,346,608
9,435,000 7.875%, 1/01/11 (Pre-refunded to 1/01/98) Aaa 1/98 at 101 1/2 9,994,873
- ---------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 3.2%
7,700,000 Municipal Electric Authority of Georgia, Power Revenue Bonds,
Series Q, 8.375%, 1/01/16 A 1/98 at 102 8,205,967
5,850,000 Municipal Electric Authority of Georgia, Power Revenue Bonds,
Series Q, 8.125%, 1/01/17 A 1/98 at 102 6,217,965
2,410,000 Urban Residential Finance Authority of the City of Atlanta, Georgia,
Single Family Mortgage Revenue Bonds (GNMA Collateralized Home
Mortgage Program), Series 1988, in cooperation with the Housing
Authority of Fulton County, Georgia, 8.250%, 10/01/21 (Alternative
Minimum Tax) AAA 10/98 at 103 2,522,306
23,420,000 Development Authority of Monroe County, Georgia, Pollution Control
Revenue Bonds (Georgia Power Company Plant Scherer Project), Second
Series 1994, 6.750%, 10/01/24 A1 10/99 at 102 24,446,733
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS - 5.2%
$ 8,230,000 Illinois Development Finance Authority, Pollution Control Refunding
Revenue Bonds, 1994 Series A (Illinois Power Company Project),
5.700%, 2/01/24 Aaa 2/04 at 102 $ 8,133,791
8,500,000 Illinois Educational Facilities Authority, Revenue Refunding
Bonds, The University of Chicago, Series 1993B, 5.600%, 7/01/24 Aa1 7/03 at 102 8,159,150
5,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992
(Highland Park Hospital), 6.200%, 10/01/22 Aaa 10/02 at 102 5,136,400
13,400,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1988B
(Evangelical Hospitals Corporation), 8.100%, 1/01/08 (Pre-refunded
to 1/01/99) Aaa 1/99 at 102 14,656,250
Illinois Housing Development Authority, Residential Mortgage Revenue
Bonds, 1988 Series C:
7,020,000 8.100%, 8/01/17 Aa 8/98 at 103 7,410,803
6,250,000 8.100%, 2/01/22 (Alternative Minimum Tax) Aa 8/98 at 102 6,496,313
5,900,000 City of Chicago, Illinois, Chicago - O'Hare International Airport,
General Airport Second Lien, Revenue Refunding Bonds, 1993 Series C,
5.000%, 1/01/18 Aaa 1/04 at 102 5,365,106
5,000,000 City of Chicago, Collateralized Single Family Mortgage Revenue Bonds,
Series 1996-A, 7.000%, 9/01/27 (Alternative Minimum Tax) Aaa 3/06 at 105 5,519,400
785,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry
and Will Counties, Illinois, General Obligation Bonds, Series 1992B,
9.000%, 6/01/06 Aaa No Opt. Call 1,018,577
4,925,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry
and Will Counties, Illinois, General Obligation Bonds, Series 1992A,
9.000%, 6/01/06 Aaa No Opt. Call 6,390,434
- ---------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.7%
2,550,000 Indiana State Office Building Commission, Correctional Facilities
Program Revenue Bonds, Series 1995A, 5.500%, 7/01/20 Aaa 7/05 at 102 2,469,497
30,000,000 The Indianapolis Local Public Improvement Bond Bank, Series 1988 D
Bonds, 8.500%, 2/01/18 (Pre-refunded to 2/01/98) N/R 2/98 at 102 32,162,700
8,000,000 Metropolitan School District of Steuben County Middle School Building
Corporation, First Mortgage Bonds, Series 1995, Steuben County,
Indiana, 6.375%, 7/15/16 Aaa 7/05 at 102 8,644,000
5,300,000 Whitley County Middle School Building Corporation, First Mortgage
Bonds, Series 1994, Columbia City, Indiana, 6.250%, 7/15/15 Aaa 1/04 at 102 5,628,812
- ---------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.8%
3,000,000 Iowa Finance Authority, Private College Refunding Revenue Bonds
(Drake University Project), Series 1996, 5.400%, 12/01/16 Aaa 12/05 at 102 2,919,240
5,785,000 Iowa Finance Authority, Variable Rate Demand Industrial Revenue
Refunding Bonds, Series A 1989 (Urbandale Hotel Corporation Project
No. 00475), 8.500%, 8/01/16 (Alternative Minimum Tax)
(Pre-refunded to 7/15/14) AAA 7/14 at 100 7,718,694
- ---------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.8%
9,815,000 Sedgwick County, Kansas and Shawnee County, Kansas, GNMA
Collateralized Mortgage Revenue Bonds, 1988 Series E, 8.250%,
11/01/20 (Alternative Minimum Tax) AAA 11/98 at 103 10,311,933
- ---------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 0.9%
7,660,000 Louisiana Public Facilities Authority, Extended Care Facilities
Revenue Bonds (Comm-Care Corporation Project), Series 1994,
11.000%, 2/01/14 BBB No Opt. Call 10,291,133
1,610,000 East Baton Rouge Mortgage Finance Authority, Single Family Mortgage
Revenue Refunding Bonds (GNMA and FNMA Mortgage-Backed
Securities Program), Series 1993B Bonds, 5.300%, 10/01/14 Aaa 10/03 at 102 1,531,271
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
MASSACHUSETTS - 0.9%
$ 3,000,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue
Bonds, Semass Project, Series 1991B, 9.250%, 7/01/15 (Alternative
Minimum Tax) N/R 7/01 at 103 $ 3,354,720
8,800,000 Massachusetts Water Resources Authority, General Revenue Bonds, 1990
Series A, 5.500%, 7/15/22 A 7/02 at 100 8,499,920
- ---------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 1.6%
4,000,000 School District of the City of Detroit, Wayne County, Michigan, School
Building and Site Improvement and Refunding Bonds (Unlimited Tax
General Obligation), Series 1993, 5.400%, 5/01/13 Aa 5/03 at 102 3,908,280
8,870,000 City of Detroit, Michigan, Sewage Disposal System Revenue Bonds,
Series 1995-A, 5.000%, 7/01/25 Aaa 7/05 at 100 8,026,374
9,625,000 Livonia Public Schools School District, County of Wayne, State of
Michigan, 1993 Refunding Bonds, 5.500%, 5/01/21 Aaa 5/03 at 102 9,292,456
- ---------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 4.3%
13,645,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1988
Series C, 8.500%, 7/01/19 (Alternative Minimum Tax) AA+ 7/98 at 102 14,317,835
2,945,000 The Minneapolis/Saint Paul Housing Finance Board, Single Family
Mortgage Revenue Bonds (Minneapolis/Saint Paul Family Housing
Program, Phase X, FNMA and GNMA Mortgage-Backed Securities
Program), Series 1994, 7.500%, 11/01/27 (Alternative Minimum Tax) AAA 11/04 at 102 3,099,377
21,970,000 The Housing and Redevelopment Authority of the City of Saint Paul,
Minnesota, Sales Tax Revenue Refunding Bonds (Civic Center Project),
Series 1996, 7.100%, 11/01/23 Aaa 11/15 at 103 26,202,301
2,900,000 Housing and Redevelopment Authority of the City of Saint Paul,
Minnesota, Single Family Mortgage Revenue Bonds, Refunding Series
1991-B, 7.250%, 9/01/11 Aa No Opt. Call 3,064,923
8,635,000 Port Authority of the City of Saint Paul, Energy Park Tax Increment
Revenue Refunding Bonds, Series 1988, 8.000%, 12/01/07 (Pre-refunded
to 12/01/98) AAA 12/98 at 102 9,285,906
- ---------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.6%
7,000,000 Missouri Housing Development Commission Single Family Mortgage
Revenue Bonds (Homeownership Loan Program), 1996 Series C,
7.450%, 9/01/27 (Alternative Minimum Tax) AAA 3/07 at 105 7,727,090
11,120,000 Francis Howell School District, St. Charles County, Missouri,
General Obligation Refunding Bonds, Series 1994A, 7.800%, 3/01/08 AAA No Opt. Call 13,712,739
- ---------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.8%
10,000,000 Clark County School District, Nevada, General Obligation, School
Improvement Bonds, Series 1988A, 8.000%, 3/01/08 (Pre-Refunded
to 3/01/98) N/R 3/98 at 102 10,681,500
- ---------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 2.3%
10,000,000 Business Finance Authority of the State of New Hampshire, Pollution
Control Refunding Revenue Bonds (The United Illuminating Company
Project - 1993 Series A), 5.875%, 10/01/33 BBB- 10/03 at 102 9,312,400
11,000,000 New Hampshire Housing Finance Authority, Single Family Mortgage
Revenue Bonds, 1993 Series B, 6.050%, 7/01/25 Aa 7/03 at 102 11,050,380
9,135,000 New Hampshire Housing Finance Authority Single Family Mortgage
Acquisition Revenue Bonds, 1996 Series B, 6.400%, 1/01/27
(Alternative Minimum Tax) Aa 7/06 at 102 9,287,920
- ---------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.5%
5,655,000 New Mexico Mortgage Finance Authority, Single Family Mortgage
Purchase Refunding Senior Bonds, 1992 Series A, 6.900%, 7/01/24 Aa1 7/02 at 102 5,921,068
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NEW YORK - 9.0%
$ 12,365,000 New York State Energy Research and Development Authority, Facilities
Revenue Bonds, Series 1993 A (Consolidated Edison Company of New
York, Inc. Project), 6.000%, 3/15/28 (Alternative Minimum Tax) A1 3/03 at 102 $ 12,401,848
16,960,000 New York State Medical Care Facilities Finance Agency, Hospital and
Nursing Home FHA-Insured Mortgage Revenue Bonds, 1993 Series B,
5.500%, 2/15/22 AAA 2/04 at 102 16,276,851
18,000,000 Metropolitan Transportation Authority, New York, Commuter Facilities
1987 Service Contract Bonds, Series 2, 8.000%, 7/01/18 (Pre-refunded
to 7/01/98) Aaa 7/98 at 102 19,486,440
11,540,000 Municipal Assistance Corporation for the City of New York (A Public
Benefit Corporation of the State of New York), Series 60 Bonds,
7.000%, 7/01/06 Aa 7/97 at 102 11,970,327
7,060,000 Municipal Assistance Corporation for the City of New York (A Public
Benefit Corporation of the State of New York), Series 61 Bonds,
6.875%, 7/01/07 Aa 7/97 at 102 7,332,304
7,500,000 The City of New York, General Obligation Bonds, Fiscal 1991 Series
B, 9.500%, 6/01/03 Baal No Opt. Call 9,128,400
10,000,000 The City of New York, General Obligation Bonds, Fiscal 1996 Series
G, 5.750%, 2/01/07 Baal 2/06 at 101 1/2 9,930,300
12,930,000 New York City Municipal Water Finance Authority, Water and Sewer
Revenue Bonds, Fiscal 1993 Series A, 5.500%, 6/15/20 A 6/02 at 100 12,282,336
10,000,000 New York City Municipal Water Finance Authority, Water and Sewer
System Revenue Bonds, Fiscal 1996 Series B, 5.750%, 6/15/26 Aaa 6/06 at 101 9,992,200
7,955,000 New York City Municipal Water Finance Authority, Water and Sewer
System Revenue Bonds, Series 1992C, 6.500%, 6/15/21 (Pre-refunded
to 6/15/97) Aaa 6/97 at 101 1/2 8,209,003
- ---------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.6%
16,415,000 North Carolina Eastern Municipal Power Agency, Power System Revenue
Bonds, Refunding Series 1988 A, 8.000%, 1/01/21 (Pre-refunded to
1/01/98) Aaa 1/98 at 102 17,481,975
North Carolina Eastern Municipal Power Agency, Power
System Revenue Bonds, Refunding Series 1987 A:
395,000 7.250%, 1/01/21 (Pre-refunded to 1/01/97) Aaa 1/97 at 102 405,175
2,605,000 7.250%, 1/01/21 Baal 1/97 at 102 2,661,138
- ---------------------------------------------------------------------------------------------------------------------------------
OHIO - 1.5%
7,540,000 Ohio Housing Finance Agency, Single Family Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), 1988 Series B,
8.250%, 12/15/19 (Alternative Minimum Tax) AAA 12/98 at 102 7,974,153
11,300,000 State of Ohio, Turnpike Revenue Bonds, 1994 Series A, Issued by the
Ohio Turnpike Commission, 5.750%, 2/15/24 AA- 2/04 at 102 11,260,337
- ---------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 1.6%
12,730,000 Oklahoma Housing Finance Agency, GNMA Collateralized Single Family
Mortgage Revenue Bonds, Series 1988A, 8.250%, 12/01/20 (Alternative
Minimum Tax) AAA 12/98 at 102 13,303,232
6,750,000 Washington County Medical Authority (Bartlesville, Oklahoma),
Hospital Revenue Bonds (Jane Phillips Episcopal Hospital),
Series 1989A, 8.500%, 11/01/10 (Pre-refunded to 5/01/99) BBB 5/99 at 102 7,528,208
- ---------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 4.2%
10,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage
Revenue Bonds, Series 1993 - 37A, 5.450%, 10/01/17 AA+ 10/03 at 102 9,672,500
14,500,000 County of Allegheny, Pennsylvania, Airport Revenue Bonds, Series
1988C (Greater Pittsburgh International Airport), 8.250%, 1/01/16
(Alternative Minimum Tax) Aaa 1/98 at 102 15,391,170
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
PENNSYLVANIA (CONTINUED)
$ 12,875,000 Allegheny County Hospital Development Authority (Pennsylvania),
Health Center Revenue Bonds, Series 1992A (Presbyterian University
Health System, Inc. Project ), 6.250%, 11/01/23 Aaa 11/02 at 100 $ 13,319,703
5,000,000 The School District of Philadelphia, Pennsylvania, General
Obligation Bonds, Series B of 1995, 5.500%, 9/01/25 Aaa 9/05 at 102 4,869,200
10,180,000 City of Philadelphia, Pennsylvania, Water and Sewer Revenue Bonds,
Sixteenth Series, 7.500%, 8/01/10 (Pre-refunded to 8/01/01) AAA 8/01 at 102 11,639,201
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 1.2%
17,250,000 South Carolina Jobs - Economic Development Authority, Hospital
Revenue Bonds (Anderson Area Medical Center, Inc.), Series 1996,
5.250%, 2/01/26 Aaa 2/06 at 102 16,114,950
- ---------------------------------------------------------------------------------------------------------------------------------
TEXAS - 8.0%
10,305,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds,
Series 1990 (American Airlines, Inc. Project), 7.500%, 12/01/29
(Alternative Minimum Tax) Baa2 12/00 at 102 10,983,893
10,095,000 Brazos River Authority, Texas, Collateralized Revenue Refunding Bonds
(Houston Lighting & Power Company Project), Series 1988A,
8.250%, 5/01/19 A2 5/98 at 102 10,774,494
5,565,000 Dallas-Fort Worth International Airport Facility Improvement
Corporation, American Airlines, Inc. Revenue Bonds, Series 1990,
7.500%, 11/01/25 (Alternative Minimum Tax) Baa2 11/00 at 102 5,926,836
40,000,000 Harris County Health Facilities Development Corporation, Adjustable
Convertible Extendable Securities (Greater Houston Pooled Health
Care Loan Program), Series 1985B, 7.375%, 12/01/25 (Mandatory put
12/01/98) Aa3 11/96 at 100 1/2 40,324,000
3,385,000 Harris County, Texas, Toll Road Senior Lien Revenue Bonds, Series
1985-B, 8.700%, 8/15/17 (Pre-refunded to 8/15/97) AAA 8/97 at 103 3,612,472
12,700,000 Harris County, Texas, Toll Road Multiple Mode Senior Lien Revenue
Bonds, Series 1985-D, 8.300%, 8/15/17 (Pre-refunded to 8/15/98) AAA 8/98 at 103 13,975,969
15,000,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds,
Series 1994, 5.300%, 8/15/13 Aaa 8/04 at 102 14,616,450
4,500,000 Tyler Health Facilities Development Corporation, Hospital Refunding
Revenue Bonds (East Texas Hospital Foundation Project), Series 1988A,
8.250%, 11/01/06 (Pre-refunded to 11/01/98) AA 11/98 at 102 4,933,080
- ---------------------------------------------------------------------------------------------------------------------------------
UTAH - 2.4%
6,550,000 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, 1987 Series D, 8.625%, 7/01/21 Aa 7/97 at 102 6,866,496
3,000,000 Intermountain Power Agency, Utah, Power Supply Revenue Refunding
Bonds, 1987 Series C, 8.625%, 7/01/21 (Pre-refunded to 7/01/97) Aaa 7/97 at 102 3,154,140
20,000,000 Intermountain Power Agency (Utah), Power Supply Revenue Bonds,
Series 1987B, 7.200%, 7/01/19 Aa 7/97 at 102 20,781,200
- ---------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.8%
1,000,000 Virginia Housing Development Authority, Commonwealth Mortgage
Bonds, 1987 Series C, Subseries C-7, 8.375%, 1/01/28 (Alternative
Minimum Tax) Aa1 1/99 at 102 1,012,960
Virginia Housing Development Authority, Commonwealth
Mortgage Bonds, 1992 Series B-AMT, Subseries B-7:
2,445,000 5.600%, 7/01/21 (Alternative Minimum Tax) Aa1 1/02 at 102 2,298,765
7,605,000 5.650%, 1/01/27 (Alternative Minimum Tax) Aa1 1/02 at 102 7,164,747
- ---------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 11.9%
5,000,000 Washington Health Care Facilities Authority, Revenue Bonds, Series
1987 (Virginia Mason Medical Center, Seattle), 8.000%, 7/01/15 Aaa 7/97 at 102 5,225,050
12,900,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1993A, 5.700%, 7/01/17 Aaa 7/03 at 102 12,691,278
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
WASHINGTON (CONTINUED)
$ 22,370,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1993B, 5.600%, 7/10/15 Aaa 7/03 at 102 $ 21,774,958
4,300,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1989B, 7.250%, 7/10/15
(Pre-refunded to 1/01/00) Aaa 1/00 at 102 4,737,697
Washington Public Power Supply System, Nuclear Project No. 1,
Refunding Revenue Bonds, Series 1989A:
4,060,000 7.500%, 7/01/15 (Pre-refunded to 7/01/99) Aaa 7/99 at 102 4,459,991
11,900,000 7.500%, 7/01/15 (Pre-refunded to7/01/99) Aa1 7/99 at 102 13,085,002
7,500,000 Washington Public Power Supply System, Nuclear Project No. 2,
Refunding Revenue Bonds, Series 1991A, 6.000%, 7/01/12 Aa1 7/01 at 100 7,530,975
14,440,000 Washington Public Power Supply System, Nuclear Project No. 2
Refunding Revenue Bonds, Series 1993A, 5.750%, 7/01/12 Aa1 7/03 at 102 14,270,041
6,770,000 Washington Public Power Supply System, Nuclear Project No. 2
Refunding Revenue Bonds, Series 1993B, 5.625%, 7/01/12 Aa1 7/03 at 102 6,604,338
21,530,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1993C, 5.375%, 7/01/15 Aa1 7/03 at 102 20,247,888
13,500,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1989B, 7.250%, 7/01/15
(Pre-refunded to 1/01/00) Aaa 1/00 at 102 14,874,165
17,050,000 Municipality of Metropolitan Seattle, Seattle, Washington, Sewer
Refunding Revenue Bonds, Series Z, 5.500%, 1/01/33 Aaa 1/03 at 102 16,142,940
6,360,000 Public Utility District No. 1 of Snohomish County, Washington,
Generation System Revenue Bonds, Series 1993, 5.500%, 1/01/14 Aaa 1/03 at 100 6,265,807
7,000,000 City of Spokane, Washington, Regional Solid Waste Management System
Revenue Bonds, Series 1989B, 7.750%, 1/01/11 (Alternative
Minimum Tax) Aaa 1/99 at 102 7,585,830
- ---------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.2%
15,000,000 West Virginia Housing Development Fund, Housing Finance Bonds, 1992
Series D, 7.050%, 11/01/24 Aa1 5/02 at 102 15,865,950
- ---------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.4%
5,250,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series X,
5.500%, 7/01/25 Baa1 7/05 at 100 4,971,224
- ---------------------------------------------------------------------------------------------------------------------------------
$1,237,073,276 Total Investments - (cost $1,232,758,410) - 98.1% 1,280,412,304
==================---------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.1%
$ 100,000 Maricopa County, Arizona Pollution Control Corporation, Pollution
================== Control Revenue Refunding Bonds, (Arizona Public Service Company
Palo Verde Project), 1994 Series C, Variable Rate Demand Bonds,
3.600%, 5/01/29+ A-1+ 100,000
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 23,679,463
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,304,191,767
=================================================================================================================================
<PAGE>
<CAPTION>
NUMBER OF MARKET MARKET
STANDARD & POOR'S MOODY'S SECURITIES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 69 $ 633,219,899 49%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 31 322,463,921 25
PORTFOLIO OF A+ A1 6 90,412,888 7
INVESTMENTS A, A- A, A2, A3 9 84,343,318 7
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 13 103,773,358 8
TEMPORARY Non-Rated Non-Rated 3 46,198,920 4
INVESTMENTS):
- --------------------------------------------------------------------------------------------------------------------------
TOTAL 131 $1,280,412,304 100%
==========================================================================================================================
<FN>
* Ratings (not covered by the report of independent auditors): Using the higher of
Standard & Poor's or Moody's rating.
N/R Investment is not rated.
** 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.
+ 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.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN PREMIUM INCOME MUNICIPAL FUND 2, INC. (NPM)
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ALASKA - 0.5%
$ 3,500,000 Anchorage Parking Authority, Lease Revenue Refunding Bonds, Series
1993 (5th Avenue Garage Project), 6.750%, 12/01/08 Baa1 12/02 at 102 $ 3,744,615
1,140,000 City of Valdez, Alaska, Home Mortgage Revenue Refunding Bonds, 1992
Series, 7.900%, 2/01/10 A1 8/02 at 102 1,232,819
- ---------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 3.9%
The Industrial Development Authority of the County of Mohave, Hospital
System Revenue Refunding Bonds (Medical Environments, Inc. and
Phoenix Baptist Hospital and Medical Center, Inc.) Series 1993:
5,705,000 6.250%, 7/01/03 Aaa No Opt. Call 6,119,639
3,000,000 6.750%, 7/01/08 (Pre-refunded to 7/01/03) Aaa 7/03 at 102 3,391,350
2,590,000 Navajo County, Arizona, Pollution Control Corporation, Pollution
Control Revenue Refunding Bonds (Arizona Public Service
Company), 1993 Series A, 5.875%, 8/15/28 Baa1 8/03 at 102 2,549,777
9,000,000 City of Phoenix (Arizona), Civic Improvement Corporation, Wastewater
System Lease Revenue Bonds, Series 1993, 6.125%, 7/01/14
(Pre-refunded to 7/01/03) AAA 7/03 at 102 9,879,840
9,380,000 City of Phoenix Civic Improvement Corporation (Arizona), Wastewater
System Lease Revenue Refunding Bonds, Series 1993, 4.750%, 7/01/23 A1 7/04 at 102 8,039,504
5,430,000 The Industrial Development Authority of the County of Pima (Arizona)
Industrial Development Lease Obligation Refunding Revenue Bonds,
1988 Series A (Irvington Project), 7.250%, 7/15/10 Aaa 1/02 at 103 6,020,458
- ---------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 15.4%
State Public Works Board of the State of California Lease Revenue
Bonds (The Trustees of The California State University) 1992 Series
A (Various California State University Projects):
15,480,000 6.625%, 10/01/10 A 10/02 at 102 16,732,332
10,500,000 6.700%, 10/01/17 (Pre-refunded to 10/01/02) A 10/02 at 102 11,853,240
7,150,000 State Public Works Board of the State of California, Lease Revenue
Bonds (The Trustees of the California State University), 1994 Series
A (Various California State University Projects), 6.375%, 10/01/19 A 10/04 at 102 7,497,562
17,500,000 State Public Works Board of the State of California, Lease Revenue Bonds
(Department of Corrections), 1994 Series A (California State Prison -
Monterey County (Soledad II)), 6.875%, 11/01/14 (Pre-refunded to
11/01/04) A 11/04 at 102 20,236,125
30,000,000 Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue
Bonds Series 1995A, 0.000%, 1/01/21 Baa No Opt. Call 6,454,200
5,000,000 City of Loma Linda, California, Hospital Revenue Bonds (Loma Linda
University Medical Center Project), Series 1993-A, 6.500%, 12/01/18 BBB 12/03 at 102 5,113,100
12,980,000 Los Angeles Community College District, Refunding Certificates of
Participation, 1992 Series A, Laacd Improvement Corporation,
6.000%, 8/15/20 Aaa 2/02 at 102 13,292,169
3,715,000 Community Redevelopment Financing Authority of the Community
Redevelopment Agency of the City of Los Angeles, California Pooled
Financing Bonds, Series D (Crenshaw Redevelopment Project),
7.000%, 9/01/14 Ba1 9/02 at 102 3,909,740
7,000,000 Los Angeles State Building Authority, Lease Revenue Refunding Bonds
(State of California Department of General Services Lease), 1993
Series A, 5.625%, 5/01/11 A No Opt. Call 7,196,070
5,000,000 Los Angeles County Public Works Finance Authority, Revenue Bonds,
Series 1994A (Los Angeles County Regional Park and Open Space
District), 6.125%, 10/01/10 Aa 10/04 at 102 5,238,100
10,000,000 Los Angeles County Transportation Commission (California)
Proposition C Sales Tax Revenue Bonds, Second Senior Bonds, Series
1992-A, 6.750%, 7/01/19 (Pre-refunded to 7/01/02) Aaa 7/02 at 102 11,309,400
2,035,000 Parlier Redevelopment Agency (Parlier Redevelopment Project), 1992
Tax Allocation Bonds, Series A, 6.750%, 8/01/22 BBB 8/02 at 102 2,135,509
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
CALIFORNIA (CONTINUED)
Redevelopment Agency of the City and County of San
Francisco (California), Hotel Tax Revenue Bonds, Series
1994:
$ 2,390,000 6.750%, 7/01/15 Aaa 7/04 at 102 $ 2,648,192
6,865,000 6.750%, 7/01/25 Aaa 7/04 at 102 7,592,827
5,605,000 County of San Joaquin, California, Certificates of Participation
(1994 Solid Waste System Facilities Project), 6.600%, 4/01/19 A 4/04 at 102 5,797,083
County of Santa Clara, California, Certificates of
Participation (The Terraces of Los Gatos Project),
American Baptist Homes of the West:
6,000,000 6.125%, 3/01/11 A 3/02 at 102 6,166,800
7,760,000 6.125%, 3/01/18 A 3/02 at 102 7,841,247
- ---------------------------------------------------------------------------------------------------------------------------------
COLORADO - 8.9%
9,870,000 Colorado Health Facilities Authority, Insured Hospital Revenue Bonds
(PSL Healthcare System Project) Series 1991A, 6.250%, 2/15/21
(Pre-refunded to 2/15/01) Aaa 2/01 at 102 10,705,199
2,440,000 Colorado Housing and Finance Authority, Single Family Program Senior
Bonds,1994 Series E, 8.125%, 12/01/24 (Alternative Minimum Tax) Aa 12/04 at 105 2,738,070
Colorado Housing and Finance Authority, General Obligation Bonds,
1994 Series A:
6,070,000 6.850%, 8/01/24 A 8/02 at 102 6,339,447
2,405,000 6.875%, 8/01/30 A 8/02 at 102 2,507,910
5,000,000 Colorado Housing and Finance Authority, Single Family Program Senior
Bonds, 1995 Series D, 7.375%, 6/01/26 Aa 12/05 at 105 5,474,050
7,240,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991A, 8.000%, 11/15/25 (Alternative Minimum Tax) Baa 11/01 at 100 8,126,610
15,270,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991D, 7.750%, 11/15/21 (Alternative Minimum Tax) Baa 11/01 at 102 16,921,298
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B:
7,080,000 7.250%, 11/15/23 (Alternative Minimum Tax) Baa 11/02 at 102 7,630,966
2,510,000 7.500%, 11/15/25 (Alternative Minimum Tax) Baa 11/97 at 102 2,621,544
18,245,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992C, 6.750%, 11/15/13 (Alternative Minimum Tax) Baa 11/02 at 102 19,018,588
- ---------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 1.1%
3,170,000 Connecticut Housing Finance Authority Housing Mortgage Finance
Program Bonds, 1996 Series C-2, 6.250%, 11/15/18 Aa 5/06 at 102 3,232,576
6,300,000 State of Connecticut Health and Educational Facilities Authority,
Revenue Bonds, University of Hartford Issue, Series D,
6.750%, 7/01/12 Baa 7/02 at 102 6,463,800
- ---------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.9%
3,850,000 State of Florida, Full Faith and Credit, Department of Transportation
Right-of-Way Acquisition and Bridge Construction Bonds, Series 1995,
5.875%, 7/01/24 Aaa 7/05 at 101 3,894,930
1,750,000 Alachua County Health Facilities Authority, Health Facilities Revenue
Bonds, Series 1992 (Santa Fe Healthcare Facilities Project),
7.600%, 11/15/13 (Pre-refunded to 11/15/00) AAA 11/00 at 102 1,985,515
6,000,000 Dade County, Florida, Aviation Bonds, Series 1996A, 5.750%, 10/01/18
(Alternative Minimum Tax) Aaa 10/06 at 102 5,951,700
12,500,000 City of Tampa, Florida, Revenue Bonds (The Florida Aquarium Project),
Series 1992, 7.750%, 5/01/27 (Pre-refunded to 5/01/02) N/R 5/02 at 102 14,612,875
- ---------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 2.1%
Georgia Housing and Finance Authority, Single Family Mortgage Bonds,
1994 Series B:
5,485,000 6.650%, 12/01/20 (Alternative Minimum Tax) AA+ 9/04 at 102 5,668,144
5,500,000 6.700%, 12/01/25 (Alternative Minimum Tax) AA+ 9/04 at 102 5,699,595
7,000,000 Development Authority of Burke County, Georgia, Pollution Control
Revenue Bonds (Oglethorpe Power Corporation Vogtle Project), Series
1992, 8.000%, 1/01/15 Aaa 1/03 at 103 8,316,630
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
IDAHO - 0.3%
$ 2,335,000 Idaho Housing and Finance Association, Single Family Mortgage Bonds,
1996 Series G, 6.350%, 7/01/26 (Alternative Minimum Tax) Aaa 7/06 at 102 $ 2,359,658
- ---------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 9.1%
3,000,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, Series
1993C (Lutheran General HealthSystem), 6.000%, 4/01/18 A+ No Opt. Call 3,030,570
6,900,000 Illinois Health Facilities Authority Revenue Refunding Bonds,
Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19 A 10/03 at 102 6,468,888
11,510,000 The Illinois State Toll Highway Authority, Toll Highway Priority
Revenue Bonds, 1992 Series A, 6.375%, 1/01/15 A1 1/03 at 102 11,976,270
17,000,000 City of Chicago, General Obligation Bonds, Project Series A of 1992,
6.250%, 1/01/12 Aaa 1/02 at 102 17,894,200
5,000,000 City of Chicago, General Obligation Bonds (Emergency Telephone System)
Series 1993, 5.625%, 1/01/23 Aaa 1/03 at 102 4,859,550
8,270,000 City of Chicago, Illinois, Mortgage Revenue Bonds, Series 1992 (FHA
Insured Mortgage Loan -Lakeview Towers Project), 6.650%, 12/01/33 AAA 6/02 at 102 8,552,421
5,500,000 Chicago Park District, Illinois, General Obligation Capital Improvement
Bonds and Aquarium and Museum Bonds, Series 1991, 6.700%, 1/01/11 AA- 1/02 at 102 5,988,785
20,900,000 Public Building Commission of Chicago (Illinois), Building Revenue
Bonds, Series A of 1993 (Board of Education of the City of Chicago),
5.750%, 12/01/18 Aaa 12/03 at 102 20,501,855
2,850,000 City of East Louis, Illinois, Mortgage Revenue Refunding Bonds, Series
1994A (FHA Insured Mortgage Loan - Dawson Manor Apartments
Section 8 Assisted Project), 6.500%, 7/01/24 Aaa 7/03 at 102 2,962,461
1,445,000 Village of Wheeling, Cook and Lake Counties, Illinois, Single Family
Mortgage Revenue Refunding Bonds, Series 1992, 6.850%, 11/01/09 Aaa 11/02 at 102 1,536,180
- ---------------------------------------------------------------------------------------------------------------------------------
INDIANA - 7.7%
8,200,000 Indiana Bond Bank, State Revolving Fund Program Bonds, Series 1993A
Guarantee Revenue Bonds, 6.250%, 2/01/09 A 2/03 at 102 8,462,728
2,875,000 Indiana Bond Bank, State Revolving Fund Program Bonds, Series 1994B
Guarantee Revenue Bonds, 6.750%, 2/01/17 A 2/05 at 102 3,176,501
6,000,000 Indiana Municipal Power Agency, Power Supply System Refunding
Revenue Bonds, 1993 Series B, 5.750%, 2/15/28 (Alternative
Minimum Tax) Aaa 2/03 at 102 5,817,480
5,250,000 Indiana Transportation Finance Authority, Aviation Technology Center
Lease Revenue Bonds, Series A, 6.500%, 3/01/18 A 3/03 at 102 5,502,000
8,000,000 East Chicago Elementary School Building Corporation (Lake County,
Indiana), First Mortgage Bonds, Series 1992, 7.000%, 1/15/16
(Pre-refunded to 1/15/03) A 1/03 at 102 9,041,840
13,630,000 Hospital Authority of the City of Fort Wayne, Indiana, Revenue Bonds,
Series 1992 (Parkview Memorial Hospital, Inc. Project), 6.400%,
11/15/22 A1 11/02 at 102 13,934,085
6,031,000 City of Greenfield, Indiana, Multifamily Housing Revenue Bonds, Series
1996 A (Pedcor Investments - 1988-V, L.P. Project), 6.200%, 12/01/28
(Alternative Minimum Tax) Aaa 12/05 at 105 6,109,825
10,675,000 Highland School Building Corporation (Highland, Indiana), First
Mortgage Bonds, Series 1992A, 6.750%, 1/15/20 (Pre-refunded
to 1/15/02) AAA 1/02 at 102 11,907,429
5,905,000 Muncie School Building Corporation, First Mortgage Bonds, Series 1992,
6.625%, 7/15/14 (Pre-refunded to 7/15/01) N/R 7/01 at 102 6,495,323
- ---------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.7%
3,000,000 Johnson County, Kansas, Single Family Mortgage Revenue Refunding
Bonds, Series 1994, 7.100%, 5/01/12 A 5/04 at 103 3,251,910
2,550,000 Sedgwick County, Kansas and Shawnee County, Kansas, Collateralized
Single Family Mortgage Refunding Revenue Bonds (GNMA Certificates),
Series 1994A-I, 7.900%, 5/01/24 (Alternative Minimum Tax) Aaa No Opt. Call 2,913,401
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
KENTUCKY - 0.8%
$ 7,000,000 Kentucky Housing Corporation, Housing Revenue Bonds, 1996 Series A,
6.375%, 7/01/28 (Alternative Minimum Tax) Aaa 7/06 at 102 $ 7,134,890
- ---------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 4.6%
Louisiana Public Facilities Authority, Hospital Revenue
and Refunding Bonds (Pendleton Memorial Methodist
Hospital Project), Series 1992:
5,500,000 6.750%, 6/01/10 Baa 6/02 at 102 5,544,275
3,130,000 6.750%, 6/01/22 Baa 6/02 at 102 3,125,211
4,000,000 Bossier Public Trust Financing Authority, Single Family Mortgage
Revenue Refunding Bonds, Series 1995B, 6.125%, 8/01/28 AAA 8/05 at 102 4,045,040
12,750,000 East Baton Rouge Mortgage Finance Authority, Single Family Mortgage
Revenue Bonds (GNMA and FNMA Mortgage Backed Securities
Program), Series 1994C, 6.350%, 10/01/28 (Alternative MinimumTax) Aaa 10/05 at 102 12,940,103
3,000,000 Mississippi River Bridge Authority, Bridge Revenue Bonds, Series 1992,
State of Louisiana, 6.750%, 11/01/12 A 11/02 at 102 3,309,780
5,000,000 New Orleans Home Mortgage Authority, Single Family Mortgage Revenue
Bonds, Series 1995A, 6.300%, 6/01/28 (Alternative MinimumTax) Aaa 6/05 at 102 5,061,250
7,780,000 Orleans Levee District (A Political Subdivision of the State of
Louisiana) Public Improvement Bonds, Series 1986, 5.950%, 11/01/15 Aaa 12/05 at 103 8,034,406
- ---------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.0%
7,925,000 Maine State Housing Authority, Mortgage Purchase Bonds, 1990 Series
A-4, 6.400%, 11/15/24 (Alternative Minimum Tax) AA- 8/02 at 102 8,080,330
1,250,000 Maine State Housing Authority Mortgage Purchase Bonds, 1995 Series
B-2, 6.300%, 11/15/26 (Alternative Minimum Tax) AA- 11/05 at 102 1,268,125
- ---------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.3%
2,560,000 Community Development Administration, Department of Housing and
Community Development, State of Maryland, Multi-Family Housing
Revenue Bonds (Insured Mortgage Loans), 1993 Series C,
6.625%, 5/15/23 Aa 5/03 at 102 2,679,526
- ---------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.0%
2,500,000 Massachusetts Industrial Finance Agency, Revenue Bonds (College of the
Holy Cross-1996 Issue), 5.625%, 3/01/26 Aaa 3/06 at 102 2,478,500
6,900,000 Massachusetts Water Resources Authority, General Revenue Bonds, 1993
Series C, 5.250%, 12/01/20 Aaa 12/04 at 102 6,499,938
300,000 City of Boston, Massachusetts, Revenue Refunding Bonds, Boston City
Hospital (FHA Insured Mortgage) Series B, 5.750%, 2/15/23 Aa 8/00 at 102 290,688
- ---------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 2.7%
8,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Refunding
Bonds (Oakwood Hospital Obligated Group), Series 1993A,
5.625%, 11/01/18 Aaa 11/03 at 102 7,841,840
Michigan State Housing Development Authority, Rental Housing
Revenue Bonds, 1992 Series A:
9,200,000 6.600%, 4/01/12 A+ 10/02 at 102 9,525,680
6,750,000 6.650%, 4/01/23 A+ 10/02 at 102 6,988,478
- ---------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 2.7%
3,900,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 1995
Series D, 5.950%, 2/01/18 Aaa 2/05 at 102 3,914,430
5,500,000 Minnesota Housing Finance Agency Single Family Mortgage Bonds,
1996 Series G, 6.250%, 7/01/26 (Alternative Minimum Tax) AA+ 1/06 at 102 5,574,415
3,560,000 Housing and Redevelopment Authority of the City of Saint Paul,
Minnesota and City of Minneapolis, Minnesota, HealthCare Facility
Revenue Bonds, Series 1992 (Group Health Plan Inc. Project),
6.900%, 10/15/22 A 12/02 at 102 3,882,144
2,000,000 Southern Minnesota Municipal Power Agency, Power Supply System
Revenue Bonds, Series 1992B, 5.750%, 1/01/11 Aaa 1/03 at 102 2,029,680
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
MINNESOTA (CONTINUED)
$ 4,000,000 Washington County Housing and Redevelopment Authority, Pooled
Housing and Redevelopment Limited Annual Appropriation Tax and
Revenue Bonds (Pooled Refunding Project), Series 1992,
7.200%, 1/01/22 BBB 1/03 at 102 $ 4,190,240
5,170,000 Washington County Housing and Redevelopment Authority, Lease
Revenue Bonds (South Washington County Schools Project), Series
1992, 7.400%, 12/01/14 Baa1 12/02 at 100 5,570,778
- ---------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.4%
4,000,000 Mississippi Hospital Equipment and Facilities Authority, Revenue
Bonds, Series 1992A (Wesley Health Systems), 6.050%, 4/01/12 AAA 10/02 at 102 4,127,040
- ---------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.8%
5,500,000 The Industrial Development Authority of the City of St. Louis, Missouri,
Industrial Revenue Refunding Bonds (Kiel Center Multipurpose Arena
Project), Series 1992, 7.625%, 12/01/09 (Alternative Minimum Tax) N/R 12/02 at 102 5,861,460
11,000,000 St. Louis Municipal Finance Corporation, Leasehold Revenue Refunding
Bonds, 6.000%, 7/15/13 Aa3 7/03 at 102 10,912,990
- ---------------------------------------------------------------------------------------------------------------------------------
NEVADA - 1.1%
10,000,000 Clark County, Nevada, Las Vegas-McCarran International Airport
Passenger Facility Charge Revenue Bonds, 1992 Series A,
6.000%, 7/01/22 Aaa 7/02 at 102 10,211,300
- ---------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.6%
5,215,000 New Hampshire HigherEducational and Health Facilities Authority,
Hospital Revenue Bonds, Catholic Medical Center Issue, Series 1989,
8.000%, 7/01/04 BBB+ 7/99 at 102 5,634,755
- ---------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 1.3%
4,500,000 New Jersey Economic Development Authority, Insured Revenue Bonds
(Educational Testing Service Issue), Series 1995A, 6.000%, 5/15/25 Aaa 5/05 at 102 4,636,260
7,425,000 New Jersey Housing and Mortgage Finance Agency, Housing Revenue
Refunding Bonds, 1992 Series One, 6.700%, 11/01/28 A+ 11/02 at 102 7,727,569
- ---------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.4%
4,000,000 New Mexico Mortgage Finance Authority, Single Family Mortgage
Program Bonds, 1995 Series E, 6.300%, 7/01/17 (Alternative
Minimum Tax) AAA 7/05 at 102 4,102,640
- ---------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 11.8%
16,200,000 New York State Energy Research and Development Authority, Facilities
Revenue Bonds, Series 1992B (Consolidated Edison Company of New
York, Inc. Project), 6.375%, 12/01/27 (Alternative MinimumTax) Aaa 12/01 at 101 16,902,918
7,635,000 New York State Medical Care Facilities Finance Agency, Mercy
Medical Center Project Revenue Bonds, 1995 Series A,
5.875%, 11/01/15 AA- 5/05 at 102 7,670,655
2,500,000 New York State Medical Care Facilities Finance Agency, Mental
Health Services Facilities Improvement Revenue Bonds, 1995
Series A, 6.000%, 2/15/25 Aaa 2/05 at 102 2,554,600
4,000,000 New York State Urban Development Corporation, Correctional
Facilities Revenue Bonds, 1993A Refunding Series, 5.250%, 1/01/21 Aaa 1/04 at 102 3,767,560
10,750,000 The City of New York, General Obligation Bonds, Fiscal 1995
Series D, 6.600%, 2/01/03 Baa1 No Opt. Call 11,407,900
7,695,000 The City of New York, General Obligation Bonds, Fiscal 1995
Series E, 6.600%, 8/01/03 Baa1 No Opt. Call 8,197,330
The City of New York, General Obligation Bonds, Fiscal 1993
Series A:
10,000,000 6.375%, 8/01/08 Baa1 8/02 at 101 1/2 10,206,800
2,000,000 6.500%, 8/01/11 Baa1 8/02 at 101 1/2 2,066,640
The City of New York, General Obligation Bonds, Fiscal 1996
Series F:
17,365,000 7.000%, 2/01/06 Baa1 No Opt. Call 18,994,532
4,000,000 5.750%, 2/01/15 Baa1 2/06 at 101 1/2 3,823,440
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$ 11,130,000 The City of New York, General Obligation Bonds, Fiscal 1996
Series I, 5.875%, 3/15/18 Baa1 3/06 at 101 1/2 $ 10,710,176
9,000,000 The City of New York, General Obligation Bonds, Fiscal 1996
Series J (Subseries J-1), 5.875%, 2/15/19 Baa1 2/06 at 101 1/2 8,653,500
3,150,000 New York City, New York, Municipal Water Finance Authority, Water
and Sewer System Revenue Bonds, Fiscal 1996 Series A,
5.875%, 6/15/25 Aaa 6/05 at 101 3,179,484
- ---------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.8%
2,000,000 North Carolina Housing Finance Authority Single Family Revenue Bonds,
Series JJ (1985 Resolution), 6.450%, 9/01/27 (Alternative MinimumTax) Aa 3/06 at 102 2,044,960
5,000,000 County of Pitt, North Carolina, Pitt County Memorial Hospital Revenue
Bonds, Series 1995, 5.500%, 12/01/15 Aa 12/05 at 102 4,870,150
- ---------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 0.5%
4,240,000 Mercer County, North Dakota, Pollution Control Revenue Bonds (Basin
Electric Power Cooperative-Antelope Valley Station), 1984 Series B,
7.000%, 1/01/19 A 1/99 at 103 4,494,824
- ---------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.5%
1,000,000 Tulsa County Industrial Authority (Tulsa, Oklahoma), Recreational
Facilities Revenue Bonds, Refunding Series 1992, 6.600%, 9/01/08 A- 9/02 at 102 1,061,640
2,990,000 Tulsa County Industrial Authority (Tulsa, Oklahoma), Recreational
Facilities Revenue Bonds, Refunding Series 1992, 6.600%, 11/01/08 A- 11/02 at 102 3,195,383
- ---------------------------------------------------------------------------------------------------------------------------------
OREGON - 2.7%
13,350,000 State of Oregon, General Obligation, Elderly &Disabled Housing
Bonds, 1992 Series B, 6.375%, 8/01/24 Aa 8/02 at 102 13,961,964
7,000,000 State of Oregon, General Obligation, Veterans' Welfare Bonds,
Series 75, 6.000%, 4/01/27 Aa 10/05 at 102 7,097,510
3,380,000 City of Portland, Oregon, Limited Tax Improvement Bonds, 1996
SeriesA, 5.550%, 6/01/16 Aa 6/06 at 100 3,393,047
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 0.4%
1,200,000 South Carolina Public Service Authority Revenue Bonds, 1993 Refunding
Series A (Santee Cooper), 5.500%, 7/01/21 Aaa 1/03 at 102 1,161,372
2,135,000 School District No. 4 of Lexington County, South Carolina,
Certificates of Participation, Series 1994, 7.000%, 7/01/12 Baa 7/04 at 102 2,311,479
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 1.3%
10,370,000 South Dakota Building Authority, Revenue Bonds, Series 1992,
6.700%, 9/01/17 Aaa No Opt. Call 11,481,042
- ---------------------------------------------------------------------------------------------------------------------------------
TEXAS - 2.3%
10,290,000 State of Texas, Veterans' Housing Assistance Bonds, Series 1993,
General Obligation Bonds, 6.800%, 12/01/23 (Alternative Minimum Tax) Aa 12/03 at 102 10,669,804
1,960,000 Baytown Housing Finance Corporation, Single Family Mortgage Revenue
Refunding Bonds, Series 1992-A, 8.500%, 9/01/11 A1 9/02 at 103 2,130,108
1,500,000 Harris County, Texas, Toll Road Unlimited Tax and Subordinate Lien,
Revenue Refunding Bonds, Series 1992A, 6.500%, 8/15/15 AA+ 8/02 at 102 1,618,380
1,595,000 Hidalgo County Housing Finance Corporation, Single Family Mortgage
Revenue Bonds (GNMA and FNMA Collateralized)Series 1994A,
7.000%, 10/01/27 (Alternative Minimum Tax) Aaa 4/04 at 102 1,641,351
2,990,000 Port Arthur Housing Finance Corporation, Single Family Mortgage
Revenue Refunding Bonds, Series 1992, 8.700%, 3/01/12 A 9/02 at 103 3,241,997
2,150,000 City of San Antonio, Texas, Hotel Occupancy Tax Revenue Bonds
(Henry B Gonzalez Convention Center Project), 5.700%, 8/15/26 Aaa 8/06 at 102 2,133,037
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
UTAH - 1.7%
$ 3,000,000 Utah Associated Municipal Power Systems, Central-St. George
Transmission Project Revenue Bonds, 1989 Series, 5.375%, 12/01/19 Aaa 12/03 at 101 $ 2,818,800
3,725,000 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1994
Issue B (Federally Insured or Guaranteed Mortgage Loans),
6.450%, 7/01/14 Aa 7/04 at 102 3,885,063
6,000,000 Redevelopment Agency of Salt Lake County, Utah, Central Business
District Neighborhood Redevelopment, Junior Lien Tax Increment
Bonds, Series 1992A, 5.800%, 3/01/15 A 3/02 at 102 5,786,400
3,000,000 Municipal Building Authority of Weber County, Utah, Lease Revenue
Bonds, Series 1994, 7.500%, 12/15/19 AA 12/04 at 102 3,497,130
- ---------------------------------------------------------------------------------------------------------------------------------
VERMONT - 0.7%
6,620,000 Vermont Housing Finance Agency, Single Family Housing Bonds, Series 4,
6.400%, 11/01/25 A1 5/02 at 102 6,756,835
- ---------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 0.7%
3,000,000 Washington Public Power Supply System, Nuclear Project No. 3,
Refunding Revenue Bonds, Series 1989A, 6.000%, 7/01/18 Aaa 7/99 at 100 3,006,660
3,000,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1990B, 7.375%, 7/01/04 Aa1 7/00 at 102 3,296,400
- ---------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.8%
7,000,000 The County Commission of Harrison County, West Virginia, Solid Waste
Disposal Revenue Bonds (The Potomac Edison Company Harrison
Station Project) Series B, 6.250%, 5/01/23 (Alternative MinimumTax) Aaa 5/03 at 102 7,268,450
- ---------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 2.0%
17,360,000 Wisconsin Housing and Economic Development Authority, Home
Ownership Revenue Bonds, 1995 Series B, 7.100%, 9/01/15
(Alternative Minimum Tax) Aa 1/05 at 102 18,255,950
- ---------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.6%
1,375,000 Puerto Rico Electric Power Authority, Power Revenue Bonds,
Series X, 5.500%, 7/01/25 Baa1 7/05 at 100 1,301,988
4,000,000 Puerto Rico Electric Power Authority, Power Revenue Refunding
Bonds, Series Z, 5.500%, 7/01/14 Baa1 7/05 at 102 3,857,400
- ---------------------------------------------------------------------------------------------------------------------------------
$885,206,000 Total Investments - (cost $850,163,194) - 98.1% 900,242,925
==================---------------------------------------------------------------------------------------------------------------
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.3%
$ 3,000,000 The Port Authority of New York and New Jersey, Versatile Structure
================== Obligations, Series 2, Variable Rate Demand Bonds, 3.550%,
5/01/19+ A-1+ 3,000,000
- ---------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.6% 14,359,723
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $917,602,648
=================================================================================================================================
<PAGE>
<CAPTION>
MARKET
NUMBER OF MARKET MARKET
STANDARD & POOR'S MOODY'S SECURITIES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 49 $315,494,900 35%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 25 143,106,407 16
PORTFOLIO OF A+ A1 10 71,341,918 7
INVESTMENTS A, A- A, A2, A3 23 153,043,851 17
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 27 186,376,451 21
TEMPORARY BB+, BB, BB- Ba1, Ba, Ba2, Ba3 1 3,909,740 1
INVESTMENTS): Non-Rated Non-Rated 3 26,969,658 3
- -------------------------------------------------------------------------------------------------------------------------
TOTAL 138 $900,242,925 100%
==========================================================================================================================
<FN>
* Ratings (not covered by the report of independent auditors): Using the higher of
Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
** 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.
+ 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.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN PREMIUM INCOME MUNICIPAL FUND 4, INC. (NPT)
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ALABAMA - 3.0%
$ 8,000,000 Alabama Higher Education Loan Corporation, Student Loan Revenue
Refunding Bonds, Series 1994-D, 5.850%, 9/01/04 (Alternative
Minimum Tax) Aaa No Opt. Call $ 8,331,520
7,500,000 State of Alabama, General Obligation Refunding Bonds, 1992 Series,
5.900%, 3/01/99 Aa No Opt. Call 7,789,350
11,000,000 The DCH Health Care Authority, Health Care Facilities Revenue Bonds,
Series 1993-B, 5.750%, 6/01/23 A1 12/02 at 102 10,600,920
- ---------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.8%
6,700,000 Kyrene Elementary School District No. 28 of Maricopa County, Arizona,
School Improvement Bonds, Project of 1993, Series A (1993),
5.200%, 7/01/13 (Pre-refunded to 7/01/03) Aaa 7/03 at 100 6,922,306
- ---------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.3%
850,000 Arkansas Development Finance Authority, Single Family Mortgage
Revenue Refunding Bonds, 1991 Series A (FHA Insured or VA
Guaranteed Mortgage Loans), 8.000%, 8/15/11 AA 8/01 at 103 918,238
606,609 City of Jacksonville, Arkansas, Residential Housing Facilities
Board, Single Family Mortgage Revenue Refunding Bonds,
Series 1993A, 7.900%, 1/01/11 Aaa 7/03 at 103 663,115
986,666 Residential Housing Facilities Board of Lonoke County, Arkansas,
Single Family Mortgage Revenue Refunding Bonds, Series 1993A,
7.900%, 4/01/11 Aaa 4/05 at 103 1,072,595
- ---------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 4.9%
3,105,000 California Educational Facilities Authority, Revenue Bonds (Loyola
Marymount University), Series 1994, 5.750%, 10/01/24 A1 4/04 at 102 3,051,873
5,000,000 California Health Facilities Financing Authority, Kaiser Permanente,
Revenue Bonds, 1990 Series A, 6.500%, 12/01/20 AA 12/00 at 102 5,261,850
3,965,000 California Housing Finance Agency, Home Mortgage Revenue Bonds,
Series 1993-C, 5.650%, 8/01/14 Aa 2/04 at 102 3,916,508
4,780,000 Foothill/Eastern Transportation Corridor Agency, Toll Road Revenue
Bonds Series 1995A, 0.000%, 1/01/14 Baa No Opt. Call 1,623,623
Community Redevelopment Financing Authority of the
Community Redevelopment Agency of the City of Los
Angeles, California, Grand Central Square, Multi-Family
Housing Bonds, 1993 Series A:
500,000 5.750%, 12/01/13 (Alternative Minimum Tax) Baa1 6/03 at 102 479,515
3,900,000 5.900%, 12/01/26 (Alternative Minimum Tax) A 12/96 at 100 3,733,431
3,135,000 Department of Water and Power of The City of Los Angeles, Water
Works Refunding Revenue Bonds, Second Issue of 1993, 9.000%, 5/15/00 Aa No Opt. call 3,602,178
4,500,000 Los Angeles County Transportation Commission (California), Proposition
CSales Tax Revenue Bonds, Second Senior Bonds, Series 1992-A,
6.750%, 7/01/19 (Pre-refunded to 7/01/02) Aaa 7/02 at 102 5,089,230
3,000,000 Mountain View Shoreline Regional Park Community (County of Santa
Clara, California), Tax Allocation Bonds, 1993 Series A, 5.750%,
8/01/18 A 8/02 at 102 2,946,750
2,500,000 Transmission Agency of Northern California, California-Oregon
Transmission Project, Revenue Bonds, 1992 Series A, 6.500%, 5/01/16 Aaa 5/02 at 102 2,704,550
5,000,000 Airports Commission, City and County of San Francisco, California,
San Francisco International Airport, Second Series Revenue Bonds,
Issue 8, 6.300%, 5/01/25 (Alternative Minimum Tax) Aaa 5/04 at 101 5,239,350
3,545,000 Redevelopment Agency of the City of San Leandro, Plaza 1 and Plaza 2
Redevelopment Projects, 1993 Tax Allocation Bonds, Series A,
6.125%, 6/01/23 A- 6/03 at 102 3,561,201
1,945,000 South Gate Public Financing Authority (Los Angeles County,
California), Water Revenue Refunding Bonds, 1996 Series A,
6.000%, 10/01/12 Aaa No Opt. Call 2,080,294
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
COLORADO - 3.3%
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1990A:
$ 4,100,000 8.500%, 11/15/23 (Alternative Minimum Tax) Baa 11/00 at 102 $ 4,698,190
1,305,000 8.000%, 11/15/25 (Alternative Minimum Tax) Baa 11/00 at 102 1,467,668
1,200,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991A, 8.750%, 11/15/23 (Alternative Minimum Tax) Baa 11/01 at 102 1,420,776
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991D:
6,000,000 7.500%, 11/15/02 (Alternative Minimum Tax) Baa 11/01 at 102 6,656,400
3,040,000 7.750%, 11/15/13 (Alternative Minimum Tax) Baa No Opt. Call 3,619,059
4,145,000 7.750%, 11/15/21 (Alternative Minimum Tax) Baa 11/01 at 102 4,593,240
1,000,000 7.000%, 11/15/25 (Alternative Minimum Tax) Baa 11/01 at 100 1,050,200
5,240,000 City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992C, 6.750%, 11/15/22 (Alternative Minimum Tax) Baa 11/02 at 102 5,435,190
- ---------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 1.5%
2,400,000 Connecticut Development Authority, Water Facilities Revenue Refunding
Bonds (The Connecticut Water Company Project-1993 Series),
6.650%, 12/15/20 Aaa 12/03 at 102 2,634,288
590,000 Connecticut Housing Finance Authority, Housing Mortgage Finance
Program Bonds, 1990 Series B, 1990 Subseries BI, 7.550%, 11/15/08 Aa 11/00 at 102 593,481
3,000,000 Connecticut Housing Finance Authority Housing Mortgage Finance
Program Bonds, 1996 Series C-2, 6.250%, 11/15/18 Aa 5/06 at 102 3,059,220
6,500,000 State of Connecticut Health and Educational Facilities Authority,
Revenue Bonds, Yale-New Haven Hospital Issue, Series F, 7.100%,
7/01/25 (Pre-refunded to 7/01/00) Aaa 7/00 at 102 7,181,070
- ---------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 5.2%
9,500,000 District of Columbia (Washington, D.C.), General Obligation
Refunding Bonds, Series 1993A, 6.000%, 6/01/07 Aaa No Opt. Call 10,056,605
6,000,000 District of Columbia (Washington, D.C.), General Obligation
Refunding Bonds, Series 1993 B, 5.500%, 6/01/10 Aaa No Opt. Call 5,965,680
5,000,000 District of Columbia (Washington, D.C.), General Obligation
Bonds, Series 1993 E, 6.000%, 6/01/09 Aaa 6/03 at 102 5,158,600
3,890,000 District of Columbia (Washington, D.C.), General Obligation
Bonds, Series 1993-A3, 5.500%, 6/01/06 Aaa No Opt. Call 3,959,398
3,240,000 District of Columbia, Hospital Revenue Refunding Bonds (Medlantic
Healthcare Group, Inc. Issue), Series 1992B, 6.750%, 8/15/07 Baa1 8/02 at 102 3,365,582
4,250,000 District of Columbia, Hospital Revenue Refunding Bonds (Medlantic
Healthcare Group, Inc. Issue), Series 1993A, 5.750%, 8/15/14 Aaa 8/06 at 102 4,253,188
6,055,000 District of Columbia Housing Finance Agency, Collateralized Single
Family Mortgage Revenue Bonds, Series 1988F-1, 5.850%, 12/01/14
(Alternative Minimum Tax) AAA 12/04 at 103 6,088,969
2,000,000 District of Columbia, Revenue Bonds (The American College of
Obstetricians and Gynecologists Issue), Series 1991, 6.500%,
8/15/18 Aaa 8/01 at 102 2,124,720
4,500,000 District of Columbia, University Revenue Refunding Bonds (The
Howard University Issue), Series 1992A, 6.750%, 10/01/12 A+ 10/02 at 102 4,767,300
- ---------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 1.0%
2,500,000 State of Florida, Hillsborough County Expressway Bonds, Series 1971,
Division of Bond Finance of the Department of General Services,
5.500%, 10/01/08 Aa 4/05 at 100 2,537,700
2,000,000 Jacksonville Health Facilities Authority, Hospital Revenue Bonds (New
Children's Hospital at Baptist Medical Center Project), Series 1991,
7.000%, 6/01/21 Aaa 6/01 at 102 2,200,320
3,530,000 Lee County, Florida, Capital Refunding Revenue Bonds, Series 1989A,
7.300%, 10/01/07 Aaa 10/99 at 102 3,864,750
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
GEORGIA - 2.1%
$ 2,480,000 Municipal Electric Authority of Georgia, General Power Revenue Bonds,
1992B Series, 8.250%, 1/01/11 A No Opt. Call $ 3,115,178
4,185,000 Municipal Electric Authority of Georgia, Power Revenue Bonds,
Series EE, 7.250%, 1/01/24 Aaa No Opt. Call 5,235,519
5,500,000 Municipal Electric Authority of Georgia, General Power Revenue Bonds,
Series 1993B, 5.700%, 1/01/19 Aaa No Opt. Call 5,607,525
3,400,000 Development Authority of Burke County, Georgia, Pollution Control
Revenue Bonds (Oglethorpe Power Corporation Vogtle Project), Series
1992, 7.500%, 1/01/03 Aaa No Opt. Call 3,760,162
1,000,000 Development Authority of Monroe County (Georgia), Pollution Control
Revenue Bonds (Oglethorpe Power Corporation Scherer Project), Series
1992A, 6.450%, 1/01/05 A+ No Opt. Call 1,081,540
- ---------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.7%
1,500,000 State of Hawaii, Airports System Revenue Bonds, Series of 1990 (Payable
Solely from the Receipts of the Aviation Fuel Tax and the
Revenues of the State of Hawaii Airports System), 7.300%,
7/01/20 (Alternative Minimum Tax) Aaa 7/00 at 102 1,650,585
5,000,000 City and County of Honolulu, Hawaii, General Obligation Bonds, 1993
Series B, 5.000%, 10/01/13 Aa No Opt. Call 4,755,800
- ---------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.1%
3,955,000 Illinois Development Finance Authority, Child Care Facility Revenue
Bonds, Series 1992 (Illinois Facilities Fund Project), 7.400%,
9/01/04 N/R 9/02 at 102 4,127,952
2,240,000 Illinois Educational Facilities Authority Revenue Bonds, Chicago
College of Osteopathic Medicine, Series A, 8.750%, 7/01/05 Aaa No Opt. Call 2,623,152
Illinois Educational Facilities Authority, Revenue Refunding Bonds,
Loyola University of Chicago, Series 1991-A:
6,190,000 7.125%, 7/01/21 (Pre-refunded to 7/01/01) A+ 7/01 at 102 6,946,232
10,360,000 7.125%, 7/01/21 A1 7/01 at 102 11,287,220
Illinois Health Facilities Authority, Revenue Refunding Bonds, Series
1993C (Lutheran General Healthsystem):
5,705,000 7.000%, 4/01/08 A+ No Opt. Call 6,451,556
4,075,000 7.000%, 4/01/14 A+ No Opt. Call 4,672,069
2,500,000 Illinois Health Facilities Authority, Hospital Revenue Refunding Bonds,
Series 1993 (Delnor-Community Hospital), 5.500%, 5/15/13 Aaa 5/03 at 102 2,446,825
3,000,000 Illinois Health Facilities Authority Revenue Refunding Bonds,
Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19 A 10/03 at 102 2,812,560
2,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992
(Trinity Medical Center), 7.000%, 7/01/12 Baa 7/02 at 102 2,046,080
5,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1990
(Riverside Senior Living Center Project), 7.500%, 11/01/20
(Pre-refunded to 11/01/00) A 11/00 at 102 5,422,050
12,245,000 Illinois Health Facilities Authority, Refunding Revenue Bonds, Series
1990-B (Hinsdale Hospital), 9.000%, 11/15/15 Baa1 11/00 at 102 13,750,890
8,190,000 Illinois Housing Development Authority, Multi-Family Program Bonds,
Series 5, 6.650%, 9/01/14 A1 9/04 at 102 8,463,464
3,410,000 Illinois Housing Development Authority, Section 8 Elderly Housing
Revenue Bonds (Skyline Towers Apartments), Series 1992B,
6.875%, 11/01/17 A 11/02 at 102 3,551,276
3,920,000 Illinois Housing Development Authority, Section 8 Elderly Housing
Revenue Bonds (Morningside North Development), Series 1992D,
6.600%, 1/01/07 A 1/03 at 102 4,143,087
4,000,000 Board of Education of the City of Chicago, General Obligation Lease
Certificates, 1992 Series A, 6.250%, 1/01/15 Aaa No Opt. Call 4,319,880
9,700,000 City of Chicago, Illinois, Tax Increment Allocation Revenue and
Refunding Bonds (Stockyards Industrial - Commercial Redevelopment
Project), Series 1994A, 9.250%, 1/01/12 N/R No Opt. Call 10,713,456
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
ILLINOIS (CONTINUED)
$ 7,850,000 Township High School District Number 205, Cook County, Illinois
(Thornton), School Bonds, Series 1995A, 6.750%, 12/01/01 Aaa No Opt. Call $ 8,608,781
2,025,000 Long Creek Township, Macon County, Illinois, Waterworks Refunding
Revenue Bonds, Series 1993, 7.250%, 5/01/23 N/R 5/03 at 100 1,933,814
3,050,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry
and Will Counties, Illinois, General Obligation Bonds, Series 1990A,
7.200%, 11/01/20 Aaa No Opt. Call 3,706,086
14,375,000 Village of Wheeling, Illinois, Multi-Family Housing Revenue Bonds,
Series 1993A (FHA Insured Mortgage Loan - Arlington Club Project),
6.400%, 2/01/40 AAA 2/03 at 100 14,527,806
5,000,000 Town of Wood River, Wood River Township Hospital, Madison County,
Illinois, General Obligation Bonds (Alternate Revenue Source), Series
1993, 6.625%, 2/01/14 BBB 2/04 at 102 5,293,350
4,765,000 Town of Wood River, Wood River Township Hospital, Madison County,
Illinois, General Obligation Tort Immunity Bonds, Series 1993,
6.500%, 2/01/14 BBB 2/04 at 102 4,998,914
- ---------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.4%
2,100,000 City of Indianapolis, Indiana, Economic Development Revenue Bonds,
Series 1993A (The Meadows-Section 8 Assisted Project),
6.000%, 7/01/23 (Alternative Minimum Tax) A 7/03 at 103 2,040,003
2,250,000 Indiana Bond Bank, Special Program Bonds, Series 1992B,
6.750%, 8/01/12 A 2/03 at 102 2,459,543
3,200,000 Indiana Health Facility Financing Authority, Hospital Revenue Refunding
Bonds, Series 1992 (The Methodist Hospitals, Inc.), 6.750%, 9/15/09 A 9/02 at 102 3,437,184
2,000,000 Hospital Authority of the City of Kokomo (Indiana), Hospital Revenue
Refunding Bonds, Series 1993 (Saint Joseph Hospital and Health
Center of Kokomo), 6.250%, 8/15/05 Baa No Opt. Call 2,052,500
3,615,000 Mooresville Consolidated School Building Corporation, First Mortgage
Bonds, Series 1994A (Morgan County, Indiana), 6.200%, 7/15/15 A 1/04 at 101 3,766,613
5,900,000 Muncie School Building Corporation, First Mortgage Bonds, Series
1992, 6.625%, 7/15/14 (Pre-refunded to 7/15/01) N/R 7/01 at 102 6,489,823
9,500,000 City of Petersburg, Indiana, Pollution Control Refunding Revenue
Bonds, Series 1993A (Indianapolis Power and Light Company
Project), 6.100%, 1/01/16 Aa2 1/03 at 102 9,711,470
- ---------------------------------------------------------------------------------------------------------------------------------
IOWA - 0.6%
3,810,000 Iowa Finance Authority, Hospital Revenue Bonds (Trinity Regional
Hospital Project), Series 1993, 7.000%, 7/01/12 A- 7/00 at 100 3,980,345
1,000,000 City of Davenport, Iowa, Home Ownership Mortgage Revenue Refunding
Bonds, Series 1994, 7.900%, 3/01/10 A1 9/04 at 102 1,063,860
- ---------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.5%
2,225,000 Johnson County, Kansas, Single Family Mortgage Revenue Refunding
Bonds, Series 1994, 7.100%, 5/01/12 A 5/04 at 103 2,411,833
1,865,000 Labette County, Kansas, Single Family Mortgage Revenue Refunding
Bonds, 1993 Series A, 8.400%, 12/01/11 A1 6/03 at 103 1,982,141
- ---------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.8%
7,000,000 Kentucky Housing Corporation, Housing Revenue Bonds, 1996 Series A,
6.375%, 7/01/28 (Alternative Minimum Tax) Aaa 7/06 at 102 7,134,890
- ---------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 2.0%
3,500,000 Clover Dale Housing Corporation, 1995 Multi-Family Mortgage Revenue
Refunding Bonds (Clover Dale Plaza-FHA Insured Mortgage, Section 8
Assisted Project), Series A, 6.550%, 2/01/22 AA- 4/01 at 100 3,551,590
6,000,000 City of New Orleans, Louisiana, General Obligation Refunding Bonds,
Series 1995, 6.500%, 10/01/02 Aaa No Opt. Call 6,573,000
6,965,000 Orleans Levee District (APolitical Subdivision of the State of
Louisiana), Public Improvement Bonds, Series 1986, 5.950%, 11/01/14 Aaa 12/05 at 102 7,161,134
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
MAINE - 1.0%
$ 8,000,000 Maine Educational Loan Marketing Corporation, Subordinate Student
Loan Revenue Bonds, Series 1994-2, 6.250%, 11/01/06 (Alternative
Minimum Tax) A No Opt. Call $ 8,475,760
- ---------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.6%
2,000,000 Maryland Health and Higher Educational Facilities Authority, Project
and Refunding Revenue Bonds, Doctors Community Hospital Issue,
Series 1993, 5.750%, 7/01/13 Baa 7/03 at 102 1,905,120
4,305,000 Maryland Transportation Authority, Special Obligation Revenue Bonds,
Baltimore/Washington International Airport Projects, Series 1994-A
(Qualified Airport Bonds), 6.400%, 7/01/19 (Alternative Minimum Tax) Aaa 7/04 at 102 4,456,278
6,800,000 Housing Opportunities Commission of Montgomery County (Montgomery
County, Maryland), Multi-Family Housing Revenue Bonds, 1996
Series B, 6.400%, 7/01/28 Aa 7/06 at 102 7,013,656
1,000,000 Prince George's County, Maryland, Project and Refunding Revenue Bonds
(Dimensions Health Corporation Issue), Series 1994, 5.375%, 7/01/14 A 7/04 at 102 952,790
- ---------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.5%
4,195,000 Massachusetts Health and Educational, Facilities Authority, Revenue
Refunding Bonds, Youville Hospital Issue (FHA Insured Project),
Series B, 6.000%, 2/15/34 Aa 2/04 at 102 4,220,631
2,000,000 Massachusetts Housing Finance Agency, Housing Project Revenue Bonds,
6.300%, 10/01/13 A1 4/03 at 102 2,047,020
3,300,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue
Bonds, SEMASS Project, Series 1991B, 9.250%, 7/01/15 (Alternative
Minimum Tax) N/R 7/01 at 103 3,690,192
3,000,000 Massachusetts Water Resources Authority, General Revenue Refunding
Bonds, 1993 Series B, 5.500%, 3/01/17 Aaa 3/03 at 102 2,926,290
- ---------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.4%
2,000,000 Michigan State Hospital Finance Authority, Hospital Revenue and
Refunding Bonds (The Detroit Medical Center Obligated Group),
Series 1993B, 5.000%, 8/15/03 A No Opt. Call 2,007,840
3,750,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue Bonds
(Consumers Power Company Project), Collateralized Series 1993B,
5.800%, 6/15/10 Aaa 6/03 at 102 3,858,038
14,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (WMX
Technologies, Inc. Project), Series 1993, 6.000%, 12/01/13
(Alternative Minimum Tax) A1 12/03 at 102 14,287,560
5,000,000 City of Detroit, Michigan, Convention Facility Limited Tax Revenue
Refunding Bonds (Cobo Hall Expansion Project), Series 1993,
5.250%, 9/30/12 Aaa 9/03 at 102 4,811,900
4,260,000 County of Jackson Hospital Finance Authority, Hospital Revenue
Refunding Bonds (W. A. Foote Memorial Hospital, Jackson, Michigan),
Series 1993A, 4.750%, 6/01/15 Aaa 6/03 at 102 3,761,750
1,000,000 City of Kalamazoo Hospital Finance Authority, Hospital Revenue
Refunding and Improvement Bonds (Bronson Methodist Hospital),
Series 1996, 5.750%, 5/15/16 Aaa 5/06 at 102 1,002,060
6,000,000 County of Monroe, Michigan, Pollution Control Revenue Bonds (The
Detroit Edison Company Project), Series CC-1992, 6.550%, 9/01/24
(Alternative Minimum Tax) Aaa 9/03 at 103 6,453,120
2,750,000 City of Royal Oak Hospital Finance Authority (Michigan), Hospital
Revenue Bonds (William Beaumont Hospital), Series 1991D,
6.750%, 1/01/20 (Pre-refunded to 1/01/01) Aaa 1/01 at 102 3,028,740
- ---------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 0.8%
4,000,000 Minneapolis Community Development Agency, Limited Tax Supported
Development Revenue Bonds, Common Bond Fund Series 1992G-3,
7.375%, 12/01/12 BBB+ 12/02 at 102 4,497,000
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
MINNESOTA (CONTINUED)
$ 2,720,000 City of Minnetonka, Minnesota, Multi-Family Housing Revenue
Refunding Bonds, Series 1994A (GNMA Collateralized Mortgage
Loan-Brier Creek Project), 6.450%, 6/20/24 AAA 6/04 at 102 $ 2,811,691
- ---------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 1.3%
1,920,000 Mississippi Educational Facilities Authority, For Private, Nonprofit
Institutions of Higher Learning, Educational Facilities Revenue Bonds
(Tougaloo College Project), 1993 Series A, 6.500%, 6/01/18 Baa 6/03 at 102 1,971,245
2,000,000 Mississippi Higher Education Assistance Corporation, Student Loan
Revenue Bonds, Senior Series 1993-B, 5.800%, 9/01/06 (Alternative
Minimum Tax) Aaa 9/02 at 102 2,036,960
3,000,000 Mississippi Home Corporation, Single Family Mortgage Revenue Bonds,
Series 1995B, 6.550%, 4/01/21 (Alternative Minimum Tax) Aaa 4/05 at 102 3,100,410
2,030,000 Mississippi Housing Finance Corporation, Single Family Mortgage
Purchase Revenue Bonds, Series 1989 (GNMA Mortgage-Backed
Securities Program), 8.250%, 10/15/18 (Alternative Minimum Tax) Aaa 10/99 at 102 2,135,093
1,695,000 Mississippi Regional Housing Authority No. V, Multi-Family Housing
Revenue Refunding Bonds, Series 1993A (FHA Insured Mortgage
Loan-Deville Apartments Section 8 Assisted Project), 7.050%, 7/01/21 AAA 7/00 at 105 1,793,768
- ---------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 2.1%
9,000,000 Nebraska Higher Education Loan Program, Inc., 1993-1 Series A-2 Senior
Notes, 6.250%, 6/01/18 (Alternative Minimum Tax) Aa No Opt. Call 9,165,690
1,280,000 Nebraska Investment Finance Authority, Single Family Mortgage Revenue
Bonds, 1988 Series 1, 8.125%, 8/15/38 (Alternative Minimum Tax) Aaa 8/98 at 102 1,343,373
Airport Authority of the City of Omaha (Nebraska), Airport
Facilities Revenue Refunding Bonds, Series 1991:
1,665,000 8.375%, 1/01/14 (Pre-refunded to 1/01/02) A 1/02 at 102 1,970,594
5,075,000 8.375%, 1/01/14 A 1/02 at 102 5,925,773
- ---------------------------------------------------------------------------------------------------------------------------------
NEVADA - 0.8%
1,725,000 Nevada Housing Division, Single Family Program Senior Bonds, 1993
Issue B, 6.200%, 10/01/15 Aa 4/04 at 102 1,766,883
4,500,000 Clark County School District, Nevada, General Obligation (Limited Tax),
School Improvement Bonds (Current Coupon Bonds), Series 1991A,
7.000%, 6/01/10 Aaa No Opt. Call 5,236,245
- ---------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 0.5%
4,010,000 New Hampshire Housing Finance Authority, Single Family Residential
Mortgage Bonds, 1990 Series A, 7.950%, 7/01/22 (Alternative
Minimum Tax) Aa 7/00 at 102 4,230,991
- ---------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.4%
860,000 New Mexico Educational Assistance Foundation, Student Loan Revenue
Bonds, 1992 Series One, Student Loan Revenue Bonds, Subordinate
1992 Series One-B, 6.850%, 12/01/05 (Alternative Minimum Tax) A 12/02 at 101 891,854
2,850,000 New Mexico Mortgage Finance Authority, Single Family Mortgage
Purchase Refunding Senior Bonds, 1992 Series A, 6.900%, 7/01/24 Aa1 7/02 at 102 2,984,093
- ---------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 7.5%
10,500,000 New York State Medical Care Facilities Finance Agency, Hospital and
Nursing Home FHA-Insured Mortgage Revenue Bonds, 1992 Series B,
6.200%, 8/15/22 AAA 8/02 at 102 10,822,140
8,240,000 New York State Medical Care Facilities Finance Agency, Hospital and
Nursing Home FHA-Insured Mortgage Revenue Bonds, 1994 Series A,
6.200%, 2/15/21 AAA 2/04 at 102 8,458,360
7,500,000 New York State Thruway Authority, General Revenue Bonds, Series C,
6.000%, 1/01/15 Aaa 1/05 at 102 7,726,575
1,000,000 The City of New York, General Obligation Bonds, Fiscal 1995
Series A, 7.000%, 8/01/04 Baa1 No Opt. Call 1,091,530
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
NEW YORK (CONTINUED)
$ 8,000,000 The City of New York, General Obligation Bonds, Fiscal 1996
Series B, 6.750%, 8/15/03 Baa1 No Opt. Call $ 8,592,080
14,310,000 The City of New York, General Obligation Bonds, Fiscal 1996
Series F, 6.500%, 2/01/05 Baa1 No Opt. Call 15,140,409
The City of New York, General Obligation Bonds, Fiscal 1991
Series D:
2,105,000 9.500%, 8/01/02 (Pre-refunded to 8/01/01) Baa1 8/01 at 101 1/2 2,560,754
2,295,000 9.500%, 8/01/02 Baa1 8/01 at 101 1/2 2,717,372
4,000,000 New York City Housing Development Corporation, Multi-Family Housing
Revenue Bonds, 1993 Series A, 5.700%, 11/01/13 Aa 5/03 at 102 4,000,000
5,000,000 New York City Municipal Water Finance Authority, Water and Sewer
System Revenue Bonds, Fixed Rate Fiscal 1994 Series F,
5.500%, 6/15/23 Aaa 6/04 at 101 1/2 4,866,850
- ---------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 0.5%
2,000,000 North Carolina Municipal Power Agency Number 1, Catawba Electric
Revenue Bonds, Series 1992, 6.000%, 1/01/11 Aaa No Opt. Call 2,134,980
2,500,000 North Carolina Municipal Power Agency Number 1, Catawba Electric
Revenue Bonds, Series 1993, 4.100%, 1/01/05 Aaa No Opt. Call 2,295,250
- ---------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 1.2%
8,330,000 Mercer County, North Dakota, Pollution Control Revenue Bonds (Basin
Electric Power Cooperative-Antelope Valley Station), 1984 Series B,
7.000%, 1/01/19 A 1/99 at 103 8,830,633
1,340,000 City of Minot, North Dakota, Single Family Mortgage Revenue Refunding
Bonds, Series 1993, 7.700%, 8/01/10 Aa 8/03 at 102 1,436,936
- ---------------------------------------------------------------------------------------------------------------------------------
OHIO - 5.5%
3,960,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Programs), 1995 Series A-1,
6.300%, 9/01/17 AAA 3/05 at 102 4,102,560
15,270,000 Ohio Housing Finance Agency, Single Family Mortgage Revenue Bonds
(GNMA Mortgage-Backed Securities Program), 1989 Series A,
7.650%, 3/01/29 (Alternative Minimum Tax) AAA 9/99 at 102 16,179,329
10,000,000 State of Ohio, Pollution Control Revenue Bonds, Series 1983 (Philip
Morris Project), 7.250%, 12/01/08 A 12/97 at 103 10,522,000
4,500,000 Akron, Bath and Copley Joint Township Hospital District, Ohio, Hospital
Facilities Revenue Bonds, Series 1992 (Summa Health System Project),
6.250%, 11/15/07 A 11/02 at 102 4,644,540
1,995,000 County of Franklin, Ohio, Multi-Family Housing Mortgage Revenue Bonds,
Series 1994A (FHA Insured Mortgage Loan-Hamilton Creek Apartments
Project), 5.550%, 7/01/24 (Alternative Minimum Tax) Aa 1/05 at 103 1,894,951
6,600,000 The Student Loan Funding Corporation, Cincinnati, Ohio, Student Loan
Revenue Bonds, Series 1986A, 5.500%, 12/01/01 (Alternative
Minimum Tax) A1 No Opt. Call 6,758,136
4,370,000 City of Toledo, Ohio, General Obligation (Limited Tax), Various
Purpose Improvement Bonds, Series 1994, 5.750%, 12/01/09 Aaa 12/04 at 102 4,502,935
- ---------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 0.4%
3,340,000 Tulsa Industrial Authority Hospital Revenue and Refunding Bonds
(Hillcrest Medical Center Project), Series 1996, 6.500%, 6/01/09 AAA No Opt. Call 3,624,434
- ---------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.6%
State of Oregon Department of Administrative Services,
Certificates of Participation, 1996 Series C:
1,000,000 5.350%, 5/01/08 Aaa 5/06 at 101 1,007,910
1,500,000 5.400%, 5/01/09 Aaa 5/06 at 101 1,504,890
Columbia River People's Utility District, Columbia County,
Oregon, General Obligation Refunding Bonds, Series 1996:
1,200,000 5.000%, 6/01/05 Aaa No Opt. Call 1,210,368
1,215,000 5.000%, 6/01/06 Aaa No Opt. Call 1,217,236
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
PENNSYLVANIA - 2.2%
$ 5,000,000 The Harrisburg Authority, Dauphin County, Pennsylvania, Water
Revenue Bonds, Series of 1991, 7.000%, 7/15/10 (Pre-refunded
to 7/15/01) Aaa 7/01 at 100 $ 5,525,450
3,000,000 City of Philadelphia, Pennsylvania, Water and Wastewater Revenue
Bonds, Series 1993, 5.500%, 6/15/14 Aaa 6/03 at 102 2,963,160
5,400,000 City of Philadelphia, Pennsylvania, Water and Wastewater Revenue
Bonds, Series 1995, 5.300%, 8/01/06 Aaa No Opt. Call 5,521,284
5,600,000 The Philadelphia Municipal Authority Philadelphia, Pennsylvania,
Lease Revenue Refunding Bonds, Series A (Financial Guaranty
Insured), 5.625%, 11/15/18 Aaa 11/03 at 102 5,530,224
- ---------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.1%
5,500,000 Rhode Island Health and Educational Building Corporation, Higher
Education Facility Revenue Bonds, Johnson and Wales University
(Series 1990), 8.375%, 4/01/20 (Pre-refunded to 4/01/00) AAA 4/00 at 102 6,270,660
3,950,000 Rhode Island Health and Educational Building Corporation, Higher
Education Facility Revenue Bonds, Providence College Issue, Series
1993, 5.600%, 11/01/22 Aaa 11/03 at 102 3,801,046
- ---------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.9%
7,325,000 South Dakota Student Loan Assistance Corporation, Student Loan
Revenue Bonds, Series 1989-B, 7.400%, 8/01/99 (Alternative
Minimum Tax) A No Opt. Call 7,651,842
- ---------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 0.3%
2,400,000 Tennessee Housing Development Agency, Mortgage Finance Program
Bonds, 1994 Series A, 6.900%, 7/01/25 (Alternative Minimum Tax) A1 7/04 at 102 2,518,728
- ---------------------------------------------------------------------------------------------------------------------------------
TEXAS - 5.6%
4,831,035 General Services Commission (an Agency of the State of Texas), as
Lessee, Participation Interests, 7.500%, 9/01/22 A 9/97 at 102 4,893,983
8,500,000 Texas Turnpike Authority, Dallas North Tollway Revenue Bonds, Series
1990, 7.250%, 1/01/10 (Pre-refunded to 1/01/99) Aaa 1/99 at 102 9,199,890
1,000,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds,
Series 1990 (American Airlines, Inc. Project), 7.500%, 12/01/29
(Alternative Minimum Tax) Baa2 12/00 at 102 1,065,880
6,000,000 Dallas-Fort Worth International Airport Facility Improvement
Corporation, American Airlines, Inc. Revenue Bonds, Series
1990, 7.500%, 11/01/25 (Alternative Minimum Tax) Baa2 11/00 at 102 6,390,120
2,850,000 City of Dallas, Texas (Dallas, Denton and Collin Counties),
Waterworks and Sewer System Revenue Refunding Bonds, Series
1993, 5.000%, 4/01/09 Aa 4/03 at 100 2,753,955
City of Houston, Texas, Airport System Subordinate Lien
Revenue Bonds, Series 1991A:
2,500,000 6.750%, 7/01/08 (Alternative Minimum Tax) Aaa 7/01 at 102 2,733,275
2,500,000 6.750%, 7/01/21 (Alternative Minimum Tax) Aaa 7/01 at 102 2,689,775
3,300,000 Houston Housing Finance Corporation, Single Family Mortgage Revenue
Refunding Bonds, Series 1993A, 5.950%, 12/01/10 Aaa 6/03 at 102 3,359,664
2,232,443 The Midland Housing Finance Corporation (Midland, Texas), Single
Family Mortgage Revenue Refunding, Series 1992A, 8.450%, 12/01/11 Aaa 11/05 at 103 2,406,975
2,215,000 North Texas Higher Educational Authority, Inc., Student Loan Revenue
Bonds, Series 1993D, 6.300%, 4/01/09 (Alternative Minimum Tax) A 4/03 at 102 2,241,514
8,500,000 Travis County Health Facilities Development Corporation, Hospital
Revenue Bonds (Daughters of Charity National Health System -
Daughters of Charity Health Services of Austin), Series 1993B,
6.000%, 11/15/22 Aa 11/03 at 102 8,585,255
1,690,000 Board of Regents of the University of Texas System, Revenue
Financing System Refunding Bonds, Series 1991A, 7.000%, 8/15/07 Aa1 8/01 at 102 1,883,015
810,000 University of Texas Financing System Revenue Refunding Bonds, Series
1991-A, 7.000%, 8/15/07 (Pre-refunded to 8/15/01) Aaa 8/01 at 102 910,319
<PAGE>
<CAPTION>
PRINCIPAL RAT- OPT. CALL MARKET
AMOUNT DESCRIPTION INGS* PROVISIONS** VALUE
<S> <C> <C> <C> <C>
UTAH - 1.1%
$ 1,500,000 Intermountain Power Agency (Utah), Power Supply Revenue Refunding
Bonds, 1988 Series A, 7.750%, 7/01/20 Aa 7/98 at 102 $ 1,599,765
8,000,000 Intermountain Power Agency (Utah), Power Supply Revenue Bonds,
Series 1996A, 6.150%, 7/01/14 Aa 7/06 at 102 8,278,160
- ---------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.3%
2,645,000 Suffolk Redevelopment and Housing Authority, Multi-Family Housing
Revenue Refunding Bonds, Series 1994 (Chase Heritage at Dulles
Project), 7.000%, 7/01/24 (Mandatory put 7/01/04) Baa3 7/02 at 104 2,799,521
- ---------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 11.1%
4,500,000 Washington Health Care Facilities Authority Revenue Bonds,
Refunding Series 1993 (Franciscan Health System/St. Joseph
Hospital and Health Care Center, Tacoma), 5.625%, 1/01/13 Aaa 1/03 at 102 4,459,590
4,500,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1993A, 5.750%, 7/01/13 Aa1 7/03 at 102 4,421,565
23,000,000 Washington Public Power Supply System, Nuclear Project No. 1
Refunding Revenue Bonds, Series 1993C, 5.375%, 7/01/15 Aa1 7/03 at 102 21,630,350
4,845,000 Washington Public Power Supply System, Nuclear Project No. 1,
Refunding Revenue Bonds, Series 1989A, 7.500%, 7/01/15
(Pre-refunded to 7/01/99) Aaa 7/99 at 102 5,322,329
3,580,000 Washington Public Power Supply System, Nuclear Project No. 2
Refunding Revenue Bonds, Series 1990C, 7.625%, 7/01/10
(Pre-refunded to 1/01/01) Aaa 1/01 at 192 4,060,651
7,250,000 Washington Public Power Supply System Nuclear Project No. 2
Refunding Revenue Bonds, Series 1992A, 6.250%, 7/01/12 Aa1 7/02 at 102 7,406,165
6,475,000 Washington Public Power Supply System, Nuclear Project No. 2
Refunding Revenue, Series 1999-A, 7.250%, 7/01/06 Aa1 No Opt. Call 7,385,644
10,000,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1993B, 7.000%, 7/01/09 Aa1 No Opt. Call 11,256,900
2,380,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1989B, 5.500%, 7/01/17 Aa1 1/00 at 100 2,246,625
9,655,000 Washington Public Power Supply System, Nuclear Project No. 3
Refunding Revenue Bonds, Series 1993C, 5.000%, 7/01/05 Aaa No Opt. Call 9,547,443
5,000,000 Public Utility District No. 1 of Snohomish County, Washington,
Generation System Revenue Bonds, Series 1993, 5.500%, 1/01/14 Aaa 1/03 at 100 4,925,950
3,500,000 City of Tacoma, Washington, Electric System Refunding Revenue
Bonds, 1992B, 6.150%, 1/01/08 Aaa 1/02 at 102 3,676,435
4,705,000 City of Tacoma, Washington, Sewer Revenue Refunding Bonds, 1994
Series B, 8.000%, 12/01/08 Aaa No Opt. Call 5,858,807
5,595,000 Housing Authority of the City of Vancouver Revenue Bonds, 1993,
Series B (Fishers Mill Project), (Junior Lien Bonds),
6.000%, 3/01/23 Aa 3/03 at 100 5,638,865
- ---------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.3%
2,580,000 West Virginia Housing Development Fund, Housing Finance Bonds,
1990 Series A, 7.950%, 5/01/17 (Alternative Minimum Tax) Aa1 11/00 at 102 2,721,049
- ---------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 0.3%
1,400,000 Wisconsin Health and Educational Facilities Authority, Wheaton
Franciscan Services, Inc. System, Revenue Bonds, Series 1993,
5.750%, 8/15/22 Aaa 8/03 at 102 1,367,670
830,000 Wisconsin Housing and Economic Development Authority, Home
Improvement Revenue Bonds, 1992 Series A, 7.000%, 5/01/10
(Alternative Minimum Tax) A1 5/02 at 102 872,239
- ---------------------------------------------------------------------------------------------------------------------------------
$829,856,753 Total Investments - (cost $837,613,511) - 98.3% 867,184,032
==================---------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.7% 15,378,566
- ---------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $882,562,598
=================================================================================================================================
<PAGE>
<CAPTION>
NUMBER OF MARKET MARKET
STANDARD & POOR'S MOODY'S SECURITIES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 81 $367,486,023 42%
RATINGS* AA+, AA, AA- Aa1, Aa, Aa2, Aa3 33 168,218,529 20
PORTFOLIO OF A+ A1 16 86,851,858 10
INVESTMENTS: A,A- A, A2, A3 26 106,390,177 12
BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 27 111,282,208 13
Non-rated Non-rated 5 26,955,237 3
- ---------------------------------------------------------------------------------------------------------------------------
TOTAL 188 $867,184,032 100%
===========================================================================================================================
<FN>
* Ratings (not covered by the report of independent auditors): Using the higher of
Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
** 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.
</FN>
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
<CAPTION>
NPI NPM NPT
<S> <C> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $1,280,412,304 $900,242,925 $867,184,032
Temporary investments in short-term municipal
securities, at amortized cost (note 1) 100,000 3,000,000 --
Cash 417,891 167,166 --
Receivables:
Interest 26,961,591 17,582,128 17,460,349
Investments sold 2,092,226 581,185 1,705,275
Other assets 605,101 15,166 77,585
------------- ----------- -----------
Total assets 1,310,589,113 921,588,570 886,427,241
------------- ----------- -----------
LIABILITIES
Accrued expenses:
Management fees (note 6) 680,514 483,161 465,224
Other 339,840 243,619 530,913
Preferred share dividends payable 306,050 102,480 93,530
Common share dividends payable 5,070,942 3,156,662 2,774,976
------------- ----------- -----------
Total liabilities 6,397,346 3,985,922 3,864,643
------------- ----------- -----------
Net assets (note 7) $1,304,191,767 $917,602,648 $882,562,598
============== ============ ============
Preferred shares, at liquidation value $ 350,000,000 $300,000,000 $308,400,000
============== ============ ============
Preferred shares outstanding 14,000 12,000 12,336
============== ============ ============
Common shares outstanding 63,785,431 40,731,119 40,808,465
============== ============ ============
Netasset value per Common share outstanding (net assets
less Preferred shares at liquidation value, divided
by Common shares outstanding) $ 14.96 $ 15.16 $ 14.07
============== ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Year ended October 31, 1996
<CAPTION>
NPI NPM NPT
<S> <C> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $83,668,548 $55,590,749 $51,693,303
----------- ----------- -----------
Expenses:
Management fees (note 6) 8,045,628 5,677,367 5,475,423
Preferred shares--remarketing/auction fees 816,659 750,164 771,000
Preferred shares--dividend disbursing agent fees 30,000 74,918 105,000
Shareholders' servicing agent fees and expenses 273,678 84,840 128,966
Custodian's fees and expenses 114,442 122,634 116,363
Directors' fees and expenses (note 6) 42,961 7,579 7,582
Professional fees 37,297 22,640 16,095
Shareholders' reports--printing and mailing expenses 257,036 157,046 170,223
Stock exchange listing fees 44,336 35,428 36,896
Investor relations expense 97,531 52,033 55,478
Other expenses 40,399 33,962 26,606
----------- ----------- -----------
Total expenses 9,799,967 7,018,611 6,909,632
----------- ----------- -----------
Net investment income 73,868,581 48,572,138 44,783,671
----------- ----------- -----------
REALIZED AND UNREALIZED GAIN (LOSS)
FROM INVESTMENTS
Net realized gain from investment transactions,
net of taxes, if applicable (notes 1 and 3) 1,864,659 4,115,140 3,382,309
Net change in unrealized appreciation or depreciation
of investments (8,027,802) 6,744,631 4,202,791
----------- ----------- -----------
Net gain (loss) from investments (6,163,143) 10,859,771 7,585,100
----------- ----------- -----------
Net increase in net assets from operations $67,705,438 $59,431,909 $52,368,771
============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
NPI NPM
Year ended Year ended Year ended Year ended
10/31/96 10/31/95 10/31/96 10/31/95
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 73,868,581 $ 78,793,817 $ 48,572,138 $ 48,688,900
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) 1,864,659 4,129,049 4,115,140 (2,588,592)
Net change in unrealized appreciation or depreciation
of investments (8,027,802) 59,644,723 6,744,631 79,286,649
-------------- -------------- ------------ ------------
Net increase in net assets from operations 67,705,438 142,567,589 59,431,909 125,386,957
-------------- -------------- ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Common shareholders (61,521,076) (67,357,422) (37,757,770) (37,391,184)
Preferred shareholders (12,507,980) (13,745,101) (10,618,502) (12,048,841)
From accumulated net realized gains from investment
transactions:
Common shareholders (3,157,383) -- -- --
Preferred shareholders -- -- -- --
-------------- -------------- ------------ ------------
Decrease in net assets from distributions to shareholders (77,186,439) (81,102,523) (48,376,272) (49,440,025)
-------------- -------------- ------------ ------------
Net increase (decrease) in net assets (9,481,001) 61,465,066 11,055,637 75,946,932
Net assets at beginning of year 1,313,672,768 1,252,207,702 906,547,011 830,600,079
-------------- -------------- ------------ ------------
Net assets at end of year $1,304,191,767 $1,313,672,768 $917,602,648 $906,547,011
============== ============== ============ ============
Balance of undistributed net investment income at end of year $ 687,524 $ 847,999 $ 2,359,346 $ 2,163,480
============== ============== ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NPT
Year ended Year ended
10/31/96 10/31/95
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $ 44,783,671 $ 44,910,619
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) 3,382,309 (6,194,923)
Net change in unrealized appreciation or depreciation
of investments 4,202,791 80,130,266
------------ ------------
Net increase in net assets from operations 52,368,771 118,845,962
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Common shareholders (33,267,660) (34,279,102)
Preferred shareholders (10,875,395) (11,846,699)
From accumulated net realized gains from investment
transactions:
Common shareholders -- --
Preferred shareholders -- --
------------ ------------
Decrease in net assets from distributions to shareholders (44,143,055) (46,125,801)
------------ ------------
Net increase (decrease) in net assets 8,225,716 72,720,161
Net assets at beginning of year 874,336,882 801,616,721
------------ ------------
Net assets at end of year $882,562,598 $874,336,882
============ ============
Balance of undistributed net investment income at end of year $ 1,630,654 $ 1,022,082
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT
ACCOUNTING POLICIES
At October 31, 1996, the National Funds (the
"Funds") covered in this report and their
corresponding New York Stock Exchange symbols are
Nuveen Premium Income Municipal Fund, Inc. (NPI),
Nuveen Premium Income Municipal Fund 2, Inc. (NPM)
and Nuveen Premium Income Municipal Fund 4, Inc.
(NPT).
Each Fund invests primarily in a diversified
portfolio of municipal obligations issued by state
and local government authorities. The Funds are
registered under the Investment Company Act of
1940 as closed-end, diversified management
investment companies.
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. 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 October 31, 1996, there were no such purchase
commitments in any of the Funds.
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.
Federal Income Taxes The Funds intend to comply with the requirements of
the Internal Revenue Code applicable to regulated
investment companies by distributing to shareholders
all of their tax-exempt net investment income, in
addition to any significant amounts of net realized
capital gains and/or market discount realized from
investment transactions. The Funds currently
consider significant net realized capital gains
and/or market discount as amounts in excess of
$.001 per Common share for NPI and $.01 per Common
share for NPM and NPT. Furthermore, each Fund
intends to satisfy conditions which will enable
interest from municipal securities, which is exempt
from regular federal income tax, to retain such
tax-exempt status when distributed to shareholders
of the Funds. All regular monthly income dividends
paid during the year ended October 31, 1996, have
been designated Exempt Interest Dividends which are
exempt from regular federal personal income tax. Net
realized capital gain and market discount
distributions are subject to federal taxation.
<PAGE>
Dividends and Tax-exempt net investment income is declared as a
Distributions to dividend monthly and payment is made or reinvestment
Shareholders is credited to shareholder accounts after month-end.
Net realized capital gains and/or market discount
from investment transactions are distributed to
shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to
the extent they exceed available capital loss
carryovers.
Distributions to shareholders of tax-exempt net
investment income, net realized capital gains
and/or market discount 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 occur and will be
classified as either distributions in excess of
net investment income, distributions in excess of
net realized gains and/or distributions in excess
of net ordinary taxable income from investment
transactions, where applicable.
Preferred Shares The Board of Directors of NPI approved a 4
for 1 split of the Fund's Preferred shares
effective as of the close of business on August 9,
1995, which lowered the stated value from $100,000
to $25,000 per share.
NPI has issued and outstanding 2,800 shares of
each Series A, B, C, D and E $25,000 stated value
Preferred shares. The dividend rate on each Series
may change every 28 days as set by the auction
agent, except for series E which may change every
seven days.
NPM and NPT have issued and outstanding $25,000
stated value Preferred shares. Each Fund's
Preferred shares are issued in more than one
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, for each of the Funds is as follows:
<TABLE>
<CAPTION>
NPM NPT
- -----------------------------------------------------------
<S> <C> <C>
Number of shares:
Series M 2,000 2,200
Series T 3,000 2,000
Series T2 -- 1,328
Series W 2,000 1,680
Series Th 3,000 2,000
Series F 2,000 1,800
Series F2 -- 1,328
------ ------
Total 12,000 12,336
====== ======
</TABLE>
<PAGE>
Derivative Financial In October 1994, the Financial Accounting Standards
Instruments Board (FASB) issued Statement of 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 year ended
October 31, 1996.
Use of Estimates The preparation of financial statements in
conformity with generally accepted
accounting principles requires management to make
estimates and assumptions that affect the reported
amounts of assets and liabilities at the date of
the financial statements and the reported amounts
of increases and decreases in net assets from
operations during the reporting period.
2. FUND SHARES
There were no share transactions during the year
ended October 31, 1996, or the year ended October
31, 1995, in any of the Funds.
3. SECURITIES TRANSACTIONS
Purchase and sales (including maturities) of
investments in municipal securities and temporary
municipal investments during the year ended
October 31, 1996, were as follows:
<TABLE>
<CAPTION>
NPI NPM NPT
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
PURCHASES
Investments in municipal securities $230,329,706 $215,663,940 $181,407,812
Temporary municipal investments 175,150,000 92,400,000 44,850,000
SALES AND MATURITIES
Investments in municipal securities 206,132,550 214,082,611 174,412,915
Temporary municipal investments 178,550,000 94,900,000 47,750,000
============ ============ ============
</TABLE>
At October 31, 1996, the identified cost of
investments owned for federal income tax purposes
was the same as the cost for financial reporting
purposes for each Fund.
<PAGE>
At October 31, 1996, 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:
<TABLE>
<CAPTION>
NPM NPT
- ----------------------------------------------------------------------------------------------
<S> <C> <C>
Expiration year:
2001 $-- $ 3,894,138
2002 -- 12,137,697
2003 659,243 5,211,676
-------- -----------
Total $659,243 $21,243,511
======== ===========
</TABLE>
4. DISTRIBUTIONS TO COMMON SHAREHOLDERS
On November 1, 1996, the Funds declared Common
share dividend distributions from their tax-exempt
net investment income which were paid December 2,
1996, to shareholders of record on November 15,
1996, as follows:
<TABLE>
<CAPTION>
NPI NPM NPT
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dividend per share $.0795 $.0775 $.0680
====== ====== ======
</TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized
depreciation of investments at October 31, 1996,
were as follows:
<TABLE>
<CAPTION>
NPI NPM NPT
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized:
Appreciation $51,365,713 $50,245,622 $30,778,082
Depreciation (3,711,819) (165,891) (1,207,561)
----------- ----------- -----------
Net unrealized appreciation $47,653,894 $50,079,731 $29,570,521
=========== =========== ===========
</TABLE>
<PAGE>
6. MANAGEMENT FEE AND OTHER TRANSACTIONS
WITH AFFILIATES
Under the Funds' investment management agreements
with Nuveen Advisory Corp (the "Adviser"), a
wholly owned subsidiary of The John Nuveen
Company, 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:
<TABLE>
<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
</TABLE>
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 who are
affiliated with the Adviser or to their officers,
all of whom receive remuneration for their
services to the Funds from the Adviser.
7. COMPOSITION OF NET ASSETS
At October 31, 1996, net assets consisted of:
<TABLE>
<CAPTION>
NPI NPM NPT
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $ 350,000,000 $300,000,000 $308,400,000
Common shares, $.01 par value per share 637,854 407,311 408,085
Paid-in surplus 903,352,773 565,415,504 563,796,849
Balance of undistributed net investment income 687,524 2,359,346 1,630,654
Accumulated net realized gain (loss) from investment transactions 1,859,722 (659,244) (21,243,511)
Net unrealized appreciation of investments 47,653,894 50,079,731 29,570,521
------------ ----------- -----------
Net assets $1,304,191,767 $917,602,648 $882,562,598
============= ============ ============
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Preferred 1,000,000 1,000,000 1,000,000
============= ============ ============
</TABLE>
<PAGE>
8. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which
include general obligation, escrowed and revenue
bonds. At October 31, 1996, the revenue sources by
municipal purpose for these investments, expressed
as a percent of total investments, were as
follows:
<TABLE>
<CAPTION>
NPI NPM NPT
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Revenue Bonds:
Housing Facilities 16% 20% 19%
Electric Utilities 11 2 12
Health Care Facilities 9 9 12
Transportation 7 10 7
Educational Facilities 5 4 9
Pollution Control Facilities 8 6 8
Lease Rental Facilities 4 5 3
Water / Sewer Facilities 4 2 4
Other 8 8 5
General Obligation Bonds 7 19 13
Escrowed Bonds 21 15 8
----- ----- -----
100% 100% 100%
===== ===== =====
</TABLE>
Certain long-term and intermediate-term
investments owned by the Funds are either 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,
both of which ensure the timely payment of
principal and interest in the event of default
(46% for NPI, 36% for NPM and 36% for NPT). Such
insurance or escrow, however, does not guarantee
the market value of the municipal securities or
the value of any of the Funds' shares.
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.
<PAGE>
9. OTHER MATTERS
As previously reported, certain legal actions
challenging the Fund's 1993 rights offering
brought by certain Fund shareholders are pending
in federal district court in Chicago against John
Nuveen &Co. Incorporated ("Nuveen"), Nuveen
Advisory Corp., the directors of the Fund,
in-house counsel to Nuveen (collectively "the
Nuveen Defendants"), and the Fund's former outside
legal counsel. Certain of the claims in these
actions are asserted on behalf of Fund
shareholders and certain are asserted on behalf of
the Fund.
On November 4, 1996, a Memorandum of Understanding
was signed on behalf of the plaintiffs by their
counsel and on behalf of the Nuveen Defendants by
their counsel, pursuant to which the above
litigation will be settled contingent on agreement
by the parties on settlement documentation,
approval by the Court of that final settlement
documentation, resolution of related claims
involving the Funds' former outside counsel, and
certain other contingencies. A similar agreement
has been reached between plaintiffs and the Fund's
former outside counsel. The settlements, which in
no way constitute an admission of liability by any
defendant, will be paid one half each by the
insurer for the Fund's former outside counsel and
by the insurer for the Nuveen Defendants. The
Memorandum of Understanding provides that the
settlement amounts will be paid primarily to the
Fund's shareholders allegedly injured by the
rights offering and that the Fund will be
reimbursed for litigation related expenses and
will receive any amounts after shareholder claims
are satisfied. If the Court preliminary approves
the settlement and related documentation,
shareholders will receive formal notification
which will include information on the
shareholders' rights under the settlement and the
procedure for filing any claims. Thereafter, the
Court will conduct a hearing to determine whether
to grant final approval of the settlement.
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD
IS AS FOLLOWS:
<CAPTION>
Dividends from tax-exempt
Operating performance net investment income
Net
realized and
Net asset unrealized
value Net gain (loss)
beginning investment from To Common To Preferred
of period income investments++ shareholders shareholders+
<S> <C> <C> <C> <C> <C>
NPI
Year ended 10/31,
1996 $15.110 $1.158 $ (.097) $ (.965) $(.196)
1995 14.140 1.235 1.006 (1.056) (.215)
1994 16.300 1.256 (2.016)+++ (1.172) (.156)
1993 15.790 1.431 .612 (1.364) (.169)
5 mos. ended
10/31/92 15.760 .602 .023 (.516) (.079)
Year ended 5/31,
1992 15.180 1.492 .492 (1.135) (.269)
1991 14.600 1.504 .532 (1.080) (.376)
1990 14.720 1.508 (.115) (1.080) (.433)
6/22/89 to
5/31/90 14.050 1.101 .741 (.747) (.268)
<CAPTION>
NPM
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 14.890 1.193 .265 (.927) (.261)
1995 13.030 1.196 1.878 (.918) (.296)
1994 15.600 1.179 (2.528) (.940) (.239)
1993 13.570 1.143 2.182 (.907) (.250)
7/23/92 to
10/31/92 14.050 .162 (.545) (.076) --
<CAPTION>
NPT
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 13.870 1.097 .185 (.816) (.266)
1995 12.090 1.100 1.810 (.840) (.290)
1994 14.870 1.069 (2.770) (.835) (.201)
2/19/93 to
10/31/93 14.050 .510 .972 (.416) (.073)
<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 shareholders+ discounts of period of period
NPI
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 $(.050) $ -- $ -- $14.960 $14.500
1995 -- -- -- 15.110 14.375
1994 (.072) -- -- 14.140 13.250
1993 -- -- -- 16.300 17.750
5 mos. ended
10/31/92 -- -- -- 15.790 15.875
Year ended 5/31,
1992 -- -- -- 15.760 16.250
1991 -- -- -- 15.180 15.375
1990 -- -- -- 14.600 15.000
6/22/89 to
5/31/90 -- -- (.157) 14.720 14.875
<CAPTION>
NPM
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 -- -- -- 15.160 14.125
1995 -- -- -- 14.890 13.125
1994 (.032) (.010) -- 13.030 11.375
1993 -- -- (.138) 15.600 14.875
7/23/92 to
10/31/92 -- -- (.021) 13.570 13.375
<CAPTION>
NPT
<S> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 -- -- -- 14.070 12.688
1995 -- -- -- 13.870 12.125
1994 (.031) (.005) (.007) 12.090 10.750
2/19/93 to
10/31/93 -- -- (.173) 14.870 14.250
<PAGE>
<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
value** value** (in thousands) assets*** net assets*** rate
NPI
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 8.24% 5.92% $1,304,192 .75% 5.67% 16%
1995 16.88 14.84 1,313,673 .76 6.13 12
1994 (19.13) (5.88) 1,252,208 .77 6.08 15
1993 20.96 12.33 1,213,064 .79 6.28 11
5 mos. ended
10/31/92 .73 3.46 1,173,329 .78* 6.33* 2
Year ended 5/31,
1992 13.32 11.72 1,167,042 .66 6.71 2
1991 10.14 11.88 1,127,103 .65 6.97 1
1990 8.39 6.74 1,090,365 .65 6.98 4
6/22/89 to
5/31/90 4.38 10.44 1,089,152 .62* 6.92* 7
<CAPTION>
NPM
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 14.94 8.28 917,603 .77 5.34 24
1995 24.22 22.06 906,547 .77 5.60 27
1994 (17.76) (10.64) 830,600 .76 5.41 26
1993 18.47 22.31 835,582 .73 5.19 20
7/23/92 to
10/31/92 (10.38) (2.89) 552,570 .73* 4.77* 12
<CAPTION>
NPT
<S> <C> <C> <C> <C> <C> <C>
Year ended 10/31,
1996 11.57 7.53 882,563 .79 5.11 20
1995 21.32 22.41 874,337 .80 5.35 32
1994 (19.12) (13.29) 801,617 .88 5.15 47
2/19/93 to
10/31/93 (2.13) 8.94 431,437 .82* 4.04* 10
<FN>
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and changes
in stock price per share. Total Return on Net Asset Value is the combination
of reinvested dividend income, reinvested capital gains distributions, if any,
and changes in net asset value per share.
*** Ratios do not reflect the effect of dividend payments to Preferred shareholders.
+ The amounts shown are based on Common share equivalents.
++ Net of taxes, if applicable.
+++ Includes ($.187) effect of the Fund's Rights Offering of shares at a price
below NAV and costs of the offering.
</FN>
</TABLE>
<PAGE>
REPORT OF INDEPENDENT AUDITORS
The Board of Directors and Shareholders
Nuveen Premium Income Municipal Fund, Inc.
Nuveen Premium Income Municipal Fund 2, Inc.
Nuveen Premium Income Municipal Fund 4, Inc.
We have audited the accompanying statements of net
assets, including the portfolios of investments,
of Nuveen Premium Income Municipal Fund, Inc.,
Nuveen Premium Income Municipal Fund 2, Inc. and
Nuveen Premium Income Municipal Fund 4, Inc. as of
October 31, 1996, and the related statements of
operations and 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 October
31, 1996, by correspondence with the custodian. 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 Premium Income Municipal Fund,
Inc., Nuveen Premium Income Municipal Fund 2, Inc.
and Nuveen Premium Income Municipal Fund 4, Inc.
at October 31, 1996, and the results of their
operations, changes in their net assets and their
financial highlights for the periods indicated
therein in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Chicago, Illinois
December 13, 1996
<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 add to your tax-free portfolio and earn the
tax-free income you need to achieve your financial goals.
NUVEEN EXCHANGE-TRADED FUNDS 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 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. 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. Income or capital gains taxes may be payable on dividends
or distributions that are reinvested.
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
<PAGE>
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.
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 financial 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. Nuveen is pleased to provide the account information you
and your adviser need to plan effectively."
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."
More than just a number
If you've ever called our toll-free customer service line, you've spoken with
one of Nuveen's customer service representatives. These reps are ready to
assist you with answers to your questions about current account balances,
yields, and previous transactions on your accounts. They can also supply
additional information about any of Nuveen's tax-free unit trusts and
mutual funds.
If you have a question about your account, or whenever you need help, just
call 800.257.8787. Our customer service reps are available Monday through
Friday from 8:00 a.m. to 8:00 p.m. Eastern time.
Photographic image of woman seated and man standing behind her representing
Nuveen investors.
<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
FAN-5-10.96
