Nuveen Exchange-Traded Funds
JANUARY 31, 1998
SEMIANNUAL REPORT
DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN.
NAZ
Arizona
NUM
NMP
Michigan
NUO
Ohio
NTX
Texas
Photo of: 2 people fishing.
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Highlights
As of January 31, 1998
CONTENTS
1 Dear Shareholder
4 NAZ Commentary & Overview
6 NUM Commentary & Overview
8 NMP Commentary & Overview
10 NUO Commentary & Overview
12 NTX Commentary & Overview
14 Shareholder Meeting Report
19 Portfolio of Investments
44 Statement of Net Assets
46 Statement of Operations
48 Statement of Changes in Net Assets
51 Notes to Financial Statements
56 Financial Highlights
60 Building Better Portfolios
61 Fund Information
Performance Highlights
Nuveen Arizona Premium Income Municipal Fund
o Stable Tax-Free Dividend for 12 Consecutive Months
o Taxable Equivalent Yield of 7.70% for Investors in
Combined 34.3% Federal and State Income Tax Bracket
o 1-Year Total Return of 11.89% Outperforms Lehman Brothers Municipal Index
Nuveen Michigan Quality Income Municipal Fund
o Stable Tax-Free Dividend for 32 Consecutive Months
o Taxable Equivalent Yield of 8.38% for Investors in
Combined 34% Federal and State Income Tax Bracket
o 1-Year Total Return of 10.89% Outperforms Lehman Brothers Municipal Index
Nuveen Michigan Premium Income Municipal Fund
o Stable Tax-Free Dividend for 6 Consecutive Months
o Ranked first in Lipper Category for 1- and 3-year Periods
o 1-Year Total Return of 13.03% Outperforms both Lehman Brothers
Municipal Index
Nuveen Ohio Quality Income Municipal Fund
o Stable Tax-Free Dividend for 6 Consecutive Months
o Taxable Equivalent Yield of 8.13% for Investors in
Combined 35.8% Federal and State Income Tax Bracket
o 1-Year Total Return of 12.11% Outperforms Lehman Brothers Municipal Index
Nuveen Texas Quality Income Municipal Fund
o Stable Tax-Free Dividend for 24 Consecutive Months
o Taxable Equivalent Yield of 8.48% for Investors in
Combined 31% Federal and State Income Tax Bracket
o 1-Year Total Return of 11.87% Outperforms Lehman Brothers Municipal Index
PIE CHARTS FOR HIGH CREDIT QUALITY:
Nuveen Arizona Premium Income Municipal Fund
AAA 63%
AA 23%
A 4%
BBB/NR 10%
Nuveen Michigan Quality Income Municipal Fund
AAA 55%
AA 34%
A 8%
BBB/NR 3%
Nuveen Michigan Premium Income Municipal Fund
AAA 52%
AA 34%
A 13%
BBB 1%
Nuveen Ohio Quality Income Municipal Fund
AAA 64%
AA 17%
A 8%
BBB/NR 11%
Nuveen Texas Quality Income Municipal Fund
AAA 60%
AA 16%
A 18%
BBB/NR 6%
<PAGE>
Dear Shareholder
Photo of: TIMOTHY R. SCHWERTFEGER
CHAIRMAN OF THE BOARD
Wealth takes a lifetime to build. Once achieved, it should be preserved.
Over the past year, the bond market enjoyed a period of solid performance, as
the benign inflationary environment provided the ideal backdrop for
fixed-income investments, including municipal issues. A shrinking federal
deficit and the inactivity of the Federal Reserve, which has been on hold since
its last interest rate tightening in March 1997, also contri buted to the
positive environment for bonds.
Between the end of January 1997 and January 1998, the yield on 30-year Treasury
bonds dropped from 6.79% to 5.80%, and the municipal market followed suit, as
the yield on the Bond Buyer 40 declined from 5.82% to 5.19%. The relatively
tight spread between tax-free municipal bond
yields and taxable Treasury
bond yields, combined with their ability to provide dependable tax-free income,
continue to make municipals an attractive investment opportunity.
FUND PERFORMANCE REVIEW
Over the past 12 months, the funds covered in this report
have performed well, rewarding investors with reliable tax-free income and
attractive returns. As of January 31, 1998, shareholders were receiving current
market yields that ranged from 5.06% to 5.85%. To match these yields, investors
in the 31% federal income tax bracket and applicable state tax bracket would
have had to earn at least 7.70% on taxable alternatives. Dividend stability
continues to be a hallmark of the
<PAGE>
Nuveen exchange-traded funds, as the dividends for the five funds in this report
were declared a total of 60 times over the past year with only two minor
adjustments.
For the 12 months ended January 31, 1998, the funds posted total returns
that ranged from 10.89% to 13.03%, as each fund outpaced the Lehman Brothers
Municipal Bond Index's one-year return of 10.11%. These returns were equivalent
to taxable returns of 14.18% to 16.00% for investors in the combined 31% federal
and applicable state tax bracket. For shareholders in higher federal tax
brackets, the tax-adjusted returns were even more attractive. You will find
additional details on the individual performance of each fund on pages 4-13.
MEETING INVESTOR NEEDS
The stable income stream and attractive returns detailed on the following pages
demonstrate that these funds continued to achieve their investment objectives,
which are to maintain a high level of current tax-free income and enhance
portfolio value through investments in state tax-exempt municipal bonds that
meet our value investing criteria.
At Nuveen, value investing means taking a fundamental approach to finding
bonds that are underrated or undervalued by the market but that have the
potential for above-market appreciation. Because we realize that we cannot
control the direction of the market, we focus instead on controlling the
selection process by thoroughly researching and assessing the individual
characteristics of each bond, such as sector, geographic region, structure and
credit quality. This enables us to select the bonds that create well-constructed
portfolios designed to meet our shareholders' needs for income and to provide
the potential for capital appreciation.
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BUILDING BETTER PORTFOLIOS
As you review the performance
of your fund and discuss the results with your financial adviser, we hope that
you continue to think of Nuveen when seeking quality investment solutions that
withstand the test of time. Your adviser can introduce you to a variety of other
Nuveen products and services designed to round out your portfolio of core
investments. These include our two balanced funds, which emphasize capital
appreciation and stability through a blend of equities and Treasury securities
or municipal bonds, as well as the new Nuveen Rittenhouse Growth Fund, a blue
chip equity mutual fund that provides a tax-efficient approach to building and
sustaining wealth. We encourage you to talk to your financial adviser about our
additional products and services to determine those that can best complement
your current Nuveen investments.
On behalf of everyone at Nuveen,
I thank you for your continued confidence in us and our family of investments.
Sincerely,
/s/TIMOTHY R. SCHWERTFEGER
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
March 16, 1998
Side Bar Text: "The stable income stream and attractive returns detailed on
the following pages demonstrate that these funds continued to achieve their
investment objectives."
Side Bar Text: "We hope that you continue to think of Nuveen when seeking
quality investment solutions that withstand the test of time."
<PAGE>
Nuveen Arizona Premium Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER STEVE KRUPA TALKS ABOUT THE ARIZONA MUNICIPAL MARKET, THE
PERFORMANCE OF THE ARIZONA PREMIUM INCOME FUND, AND OPPORTUNITIES TO FIND
VALUE DURING THE PAST YEAR.
PERFORMANCE REVIEW
Over the past 12 months, we have enjoyed a bull market in fixed-income
investments, including municipal bonds. New issue and refunding activity took
off, totaling $220 billion nationally by year end - the third largest volume
ever. In Arizona, supply was particularly heavy due to the tremendous growth in
the state's population and economy. This environment afforded numerous
opportunities to find value in the essential services sector, especially among
bonds issued by schools, water and sewer districts, and hospitals. The bull
market also brought volatility, as the continued strength of the economy caused
concern that robust growth would be accompanied by higher inflation. This
volatility, too, provided opportunities as we took advantage of temporary dips
in the market to purchase bonds at attractive levels.
As Tim mentioned in his letter to shareholders, the Arizona Premium Income Fund
performed well over the past 12 months, providing a steady monthly dividend of
$.069 per share throughout the period and generating a total return on net asset
value of 11.89%, equivalent to a taxable return of 14.91% for shareholders in
the combined 34.3% federal and state tax bracket. This compares favorably with
the 10.11% annual return for the Lehman Brothers Municipal Bond Index.
Nearly one quarter of the fund's portfolio has been pre-refunded and
escrowed with U.S. Treasury securities, providing exceptional stability and
enhanced credit quality. However, since pre-refunding also means the portfolio
is less affected by interest rate movements, the fund was less able to
participate fully in the market rally as interest rates fell. With short-term
interest rates well below long-term rates, common shareholders benefited from
the leveraged structure of the fund, which enabled us to add an additional 134
basis points to the yield.
STATE GROWTH CONTINUES
Over the past year, the state's economic growth slowed somewhat from peak
levels, but continued at a robust pace, making Arizona one of the
fastest-growing states in the country. Job growth and population growth remain
strong, as unemployment fell to its lowest rate since 1969. This continued
growth has increased the demand for essential services, which was reflected in
the increased supply of municipal bonds issued early in 1997. Although supply
has been relatively light in recent months, we expect new issuance to pick up
again as this vibrant growth creates additional financing needs throughout the
state.
SUMMARY AND OUTLOOK
In the coming months, we anticipate that the trend toward tight credit spreads
will continue, enabling us improve the quality of our portfolio by purchasing
high quality bonds at yields similar to those of bonds with lower credit
ratings. The fund's dividend is quite stable, having remained at its current
level for the past 12 months. Given the strong economy and low interest rate
environment, the trend toward pre-refunding is expected to continue, which
should increase the value of certain bonds in the portfolio. However, it may
limit the fund's ability to participate fully in future market rallies. Our
focus will continue to be on purchasing bonds issued by the essential services
sector, which we believe currently offers greater stability than general
obligation bonds.
<PAGE>
Nuveen Arizona Premium Income Municipal Fund
Performance Overview
As of January 31, 1998
NAZ
PORTFOLIO STATISTICS
=============================================
Inception Date 11/92
- ---------------------------------------------
Share Price $16 3/8
- ---------------------------------------------
Net Asset Value $15.59
- ---------------------------------------------
Current Market Yield 5.06%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal Only)(1) 7.33%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal and State)(1) 7.70%
- ---------------------------------------------
Fund Net Assets ($000) $97,033
- ---------------------------------------------
Average Weighted Maturity (Years) 18.64
- ---------------------------------------------
Average Weighted Duration (Years) 5.57
- ---------------------------------------------
ANNUALIZED TOTAL RETURN (AT NAV)
=============================================
1-Year 11.89%
- ---------------------------------------------
3-Year 11.37%
- ---------------------------------------------
5-Year 7.83%
- ---------------------------------------------
Since Inception 7.71%
- ---------------------------------------------
TAXABLE EQUIVALENT TOTAL RETURN(2)
=============================================
1-Year 14.91%
- ---------------------------------------------
3-Year 14.37%
- ---------------------------------------------
5-Year 10.79%
- ---------------------------------------------
Since Inception 10.56%
- ---------------------------------------------
PIE CHART:
Diversification
Transportation 6%
Tax Obligation (Limited) 9%
Housing (Single Family) 4%
Water and Sewer 10%
Housing (Multi-Family) 4%
Health Care 12%
Basic Materials 4%
Tax Obligation (G.O) 12%
Education/Civic Org. 4%
Utilities 14%
Other 1%
U.S. Guaranteed 20%
BAR CHART:
1997-1998 Monthly Tax-Free Dividends
Feb 97 0.069
Mar 97 0.069
Apr 97 0.069
May 97 0.069
Jun 97 0.069
Jul 97 0.069
Aug 97 0.069
Sep 97 0.069
Oct 97 0.069
Nov 97 0.069
Dec 97 0.069
Jan 98 0.069
1 Taxable equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 34.3%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 34.3%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
<PAGE>
Nuveen Michigan Quality Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER JAMES LUMBERG REVIEWS THE MICHIGAN MUNICIPAL MARKET AND OFFERS
INSIGHTS INTO FACTORS THAT AFFECTED THE PERFORMANCE OF THE MICHIGAN QUALITY
INCOME FUND.
PERFORMANCE REVIEW
For the 12 months ended January 31, 1998, the Michigan Quality Income Fund
posted a total return on net asset value of 10.89%, compared with 10.11% for the
Lehman Brothers Municipal Bond Index. This provided investors in the combined
34% federal and state tax bracket with a taxable equivalent return of 14.18%.
Also, the fund ranked in the middle of its peer group for the 1- and 3-year
periods, however, it ranked first for the longer-term 5-year period. Throughout
the period, the fund produced a steady monthly dividend of $.0795 per share.
IMPROVING ECONOMIC ENVIRONMENT LEADS TO CREDIT UPGRADES
In 1997, Standard & Poor's upgraded their credit rating for the state of
Michigan from AA to AA+. This upgrade reflects the improved economic environment
in the state as demonstrated by growth in per capita income, some
diversification of the employment base and a trend of unemployment rates that
are below the national average, among other factors.
KEEPING AN EYE ON STRUCTURE
Portfolio structure played a positive role in the fund's performance in
1997. The fund's leverage-adjusted duration on January 31 was 7.31 years, which
is longer than the 7.19 year average of the Lehman Brothers index. Duration was
beneficial in a year in which municipal bond yields fell 40 basis points from
5.82% on February 1, 1997, to 5.19% on January 31, 1998, as measured by the Bond
Buyer 40. However, duration is only one structural element that led to the
fund's favorable performance. Others include sector allocation, credit quality
and call protection.
Sector Allocation
The fund's largest sector allocation is in General Obligation bonds, which
account for 27% of the fund's net asset value. In the current market, as money
has come into the fund through bond calls and pre-refunding, we have redeployed
assets into General Obligation bonds backed by the full faith and credit of the
state or local government. Our bias for General Obligation bonds in the past
year was the result of two market dynamics. First, supply within this sector was
heavy at times, providing opportunities to purchase bonds at attractive levels.
Second, many General Obligation bonds are highly rated, matching a preference
for higher credit quality in a market where investors are generally not
compensated for assuming incremental credit risk. The fund's second largest
sector allocations is escrowed securities. Nearly a quarter of the fund's
portfolio holdings have been pre-refunded and escrowed with U.S. Treasury
securities, providing exceptional stability and enhanced credit quality.
Looking forward, we see similar opportunity in the public utility sector.
The state of Michigan is on the forefront of a national trend toward
deregulation of the electric utility sector, providing additional opportunities
for value investing. We are attempting to select credits that will be dominant
after the storm of deregulation has passed, especially the bonds of those
companies who stand to benefit from deregulation, including low cost providers
with fundamentally sound financials and favorable customer bases. We feel that
our investment in this sector will provide the same upside potential that
healthcare bonds did a few years ago.
Credit Quality
As of January 31, more than 85% of the portfolio was invested in bonds
rated AA or better. There are three reasons for the fund's high credit quality.
First, a large percentage of the fund has been pre-refunded. Second, several
bonds that we felt were underrated at the time of purchase have been upgraded as
the economic environment within the state has improved. Lastly, new purchases in
the past year have largely been in bonds with ratings of AA or better.
Call Protection
Finally, the fund benefits from well-diversified call protection that will
heighten, in part, the fund's ability to maintain predictable income for
investors. Less than 2% of the total portfolio is subject to call prior to the
year 2001. Staggered call exposure helps protect the fund from reinvestment risk
in the event that interest rates cycle downward.
STRATEGIES FOR THE FUTURE
We continue to manage the fund by focusing on the selection of undervalued
securities that provide both attractive income and the opportunity for price
appreciation relative to the market, consistent with the preservation of
capital.
If the yield curve remains flat throughout the year, we will continue
to seek maturities inside of 25 years, favoring bonds in the 15- to 20-year
maturity range.
Similarly, with credit premiums remaining at historically tight
spreads, we will continue to favor the high end of the credit quality spectrum.
<PAGE>
Nuveen Michigan Quality Income Municipal Fund
Performance Overview
As of January 31, 1998
NUM
PORTFOLIO STATISTICS
=============================================
Inception Date 10/91
- ---------------------------------------------
Share Price $17 1/4
- ---------------------------------------------
Net Asset Value $16.06
- ---------------------------------------------
Current Market Yield 5.53%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal Only)(1) 8.01%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal and State)(1) 8.38%
- ---------------------------------------------
Fund Net Assets ($000) $262,199
- ---------------------------------------------
Average Weighted Maturity (Years) 20.87
- ---------------------------------------------
Leverage-Adjusted Duration (Years) 7.31
- ---------------------------------------------
ANNUALIZED TOTAL RETURN (AT NAV)
=============================================
1-Year 10.89%
- ---------------------------------------------
3-Year 10.38%
- ---------------------------------------------
5-Year 8.37%
- ---------------------------------------------
Since Inception 8.85%
- ---------------------------------------------
TAXABLE EQUIVALENT TOTAL RETURN(2)
=============================================
1-Year 14.18%
- ---------------------------------------------
3-Year 13.71%
- ---------------------------------------------
5-Year 11.78%
- ---------------------------------------------
Since Inception 12.14%
- ---------------------------------------------
PIE CHART:
Diversification
Tax Obligation (Limited) 6%
Housing (Multi-Family) 5%
Other 4%
Health Care 8%
Long-Term Care 3%
Utilities 17%
Housing (Single Family) 3%
U.S. Guaranteed 24%
Education/Civic Org. 3%
Tax Obligation (G.O.) 27%
BARCHART:
1997-1998 Monthly Tax-Free Dividends(3)
Feb 97 0.0795
Mar 97 0.0795
Apr 97 0.0795
May 97 0.0795
Jun 97 0.0795
Jul 97 0.0795
Aug 97 0.0795
Sep 97 0.0795
Oct 97 0.0795
Nov 97 0.0795
Dec 97 0.0795
Jan 98 0.0795
1 Taxable equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 34%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 34%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
3 The fund paid shareholders a capital gains distribution in December of $0.0101
per share.
<PAGE>
Nuveen Michigan Premium Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER JAMES LUMBERG DISCUSSES THE MICHIGAN PREMIUM INCOME FUND
AND REVIEWS FACTORS THAT AFFECTED PERFORMANCE OVER THE PAST YEAR.
PERFORMANCE REVIEW
The Nuveen Michigan Premium Income Municipal Fund provided investors with a
total return on net asset value of 13.03%, equivalent to a taxable return of
16.00% for shareholders in the combined 34% federal and state tax bracket. This
performance bested both the Lehman Brothers Municipal Bond Index's annual return
of 10.11% and the Lipper peer group average of 11.11%. Also, the fund ranked
first in its Lipper category for total return for both the 1- and 3- year
periods. In August 1997, the monthly dividend of $.067 per share was increased
to $.068.
IMPROVING ECONOMIC ENVIRONMENT LEADS TO CREDIT UPGRADES
In 1997, Standard & Poor's upgraded their credit rating for the state of
Michigan from AA to AA+. This upgrade reflects the improved economic environment
in the state as demonstrated by growth in per capita income, some
diversification of the employment base and a trend of unemployment rates that
are below the national average, among other factors.
KEEPING AN EYE ON STRUCTURE
Portfolio structure played a positive role in the fund's performance in
1997. The fund's leverage-adjusted duration on January 31 was 8.38 years, which
is longer than the 7.19 year average of the Lehman Brothers index. Duration was
beneficial in a year in which municipal bond yields fell 40 basis points from
5.82% on February 1, 1997, to 5.19% on January 31, 1998, as measured by the Bond
Buyer 40. However, duration is only one structural element that led to the
fund's favorable performance. Others include sector allocation, credit quality
and call protection.
Sector Allocation
The fund's two largest sector allocations are healthcare and public utility
bonds, each accounting for roughly 20% of the fund's net assets. The fund
established its core position in healthcare bonds in the mid-1990s, when
uncertainty surrounding healthcare reform created opportunities for value
investing. At that time, the fund sought out bonds of fundamentally strong
facilities with favorable competitive positions and healthy financial operations
that were being penalized by broad market hysteria. Since that time, spreads for
healthcare bonds have narrowed and many of these bonds have been pre-refunded,
adding price stability and dependable income to the portfolio.
Looking forward, we see similar opportunity in the public utility sector. The
state of Michigan is on the forefront of a national trend toward deregulation of
the electric utility sector, providing additional opportunities for value
investing. We are attempting to select credits that will be dominant after the
storm of deregulation has passed, especially the bonds of those companies who
stand to benefit from deregulation, including low cost providers with
fundamentally sound financials and favorable customer bases. We feel that our
investment in this sector will provide the same upside potential that healthcare
bonds did a few years ago.
Credit Quality
As of January 31, more than 85% of the portfolio was invested in bonds
rated AA or better. The reasons for such high credit quality include: Some of
the fund's lower-rated credits have been pre-refunded as issuers took advantage
of lower interest rates, adding price stability and credit quality to the fund.
Second, several bonds that we felt were underrated at the time of purchase have
been upgraded as the economic environment within the state has improved. And
lastly, our credit bias is to purchase bonds with high credit quality since we
believe investors are not adequately compensated for credit risk in the current
market.
Call Protection
Finally, the fund benefits from well-diversified call protection that will
heighten, in part, the fund's ability to maintain predictable income for
investors. Less than 2% of the total portfolio is subject to call prior to the
year 2001. Staggered call exposure helps protect the fund from reinvestment risk
in the event that interest rates cycle downward.
STRATEGIES FOR THE FUTURE
We continue to manage the fund by focusing on the selection of undervalued
securities that provide both attractive income and the opportunity for price
appreciation relative to the market, consistent with the preservation of
capital.
If the yield curve remains flat throughout the year, we will continue
to seek maturities inside of 25 years, favoring bonds in the 15- to 20-year
maturity range.
Similarly, with credit premiums remaining at historically tight
spreads, we will continue to favor the high end of the credit quality spectrum.
<PAGE>
Nuveen Michigan Premium Income Municipal Fund
Performance Overview
As of January 31, 1998
NMP
PORTFOLIO STATISTICS
=============================================
Inception Date 12/92
- ---------------------------------------------
Share Price $15 1/16
- ---------------------------------------------
Net Asset Value $15.40
- ---------------------------------------------
Current Market Yield 5.42%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal Only)(1) 7.86%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal and State)(1) 8.21%
- ---------------------------------------------
Fund Net Assets ($000) $174,235
- ---------------------------------------------
Average Weighted Maturity (Years) 16.25
- ---------------------------------------------
Leverage-Adjusted Duration (Years) 8.38
- ---------------------------------------------
ANNUALIZED TOTAL RETURN (AT NAV)
=============================================
1-Year 13.03%
- ---------------------------------------------
3-Year 12.32%
- ---------------------------------------------
5-Year 7.73%
- ---------------------------------------------
Since Inception 7.54%
- ---------------------------------------------
TAXABLE EQUIVALENT TOTAL RETURN(2)
=============================================
1-Year 16.00%
- ---------------------------------------------
3-Year 15.32%
- ---------------------------------------------
5-Year 10.66%
- ---------------------------------------------
Since Inception 10.40%
- ---------------------------------------------
PIE CHART:
Diversification
Water and Sewer 7%
Education/Civic Org. 6%
Housing (Multi-Family) 10%
U.S. Guaranteed 3%
Tax Obligation (Limited) 11%
Housing (Single Family) 3%
Tax Obligation (G.O.) 14%
Capital Goods 3%
Health Care 19%
Other 2%
Utilities 22%
BAR CHART:
1997-1998 Monthly Tax-Free Dividends
Feb 97 0.067
Mar 97 0.067
Apr 97 0.067
May 97 0.067
Jun 97 0.067
Jul 97 0.067
Aug 97 0.068
Sep 97 0.068
Oct 97 0.068
Nov 97 0.068
Dec 97 0.068
Jan 98 0.068
1 Taxable equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 34%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 34%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
<PAGE>
Nuveen Ohio Quality Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER JAMES LUMBERG COMMENTS ON THE OHIO MUNICIPAL MARKET AND THE
PERFORMANCE OF THE OHIO QUALITY INCOME FUND OVER THE PAST 12 MONTHS.
PERFORMANCE REVIEW
Over the past year, the performance of the Ohio Quality Income Fund was strong,
with the fund's total annual return on net asset value of 12.11% outperforming
both the Lehman Brothers Municipal Bond Index return of 10.11% and the Lipper
peer group average of 11.60%. For investors in the combined 35.8% federal and
state tax bracket, this provided a taxable equivalent return of 15.58%. Also,
the fund ranked first in its Lipper category for both the 3- and 5-year periods.
MAINTAINING FINANCIAL STRENGTH
Ohio's current budget calls for $3 billion of debt to be issued through the year
2000, with capital spending targeted for schools, prisons, and parks and natural
resource facilities. As specified in the state constitution, the Ohio Building
Authority and the Ohio Public Facilities Commission are the state's primary
vehicles for financing long-term capital improvements. Bonds issued by these two
agencies are secured by state lease-rental payments, with user departments
incurring an absolute and unconditional obligation to make payments.
The state's AA+ credit rating for General Obligation bonds reflects the depth of
Ohio's economy, strong financial management, and manageable level of debt.
Economic diversification, an expanding service sector, strong export activity,
and stable real estate markets also contributed to the continuing strength of
Ohio's economic performance. This has enabled the state to accumulate sizable
financial reserves. As the state continues to work toward restructuring school
funding formulas in line with 1997's state supreme court decision, the challenge
will be to balance education requirements with other spending needs while
maintaining a strong financial position.
KEEPING AN EYE ON STRUCTURE
Sector Allocation
In addition to pre-refunded and escrowed bonds, which represent 18% of the
portfolio, the fund's two largest sector allocations are General Obligation
(accounting for 16% of the fund's net assets) and education bonds, accounting
for another 12% of the portfolio. General Obligation bonds provide the core
position of the portfolio. Backed by the full faith and credit of the state or
local government, these bonds support essential services such as water and
sewer projects.
Looking forward, we see opportunity in the public utility sector. The state of
Ohio is considering legislative proposals to deregulate its electric utility
sector, which should provide opportunities for value investing. We are
attempting to select credits that will be dominant after the storm of
deregulation has passed, especially the bonds of those companies that stand to
benefit from deregulation, including low cost providers with fundamentally sound
financials and favorable customer bases. We feel that our investment in this
sector will provide the same upside potential that healthcare bonds did a few
years ago.
Credit Quality
With 80% of the portfolio rated AA or better, the fund is reaping the rewards of
selecting bonds that were eventually pre-refunded. In an advance refunding, a
bond issue is essentially repaid early and becomes secured by U.S. government or
agency securities until it can be called by the issuer. With these bonds now
backed by AAA-rated Treasury bonds, we have improved the credit quality of the
fund and improved its net asset value stability.
Call Protection
Finally, the fund benefits from well-diversified call
protection that will heighten, in part, the fund's ability to maintain
predictable income for investors. Less than 2% of the total portfolio is subject
to call prior to the year 2001. Staggered call exposure helps protect the fund
from reinvestment risk in the event that interest rates cycle downward.
STRATEGIES FOR THE FUTURE
We continue to manage the fund by focusing on the selection of undervalued
securities that provide both attractive income and the opportunity for price
appreciation relative to the market, consistent with the preservation of
capital.
If the yield curve remains flat throughout the year, we will continue to seek
maturities inside of 25 years, favoring bonds in the 15- to 20-year range. It is
our opinion that in the current yield environment, investors are not being
adequately compensated for assuming incremental interest rate risk of maturities
at the long end of the market.
Similarly, with credit premiums remaining at historically tight spreads, we will
continue to favor the high end of the credit spectrum.
<PAGE>
Nuveen Ohio Quality Income Municipal Fund
Performance Overview
As of January 31, 1998
NUO
PORTFOLIO STATISTICS
=============================================
Inception Date 10/91
- ---------------------------------------------
Share Price $18 5/8
- ---------------------------------------------
Net Asset Value $16.82
- ---------------------------------------------
Current Market Yield 5.22%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal Only)(1) 7.57%
- ---------------------------------------------
Taxable Equivalent Yield
(Federal and State)(1) 8.13%
- ---------------------------------------------
Fund Net Assets ($000) $234,003
- ---------------------------------------------
Average Weighted Maturity (Years) 19.58
- ---------------------------------------------
Average Weighted Duration (Years) 5.13
- ---------------------------------------------
ANNUALIZED TOTAL RETURN (AT NAV)
=============================================
1-Year 12.11%
- ---------------------------------------------
3-Year 11.35%
- ---------------------------------------------
5-Year 9.33%
- ---------------------------------------------
Since Inception 9.34%
- ---------------------------------------------
TAXABLE EQUIVALENT TOTAL RETURN(2)
=============================================
1-Year 15.58%
- ---------------------------------------------
3-Year 14.86%
- ---------------------------------------------
5-Year 12.91%
- ---------------------------------------------
Since Inception 12.79%
- ---------------------------------------------
PIE CHART:
Diversification
Water and Sewer 10%
Utilities 10%
Housing (Multi-Family) 8%
Health Care 11%
Housing (Single Family) 6%
Education/Civic Org. 12%
Other 5%
Tax Obligation (G.O.) 16%
Tax Obligation (Limited) 4%
U.S. Gauranteed 18%
BAR CHART:
1997-1998 Monthly Tax-Free Dividends
Feb 97 0.08
Mar 97 0.08
Apr 97 0.08
May 97 0.08
Jun 97 0.08
Jul 97 0.08
Aug 97 0.081
Sep 97 0.081
Oct 97 0.081
Nov 97 0.081
Dec 97 0.081
Jan 98 0.081
1 Taxable equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 35.8%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 35.8%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
<PAGE>
Nuveen Texas Quality Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER DAN SOLENDER DISCUSSES THE CURRENT STATE OF THE TEXAS
MUNICIPAL MARKET AND FACTORS THAT AFFECTED THE ANNUAL PERFORMANCE OF THE TEXAS
QUALITY INCOME FUND.
PERFORMANCE REVIEW
The Texas Quality Income Fund returned 11.87% on net asset value for the 12
months ending January 31, 1998, outperforming the Lehman Brothers Municipal Bond
Index's 10.11% return and providing a taxable equivalent return of 14.70% for
investors in the 31% federal tax bracket. This strong performance was due in
large part to the appreciation of the bonds in the portfolio during the strong
bond market of the past year. Over this period, the fund continued to provide a
steady dividend of $.078 per share each month.
PORTFOLIO CHANGES AND PURCHASES
Although supply in the general municipal bond market was heavy, reaching
its highest level since 1993, Texas saw only sporadic supply, with periods of
limited and heavy volume alternating intermittently. In this environment, we
focused on new issues and opportunities that presented themselves when supply
was heavy. Portfolio turnover remained below 10%, but bonds were added when they
could enhance the total return performance of the portfolio. Incremental yield
was added through the purchase of longer-term discount bonds and insured
hospital bonds.
THE STATE OF THE STATE
The credit quality of the new supply market in Texas is very high, with the
majority of new bonds rated AAA and AA. A strong state economy and a balanced
budget with sizable cash reserves and low debt levels form the basis of the
state's credit strength. State finances have recovered significantly from the
budget deficits of the 1980s, which were brought on by the collapse of oil
prices, decline in real estate markets, and aerospace cutbacks. The Texas
economy now continues to expand, with economic diversification supplied by the
construction, services, and manufacturing sectors, particularly in apparel and
high-technology. Strong financial management and increased revenues from
additional taxes and a new lottery have improved and stabilized the Texas
economy.
Current spending pressures come from growing demand for medical assistance and
education funding on behalf of a growing population as well as the increasing
operational costs of correctional facilities. Despite continued uncertainty
regarding the constitutionality of school funding formulas, the outlook for
general obligation bonds is stable. Overall, economic fundamentals in the state
remain strong due to the competitive advantages offered by Texas's low-cost
business environment, substantial growth in the high-tech sector, and favorable
geographic position for international trade.
SUMMARY AND OUTLOOK
We expect credit spreads to remain tight, providing us with opportunities to buy
higher quality bonds at yields comparable to those with lower credit
ratings. Over the coming months, we plan to focus on sectors such as health care
and essential services, seeking primarily bonds with longer maturities. We will
also search for opportunities to enhance yield if credit spreads temporarily
widen.
<PAGE>
Nuveen Texas Quality Income Municipal Fund
Performance Overview
As of January 31, 1998
NTX
PORTFOLIO STATISTICS
=============================================
Inception Date 10/91
- ---------------------------------------------
Share Price $16
- ---------------------------------------------
Net Asset Value $16.09
- ---------------------------------------------
Current Market Yield 5.85%
- ---------------------------------------------
Taxable Equivalent Yield(1) 8.48%
- ---------------------------------------------
Fund Net Assets ($000) $220,279
- ---------------------------------------------
Average Weighted Maturity (Years) 20.28
- ---------------------------------------------
Average Weighted Duration (Years) 5.73
- ---------------------------------------------
ANNUALIZED TOTAL RETURN (AT NAV)
=============================================
1-Year 11.87%
- ---------------------------------------------
3-Year 10.98%
- ---------------------------------------------
5-Year 8.66%
- ---------------------------------------------
Since Inception 8.85%
- ---------------------------------------------
TAXABLE EQUIVALENT TOTAL RETURN(2)
=============================================
1-Year 14.70%
- ---------------------------------------------
3-Year 13.89%
- ---------------------------------------------
5-Year 11.67%
- ---------------------------------------------
Since Inception 11.75%
- ---------------------------------------------
PIE CHART:
Diversification
Housing (Single Family) 9%
Education/Civic Org. 9%
Utilities 8%
Transportation 12%
Tax Obligation (Limited) 7%
Tax Obligation (G.O.) 14%
Water and Sewer 6%
U.S. Guaranteed 15%
Other 4%
Health Care 16%
BAR CHART:
1997-1998 Monthly Tax-Free Dividends
Feb 97 0.078
Mar 97 0.078
Apr 97 0.078
May 97 0.078
Jun 97 0.078
Jul 97 0.078
Aug 97 0.078
Sep 97 0.078
Oct 97 0.078
Nov 97 0.078
Dec 97 0.078
Jan 98 0.078
1 Taxable equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. It is
based on the current market yield and a federal income tax rate of 31%.
2 Taxable equivalent total return is based on the annualized total return and a
federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
<PAGE>
<TABLE>
Shareholder Meeting Report
Annual Meeting Date: January 31, 1998
<CAPTION>
ARIZONA PREMIUM MICHIGAN QUALITY
- --------------------------------------------------------------------------------------------------------------------
Preferred Preferred
Common Shares Common Shares
Shares Series-Th Shares Series-Th
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
APPROVAL OF THE DIRECTORS
WAS REACHED AS FOLLOWS:
ROBERT P. BREMNER
For 4,055,603 1,061 10,182,662 3,141
Withhold 35,252 8 125,539 28
- --------------------------------------------------------------------------------------------------------------------
Total 4,090,855 1,069 10,308,201 3,169
LAWRENCE H. BROWN
For 4,055,603 1,061 10,182,662 3,141
Withhold 35,252 8 125,539 28
- --------------------------------------------------------------------------------------------------------------------
Total 4,090,855 1,069 10,308,201 3,169
ANTHONY T. DEAN
For 4,055,603 1,061 10,182,662 3,141
Withhold 35,252 8 125,539 28
- --------------------------------------------------------------------------------------------------------------------
Total 4,090,855 1,069 10,308,201 3,169
ANNE E. IMPELLIZZERI
For 4,055,603 1,061 10,177,562 3,141
Withhold 35,252 8 130,639 28
- --------------------------------------------------------------------------------------------------------------------
Total 4,090,855 1,069 10,308,201 3,169
PETER R. SAWERS
For 4,055,603 1,061 10,172,721 3,141
Withhold 35,252 8 135,480 28
- --------------------------------------------------------------------------------------------------------------------
Total 4,090,855 1,069 10,308,201 3,169
JUDITH M. STOCKDALE
For 4,055,603 1,061 10,171,135 3,141
Withhold 35,252 8 137,066 28
- --------------------------------------------------------------------------------------------------------------------
Total 4,090,855 1,069 10,308,201 3,169
WILLIAM J. SCHNEIDER
For -- 1,060 -- 3,141
Withhold -- 9 -- 28
- --------------------------------------------------------------------------------------------------------------------
Total -- 1,069 -- 3,169
TIMOTHY R. SCHWERTFEGER
For -- 1,060 -- 3,141
Withhold -- 9 -- 28
- --------------------------------------------------------------------------------------------------------------------
Total -- 1,069 -- 3,169
RATIFICATION OF AUDITORS
WAS REACHED AS FOLLOWS:
For 4,037,559 1,058 10,154,328 3,128
Against 12,094 5 27,388 14
Abstain 41,202 6 126,485 27
- --------------------------------------------------------------------------------------------------------------------
Total 4,090,855 1,069 10,308,201 3,169
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
MICHIGAN PREMIUM
- --------------------------------------------------------------------------------------------------------------------
Preferred Preferred
Common Shares Shares
Shares Series-Th Series-M
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
APPROVAL OF THE DIRECTORS
WAS REACHED AS FOLLOWS:
ROBERT P. BREMNER
For 7,088,027 1,339 832
Withhold 88,483 1 8
- --------------------------------------------------------------------------------------------------------------------
Total 7,176,510 1,340 840
LAWRENCE H. BROWN
For 7,083,859 1,339 832
Withhold 92,651 1 8
- --------------------------------------------------------------------------------------------------------------------
Total 7,176,510 1,340 840
ANTHONY T. DEAN
For 7,086,695 1,339 832
Withhold 89,815 1 8
- --------------------------------------------------------------------------------------------------------------------
Total 7,176,510 1,340 840
ANNE E. IMPELLIZZERI
For 7,082,033 1,339 832
Withhold 94,477 1 8
- --------------------------------------------------------------------------------------------------------------------
Total 7,176,510 1,340 840
PETER R. SAWERS
For 7,083,761 1,339 832
Withhold 92,749 1 8
- --------------------------------------------------------------------------------------------------------------------
Total 7,176,510 1,340 840
JUDITH M. STOCKDALE
For 7,066,171 1,339 832
Withhold 110,339 1 8
- --------------------------------------------------------------------------------------------------------------------
Total 7,176,510 1,340 840
WILLIAM J. SCHNEIDER
For -- 1,339 832
Withhold -- 1 8
- --------------------------------------------------------------------------------------------------------------------
Total -- 1,340 840
TIMOTHY R. SCHWERTFEGER
For -- 1,339 832
Withhold -- 1 8
- --------------------------------------------------------------------------------------------------------------------
Total -- 1,340 840
RATIFICATION OF AUDITORS
WAS REACHED AS FOLLOWS:
For 7,054,478 1,311 836
Against 18,840 1 --
Abstain 103,192 28 4
- --------------------------------------------------------------------------------------------------------------------
Total 7,176,510 1,340 840
</TABLE>
<PAGE>
<TABLE>
Shareholder Meeting Report
Annual Meeting Date: January 31, 1998
OHIO QUALITY
- --------------------------------------------------------------------------------------------------------------------
<CAPTION>
Preferred Preferred Preferred
Common Shares Shares Shares
Shares Series-Th Series-M Series-Th2
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
APPROVAL OF THE DIRECTORS
WAS REACHED AS FOLLOWS:
ROBERT P. BREMNER
For 8,286,713 1,380 624 977
Withhold 81,219 17 12 16
- --------------------------------------------------------------------------------------------------------------------
Total 8,367,932 1,397 636 993
LAWRENCE H. BROWN
For 8,286,694 1,380 624 977
Withhold 81,238 17 12 16
- --------------------------------------------------------------------------------------------------------------------
Total 8,367,932 1,397 636 993
ANTHONY T. DEAN
For 8,287,046 1,380 624 977
Withhold 80,886 17 12 16
- --------------------------------------------------------------------------------------------------------------------
Total 8,367,932 1,397 636 993
ANNE E. IMPELLIZZERI
For 8,279,049 1,380 624 977
Withhold 88,883 17 12 16
- --------------------------------------------------------------------------------------------------------------------
Total 8,367,932 1,397 636 993
PETER R. SAWERS
For 8,283,462 1,380 624 977
Withhold 84,470 17 12 16
- --------------------------------------------------------------------------------------------------------------------
Total 8,367,932 1,397 636 993
JUDITH M. STOCKDALE
For 8,277,222 1,380 624 977
Withhold 90,710 17 12 16
- --------------------------------------------------------------------------------------------------------------------
Total 8,367,932 1,397 636 993
WILLIAM J. SCHNEIDER
For -- 1,380 624 977
Withhold -- 17 12 16
- --------------------------------------------------------------------------------------------------------------------
Total -- 1,397 636 993
TIMOTHY R. SCHWERTFEGER
For -- 1,380 624 977
Withhold -- 17 12 16
- --------------------------------------------------------------------------------------------------------------------
Total -- 1,397 636 993
RATIFICATION OF AUDITORS
WAS REACHED AS FOLLOWS:
For 8,262,896 1,378 622 978
Against 20,036 -- -- 1
Abstain 85,000 19 14 14
- --------------------------------------------------------------------------------------------------------------------
Total 8,367,932 1,397 636 993
</TABLE>
<PAGE>
<TABLE>
TEXAS QUALITY
- ---------------------------------------------------------------------------------------------------------------------
<CAPTION>
Preferred Preferred
Common Shares Shares
Shares Series-Th Series-M
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
APPROVAL OF THE DIRECTORS
WAS REACHED AS FOLLOWS:
ROBERT P. BREMNER
For 8,627,966 1,725 645
Withhold 57,477 79 16
- ---------------------------------------------------------------------------------------------------------------------
Total 8,685,443 1,804 661
LAWRENCE H. BROWN
For 8,626,966 1,725 645
Withhold 58,477 79 16
- ---------------------------------------------------------------------------------------------------------------------
Total 8,685,443 1,804 661
ANTHONY T. DEAN
For 8,626,966 1,725 645
Withhold 58,477 79 16
- ---------------------------------------------------------------------------------------------------------------------
Total 8,685,443 1,804 661
ANNE E. IMPELLIZZERI
For 8,625,316 1,725 645
Withhold 60,127 79 16
- ---------------------------------------------------------------------------------------------------------------------
Total 8,685,443 1,804 661
PETER R. SAWERS
For 8,627,966 1,725 645
Withhold 57,477 79 16
- ---------------------------------------------------------------------------------------------------------------------
Total 8,685,443 1,804 661
JUDITH M. STOCKDALE
For 8,626,316 1,725 645
Withhold 59,127 79 16
- ---------------------------------------------------------------------------------------------------------------------
Total 8,685,443 1,804 661
WILLIAM J. SCHNEIDER
For -- 1,725 645
Withhold -- 79 16
- ---------------------------------------------------------------------------------------------------------------------
Total -- 1,804 661
TIMOTHY R. SCHWERTFEGER
For -- 1,725 645
Withhold -- 79 16
- ---------------------------------------------------------------------------------------------------------------------
Total -- 1,804 661
RATIFICATION OF AUDITORS
WAS REACHED AS FOLLOWS:
For 8,595,468 1,725 645
Against 29,889 79 16
Abstain 60,086 -- --
- ---------------------------------------------------------------------------------------------------------------------
Total 8,685,443 1,804 661
</TABLE>
<PAGE>
Financial Section
<TABLE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
NUVEEN ARIZONA PREMIUM INCOME
MUNICIPAL FUND, INC. (NAZ)
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BASIC MATERIALS - 4.2%
$4,000,000 Gila County Industrial Development Authority, Asarco Incorporated Projects, 1988
Environmental Revenue Refunding Bonds, 5.550%, 1/01/27 1/08 at 102 BBB $4,092,680
- ---------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 3.8%
1,750,000 Student Loan Acquisition Authority of Arizona (A nonprofit corporation organized pursuant
to the laws of the State of Arizona, Student Loan Revenue Bonds, Series 1994,
6.600%, 5/01/10 (Alternative Minimum Tax) 5/04 at 102 Aa 1,918,350
650,000 Certificates of Participation, Series 1994B (University of Arizona Administrative and
Parking Facilities Project), 6.000%, 7/15/23 7/04 at 102 Aaa 707,356
1,000,000 Arizona Board of Regents, University of Arizona, System Revenue Refunding Bonds,
Series 1992, 6.250%, 6/01/11 6/02 at 102 AA 1,096,290
- ---------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 11.8%
1,500,000 The Industrial Development Authority of the County of Maricopa (Arizona), Insured Health
Facility Revenue Bonds (Catholic Healthcare West), 1992 Series A,
5.750%, 7/01/11 7/02 at 102 Aaa 1,610,235
3,500,000 The Industrial Development Authority of the County of Maricopa (Arizona), Samaritan
Health Services, Hospital System Revenue Refunding Bonds, Series 1990A,
7.000%, 12/01/16 No Opt. Call Aaa 4,442,270
600,000 The Industrial Development Authority of the County of Maricopa, Arizona, Baptist
Hospital System Revenue Refunding Bonds, Series 1995, 5.500%, 9/01/169/05 at 101 Aaa 622,134
400,000 Mesa Industrial Development Authority Health Care Facilities, Refunding Revenue Bonds
(Western Health Network, Inc.), Series 1988-1, 7.500%, 1/01/04 1/99 at 102 Aaa 420,960
2,000,000 Hospital District No. One, Mohave County, Arizona, Refunding General Obligation Bonds
(Kingman Regional Medical Center Project), Series 1992,
6.500%, 6/01/15 6/02 at 101 Aaa 2,187,200
2,000,000 University Medical Center Corporation (Tucson, Arizona), Hospital Revenue Refunding
Bonds, Series 1992, 6.250%, 7/01/16 7/02 at 102 Aaa 2,182,580
- ---------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.3%
4,000,000 The Industrial Development Authority of The City of Tucson, Arizona, Tax-exempt
Multifamily Housing Revenue Refunding Bonds, Series 1996,
5.900%, 12/20/31 12/06 at 102 AAA 4,166,120
- ---------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 3.9%
470,000 The Industrial Development Authority of the City of Phoenix, Arizona, Statewide
Single Family Mortgage Revenue Bonds, Series 1995, 6.150%, 6/01/08
(Alternative Minimum Tax) 6/05 at 102 AAA 488,067
390,000 The Industrial Development Authority of the County of Pima (Arizona), Single Family
Mortgage Revenue Refunding Bonds, Series 1995A, 6.500%, 2/01/17 8/05 at 102 A 415,888
2,750,000 The Industrial Development Authority of the County of Pima, Single Family Mortgage
Revenue Bonds, Series 1997A, 6.250%, 11/01/30
(Alternative Minimum Tax) 5/07 at 102 AAA 2,923,443
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG TERM CARE - 1.1%
$ 1,000,000 The Industrial Development Authority of the County of Mohave, Health Care Revenue
Refunding Bonds, Series 1996 (GNMA Collateralized - Chris Ridge and Silver Ridge
Village Projects), 6.375%, 11/01/31 5/06 at 103 AAA $1,093,950
- ---------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 11.9%
1,400,000 Maricopa Rural Road Improvement District of Pinal County, Arizona, Refunding Bonds,
Series 1994, 7.000%, 7/01/07 7/99 at 101 N/R 1,457,932
605,000 Kyrene Elementary School District No. 28 of Maricopa County, Arizona, School Improvement
Bonds, Project of 1990, Series E(1993), 6.000%, 7/01/12 7/02 at 100 Aaa 647,979
1,500,000 Paradise Valley Unified School District No. 69 of Maricopa County, Arizona, School
Improvement Bonds, Project of 1990, Series D(1993), 5.875%, 7/01/127/03 at 102 Aaa 1,631,940
1,400,000 Chandler Unified School District No. 80 of Maricopa County, Arizona, General Obligation
Refunding Bonds, Series 1993, 5.950%, 7/01/10 7/03 at 101 Aaa 1,519,420
2,500,000 City of Phoenix, Arizona, General Obligation Refunding Bonds, Series 1992,
6.375%, 7/01/13 7/02 at 102 Aa1 2,754,475
2,000,000 Tempe Union High School District No. 213 of Maricopa County, Arizona, School
Improvement and Refunding Bonds, Series 1994, 6.000%, 7/01/12 7/04 at 101 Aaa 2,185,280
1,290,000 City of Tucson, Arizona, General Obligation Bonds, Series 1994-B (1996),
5.750%, 7/01/18 7/06 at 101 AA 1,373,424
- ---------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 8.8%
City of Bullhead City, Bullhead Parkway Improvement District Improvement Bonds:
910,000 6.100%, 1/01/08 1/03 at 103 Baa 987,687
970,000 6.100%, 1/01/09 1/03 at 103 Baa 1,050,665
1,600,000 City of Lake Havasu City Municipal Property Corporation, Municipal Facilities Revenue
Bonds, Series 1993, 6.000%, 6/01/08 6/02 at 101 Aaa 1,730,976
2,150,000 Phoenix Civic Plaza Building Corporation, Senior Lien Excise Tax Revenue Bonds,
Series 1994, 6.000%, 7/01/14 7/05 at 101 AA+ 2,330,084
1,510,000 Metropolitan Domestic Water Improvement District of Pima County, Arizona, Special
Assessment and Water Revenue Bonds, Series 1992, 6.200%, 1/01/12 1/03 at 101 Aaa 1,646,776
725,000 City of Tucson, Arizona, Certificates of Participation, Series 1994,
6.375%, 7/01/09 7/04 at 100 AA 801,306
- ---------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.5%
5,000,000 Tucson Airport Authority, Inc. (Arizona), Airport Revenue Bonds, Refunding Series 1993,
5.700%, 6/01/13 6/03 at 102 Aaa 5,364,300
- ---------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 20.2%
3,195,000 Kyrene Elementary School District No. 28 of Maricopa County, Arizona, School Improvement
Bonds, Project of 1990, Series E(1993), 6.000%, 7/01/12
(Pre-refunded to 7/01/02) 7/02 at 100 Aaa 3,452,070
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:
5,000,000 6.750%, 7/01/08 (Pre-refunded to 7/01/03) 7/03 at 102 Aaa 5,722,050
1,000,000 7.000%, 7/01/16 (Pre-refunded to 7/01/03) 7/03 at 102 Aaa 1,155,390
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED - CONTINUED
$3,700,000 City of Phoenix (Arizona), Civic Improvement Corporation, Wastewater System Lease
Revenue Bonds, Series 1993, 6.125%, 7/01/23
(Pre-refunded to 7/01/03) 7/03 at 102 AAA $4,130,606
3,000,000 City of Tucson, Arizona, General Obligation Bonds, Series 1984-G (1994), 6.250%, 7/01/18
(Pre-refunded to 7/01/04) 7/04 at 101 Aaa 3,375,690
1,500,000 City of Tucson, Arizona, Water System Revenue Bonds, Series 1994-A (1996),
6.000%, 7/01/21 (Pre-refunded to 7/01/06) 7/06 at 101 Aaa 1,695,195
- ---------------------------------------------------------------------------------------------------------------------------
UTILITIES - 13.4%
2,000,000 The Industrial Development Authority of the County of Mohave (Arizona), Industrial
Development Revenue Bonds, 1994 Series (Citizens Utilities Company Projects),
6.600%, 5/01/29 (Alternative Minimum Tax) 11/03 at 101 AA+ 2,171,040
1,400,000 Navajo County, Arizona, Pollution Control Corporation, Pollution Control Revenue Refunding
Bonds (Arizona Public Service Company), 1993 Series A, 5.875%, 8/15/288/03 at 102 Baa1 1,452,556
1,855,000 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 1/02 at 103 Aaa 2,090,492
4,530,000 Salt River Project Agricultural Improvement and Power District, Arizona, Salt River Project
Electric System Revenue Bonds, 1992 Series D, 5.750%, 1/01/19 1/02 at 100 Aa 4,709,750
2,400,000 Salt River Project Agricultural Improvement and Power District, Electric System Revenue
Refunding Bonds, 1993 Series C, 5.000%, 1/01/16 1/04 at 102 Aa 2,388,648
100,000 University of Arizona Telecommunications System, Certificates of Participation, Series 1991,
6.500%, 7/15/12 7/02 at 102 A+ 110,793
- ---------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.9%
2,150,000 Arizona Municipal Financing Program of 1992 Refunding Certificates of Participation,
Series 1, 6.000%, 8/01/17 8/02 at 101 Aaa 2,309,552
500,000 Wastewater Management Authority of Arizona, Wastewater Treatment Financial Assistance
Revenue Bonds, Series 1995, 5.750%, 7/01/15 7/05 at 102 Aaa 540,285
500,000 The Industrial Development Authority of the County of Maricopa, Water System Improvement
Revenue Bonds (Chaparral City Water Company Project), Series 1997A,
5.400%, 12/01/22 (Alternative Minimum Tax) 12/07 at 102 Aaa 507,835
2,500,000 City of Phoenix Civic Improvement Corporation (Arizona), Wastewater System Lease
Revenue Refunding Bonds, Series 1993, 5.000%, 7/01/10 7/04 at 102 Aa3 2,565,550
3,500,000 City of Tucson, Arizona, Water System Revenue Refunding Bonds, Series 1992A,
5.750%, 7/01/18 7/02 at 102 A1 3,669,855
- ---------------------------------------------------------------------------------------------------------------------------
$88,400,000 Total Investments - (cost $87,517,506) - 98.8% 95,897,124
===========
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Temporary Investments in Short-Term Municipal Securities - 0.7%
$ 500,000 Maricopa County, Arizona Pollution Control Corporation, Pollution Control Revenue A-1+ $500,000
Refunding Bonds (Arizona Public Service Company Palo Verde Project), 1994 Series A,
Variable Rate Demand Bonds, 3.650%, 5/01/29+
200,000 Maricopa County, Arizona Pollution Control Corporation, Pollution Control Revenue A-1+ 200,000
Refunding Bonds (Arizona Public Service Company Palo Verde Project), 1994 Series B,
Variable Rate Demand Bonds, 3.650%, 5/01/29+
- ---------------------------------------------------------------------------------------------------------------------------
$ 700,000 Total Temporary Investments - 0.7% 700,000
===========
Other Assets Less Liabilities - 0.5% 435,731
-------------------------------------------------------------------------------------------------------------
Net Assets - 100% $97,032,855
=============================================================================================================
* Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
N/R - Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
NUVEEN MICHIGAN QUALITY INCOME
MUNICIPAL FUND, INC. (NUM)
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CAPITAL GOODS - 0.4%
$ 1,000,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (WMX Technologies, Inc.
Project), Series 1993, 6.000%, 12/01/13 (Alternative Minimum Tax) 12/03 at 102 A- $1,065,430
- ---------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 3.5%
Michigan Higher Education Student Loan Authority, Student Loan and
Refunding Revenue Bonds, Series XV-A:
1,000,000 6.800%, 10/01/07 (Alternative Minimum Tax) 10/02 at 102 A 1,081,650
1,250,000 6.800%, 10/01/08 (Alternative Minimum Tax) 10/02 at 102 A 1,349,363
990,000 6.800%, 10/01/09 (Alternative Minimum Tax) 10/02 at 102 A 1,066,557
1,930,000 Central Michigan University, Revenue Bonds, Series 1997, 5.500%, 10/01/174/07 at 101 Aaa 2,002,935
2,000,000 Board of Trustees of Oakland University, Michigan, General Revenue Bonds, Series 1995,
5.750%, 5/15/15 5/05 at 102 Aaa 2,144,020
1,450,000 Board of Trustees of Western Michigan University, General Revenue Bonds, Series 1993A,
5.000%, 7/15/21 7/03 at 102 Aaa 1,418,608
- ---------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 7.9%
410,000 Michigan State Hospital Finance Authority, Hospital Revenue and Refunding Bonds (The
Detroit Medical Center Obligated Group), Series 1988B,
8.125%, 8/15/08 8/98 at 102 A 426,781
8,800,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds (Mercy Mount Clemens
Corporation), Series 1992, 6.000%, 5/15/17 5/01 at 100 Aa 9,141,704
Regents of the University of Michigan, Medical Service Plan Revenue Bonds, Series 1991:
2,195,000 0.000%, 12/01/10 No Opt. Call Aa 1,225,886
9,250,000 6.500%, 12/01/21 12/01 at 102 Aa2 10,043,558
- ---------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 5.5%
5,250,000 Michigan State Housing Development Authority, Limited Obligation Revenue Bonds
(Parkway Meadows Project), Series 1991, 6.850%, 10/15/18 10/02 at 103 Aaa 5,645,955
7,185,000 Michigan State Housing Development Authority, Rental Housing Revenue Bonds,
1991 Series B, 7.100%, 4/01/21 1/02 at 102 AA- 7,669,628
1,135,000 Michigan State Housing Development Authority, Rental Housing Revenue Bonds,
1991 Series A, 7.150%, 4/01/10 (Alternative Minimum Tax) 1/02 at 102 AA- 1,217,253
- ---------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.6%
4,115,000 Michigan State Housing Development Authority, Single-Family Mortgage Revenue Bonds,
1991 Series B, 6.950%, 12/01/20 12/01 at 102 AA+ 4,364,698
2,390,000 Michigan State Housing Development Authority, Single-Family Mortgage Revenue Bonds,
1992 Series A, 6.875%, 6/01/23 6/02 at 102 AA+ 2,525,728
- ---------------------------------------------------------------------------------------------------------------------------
LONG TERM CARE - 2.7%
1,250,000 Michigan State Hospital Finance Authority, Revenue Bonds (Presbyterian Villages of
Michigan Obligated Group), Series 1997, 6.375%, 1/01/25 1/07 at 102 N/R 1,348,413
5,280,000 The Economic Development Corporation of the City of Warren, Nursing Home Revenue
Refunding Bonds (GNMA Mortgage-Backed Security-Autumn Woods Project),
Series 1992, 6.900%, 12/20/22 3/02 at 101 Aaa 5,631,120
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/GENERAL - 26.3%
$3,935,000 Anchor Bay School District, Counties of Macomb and St. Clair, State of Michigan, 1993
School Building and Site Bonds (General Obligation Unlimited Tax),
5.550%, 5/01/19 5/03 at 101 1/2 Aaa $4,072,213
1,200,000 Berkley School District, County of Oakland, State of Michigan, 1995 School Building and
Site Bonds (General Obligation-Unlimited Tax), 6.000%, 1/01/19 1/05 at 101 Aaa 1,295,460
6,680,000 Chippewa Valley Schools, County of Macomb, State of Michigan, 1993 Refunding Bonds
(General Obligation-Unlimited Tax), 5.000%, 5/01/21 5/03 at 102 Aaa 6,535,712
2,000,000 School District of the City of Detroit, Wayne County, Michigan,
School Building and Site Improvement Bonds (Unlimited Tax General
Obligation), Series 1996A, 5.700%, 5/01/25 5/06 at 102 Aaa 2,129,240
1,000,000 Essexville-Hampton Public Schools, County of Bay, State of Michigan, 1997
School Building and Site Bonds (General Obligation-Unlimited Tax),
5.500%, 5/01/17 5/07 at 100 Aaa 1,038,100
3,075,000 Goodrich Area Schools, Counties of Genesee, Oakland and Lapeer, State of Michigan, 1995
School Building and Site and Refunding Bonds (General Obligation-Unlimited Tax),
5.875%, 5/01/24 5/05 at 102 Aaa 3,309,869
3,000,000 Grand Rapids Community College, Community College Bonds, Series 1993 (General
Obligation Limited Tax), 5.000%, 5/01/21 5/03 at 102 AA- 2,955,150
1,325,000 Greenville Public Schools, Counties of Montcalm, Kent and Ionia,
State of Michigan, 1995 School Building and Site Bonds (General
Obligation-Unlimited Tax), 5.750%, 5/01/14 5/04 at 101 Aaa 1,416,107
1,000,000 Grosse Ile Township School District, School Improvement Refunding Bonds, General
Obligation, Series 1996, 6.000%, 5/01/22 5/07 at 100 Aaa 1,084,060
1,000,000 Huron Valley School District, Counties of Oakland and Livingston, State of Michigan,
1996 School Building and Site Bonds (General
Obligation-Unlimited Tax), 5.875%, 5/01/16 5/07 at 100 Aaa 1,078,700
3,725,000 Lake Orion Community School District, County of Oakland, State of Michigan, 1995
Refunding Bonds (General Obligation-Unlimited Tax), 5.500%, 5/01/205/05 at 101 Aaa 3,854,481
2,500,000 Lake Shore Public Schools, County of Macomb, State of Michigan 1997 School Building
and Site Bonds (General Obligation-Unlimited Tax), 5.500%, 5/01/17 5/07 at 100 Aaa 2,595,250
2,000,000 Lincoln Park School District, General Obligation Bonds, Series 1996,
5.900%, 5/01/26 5/06 at 101 Aaa 2,150,480
3,625,000 School District of the City of Lincoln Park, County of Wayne, State of Michigan 1997
Refunding Bonds (Unlimited Tax), 5.000%, 5/01/17 5/07 at 100 Aaa 3,606,984
1,500,000 Livonia Public Schools School District, County of Wayne, State of Michigan, 1995 Refunding
Bonds, 5.125%, 5/01/22 5/04 at 102 Aaa 1,496,775
1,000,000 Mancelona Public School District, General Obligation Bonds, Series 1997 (Antrim &Kalkaska
Counties), 5.200%, 5/01/17 5/06 at 100 Aaa 1,009,000
6,400,000 Mattawan Consolidated School, Counties of Van Buren and Kalamazoo, State of Michigan,
1992 Refunding Bonds (General Obligation-Unlimited Tax),
6.300%, 5/01/17 5/02 at 102 AA 6,954,560
2,500,000 Montrose Township School District, Michigan, School Building and Site Bonds, Series 1997,
6.000%, 5/01/22 No Opt. Call Aaa 2,852,675
1,045,000 Nice Community School District, Counties of Marquette and Baraga, State of Michigan,
1995 School Building and Site Bonds (General Obligation-Unlimited Tax),
5.250%, 5/01/20 5/04 at 101 Aaa 1,052,566
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/GENERAL - CONTINUED
$1,225,000 North Branch Area Schools, Count of Lapeer, State of Michigan, 1993 Refunding Bonds
(General Obligation-Unlimited Tax), 5.375%, 5/01/21 5/03 at 101 1/2 Aaa $1,246,597
1,805,000 Reeths-Puffer Schools, County of Muskegon, State of Michigan, 1995 School Building and
Site and Refunding Bonds, 5.750%, 5/01/15 5/05 at 101 Aaa 1,923,913
2,400,000 Three Rivers Community Schools, Counties of Cass and St. Joseph, State of Michigan, 1996
School Building and Site Bonds (General Obligation-Unlimited Tax),
6.000%, 5/01/23 5/06 at 102 Aaa 2,608,656
875,000 Western Townships Utilities Authority, Sewage Disposal System Bonds, Series 1989,
8.300%, 1/01/19 1/99 at 102 BBB+ 926,371
Western Townships Utilities Authority, Sewage Disposal System Refunding Bonds, Series 1991:
1,500,000 6.750%, 1/01/15 1/02 at 100 Aaa 1,630,635
6,250,000 6.500%, 1/01/19 1/02 at 100 Aaa 6,738,500
1,725,000 Williamston Community School District, General Obligation-Unlimited Tax, Series 1996
(G-SBLF), 5.500%, 5/01/25 No Opt. Call Aaa 1,855,134
1,500,000 School District of Ypsilanti, County of Washtenaw, State of Michigan, 1996 School Building
and Site and Refunding Bonds (General Obligation-Unlimited Tax),
5.375%, 5/01/26 5/07 at 100 Aaa 1,533,330
- ---------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 6.4%
2,000,000 Michigan Municipal Bond Authority, Local Government Loan Program Revenue Bonds,
Series 1992D, 6.650%, 5/01/12 5/02 at 102 A 2,179,780
3,505,000 State Building Authority, State of Michigan, 1991 Revenue Bonds, Series II,
6.800%, 10/01/21 10/01 at 102 AA- 3,827,916
4,800,000 State Building Authority, State of Michigan, 1991 Revenue Refunding Bonds, Series I,
6.250%, 10/01/20 10/01 at 102 AA- 5,153,952
4,845,000 Saginaw-Midland Municipal Water Supply Corporation, State of Michigan, Water Supply
Revenue Bonds (Limited Tax General Obligation), Series 1992,
6.875%, 9/01/16 9/04 at 102 A 5,536,769
- ---------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.0%
2,505,000 Charter County of Wayne, Michigan, Airport Revenue Bonds (Detroit Metropolitan Wayne
County Airport), Subordinate Lien, Series 1991B, 6.750%, 12/01/21
(Alternative Minimum Tax) 12/01 at 102 Aaa 2,742,649
- ---------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 23.7%
3,100,000 Michigan Municipal Bond Authority, State Revolving Fund Reserve Bonds, Series 1992A,
6.600%, 10/01/18 (Pre-refunded to 10/01/02) 10/02 at 102 Aa1*** 3,482,323
1,450,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds (McLaren Obligated
Group), Series 1991A, 7.500%, 9/15/21 (Pre-refunded to 9/15/01) 9/01 at 102 Aaa 1,643,387
5,090,000 Michigan State Hospital Finance Authority, Hospital Revenue and Refunding Bonds
(The Detroit Medical Center Obligated Group), Series 1988B, 8.125%, 8/15/08
(Pre-refunded to 8/15/98) 8/98 at 102 A*** 5,310,041
10,355,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds (Daughters of Charity
National Health System-Providence Hospital), Series 1991, 7.000%, 11/01/21
(Pre-refunded to 11/01/01) 11/01 at 102 Aa2*** 11,584,035
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED - CONTINUED
$ 3,035,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds (MidMichigan
Obligated Group), Series 1992, 6.900%, 12/01/24 (Pre-refunded to
12/01/02) 12/02 at 102 A1*** $3,457,351
7,200,000 State of Michigan, State Trunk Line Fund Bonds, Series 1989A, 7.000%, 8/15/17
(Pre-refunded to 8/15/99) 8/99 at 102 AAA 7,686,864
355,000 City of Detroit, County of Wayne, Michigan, Sewage Disposal System Revenue Bonds
(1979 Series), 6.900%, 12/15/99 12/99 at 100 Aaa 368,408
1,600,000 Gaylord Community Schools, Counties of Ostego and Antrim, State
of Michigan, 1992 School Building and Site and Refunding Bonds,
6.600%, 5/01/21 (Pre-refunded to 5/01/02) 5/02 at 102 AA*** 1,783,776
1,250,000 Gull Lake Community Schools, Counties of Kalamazoo, Barry and Calhoun, State of
Michigan, 1991 School Building and Site Bonds, 6.800%, 5/01/21 (Pre-refunded
to 5/01/01) 5/01 at 102 Aaa 1,378,488
3,100,000 Hemlock Public School District Counties of Saginaw and Midland, State of Michigan,
1992 School Building and Site and Refunding Bonds, 6.750%, 5/01/21 (Pre-refunded
to 5/01/02) 5/02 at 102 AA*** 3,484,462
1,000,000 Marquette Area Public Schools, County of Marquette, State of Michigan, 1991 School
Building and Site Bonds, Series B (General Obligation-Unlimited Tax), 6.700%, 5/01/21
(Pre-refunded to 5/01/01) 5/01 at 102 Aaa 1,099,900
2,150,000 North Branch Area Schools, County of Lapeer, State of Michigan, 1992 School Building
and Site and Refunding Bonds (General Obligation-Unlimited Tax), 6.600%, 5/01/17
(Pre-refunded to 5/01/02) 5/02 at 102 AA*** 2,396,949
1,500,000 Perry Public Schools, Counties of Shiawassee and Ingham, State of Michigan, 1992 School
Building and Site Bonds (General Obligation-Unlimited Tax), 6.375%, 5/01/22
(Pre-refunded to 5/01/02) 5/02 at 101 1/2 Aaa 1,655,400
4,650,000 Plymouth-Canton Community Schools, Counties of Wayne and Washtenaw, State of
Michigan, 1991 School Building and Site and Refunding Bonds, Series B, 6.800%, 5/01/11
(Pre-refunded to 5/01/01) 5/01 at 101 AA*** 5,082,590
6,385,000 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) 1/01 at 102 Aaa 6,976,826
4,200,000 Warren Consolidated Schools, Counties of Macomb and Oakland, State of Michigan, 1991
School Building and Site and Refunding Bonds (General Obligation-Unlimited Tax),
6.700%, 5/01/21 (Pre-refunded to 5/01/01) 5/01 at 102 Aa*** 4,615,506
- ---------------------------------------------------------------------------------------------------------------------------
UTILITIES - 16.5%
1,000,000 Michigan Public Power Agency, Belle River Project, Refunding Revenue, 1993 Series B,
5.000%, 1/01/19 1/03 at 100 AA- 967,210
2,390,000 Michigan South Central Power Agency, Power Supply System Revenue Refunding Bonds,
1991 Series, 6.750%, 11/01/10 11/01 at 102 Baa1 2,583,804
3,630,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue Bonds (The Detroit Edison
Company Pollution Control Bonds Project), Series 1991BB,
7.000%, 5/01/21 No Opt. Call Aaa 4,621,098
4,330,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue Bonds (The Detroit Edison
Company Pollution Control Bonds Project), Collateralized Series 1991CC,
6.950%, 9/01/21 9/01 at 102 Aaa 4,757,370
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES - CONTINUED
$7,600,000 Michigan Strategic Fund Limited Obligation Refunding Revenue Bonds (The Detroit Edison
Company Pollution Control Bonds Project), Collateralized Series 1991DD,
6.875%, 12/01/21 12/01 at 102 Aaa $8,368,283
7,000,000 The Economic Development Corporation of the City of Detroit, Resource Recovery Revenue
Bonds, Series 1991A, 6.875%, 5/01/09 (Alternative Minimum Tax) 5/01 at 102 Aaa 7,605,010
7,000,000 County of Monroe, Michigan, Pollution Control Revenue Bonds (The Detroit Edison Company
Monroe and Fermi Plants Project), Collateralized Series I-1992, 6.875%, 9/01/22
(Alternative Minimum Tax) 9/02 at 102 Aaa 7,777,280
1,000,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series X,
5.500%, 7/01/25 7/05 at 100 Baa1 1,024,410
5,000,000 City of Wyandotte, County of Wayne, State of Michigan, 1992 Electric Revenue Refunding
Bonds, 6.250%, 10/01/17 10/02 at 102 Aaa 5,487,900
- ---------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 2.2%
6,000,000 City of Detroit, Michigan, Water Supply System Revenue and Revenue Refunding Bonds,
Series 1993, 5.000%, 7/01/23 7/04 at 102 Aaa 5,856,360
- ---------------------------------------------------------------------------------------------------------------------------
$241,695,000 Total Investments - (cost $235,228,626) - 98.7% 258,815,902
=============
Temporary Investments in Short-Term Municipal Securities - 0.3%
$ 700,000 Regents of The University of Michigan, Hospital Revenue Bonds, Series 1995A,
Variable Rate Demand Bonds, 3.700%, 12/01/27+ VMIG-1 700,000
-------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.0% 2,682,681
-------------------------------------------------------------------------------------------------------------
Net Assets - 100% $262,198,583
=============================================================================================================
* Optional Call Provisions: Dates (month and year) and prices of the
earliest optional call or redemption. There may be other call provisions at
varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities, which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
N/R - Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
NUVEEN MICHIGAN PREMIUM INCOME
MUNICIPAL FUND, INC. (NMP)
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CAPITAL GOODS - 2.7%
$3,050,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Waste Management, Inc.
Project), Series 1992, 6.625%, 12/01/12 (Alternative Minimum Tax) 12/02 at 102 A- $3,311,111
1,370,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds (WMX Technologies, Inc.
Project), Series 1993, 6.000%, 12/01/13 (Alternative Minimum Tax) 12/03 at 102 A- 1,459,639
- ---------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 5.8%
1,250,000 Michigan Higher Education Student Loan Authority, Student Loan and Refunding Revenue
Bonds, Series XV-A, 6.700%, 10/01/05 (Alternative Minimum Tax) 10/02 at 102 A 1,348,025
1,950,000 Board of Regents of Eastern Michigan University, General Revenue Bonds, Series 1997,
5.500%, 6/01/17 12/06 at 101 Aaa 2,033,987
2,000,000 Board of Control of Ferris State University, General Revenue Bonds, Series 1993,
6.250%, 10/01/19 10/03 at 102 Aaa 2,219,240
1,130,000 Board of Trustees of Oakland University, Michigan, General Revenue Bonds, Series 1995,
5.750%, 5/15/15 5/05 at 102 Aaa 1,211,371
3,250,000 Board of Trustees of Western Michigan University, General Revenue Bonds, Series 1993A,
5.500%, 7/15/16 7/03 at 102 Aaa 3,358,225
- ---------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 18.5%
4,000,000 Michigan State Hospital Finance Authority, Hospital Revenue and Refunding Bonds (Henry
Ford Health System), Series 1992A, 5.750%, 9/01/17 9/02 at 102 AA 4,175,520
3,000,000 Michigan State Hospital Finance Authority (Michigan), Hospital Revenue Refunding Bonds
(St. John Hospital), Series 1993A, 6.000%, 5/15/13 5/03 at 102 Aaa 3,242,220
Michigan State Hospital Finance Authority, Revenue and Refunding
Bonds (The Detroit Medical Center Obligated Group), Series 1993A:
3,000,000 6.250%, 8/15/13 8/03 at 102 A 3,220,590
3,200,000 6.500%, 8/15/18 8/03 at 102 A 3,481,984
4,000,000 Michigan State Hospital Finance Authority, Hospital Revenue Refunding Bonds (Oakwood
Hospital Obligated Group), Series 1993A, 5.500%, 11/01/13 11/03 at 102 Aaa 4,152,920
1,500,000 Michigan State Hospital Finance Authority, Hospital Revenue and Refunding Bonds (The
Detroit Medical Center Obligated Group), Series 1993B,
5.000%, 8/15/02 No Opt. Call A 1,550,685
2,000,000 Michigan State Hospital Finance Authority, Hospital Revenue and Refunding Bonds (Otsego
Memorial Hospital Gaylord, Michigan), Series 1995, 6.250%, 1/01/20 1/05 at 102 AA- 2,177,960
4,000,000 City of Kalamazoo Hospital Finance Authority, Hospital Revenue Refunding and
Improvement Bonds (Bronson Methodist Hospital), Series 1996,
5.750%, 5/15/16 5/06 at 102 Aaa 4,265,280
2,650,000 Regents of the University of Michigan, Hospital Revenue Bonds, Series 1990,
6.375%, 12/01/24 12/00 at 100 AA 2,779,983
3,000,000 Regents of the University of Michigan, Hospital Revenue Refunding Bonds, Series 1993A,
5.500%, 12/01/21 12/02 at 102 AA 3,077,010
- ---------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 9.5%
2,400,000 Michigan State Housing Development Authority, Limited Obligation Revenue Bonds
(Walled Lake Villa Project), Series 1993, 6.000%, 4/15/18 4/04 at 103 Aaa 2,504,952
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING/MULTIFAMILY - CONTINUED
$1,500,000 Michigan State Housing Development Authority, Limited Obligation Revenue Bonds
(Brenton Village Green Project), Series 1993, 5.625%, 10/15/18 10/03 at 103 Aaa $1,524,105
Michigan State Housing Development Authority, Rental Housing Revenue Bonds, 1992 Series A:
4,000,000 6.500%, 4/01/06 10/02 at 102 AA- 4,275,720
4,300,000 6.600%, 4/01/12 10/02 at 102 AA- 4,582,639
1,000,000 Michigan State Housing Development Authority, Rental Housing Revenue Bonds, 1993
Series A, 5.875%, 10/01/17 4/03 at 102 Aaa 1,043,530
Mount Clemens Housing Corporation, Multifamily Housing Refunding
Revenue Bonds, Series 1992A (FHA Insured Mortgage Loan-Section 8
Assisted Project):
1,000,000 6.600%, 6/01/13 6/03 at 102 AAA 1,065,150
1,500,000 6.600%, 6/01/22 6/03 at 102 AAA 1,586,310
- ---------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 3.2%
5,250,000 Michigan State Housing Development Authority, Single Family Mortgage Revenue Bonds,
1995 Series A, 6.800%, 12/01/16 6/05 at 102 AA+ 5,647,373
- ---------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 13.7%
2,400,000 Chippewa Valley Schools, County of Macomb, State of Michigan, 1993 Refunding Bonds
(General Obligation-Unlimited Tax), 5.000%, 5/01/21 5/03 at 102 Aaa 2,348,160
3,000,000 Clarkston Community Schools, County of Oakland, State of Michigan, 1993 School Building
and Site and Refunding Bonds, 5.900%, 5/01/16 5/03 at 102 AA+ 3,225,690
2,500,000 School District of the City of Detroit, Wayne County, Michigan, School Building and Site
Bonds (Unlimited Tax General Obligation), Series 1992,
6.250%, 5/01/12 5/01 at 102 AA+ 2,684,325
3,000,000 Dexter Community Schools, Counties of Washtenaw and Livingston, State of Michigan,
1993 School Building and Site and Refunding Bonds (General Obligation Unlimited Tax),
5.000%, 5/01/17 5/03 at 102 AA 3,007,020
5,625,000 Commonwealth of Puerto Rico, Public Improvement Refunding Bonds, Series 1993 (General
Obligation Bonds), 5.375%, 7/01/06 No Opt. Call Aaa 6,097,781
4,100,000 Commonwealth of Puerto Rico, Public Improvement Refunding Bonds, Series 1997 (General
Obligation Bonds), 5.750%, 7/01/17 7/07 at 101 1/2 A 4,389,583
1,000,000 Reeths-Puffer Schools, County of Muskegon, State of Michigan, 1995 School Building and
Site and Refunding Bonds, 5.750%, 5/01/15 5/05 at 101 Aaa 1,065,880
1,000,000 Western Townships Utilities Authority, Sewage Disposal System Refunding Bonds, Series
1991, 6.500%, 1/01/10 1/02 at 100 Aaa 1,080,030
- ---------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 11.3%
1,000,000 State Building Authority, State of Michigan, 1991 Revenue Bonds,
Series II, 6.250%, 10/01/20 10/01 at 102 AA- 1,073,740
2,750,000 State Building Authority, State of Michigan, 1991 Revenue Refunding Bonds, Series I,
6.250%, 10/01/20 10/01 at 102 AA- 2,952,785
3,275,000 State of Michigan, Comprehensive Transportation Bonds, Series 1992A,
5.750%, 5/15/12 5/02 at 100 AA- 3,425,093
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/LIMITED - CONTINUED
$ 1,750,000 State of Michigan, State Trunk Line Fund Bonds, Series 1994A,
5.700%, 11/15/15 11/04 at 102 AA- $1,859,935
6,500,000 City of Detroit, Michigan, Convention Facility Limited Tax Revenue Refunding Bonds (Cobo
Hall Expansion Project), Series 1993, 5.250%, 9/30/12 9/03 at 102 Aaa 6,635,135
3,615,000 Saginaw-Midland Municipal Water Supply Corporation, State of Michigan, Water Supply
System Revenue Bonds (Limited Tax General Obligation), Series 1993,
5.250%, 9/01/16 9/02 at 101 1/2 A 3,699,193
- ---------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.8%
1,000,000 Puerto Rico Ports Authority, Special Facilities Revenue Bonds, 1993 Series A (American
Airlines, Inc. Project), 6.300%, 6/01/23 (Alternative Minimum Tax) 6/03 at 102 BBB- 1,069,920
Charter County of Wayne, Michigan, Detroit Metropolitan Wayne
County Airport, Airport Revenue Bonds (Detroit Metropolitan Wayne
County Airport), Subordinated Lien, Series 1993B:
1,000,000 4.750%, 12/01/02 (Alternative Minimum Tax) No Opt. Call Aaa 1,025,990
1,000,000 4.800%, 12/01/03 (Alternative Minimum Tax) No Opt. Call Aaa 1,030,720
- ---------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 3.5%
1,950,000 Michigan Municipal Bond Authority, State Revolving Fund Revenue Bonds, Series 1994,
7.000%, 10/01/03 No Opt. Call Aa1*** 2,229,630
2,500,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds (Daughters of Charity
National Health System-Providence Hospital), Series 1991, 7.000%, 11/01/21
(Pre-refunded to 11/01/01) 11/01 at 102 Aa2*** 2,796,725
1,000,000 State of Michigan, State Trunk Line Fund Bonds, Series 1989A, 7.000%, 8/15/17
(Pre-refunded to 8/15/99) 8/99 at 102 AAA 1,067,620
- ---------------------------------------------------------------------------------------------------------------------------
UTILITIES - 21.9%
4,020,000 Michigan Public Power Agency, Belle River Project Refunding Revenue Bonds, 1993
Series A, 5.250%, 1/01/18 1/03 at 102 AA- 4,031,377
3,000,000 Michigan Public Power Agency, Belle River Project, Refunding Revenue, 1993 Series B,
5.000%, 1/01/19 1/03 at 100 AA- 2,901,630
1,775,000 Michigan South Central Power Agency, Power Supply System Revenue Refunding Bonds,
1992 Series, 5.700%, 11/01/04 No Opt. Call Aaa 1,931,094
8,500,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue Bonds (Consumers Power
Company Project), Collateralized Series 1993B, 5.800%, 6/15/10 6/03 at 102 Aaa 9,160,790
6,750,000 The City of Grand Haven, Michigan, Electric System Revenue Refunding Bonds, 1993 Series,
5.250%, 7/01/16 7/03 at 102 Aaa 6,836,535
2,000,000 City of Lansing, Board of Water and Light, Ingham and Easton Counties, State of Michigan,
Water Supply and Electric Utility System Revenue Bonds, Series 1994A,
4.900%, 7/01/11 7/01 at 100 Aa 2,007,160
6,000,000 County of Monroe, Michigan, Pollution Control Revenue Bonds (The Detroit Edison Company
Project), Series A-1994, 6.350%, 12/01/04 (Alternative Minimum Tax)No Opt. Call Aaa 6,680,460
County of Monroe, Michigan, Pollution Control Revenue Bonds (The
Detroit Edison Company Project), Series CC-1992:
2,500,000 6.550%, 6/01/24 (Alternative Minimum Tax) 6/03 at 102 Aaa 2,768,625
1,500,000 6.550%, 9/01/24 (Alternative Minimum Tax) 9/03 at 103 Aaa 1,666,635
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER AND SEWER - 6.9%
$1,500,000 City of Ann Arbor, County of Washtenaw, State of Michigan, Water Supply System
Revenue Bonds, Series T, 5.500%, 2/01/13 2/03 at 101 1/2 Aaa $1,564,635
4,550,000 City of Detroit, Michigan, Sewage Disposal System Revenue and Revenue Refunding
Bonds, Series 1993-A, 5.700%, 7/01/13 7/03 at 102 Aaa 4,840,836
1,250,000 Detroit Water Supply System Revenue Bonds, Series 1995-A,
5.550%, 7/01/12 No Opt. Call Aaa 1,364,437
4,500,000 City of Detroit, Michigan, Water Supply System Revenue and Revenue Refunding Bonds,
Series 1993, 4.750%, 7/01/19 7/04 at 102 Aaa 4,284,719
- ---------------------------------------------------------------------------------------------------------------------------
$163,110,000 Total Investments - (cost $158,878,441) - 98.8% 172,099,417
============
Temporary Investments in Short-Term Municipal Securities - 0.3%
$ 600,000 Regents of The University of Michigan, Hospital Revenue Bonds, Series 1995A
=========== (Adjustable Rate Demand), Variable Rate Demand Bonds, 3.700%, 12/01/27+ VMIG-1 600,000
-------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.9% 1,535,547
-------------------------------------------------------------------------------------------------------------
Net Assets - 100% $174,234,964
=============================================================================================================
* Optional Call Provisions: Dates (month and year) and prices of the
earliest optional call or redemption. There may be other call provisions at
varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities, which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
+ The security has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
NUVEEN OHIO QUALITY INCOME
MUNICIPAL FUND, INC. (NUO)
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CAPITAL GOODS - 1.4%
$3,040,000 Ohio Water Development Authority, Revenue Bonds, USA Waste Services, Series 1992,
7.750%, 9/01/07 (Alternative Minimum Tax) 3/02 at 102 N/R $3,308,006
- ---------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 11.4%
2,400,000 State of Ohio (Ohio Higher Educational Facility Commission), Higher Educational Facility
Mortgage Revenue Bonds (University of Dayton 1992 Project),
6.600%, 12/01/17 12/03 at 102 Aaa 2,716,848
1,000,000 State of Ohio (Ohio Higher Educational Facility Commission), Higher Educational Facility
Revenue Bonds (University of Dayton 1994 Project),
5.800%, 12/01/14 12/04 at 102 Aaa 1,090,580
1,200,000 State of Ohio (Ohio Higher Educational Facility Commission), Higher Educational Facility
Revenue Bonds (The University of Findlay 1996 Project),
6.125%, 9/01/16 9/06 at 101 N/R 1,259,796
1,000,000 State of Ohio (Ohio Higher Educational Facility Commission), Higher Educational Facility
Revenue Bonds (Xavier University 1997 Project), 5.375%, 5/15/22 5/07 at 102 Aaa 1,025,900
1,500,000 State of Ohio (Ohio Higher Educational Facility Commission),
Higher Educational, Facility Revenue Bonds (Case Western Reserve
University), 1997 Series D, 6.250%, 7/01/14 No Opt. Call AA 1,748,835
1,000,000 State of Ohio (Ohio Higher Educational Facility Commission), Higher Educational Facility
Revenue Bonds, Series 1992 (Case Western Reserve University Project),
6.000%, 10/01/22 10/02 at 102 Aa 1,066,050
3,665,000 State of Ohio, Education Loan Revenue Bonds, Series 1997A (Supplemental Student Loan
Program), 1997A1, 5.850%, 12/01/19 (Alternative Minimum Tax) 6/07 at 102 Aaa 3,866,832
1,575,000 The Ohio State University (AState University of Ohio), General Receipt Bonds,
Series 1992 A1, 5.875%, 12/01/12 12/02 at 102 AA 1,672,225
825,000 Bowling Green State University, Ohio, General Receipts Bonds, Series 1991,
6.700%, 6/01/07 6/01 at 102 A 897,485
3,000,000 Kent State University (A State University of Ohio), General Receipts Bonds, Series 1992,
6.500%, 5/01/22 5/02 at 102 Aaa 3,307,560
3,500,000 The Student Loan Funding Corporation, Cincinnati, Ohio, Student Loan Subordinated
Revenue Refunding Bonds, Series 1992 D, 6.600%, 7/01/05
(Alternative Minimum Tax) 7/02 at 100 A 3,732,260
1,700,000 The Student Loan Funding Corporation, Cincinnati, Ohio, Student Loan Senior
Subordinated Revenue Bonds, Series 1993 A, 6.150%, 8/01/10
(Alternative Minimum Tax) 8/03 at 100 A1 1,786,377
1,400,000 University of Cincinnati, General Receipts Revenue Bonds,
Series 1997-AB, 5.375%, 6/01/20 6/07 at 100 Aaa 1,431,346
1,000,000 The University of Toledo (AState University of Ohio), General Receipts Bonds, Series 1992B,
5.900%, 6/01/20 12/02 at 102 Aaa 1,075,840
- ---------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 11.3%
1,000,000 County of Butler, Ohio, Hospital Facilities Revenue Refunding and Improvement Bonds,
Series 1991 (Fort Hamilton-Hughes Memorial Hospital Center),
7.500%, 1/01/10 1/02 at 102 BBB- 1,090,020
345,000 City of Hamilton and County of Butler, Hospital Facilities Revenue Refunding,
Fort Hamilton-Hughes Memorial Hospital Center, 7.250%, 1/01/01 No Opt. Call BBB- 356,620
City of Cambridge, Ohio, Hospital Revenue Refunding Bonds, Series
1991 (Guernsey Memorial Hospital Project):
1,680,000 8.000%, 12/01/06 12/01 at 102 BBB 1,881,583
750,000 8.000%, 12/01/11 12/01 at 102 BBB 839,153
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTH CARE - CONTINUED
$2,675,000 County of Clermont, Ohio, Hospital Facilities Revenue Refunding Bonds, Series 1993 A
(Mercy Health System), 5.875%, 1/01/15 1/03 at 102 Aaa $2,844,354
1,500,000 County of Cuyahoga, Ohio, Hospital Improvement Revenue Bonds, Series 1992 (University
Hospitals Health System, Inc. Project), 6.500%, 1/15/19 1/02 at 102 Aa 1,623,675
1,170,000 County of Cuyahoga, Ohio, Hospital Facilities Revenue Bonds, Series 1993, Health
Cleveland, Inc. (Fairview General Hospital Project),
6.300%, 8/15/15 2/03 at 102 A1 1,265,063
1,000,000 County of Cuyahoga, Ohio, Hospital Improvement and Refunding Revenue Bonds,
Series 1997 (The MetroHealth System Project), 5.625%, 2/15/17 2/07 at 102 Aaa 1,050,780
1,500,000 County of Franklin, Ohio, Hospital Revenue Refunding and Improvement Bonds, 1992
Series A (The Children's Hospital Project), 6.600%, 5/01/13 11/02 at 102 Aa 1,658,955
County of Franklin, Ohio, Hospital Refunding and Improvement
Revenue Bonds, 1996 Series A (The Children's Hospital Project):
1,000,000 5.750%, 11/01/20 11/06 at 101 Aa 1,056,460
1,500,000 5.875%, 11/01/25 11/06 at 101 Aa 1,599,000
3,250,000 City of Garfield Heights, Ohio, Hospital Improvement and Refunding Revenue Bonds,
Series 1992B (Marymount Hospital Project), 6.650%, 11/15/11 11/02 at 102 A 3,547,343
2,500,000 County of Marion, Ohio, Hospital Refunding and Improvement Revenue Bonds, Series 1996
(The Community Hospital), 6.375%, 5/15/11 5/06 at 102 BBB+ 2,753,200
1,500,000 County of Montgomery, Ohio, Hospital Facilities Revenue Refunding and Improvement Bonds,
Series 1996 (Kettering Medical Center), 5.625%, 4/01/16 4/06 at 102 Aaa 1,575,135
2,415,000 City of Mount Vernon, Ohio, Hospital Refunding Revenue Bonds, Series 1986A (Knox
Community Hospital), 7.875%, 6/01/12 6/02 at 100 N/R 2,480,833
750,000 County of Tuscarawas, Ohio, Hospital Facilities Revenue Bonds, Series 1993A (Union Hospital
Project), 6.500%, 10/01/21 10/03 at 102 Baa3 804,278
- ---------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 8.0%
2,885,000 Ohio Capital Corporation for Housing Mortgage Revenue Refunding Bonds (FHA Insured
Mortgage-Section 8), 5.700%, 1/01/24 1/02 at 100 Aaa 2,897,896
1,385,000 County of Clermont, Ohio, Mortgage Revenue Bonds, Series 1994 (GNMA Collateralized-
S.E.M. Villa IIProject), Series 1994-A, 5.950%, 2/20/30 8/03 at 103 Aaa 1,425,123
1,435,000 County of Cuyahoga, Ohio, Multifamily Housing Revenue Bonds (Water Street Associates
PJ), 1997, 6.150%, 12/20/26 (Alternative Minimum Tax) 6/08 at 105 Aaa 1,520,167
990,000 County of Franklin, Ohio, Multifamily Housing Mortgage Revenue Bonds, Series 1994A
(FHA Insured Mortgage Loan-Hamilton Creek Apartments Project), 5.550%, 7/01/24
(Alternative Minimum Tax) 1/05 at 103 Aa 988,584
6,170,000 County of Franklin, Ohio, Mortgage Revenue Bonds, Series 1992A (FHA Insured Mortgage
Loan - Kensington Place Project), 6.750%, 1/01/34 1/02 at 103 Aa 6,528,600
5,200,000 Hamilton County, Multi-Family Housing Revenue Bonds (Huntington Meadows Project),
Series 1997, 5.700%, 7/01/27 (Alternative Minimum Tax) 7/07 at 102 AAA 5,318,040
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING/SINGLE FAMILY - 5.3%
$4,000,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds, 1996 Series B-3
(Mortgage-Backed Securities Program), 5.750%, 9/01/28
(Alternative Minimum Tax) 9/07 at 102 AAA $4,112,240
7,910,000 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) 9/99 at 102 AAA 8,287,623
- ---------------------------------------------------------------------------------------------------------------------------
LONG TERM CARE - 1.0%
1,365,000 County of Franklin, Ohio, Health Care Facilities Revenue Bonds, Series 1993 (Ohio
Presbyterian Retirement Services), 6.500%, 7/01/23 7/03 at 102 N/R 1,385,243
1,000,000 County of Marion, Ohio, Health Care Facilities Refunding and Improvement Revenue Bonds,
Series 1993 (United Church Homes, Inc. Project), 6.300%, 11/15/15 11/03 at 102 BBB- 1,059,790
- ---------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 15.9%
Berea City School District, Ohio, School Improvement Bonds, Series
1993 (General Obligation Unlimited Tax Bonds):
650,000 7.500%, 12/15/06 12/03 at 102 Aaa 771,537
680,000 7.450%, 12/15/07 12/03 at 102 Aaa 805,392
1,750,000 Brecksville-Broadview Heights City School District, Ohio, School Improvement Bonds,
Series 1996 (General Obligation Unlimited Tax Bonds), 6.500%, 12/01/1612/06 at 102 Aaa 2,020,795
1,000,000 Buckeye Local School District General Obligation, 5.625%, 12/01/11 12/03 at 102 Aaa 1,074,950
2,000,000 City of Columbus, Ohio, General Obligation Refunding Bonds,
Series 1992B, 6.500%, 1/01/10 1/02 at 102 Aaa 2,195,500
1,300,000 County of Franklin, Ohio, Refunding Bonds, Series 1993 (Limited Tax General Obligation
Bonds), 5.375%, 12/01/20 12/08 at 102 Aaa 1,351,935
1,505,000 Greater Cleveland Regional Transit Authority, General Obligation, Capital Improvement
Bonds, Series 1996, 5.650%, 12/01/16 12/06 at 101 Aaa 1,600,884
1,000,000 City of Lakewood, Ohio, Various Purpose General Obligation Bonds, Series 1992 (Limited
Tax Obligation), 6.500%, 12/01/12 12/02 at 102 Aa 1,113,210
2,100,000 Lakota Local School District, County of Butler, Ohio, School Improvement Unlimited Tax
General Obligation Bonds, Series 1994, 6.250%, 12/01/14 12/05 at 100 Aaa 2,344,671
1,000,000 City of Newark, Ohio, Water System Improvement Bonds (Limited Tax General Obligation),
6.000%, 12/01/18 12/03 at 102 Aaa 1,094,840
North Canton City School District, Ohio, School Improvement Bonds,
Series 1994 (General Obligation Unlimited Tax):
650,000 9.750%, 12/01/03 No Opt. Call Aaa 836,225
715,000 9.700%, 12/01/04 No Opt. Call Aaa 942,863
1,260,000 Oak Hills Local School District, School Facilities and Improvement Bonds (General
Obligation-Unlimited Tax), 6.900%, 12/01/13 No Opt. Call Aaa 1,560,308
2,000,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1996 (General Obligation
Bonds), 5.400%, 7/01/25 7/06 at 101 1/2 A 2,047,940
1,300,000 Commonwealth of Puerto Rico, Public Improvement Refunding Bonds, Series 1997 (General
Obligation Bonds), 5.750%, 7/01/17 7/07 at 101 1/2 A 1,391,819
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/GENERAL - CONTINUED
$ 1,000,000 Revere Local School District, Ohio, School Improvement Bonds, Series 1993 (General
Obligation Unlimited Tax Bonds), 6.000%, 12/01/16 12/03 at 102 Aaa $1,094,840
2,870,000 City of Strongville, Ohio, Various Purpose Improvement Bonds, Series 1996 (General
Obligation-Limited Tax), 5.950%, 12/01/21 12/06 at 102 Aa 3,085,795
1,000,000 Sylvania City School District, General Obligation (Unlimited Tax), Series 1995,
5.800%, 12/01/15 12/05 at 101 Aaa 1,078,020
1,135,000 City of Toledo, Ohio, General Obligation (Limited Tax), Various Purpose Improvement Bonds,
Series 1994, 7.000%, 12/01/03 No Opt. Call Aaa 1,304,853
1,000,000 Upper Arlington City School District, General Obligation Bonds, Series 1996,
5.250%, 12/01/22 12/06 at 101 Aaa 1,008,340
2,000,000 Board of Education, Wayne Local School District, County of Warren, Ohio, School
Improvement Bonds, Series 1996 (Unlimited Tax General Obligation),
6.100%, 12/01/24 12/06 at 102 Aaa 2,210,620
3,000,000 Board of Education, West Clermont Local School District, County
of Clermont, Ohio, School Improvement Bonds, Series 1995
(Unlimited Tax General Obligation), 6.000%, 12/01/18 12/05 at 100 Aaa 3,248,880
1,000,000 City of Westlake, Ohio, General Obligation, Various Purpose Improvement and Refunding
Bonds (Series 1997), 5.550%, 12/01/17 12/08 at 101 Aa1 1,054,810
1,820,000 Worthington City School District, Franklin County, Ohio, General Obligation Refunding
Bonds (Unlimited Tax), 6.375%, 12/01/12 6/02 at 102 Aaa 2,000,362
- ---------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 3.8%
1,500,000 State of Ohio (OPFC), Higher Education Capital Facilities Bonds, Series II-1992A,
5.500%, 12/01/06 12/01 at 102 AA- 1,587,870
3,000,000 State of Ohio Department of Transportation, Certificates of Participation (Richenbacker
Port Authority Improvements), 6.125%, 4/15/15 (Alternative
Minimum Tax) 10/02 at 100 AA- 3,070,320
1,000,000 State of Ohio (Ohio Building Authority), State Facilities Bonds (Juvenile Correctional
Building Fund Projects), 1992 Series B, 6.000%, 10/01/12 10/02 at 102 AA- 1,066,050
3,000,000 State of Ohio (Ohio Building Authority), State Facilities Bonds (Adult Correctional Building
Fund Projects), 1993 Series A, 6.125%, 10/01/12 10/03 at 102 AA- 3,250,230
- ---------------------------------------------------------------------------------------------------------------------------
TECHNOLOGY - 0.7%
500,000 County of Franklin, Ohio, Revenue Bonds, Series 1993 (Oclc Online Computer Library Center,
Incorporated Project), 6.000%, 4/15/13 4/03 at 100 N/R 505,325
1,000,000 Puerto Rico Industrial, Medical and Environmental Pollution Control Facilities Financing
Authority, Adjustable Rate Industrial Revenue Bonds, 1983 Series A (Motorola, Inc.
Project), 6.750%, 1/01/14 1/02 at 103 AA 1,107,860
- ---------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 2.4%
3,430,000 City of Cleveland, Ohio, Parking Facilities Revenue Bonds,
Series 1996, 5.500%, 9/15/22 9/06 at 102 Aaa 3,578,450
Columbus Municipal Airport Authority, Airport Improvement Revenue
Bonds, Series 1994A (Port Columbus International Airport Project):
830,000 5.950%, 1/01/08 (Alternative Minimum Tax) 1/04 at 102 Aaa 899,006
1,000,000 6.000%, 1/01/14 (Alternative Minimum Tax) 1/04 at 102 Aaa 1,083,810
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED - 17.5%
$ 360,000 Ohio Water Development Authority, State of Ohio, Water Development Revenue Refunding
Bonds, Refunding and Improvement Series, 8.000%, 12/01/18
(Pre-refunded to 12/01/00) 12/00 at 100 AAA $ 393,487
1,500,000 City of Akron, Ohio, Waterworks System Mortgage Revenue Improvement Bonds, Series
1991, 6.550%, 3/01/12 (Pre-refunded to 3/01/01) 3/01 at 102 Aaa 1,637,640
2,000,000 City of Barberton, Ohio Hospital Facilities Revenue Bonds, Series 1992 (The Barberton
Citizens Hospital Company Project), 7.250%, 1/01/12
(Pre-refunded to 1/01/02) 1/02 at 102 N/R*** 2,257,280
2,000,000 County of Carroll, Ohio, Hospital Improvement Revenue Bonds, Series 1991 (Timken Mercy
Medical Center), 7.125%, 12/01/18 (Pre-refunded to 12/01/01) 12/01 at 102 AAA 2,252,540
2,500,000 County of Clermont, Ohio, Waterworks System Revenue Bonds, Series 1991, Clermont
County Sewer District, 6.625%, 12/01/14 (Pre-refunded
to 12/01/01) 12/01 at 102 Aaa 2,776,375
2,075,000 City of Cleveland, Ohio, Airport System Revenue Bonds, 1990 Series A, 7.400%, 1/01/20
(Alternative Minimum Tax) (Pre-refunded to 1/01/00) 1/00 at 102 Aaa 2,248,325
2,000,000 City of Cleveland, Ohio, Public Power System First Mortgage Revenue Bonds, Series 1994A,
7.000%, 11/15/24 (Pre-refunded to 11/15/04) 11/04 at 102 Aaa 2,358,580
1,000,000 City of Cleveland, Ohio, Regional Sewer District, 6.750%, 4/01/07
(Pre-refunded to 5/15/04) 5/04 at 100 Aaa 1,141,110
1,575,000 City of Cleveland, Ohio, Waterworks Improvement, First Mortgage Revenue Bonds, Series F,
1992 A, 6.500%, 1/01/21 (Pre-refunded to 1/01/02) 1/02 at 102 Aaa 1,741,919
35,000 City of Cleveland, Ohio, First Mortgage Revenue Refunding Bonds, Series F, 1992-B,
6.500%, 1/01/11 (Pre-refunded to 1/01/02) 1/02 at 102 Aaa 38,709
1,950,000 City School District of Columbus, Franklin County, Ohio, School Building Renovation and
Improvement Bonds, Series 1992 (General Obligation-Unlimited Tax), 6.650%, 12/01/12
(Pre-refunded to 12/01/02) 12/02 at 102 Aaa 2,204,943
3,250,000 County of Cuyahoga, Ohio, Hospital Revenue Bonds (Meridia Health System), Series 1991,
7.000%, 8/15/23 (Pre-refunded to 8/15/01) 8/01 at 102 A1*** 3,622,548
2,000,000 Dublin City School District, Franklin, Delaware and Union Counties, Ohio, Various Purpose
School Building Construction and Improvement Bonds (General Obligation-Unlimited Tax),
6.200%, 12/01/19 (Pre-refunded to 12/01/02) 12/02 at 102 Aaa 2,222,300
3,280,000 County of Franklin, Ohio, First Mortgage Revenue, Series 1979 (OCLC Inc Project),
7.500%, 6/01/09 No Opt. Call Aaa 3,831,794
1,000,000 Hamilton County, Ohio, Sewer System Improvement and Refunding Revenue Bonds, 1991
Series A (The Metropolitan Sewer District of Greater Cincinnati), 6.700%, 12/01/13
(Pre-refunded to 6/01/01) 6/01 at 102 AAA 1,101,820
1,400,000 City of Middleburg Heights, Ohio, Hospital Improvement Revenue Bonds, Series 1991
(Southwest General Hospital Project), 6.750%, 8/15/21
(Pre-refunded to 8/15/01) 8/01 at 102 AAA 1,550,024
2,500,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1992 (General Obligation
Bonds), 6.600%, 7/01/13 (Pre-refunded to 7/01/02) 7/02 at 101 1/2 Aaa 2,795,000
1,400,000 Reynoldsburg City School District, Franklin, Fairfield and Licking Counties, Ohio, General
Obligation Bonds (Unlimited Tax), For School Building Construction and Improvement,
6.550%, 12/01/17 (Pre-refunded to 12/01/02) 12/02 at 102 Aaa 1,576,946
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. GUARANTEED - CONTINUED
$ 1,000,000 Solon City School District, Ohio, School Improvement Bonds, Series 1990, General
Obligation Unlimited Tax Bonds, 7.150%, 12/01/13
(Pre-refunded to 12/01/01) 12/01 at 102 N/R*** $1,124,860
3,500,000 University of Cincinnati, General Receipts Bonds, Series O, 6.300%, 6/01/12 (Pre-refunded
to 12/01/02) 12/02 at 102 AA*** 3,897,705
- ---------------------------------------------------------------------------------------------------------------------------
UTILITIES - 10.1%
2,250,000 Ohio Air Quality Development Authority, State of Ohio, Air Quality Development Refunding
Revenue Bonds, Series 1992 (Ashland Oil, Inc. Project),
6.850%, 4/01/10 4/01 at 102 Baa1 2,396,115
4,000,000 Ohio Air Quality Development Authority, State of Ohio, Collateralized Pollution Control
Revenue Refunding Bonds, Series 1992 (The Cleveland Electric Illuminating Company
Project), 8.000%, 12/01/13 6/02 at 103 Aaa 4,658,360
2,000,000 Ohio Air Quality Development Authority, Air Quality Development Revenue Refunding Bonds
(JMG Funding Limited Partnership Project), Series 1994, 6.375%, 1/01/29 (Alternative
Minimum Tax) 10/04 at 102 Aaa 2,208,160
3,000,000 State of Ohio, Ohio Air Quality Development Authority, Air Quality Development Revenue
Bonds (JMG Funding, Limited Partnership Project), Series 1997, 5.625%, 1/01/23
(Alternative Minimum Tax) 4/07 at 102 Aaa 3,145,650
4,000,000 State of Ohio, Ohio Air Quality Development Authority, Air Quality Development Revenue
Refunding Bonds (JMG Funding, Limited Partnership Project), Series 1994,
6.375%, 4/01/29 (Alternative Minimum Tax) 10/04 at 102 Aaa 4,416,320
2,000,000 County of Ashtabula, Ohio, Industrial Development Refunding Revenue Bonds, 1992 Series A
(Ashland Oil, Inc. Project), 6.900%, 5/01/10 5/02 at 102 Baa1 2,167,600
3,000,000 City of Cleveland, Ohio, Public Power System Improvement First Mortgage Revenue Bonds,
Series 1991B, 7.000%, 11/15/17 11/01 at 102 Aaa 3,334,770
1,250,000 City of Hamilton, Ohio, Electric System Mortgage Revenue Bonds, 1992 Series B,
6.300%, 10/15/25 10/02 at 102 Aaa 1,380,413
- ---------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.9%
1,000,000 Ohio Water Development Authority, State of Ohio, Water Development Revenue Bonds,
1995 Fresh Water Series, 5.900%, 12/01/21 6/05 at 102 Aaa 1,080,100
City of Cleveland, Ohio, Waterworks Improvement First Mortgage
Revenue Refunding Bonds, Series F, 1992B:
2,965,000 6.500%, 1/01/11 1/02 at 102 Aaa 3,251,419
3,720,000 6.250%, 1/01/16 1/02 at 102 Aaa 4,053,200
1,000,000 City of Cleveland, Ohio, Waterworks Improvement First Mortgage Refunding Revenue Bonds,
Series G, 1993, 5.500%, 1/01/21 No Opt. Call Aaa 1,077,710
4,000,000 City of Cleveland, Waterworks Improvement and Refunding Revenue Bonds, 1st Mortgage
Series 1996-H, 5.750%, 1/01/26 1/06 at 102 Aaa 4,270,880
2,500,000 City of Columbus, Ohio, Sewerage System Revenue Refunding Bonds, Series 1992,
6.250%, 6/01/08 6/02 at 102 AA- 2,740,725
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER AND SEWER - CONTINUED
$1,000,000 County of Montgomery, Ohio, Water Revenue Bonds, Greater Moraine-Beavercreek Sewer
District Series 1992, 6.250%, 11/15/17 11/02 at 102 Aaa $1,103,530
2,000,000 Northeast Ohio Regional Sewer District, Wastewater Improvement Revenue Refunding Bonds,
Series 1995, 5.600%, 11/15/16 11/05 at 101 Aaa 2,107,580
1,250,000 City of Oxford, Ohio, Water Supply System Mortgage Revenue, Series 1992 Refunding Bonds,
6.000%, 12/01/14 12/02 at 102 Aaa 1,366,762
2,000,000 Southwest Regional Water District (Ohio), Waterworks System Revenue Bonds, Series 1995,
6.000%, 12/01/20 12/05 at 101 Aaa 2,179,800
- ---------------------------------------------------------------------------------------------------------------------------
$212,935,000 Total Investments - (cost $213,849,104) - 98.7% 231,037,007
============
Temporary Investments in Short-Term Municipal Securities - 0.4%
$1,000,000 Ohio Air Quality Development Authority, State of Ohio, Air Quality
============ Development Revenue Refunding Bonds (The Cincinnati Gas and Electric VMIG-1 1,000,000
Company Project), 1995 Series A, Variable Rate Demand Bonds, 3.650%, 9/01/30+
-------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.9% 1,965,989
-------------------------------------------------------------------------------------------------------------
Net Assets - 100% $234,002,996
=============================================================================================================
* Optional Call Provisions: Dates (month and year) and prices of the
earliest optional call or redemption. There may be other call provisions at
varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
***Securities are backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities, which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
N/R - Investment is not rated.
+ The security has a maturity of more than one year, but has variable rate
and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS (UNAUDITED)
NUVEEN TEXAS QUALITY INCOME
MUNICIPAL FUND (NTX)
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BASIC MATERIALS - 1.5%
$ 3,000,000 Guadalupe-Blanco River Authority, Sewage and Solid Waste Disposal Facility Bonds
(E. I. du Pont de Nemours and Company Project), Series 1996, 6.400%, 4/01/26
(Alternative Minimum Tax) 4/06 at 102 AA- $3,326,160
- ---------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 8.6%
4,900,000 Board of Regents of Texas Tech University, Revenue Financing System Refunding and
Improvement Bonds, Third Series (1996), 5.375%, 2/15/17 2/06 at 100 Aaa 5,007,310
2,300,000 Brazos Higher Education Authority, Inc., Student Loan Revenue Refunding Bonds, Series
1992-A, 6.875%, 9/01/04 (Alternative Minimum Tax) 3/02 at 102 A 2,494,166
1,055,000 Brazos Higher Education Authority, Inc., Student Loan Revenue Refunding Bonds, Series
1992C-1, 6.650%, 11/01/04 (Alternative Minimum Tax) No Opt. Call Aa 1,156,153
205,000 Brazos Higher Education Authority, Inc. Student Loan Revenue Refunding Bonds,
Subordinate Series 1993A-2, 6.800%, 12/01/04 (Alternative
Minimum Tax) No Opt. Call A 222,790
1,000,000 City of Georgetown Higher Education, Finance Corporation, Higher Education Revenue
Bonds, Series 1994 (Southwestern University Project), 6.300%, 2/15/142/04 at 100 A1 1,069,730
2,500,000 North Texas Higher Educational Authority, Inc. Student Loan Revenue Bonds, Series 1993C,
6.100%, 4/01/08 (Alternative Minimum Tax) 4/03 at 102 Aa 2,631,475
2,500,000 City of Terrell Hills, Texas, Higher Education Facilities Corporation, Higher Education
Revenue and Refunding Bonds (Incarnate Word College Project), Series 1993,
5.750%, 3/15/13 3/03 at 101 1/2 AAA 2,616,850
1,445,000 Tyler Junior College District (Smith and Van Zanlt Counties, Texas), Combined Fee
Improvement Revenue and Refunding Bonds, Series 1994,
5.900%, 8/15/13 8/04 at 100 Aaa 1,559,011
2,000,000 Board of Regents of The University of Houston System, Consolidated Revenue Bonds,
Series 1995, 6.000%, 2/15/17 2/05 at 100 Aaa 2,146,860
- ---------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 15.5%
1,500,000 Texas Health Facilities Development Corporation, Hospital Revenue Bonds (All Saints
Episcopal Hospitals of Fort Worth Project), Series 1993B,
6.250%, 8/15/22 8/03 at 102 Aaa 1,654,005
3,500,000 Abilene Health Facilities Development Corporation, Hospital Revenue Refunding and
Improvement Bonds (Hendrick Medical Center Project), Series 1995C,
6.150%, 9/01/25 9/05 at 102 Aaa 3,879,225
4,500,000 Amarillo Health Facilities Corporation Hospital Revenue Bonds (High Plains Baptist Hospital
Project), Series 1992C, 6.500%, 1/01/07 1/02 at 102 Aaa 4,950,180
2,000,000 Bexar County Health Facilities Development Corporation, Health System Revenue Bonds
(Baptist Health System), Series 1997-B, 5.250%, 11/15/31 11/07 at 102 Aaa 2,005,060
6,000,000 Brazos County Health Facilities, Development Corporation, Franciscan Services Corporation,
Obligated Group, Revenue Bonds, Series 1997 A, 5.375%, 1/01/28 7/07 at 102 Aaa 6,115,200
1,850,000 Lubbock Health Facilities Development Corporation, Hospital Revenue Bonds (Methodist
Hospital, Lubbock, Texas Project), 5.500%, 12/01/14 12/03 at 102 Aaa 1,892,976
5,750,000 Midland County Hospital District, Hospital Revenue Bonds, Series 1992,
0.000%, 6/01/11 No Opt. Call BBB 2,848,493
4,500,000 Port of Corpus Christi Authority of Nueces County (Texas), Pollution Control Revenue Bonds
(Hoechst Celanese Corporation), Series 1992, 6.875%, 4/01/17
(Alternative Minimum Tax) 4/02 at 102 A+ 4,903,740
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HEALTH CARE - CONTINUED
$ 5,400,000 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 11/03 at 102 Aa2 $5,789,988
- ---------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 0.2%
330,000 Abilene Housing Development Corporation, First Lien Revenue Bonds, Series 1998,
7.000%, 7/01/08 No Opt. Call N/R 336,102
- ---------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 9.2%
4,690,000 Texas Department of Housing and Community Affairs, Single Family Mortgage Revenue
Bonds, 1996 Series E, 6.000%, 9/01/17 9/06 at 102 Aaa 4,945,371
1,595,000 Baytown Housing Finance Corporation, Single Family Mortgage Revenue Refunding Bonds,
Series 1992-A, 8.500%, 9/01/11 9/02 at 103 A1 1,807,917
1,450,000 El Paso Housing Finance Corporation, Single Family Mortgage Revenue Refunding Bonds,
Series 1991A, 8.750%, 10/01/11 4/01 at 103 A 1,633,382
1,015,000 City of Galveston Property Finance Authority, Inc., Single Family Mortgage Revenue Bonds,
Series 1991A, 8.500%, 9/01/11 9/01 at 103 A 1,103,061
2,785,000 The Harrison County Finance Corporation, Single Family Mortgage Revenue Refunding Bonds,
Series 1991, 8.875%, 12/01/11 12/01 at 103 A 2,964,187
1,630,000 Houston Housing Finance Corporation, Single Family Mortgage Revenue Refunding Bonds,
Series 1993A, 5.950%, 12/01/10 6/03 at 102 Aaa 1,703,643
970,000 Port Arthur Housing Finance Corporation, Single Family Mortgage Revenue Refunding Bonds,
Series 1992, 8.700%, 3/01/12 9/02 at 103 A 1,086,313
3,050,000 Travis County Housing Finance Corporation (Texas), Residential Mortgage Bonds (GNMA and
FNMA Mortgage-Backed Securities Program), Senior Bonds, Series 1991A,
7.050%, 12/01/25 12/01 at 103 AAA 3,270,088
1,540,000 Victoria Housing Finance Corporation, Single Family Mortgage Revenue Refunding Bonds,
Series 1995, 8.125%, 1/01/11 No Opt. Call Aaa 1,698,066
- ---------------------------------------------------------------------------------------------------------------------------
LONG TERM CARE - 2.0%
4,000,000 Tarrant County Health Facilities Development Corporation, Tax-Exempt Mortgage Revenue
Bonds (South Central Nursing Homes, Inc. Project), Series 1997A, 6.000%, 1/01/37
(Mandatory put 1/01/26) 1/08 at 105 Aaa 4,372,680
- ---------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 13.7%
8,290,000 State of Texas, College Student Loan Bonds, Series 1997, 5.000%, 8/01/22 (Alternative
Minimum Tax) 8/10 at 100 AA 7,885,531
4,595,000 State of Texas, Veterans' Housing Assistance Bonds, Series 1993, General Obligation Bonds,
6.800%, 12/01/23 (Alternative Minimum Tax) 12/03 at 102 AA 4,958,648
2,000,000 State of Texas, Veteran's Land Bonds, Series 1994, General Obligation Bonds,
6.400%, 12/01/24 (Alternative Minimum Tax) 12/04 at 100 AA 2,179,600
2,500,000 Burleson Independent School District (Johnson and Tarrant Counties, Texas), Unlimited Tax
Refunding Bonds, Series 1995, 5.375%, 8/01/19 8/06 at 100 Aaa 2,562,550
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/GENERAL - CONTINUED
$1,000,000 Caddo Mills Independent School District (Hunt County, Texas), Unlimited Tax School Building
and Refunding Bonds, Series 1995, 6.375%, 8/15/25 2/05 at 100 AAA $1,092,520
4,130,000 Coppell Independent School District (Dallas County, Texas), Unlimited Tax School Building
and Refunding Bonds, Series 1992, 0.000%, 8/15/14 8/09 at 75 11/32 Aaa 1,689,872
1,475,000 City of Corpus Christi, Texas, General Improvement and Refunding Bonds, Series 1992,
6.700%, 3/01/08 3/02 at 100 Aaa 1,616,128
2,800,000 City of Ennis, Texas (Ennis County), General Obligation Refunding and Improvement Bonds,
Series 1992, 6.500%, 8/01/13 8/02 at 100 Aaa 3,054,520
1,185,000 Fort Bend County Levee Improvement District No. 11 (A Political Subdivision of the State of
Texas, located within Fort Bend County), Unlimited Tax Levee Improvement Bonds,
Series 1994, 6.900%, 9/01/17 9/04 at 100 Aaa 1,348,388
1,545,000 Montgomery County (A political subdivision of the State of Texas),
Refunding Bonds, Series 1997, 0.000%, 3/01/14 9/07 at 72 25/64 Aaa 692,175
1,825,000 Socorro Independent School District (El Pasco, County, Texas), Unlimited Tax School Building
Bonds, Series 1996, 5.750%, 2/15/21 2/06 at 100 Aaa 1,912,217
1,225,000 Weslaco Independent School District (Hidalgo County, Texas), Unlimited Tax School Building
and Refunding Bonds, Series 1996, 5.700%, 2/15/15 2/06 at 100 Aaa 1,298,316
- ---------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 6.7%
4,035,000 City of Bryan, Texas (Brazos County), Lease Revenue Bonds (Blinn College Project), Series
1995, 5.300%, 10/01/16 10/05 at 100 Aaa 4,108,477
1,500,000 City of Dallas, Texas (Dallas, Denton and Collin Counties), Combination Tax and Surplus
Revenue, Certificates of Obligation, Series 1992, 6.250%, 1/01/20 1/02 at 100 Aaa 1,577,340
1,000,000 City of Dallas, Texas (Dallas County), Civic Center Convention Complex, Senior Lien Revenue
Bonds, 1985 Series, 8.000%, 1/01/09 7/98 at 100 A 1,015,380
1,450,000 Industrial Development Corporation of The City of Galveston, Sales Tax Revenue Bonds,
Series 1995, 5.750%, 9/01/15 9/05 at 100 Aaa 1,535,710
1,575,000 Harris County, Texas, Toll Road Unlimited Tax and Subordinate Lien, Revenue Refunding
Bonds, Series 1992A, 6.500%, 8/15/15 8/02 at 102 AA 1,742,501
4,580,000 City of San Antonio, Texas, Hotel Occupancy Tax Revenue Bonds (Henry B Gonzalez
Convention Center Project), 5.700%, 8/15/26 8/06 at 102 Aaa 4,882,646
- ---------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 12.1%
5,295,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds, Series 1990 (American
Airlines, Inc. Project), 7.500%, 12/01/29 (Alternative
Minimum Tax) 12/00 at 102 Baa2 5,787,117
5,020,000 Dallas-Fort Worth International Airport, Facility Improvement
Corporation, United Parcel Service, Inc. Revenue Bonds, Series
1992, 6.600%, 5/01/32 (Alternative Minimum Tax)5/02 at 102 Aaa
5,490,776
320,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, Series 1992A,
6.500%, 8/15/17 8/02 at 102 Aaa 353,894
320,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, Series 1992B,
6.625%, 8/15/17 2/98 at 102 Aaa 327,078
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION - CONTINUED
$3,500,000 Harris County, Texas, Toll Road Senior Lien, Revenue Refunding Bonds, Series 1994,
5.375%, 8/15/20 8/04 at 102 Aaa $3,570,735
1,000,000 City of Houston, Texas, Airport System Senior Lien, Revenue Bonds, 8.000%, 7/01/08
(Alternative Minimum Tax) 7/98 at 102 1/2 A 1,040,720
5,000,000 City of Houston, Texas, Airport System Subordinate Lien Revenue Bonds, Series 1991A,
6.750%, 7/01/21 (Alternative Minimum Tax) 7/01 at 102 Aaa 5,436,850
3,300,000 City of Houston, Texas Airport System Special Facilities Revenue Bonds (Automated People
Mover Project), Series 1997A, 5.500%, 7/15/17 (Alternative
Minimum Tax) 7/07 at 100 Aaa 3,392,994
1,125,000 City of Laredo, Texas (Webb County), International Toll Bridge System, Revenue Bonds,
Series 1996, 5.700%, 10/01/10 10/06 at 100 Aaa 1,215,585
- ---------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 14.9%
3,500,000 City of Austin, Texas, Combined Utility Systems Revenue Refunding Bonds, Series 1991,
6.750%, 5/15/12 (Pre-refunded to 5/15/01) 5/01 at 102 A*** 3,851,260
1,000,000 The City of Beaumont, Texas, Public Improvement Bonds, Series 1992, 6.250%, 3/01/10
(Pre-refunded to 3/01/02) 3/02 at 100 Aaa 1,083,020
2,000,000 City of Brownsville, Texas, General Obligation Refunding Bonds, Series 1991,
6.750%, 2/15/12 (Pre-refunded to 2/15/01) 2/01 at 100 Aaa 2,157,480
3,500,000 City of Brownsville, Texas Utilities System Priority Revenue Bonds, Series 1990,
6.500%, 9/01/17 (Pre-refunded to 9/01/00) 9/00 at 102 Aaa 3,790,885
1,975,000 City of Corpus Christi, Texas, General Improvement and Refunding Bonds, Series 1992,
6.700%, 3/01/08 (Pre-refunded to 3/01/02) 3/02 at 100 Aaa 2,172,145
1,780,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, Series 1992A,
6.500%, 8/15/17 (Pre-refunded to 8/15/02) 8/02 at 102 Aaa 1,990,859
425,000 Harris County, Texas, Toll Road Unlimited Tax and Subordinate Lien, Revenue Refunding
Bonds, Series 1992, 6.500%, 8/15/15 (Pre-refunded to 8/15/02) 8/02 at 102 AA*** 474,593
4,000,000 Harris County Health Facilities Development Corporation, Hospital Revenue Bonds (Texas
Children's Hospital Project), Series 1989A, 7.000%, 10/01/19
(Pre-refunded to 10/01/99) 10/99 at 102 Aaa 4,282,720
6,110,000 Harris County Health Facilities Development Corporation (Texas), Hospital Revenue Bonds
(Memorial Hospital System Project), Series 1992, 7.125%, 6/01/15
(Pre-refunded to 6/01/02) 6/02 at 102 A2*** 6,995,828
250,000 City of Houston, Texas, Water and Sewer System, Junior Lien Revenue Refunding Bonds,
Series 1991C, 6.375%, 12/01/17 (Pre-refunded to 12/01/01) 12/01 at 102 Aaa 275,435
1,000,000 North Central Texas Health Facilities Development Corporation, Hospital Revenue Bonds
(Presbyterian Healthcare System Project), Series 1996-A,
5.750%, 6/01/26 No Opt. Call Aaa 1,086,170
1,000,000 North Central Texas Health Facilities Development Corporation, Hospital Revenue Bonds
(Presbyterian Healthcare System Project), Series 1996-B,
5.500%, 6/01/21 No Opt. Call Aaa 1,045,470
2,500,000 Ratama Development Corporation, Special Facilities Revenue Bonds (Retama Park Racetrack
Project), Series 1993, 8.750%, 12/15/17 No Opt. Call Aaa 3,672,125
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES - 7.6%
$1,225,000 Brazos River Authority (Texas), Collateralized Pollution Control Revenue Bonds
(Texas Utilities Electric Company Project), Series 1990A, 8.125%, 2/01/20
(Alternative Minimum Tax) 2/00 at 102 Baa1 $1,329,407
2,000,000 Brazos River Authority (Texas), Collateralized Pollution Control
Revenue Bonds (Texas Utilities Electric Company Project), Series
1994A, 7.875%, 3/01/21 (Alternative Minimum Tax) 3/01 at 102 Baa1 2,212,120
1,500,000 Brazos River Authority (Texas), Collateralized Pollution, Control Revenue Refunding Bonds
(Texas Utilities Electric Company Project), Series 1992, 6.500%, 12/01/27 (Alternative
Minimum Tax) 12/02 at 102 Aaa 1,660,080
5,500,000 Brazos River Authority (Texas), Collateralized Revenue Refunding Bonds (Houston Lighting
and Power Company Project), Series 1988D, 7.750%, 10/01/15 10/98 at 102 A- 5,728,525
1,200,000 Brazos River Authority (Texas), Collateralized Revenue Refunding Bonds (Houston Lighting
& Power Company Project), Series 1993, 5.600%, 12/01/17 12/03 at 102 Aaa 1,248,480
1,500,000 Matagorda County Navigation District Number One (Texas), Pollution Control Revenue
Refunding Bonds (Central Power and Light Company Project),
Series 1993, 6.000%, 7/01/28 7/03 at 102 A- 1,577,250
1,000,000 North Texas Municipal Water District, Regional Solid Waste Disposal System, Refunding
and Improvement Revenue Bonds, Series 1993, 5.250%, 9/01/12 9/03 at 100 Aaa 1,022,270
2,000,000 City of San Antonio, Texas, Electric and Gas Systems Revenue Refunding Bonds, New Series
1992, 5.000%, 2/01/17 2/02 at 101 Aa1 1,973,440
- ---------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 5.9%
2,130,000 City of Dallas, Texas (Dallas, Denton and Collin Counties), Waterworks and Sewer System
Revenue Refunding and Improvement Bonds, Series 1995,
4.500%, 4/01/14 4/02 at 101 1/2 AA 2,037,771
3,750,000 City of Houston, Texas, Water and Sewer System, Junior Lien Revenue Refunding Bonds,
Series 1991C, 6.375%, 12/01/17 12/01 at 102 Aaa 4,070,625
1,000,000 City of Houston, Texas, Water and Sewer System, Prior Lien Revenue Refunding Bonds,
Series 1992B, 6.375%, 12/01/14 12/02 at 102 A 1,092,890
800,000 City of Laredo, Texas (Webb County), Combination Tax and Waterworks System, Revenue
Certificates of Obligation, Series 1994, 5.625%, 8/15/11 8/04 at 100 Aaa 846,086
4,500,000 City of San Antonio, Texas, Water System Revenue Refunding Bonds, Series 1992,
6.500%, 5/15/10 5/02 at 102 Aaa 4,966,290
- ---------------------------------------------------------------------------------------------------------------------------
$207,695,000 Total Investments - (cost $198,229,591) - 97.9% 215,601,674
============
Other Assets Less Liabilities - 2.1% 4,676,965
-------------------------------------------------------------------------------------------------------------
Net Assets - 100% $220,278,639
=============================================================================================================
* Optional Call Provisions: Dates (month and year) and prices of the
earliest optional call or redemption. There may be other call provisions at
varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing sufficient U.S.
Government or U.S. Government agency securities, which ensures the timely
payment of principal and interest. Securities are normally considered to be
equivalent to AAA rated securities.
N/R - Investment is not rated.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (UNAUDITED)
JANUARY 31, 1998
<CAPTION>
ARIZONA PREMIUM MICHIGAN QUALITY MICHIGAN PREMIUM
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $95,897,124 $258,815,902 $172,099,417
Temporary investments in short-term municipal
securities, at amortized cost, which approximates
market value (note 1) 700,000 700,000 600,000
Cash 107,532 -- 146,381
Receivables:
Interest 711,353 3,932,064 2,104,099
Investments sold 15,000 -- --
Other assets 402 533 4,065
- ----------------------------------------------------------------------------------------------------------------------
Total assets 97,431,411 263,448,499 174,953,962
- ----------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- 106,227 --
Accrued expenses:
Management fees (note 6) 53,621 143,384 95,815
Other 44,428 82,450 86,812
Preferred share dividends payable 3,864 15,781 14,288
Common share dividends payable 296,643 902,074 522,083
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities 398,556 1,249,916 718,998
- ----------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $97,032,855 $262,198,583 $174,234,964
======================================================================================================================
Preferred shares, at liquidation value $30,000,000 $ 80,000,000 $ 56,000,000
======================================================================================================================
Preferred shares outstanding 1,200 3,200 2,240
======================================================================================================================
Common shares outstanding 4,299,171 11,346,844 7,677,686
======================================================================================================================
Net asset value per Common share outstanding (net assets
less Preferred shares at liquidation value,
divided by Common shares outstanding) $ 15.59 $ 16.06 $ 15.40
======================================================================================================================
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS (UNAUDITED) - CONTINUED
JANUARY 31, 1998
<CAPTION>
OHIO QUALITY TEXAS QUALITY
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $231,037,007 $215,601,674
Temporary investments in short-term municipal
securities, at amortized cost, which approximates
market value (note 1) 1,000,000 --
Cash -- 86,014
Receivables:
Interest 2,841,245 3,637,874
Investments sold 196,179 1,892,448
Other assets 7,010 3,618
- ----------------------------------------------------------------------------------------------------------------------
Total assets 235,081,441 221,221,628
- ----------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 79,474 --
Accrued expenses:
Management fees (note 6) 128,137 120,813
Other 97,642 70,753
Preferred share dividends payable 16,919 18,025
Common share dividends payable 756,273 733,398
- ----------------------------------------------------------------------------------------------------------------------
Total liabilities 1,078,445 942,989
- ----------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $234,002,996 $220,278,639
======================================================================================================================
Preferred shares, at liquidation value $ 77,000,000 $ 69,000,000
======================================================================================================================
Preferred shares outstanding 3,080 2,760
======================================================================================================================
Common shares outstanding 9,336,709 9,402,542
======================================================================================================================
Net asset value per Common share outstanding (net assets less Preferred shares
at liquidation value,
divided by Common shares outstanding) $ 16.82 $ 16.09
======================================================================================================================
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS (UNAUDITED)
SIX MONTHS ENDED JANUARY 31, 1998
<CAPTION>
ARIZONA PREMIUM MICHIGAN QUALITY MICHIGAN PREMIUM
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $2,675,831 $7,700,472 $4,739,309
- ----------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees (note 6) 312,924 840,570 559,443
Preferred shares - auction fees 37,808 100,823 70,575
Preferred shares - dividend disbursing agent fees 5,905 5,905 11,569
Shareholders' servicing agent fees and expenses 3,984 18,286 13,010
Custodian's fees and expenses 19,067 27,921 23,082
Directors'/Trustees' fees and expenses (note 6) 356 965 637
Professional fees 8,445 8,621 8,526
Shareholders' reports - printing and mailing expenses 14,627 38,111 27,861
Stock exchange listing fees 8,151 12,413 8,151
Investor relations expense 3,680 10,865 7,360
Other expenses 7,606 13,979 5,991
- ----------------------------------------------------------------------------------------------------------------------
Total expenses 422,553 1,078,459 736,205
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 2,253,278 6,622,013 4,003,104
- ----------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM INVESTMENTS
Net realized gain from investment transactions
(notes 1 and 4) 249,722 42,495 47,976
Net change in unrealized appreciation or depreciation
of investments 841,686 1,362,930 2,038,070
- ----------------------------------------------------------------------------------------------------------------------
Net gain from investments 1,091,408 1,405,425 2,086,046
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $3,344,686 $8,027,438 $6,089,150
======================================================================================================================
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS (UNAUDITED) - CONTINUED
SIX MONTHS ENDED JANUARY 31, 1998
<CAPTION>
OHIO QUALITY TEXAS QUALITY
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $6,694,349 $6,437,126
- ----------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees (note 6) 749,401 706,732
Preferred shares - auction fees 97,042 86,958
Preferred shares - dividend disbursing agent fees 17,460 11,569
Shareholders' servicing agent fees and expenses 19,453 9,268
Custodian's fees and expenses 28,923 26,709
Directors'/Trustees' fees and expenses (note 6) 858 810
Professional fees 8,590 8,578
Shareholders' reports - printing and mailing expenses 31,802 24,053
Stock exchange listing fees 8,256 8,162
Investor relations expense 9,995 7,971
Other expenses 12,314 11,397
- ----------------------------------------------------------------------------------------------------------------------
Total expenses 984,094 902,207
- ----------------------------------------------------------------------------------------------------------------------
Net investment income 5,710,255 5,534,919
- ----------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM INVESTMENTS
Net realized gain from investment transactions
(notes 1 and 4) 120,386 713,514
Net change in unrealized appreciation or depreciation
of investments 2,159,025 1,535,549
- ----------------------------------------------------------------------------------------------------------------------
Net gain from investments 2,279,411 2,249,063
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $7,989,666 $7,783,982
======================================================================================================================
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED)
<CAPTION>
ARIZONA PREMIUM MICHIGAN QUALITY
- -----------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
1/31/98 7/31/97 1/31/98 7/31/97
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 2,253,278 $ 4,521,266 $ 6,622,013 $ 13,273,646
Net realized gain (loss) from investment transactions
(notes 1 and 4) 249,722 107,716 42,495 191,099
Net change in unrealized appreciation or depreciation
of investments 841,686 3,426,284 1,362,930 7,824,042
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 3,344,686 8,055,266 8,027,438 21,288,787
- -----------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (1,776,670) (3,505,995) (5,406,744) (10,753,701)
Preferred shareholders (506,988) (959,751) (1,349,829) (2,664,110)
From accumulated net realized gains from investment transactions:
Common shareholders -- -- (111,138) (270,793)
Preferred shareholders -- -- (27,488) (65,600)
- -----------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (2,283,658) (4,465,746) (6,895,199) (13,754,204)
- -----------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued to shareholders due to
reinvestment of distributions 240,512 47,204 819,478 1,679,295
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets 1,301,540 3,636,724 1,951,717 9,213,878
Net assets at beginning of period 95,731,315 92,094,591 260,246,866 251,032,988
- -----------------------------------------------------------------------------------------------------------------------
Net assets at end of period $97,032,855 $95,731,315 $262,198,583 $260,246,866
======================================================================================================================
Balance of undistributed net investment income at
end of period $ 226,335 $ 256,715 $ 314,078 $ 448,638
======================================================================================================================
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED) - CONTINUED
MICHIGAN PREMIUM OHIO QUALITY
- ----------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
1/31/98 7/31/97 1/31/98 7/31/97
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 4,003,104 $ 8,049,998 $ 5,710,255 $ 11,417,190
Net realized gain (loss) from investment transactions
(notes 1 and 4) 47,976 58,728 120,386 658,154
Net change in unrealized appreciation or depreciation
of investments 2,038,070 7,429,576 2,159,025 7,424,361
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 6,089,150 15,538,302 7,989,666 19,499,705
- ----------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (3,132,496) (6,126,793) (4,531,821) (8,909,679)
Preferred shareholders (996,496) (1,824,440) (1,200,624) (2,471,778)
From accumulated net realized gains from investment transactions:
Common shareholders -- -- -- --
Preferred shareholders -- -- -- --
- ----------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (4,128,992) (7,951,233) (5,732,445) (11,381,457)
- ----------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued to shareholders due to
reinvestment of distributions -- -- 514,174 962,543
- ----------------------------------------------------------------------------------------------------------------------
Net increase in net assets 1,960,158 7,587,069 2,771,395 9,080,791
Net assets at beginning of period 172,274,806 164,687,737 231,231,601 222,150,810
- ----------------------------------------------------------------------------------------------------------------------
Net assets at end of period $174,234,964 $172,274,806 $234,002,996 $231,231,601
======================================================================================================================
Balance of undistributed net investment income at
end of period $ 377,723 $ 503,611 $ 690,905 $ 713,095
=====================================================================================================================
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS (UNAUDITED) - CONTINUED
<CAPTION>
TEXAS QUALITY
- -----------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
1/31/98 7/31/97
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
OPERATIONS
Net investment income $ 5,534,919 $ 11,215,305
Net realized gain (loss) from investment transactions (notes 1 and 4) 713,514 (4,927)
Net change in unrealized appreciation or depreciation of investments 1,535,549 7,599,310
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 7,783,982 18,809,688
- -----------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (4,398,450) (8,791,315)
Preferred shareholders (1,264,120) (2,442,360)
From accumulated net realized gains from investment transactions:
Common shareholders -- --
Preferred shareholders -- --
- -----------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (5,662,570) (11,233,675)
- -----------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued to shareholders due to
reinvestment of distributions 158,396 --
- -----------------------------------------------------------------------------------------------------------------------
Net increase in net assets 2,279,808 7,576,013
Net assets at beginning of period 217,998,831 210,422,818
- -----------------------------------------------------------------------------------------------------------------------
Net assets at end of period $220,278,639 $217,998,831
=======================================================================================================================
Balance of undistributed net investment income at end of period $ 145,704 $ 273,355
=======================================================================================================================
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (UNAUDITED)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The state Funds (the "Funds") covered in this report and their
corresponding New York Stock Exchange symbols are Nuveen Arizona Premium Income
Municipal Fund, Inc. (NAZ), Nuveen Michigan Quality Income Municipal Fund, Inc.
(NUM), Nuveen Michigan Premium Income Municipal Fund, Inc. (NMP), Nuveen Ohio
Quality Income Municipal Fund, Inc. (NUO) and Nuveen Texas Quality Income
Municipal Fund (NTX).
Each Fund invests primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities within a single state. 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
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers and general
market conditions. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term securities are valued at
amortized cost, which approximates market value.
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 have extended settlement periods. 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 the when-issued and delayed delivery purchase commitments. At
January 31, 1998, there were no such outstanding 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.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its 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 $.01 per Common share. Furthermore, each Fund
intends to satisfy conditions which will enable interest from municipal
securities, which is exempt from regular federal and designated state income
taxes, to retain such tax-exempt status when distributed to shareholders of the
Funds. Net realized capital gain and market discount distributions are subject
to federal taxation.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared as a dividend monthly and payment
is made or reinvestment is credited to shareholder accounts after month-end. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
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 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.
<PAGE>
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in one or more Series. The dividend rate
on each Series may change every seven days, as set by the auction agent. The
number of shares outstanding, by Series and in total, for each Fund is as
follows:
<TABLE>
<CAPTION>
ARIZONA MICHIGAN MICHIGAN OHIO TEXAS
PREMIUM QUALITY PREMIUM QUALITY QUALITY
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Number of shares:
Series M -- -- 840 680 760
Series Th 1,200 3,200 1,400 1,400 2,000
Series Th2 -- -- -- 1,000 --
- ----------------------------------------------------------------------------------------------------------------------
Total 1,200 3,200 2,240 3,080 2,760
======================================================================================================================
</TABLE>
Derivative Financial Instruments
The Funds may invest in 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 six months ended January 31, 1998.
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.
<TABLE>
2. FUND SHARES
Transactions in Common shares were as follows:
<CAPTION>
ARIZONA PREMIUM MICHIGAN QUALITY
- ---------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
1/31/98 7/31/97 1/31/98 7/31/97
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders due to reinvestment
of distributions 15,456 3,160 49,309 105,844
=====================================================================================================================
<CAPTION>
MICHIGAN PREMIUM OHIO QUALITY
- ---------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
1/31/98 7/31/97 1/31/98 7/31/97
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders due to reinvestment
of distributions -- -- 29,097 58,958
=====================================================================================================================
<CAPTION>
TEXAS QUALITY
- ---------------------------------------------------------------------------------------------------------------------
SIX MONTHS ENDED YEAR ENDED
1/31/98 7/31/97
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares issued to shareholders due to reinvestment of distributions 10,110 --
=====================================================================================================================
</TABLE>
<PAGE>
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
On February 2, 1998, the Funds declared Common share dividend distributions from
their tax-exempt net investment income which were paid March 2, 1998, to
shareholders of record on February 15, 1998, as follows:
<TABLE>
<CAPTION>
ARIZONA MICHIGAN MICHIGAN OHIO TEXAS
PREMIUM QUALITY PREMIUM QUALITY QUALITY
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dividend per share $.0690 $.0795 $.0680 $.0810 $.0780
======================================================================================================================
</TABLE>
4. SECURITIES TRANSACTIONS
Purchase and sales (including maturities) of investments in municipal securities
and temporary municipal investments during the six months ended January 31,
1998, were as follows:
<TABLE>
<CAPTION>
ARIZONA MICHIGAN MICHIGAN OHIO TEXAS
PREMIUM QUALITY PREMIUM QUALITY QUALITY
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Purchases:
Investments in municipal securities $4,500,000 $8,412,835 $4,546,528 $12,772,827 $22,110,390
Temporary municipal investments 2,400,000 4,000,000 2,100,000 7,000,000 10,600,000
Sales and Maturities:
Investments in municipal securities 3,378,778 6,523,420 2,626,625 11,320,464 19,767,019
Temporary municipal investments 2,900,000 5,100,000 3,800,000 6,000,000 12,600,000
======================================================================================================================
</TABLE>
At January 31, 1998, the identified cost of investments owned for federal income
tax purposes was the same as the cost for financial reporting purposes for each
Fund.
At July 31, 1997, the Funds' last fiscal year end, the following Funds had
unused capital loss carryforwards available for federal income tax purposes to
be applied against future capital gains, if any. If not applied, the
carryforwards will expire as follows:
<TABLE>
<CAPTION>
ARIZONA MICHIGAN OHIO TEXAS
PREMIUM PREMIUM QUALITY QUALITY
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expiration year:
2002 $ -- $ 288,696 $1,148,495 $ --
2003 1,316,276 627,148 16,493 --
2004 -- 1,807,234 622,243 --
2005 -- -- -- 208,136
- ----------------------------------------------------------------------------------------------------------------------
Total $1,316,276 $2,723,078 $1,787,231 $208,136
======================================================================================================================
</TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at January 31, 1998, were as follows:
<TABLE>
<CAPTION>
ARIZONA MICHIGAN MICHIGAN OHIO TEXAS
PREMIUM QUALITY PREMIUM QUALITY QUALITY
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gross unrealized:
appreciation $8,379,618 $23,587,276 $13,233,405 $17,187,903 $17,372,083
depreciation -- -- (12,429) -- --
- ----------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation $8,379,618 $23,587,276 $13,220,976 $17,187,903 $17,372,083
======================================================================================================================
</TABLE>
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 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 as follows:
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE
- ------------------------------------------------------------------------------
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For net assets over $2 billion .5875 of 1
- ------------------------------------------------------------------------------
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those Directors/Trustees who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
<PAGE>
7. COMPOSITION OF NET ASSETS
At January 31, 1998, net assets consisted of:
<TABLE>
<CAPTION>
ARIZONA PREMIUM MICHIGAN QUALITY MICHIGAN PREMIUM
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $30,000,000 $ 80,000,000 $ 56,000,000
Common shares, $.01 par value per share 42,992 113,468 76,777
Paid-in surplus 59,450,463 158,217,233 107,234,590
Balance of undistributed net investment income 226,335 314,078 377,723
Accumulated net realized gain (loss) from investment
transactions (1,066,553) (33,472) (2,675,102)
Net unrealized appreciation of investments 8,379,618 23,587,276 13,220,976
- ----------------------------------------------------------------------------------------------------------------------
Net assets $97,032,855 $262,198,583 $174,234,964
======================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Preferred 1,000,000 1,000,000 1,000,000
======================================================================================================================
<CAPTION>
OHIO QUALITY TEXAS QUALITY
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $ 77,000,000 $ 69,000,000
Common shares, $.01 par value per share 93,367 94,025
Paid-in surplus 140,701,046 133,161,448
Balance of undistributed net investment income 690,905 145,704
Accumulated net realized gain (loss) from investment transactions (1,670,225) 505,379
Net unrealized appreciation of investments 17,187,903 17,372,083
- ----------------------------------------------------------------------------------------------------------------------
Net assets $234,002,996 $220,278,639
======================================================================================================================
Authorized shares:
Common 200,000,000 Unlimited
Preferred 1,000,000 Unlimited
======================================================================================================================
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED)
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 &
NET ASSET NET UNREALIZED
VALUE INVEST- GAIN (LOSS) TO TO
BEGINNING MENT FROM INVEST- COMMON PREFERRED
OF PERIOD INCOME MENTS SHAREHOLDERS SHAREHOLDERS+
===========================================================================================================================
<S> <C> <C> <C> <C> <C>
ARIZONA PREMIUM
Six months ended
1/31/98 $15.34 $ .53 $ .25 $ (.41) $(.12)
Year ended 7/31:
1997 14.51 1.06 .81 (.82) (.22)
1996 14.12 1.05 .38 (.80) (.24)
1995 13.61 1.07 .49 (.78) (.27)
1994 14.49 1.07 (.84) (.79) (.26)
11/19/92 to
7/31/93 14.05 .52 .69 (.42) (.11)
<CAPTION>
MICHIGAN QUALITY
<S> <C> <C> <C> <C> <C>
Six months ended
1/31/98 15.95 .58 .14 (.48) (.12)
Year ended 7/31:
1997 15.28 1.18 .72 (.95) (.24)
1996 15.10 1.19 .27 (.95) (.24)
1995 15.02 1.21 .19 (1.00) (.26)
1994 15.85 1.21 (.82) (1.05) (.17)
1993 15.23 1.21 .57 (.97) (.17)
Two months ended
7/31/92 14.29 .20 .92 (.15) (.03)
10/17/91 to
5/31/92 14.05 .47 .41 (.38) (.07)
<CAPTION>
MICHIGAN PREMIUM
<S> <C> <C> <C> <C> <C>
Six months ended
1/31/98 15.14 .52 .28 (.41) (.13)
Year ended 7/31:
1997 14.16 1.05 .97 (.80) (.24)
1996 13.73 1.05 .41 (.78) (.25)
1995 13.46 1.04 .31 (.80) (.28)
1994 14.47 1.03 (1.01) (.81) (.17)
12/17/92 to
7/31/93 14.05 .41 .62 (.34) (.05)
===========================================================================================================================
<PAGE>
<CAPTION>
DISTRIBUTIONS FROM CAPITAL GAINS
PER
ORGANIZATION COMMON
AND OFFERING SHARE
COSTS AND MARKET
TO TO PREFERRED SHARE NET ASSET VALUE
COMMON PREFERRED UNDERWRITING VALUE END END OF
SHAREHOLDERS SHAREHOLDERS+ DISCOUNTS OF PERIOD PERIOD
==========================================================================================================================
<S> <C> <C> <C> <C> <C>
ARIZONA PREMIUM
Six months ended
1/31/98 $-- $-- $-- $15.59 $16.3750
Year ended 7/31:
1997 -- -- -- 15.34 15.4375
1996 -- -- -- 14.51 13.8750
1995 -- -- -- 14.12 13.6250
1994 (.05) (.01) -- 13.61 13.1250
11/19/92 to
7/31/93 -- -- (.24) 14.49 15.7500
<CAPTION>
MICHIGAN QUALITY
<S> <C> <C> <C> <C> <C>
Six months ended
1/31/98 (.01) -- -- 16.06 17.2500
Year ended 7/31:
1997 (.03) (.01) -- 15.95 16.6250
1996 (.07) (.02) -- 15.28 15.5000
1995 (.05) (.01) -- 15.10 14.8750
1994 -- -- -- 15.02 15.2500
1993 (.02) -- -- 15.85 16.0000
Two months ended
7/31/92 -- -- -- 15.23 15.5000
10/17/91 to
5/31/92 -- -- (.19) 14.29 15.1250
<CAPTION>
MICHIGAN PREMIUM
<S> <C> <C> <C> <C> <C>
Six months ended
1/31/98 -- -- -- 15.40 15.0625
Year ended 7/31:
1997 -- -- -- 15.14 13.9375
1996 -- -- -- 14.16 12.8750
1995 -- -- -- 13.73 12.0000
1994 (.04) (.01) -- 13.46 12.5000
12/17/92 to
7/31/93 -- -- (.22) 14.47 15.0000
==========================================================================================================================
<PAGE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------------
TOTAL
INVEST- RATIO OF
MENT NET
RETURN TOTAL NET ASSETS RATIO OF INVESTMENT
ON RETURN ON END OF EXPENSES INCOME PORTFOLIO
MARKET NET ASSET PERIOD (IN TO AVERAGE TO AVERAGE TURNOVER
VALUE** VALUE** THOUSANDS) NET ASSETS++ NET ASSETS++ RATE
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
ARIZONA PREMIUM
Six months ended
1/31/98 8.90% 4.41% $ 97,033 .88%* 4.68%* 4%
Year ended 7/31:
1997 17.81 11.74 95,731 .87 4.86 11
1996 7.83 8.48 92,095 .90 4.88 15
1995 10.42 9.98 90,434 .86 5.21 11
1994 (11.66) (.43) 88,263 .84 4.97 21
11/19/92 to
7/31/93 7.92 6.19 91,363 .91* 4.22* 40
<CAPTION>
MICHIGAN QUALITY
<S> <C> <C> <C> <C> <C> <C>
Six months ended
1/31/98 6.82 3.82 262,199 .83* 5.07* 3
Year ended 7/31:
1997 14.02 11.19 260,247 .83 5.23 11
1996 11.32 8.07 251,033 .83 5.29 15
1995 4.77 8.02 247,907 .84 5.54 18
1994 1.82 1.33 246,082 .85 5.27 4
1993 9.97 11.09 253,881 .88 5.36 6
Two months ended
7/31/92 3.51 7.69 244,930 .85* 5.45* --
10/17/91 to
5/31/92 3.38 4.46 234,439 .82* 4.54* 1
<CAPTION>
MICHIGAN PREMIUM
<S> <C> <C> <C> <C> <C> <C>
Six months ended
1/31/98 11.12 4.50 174,235 .85* 4.63* 2
Year ended 7/31:
1997 14.95 12.97 172,275 .86 4.83 4
1996 14.00 8.88 164,688 .87 4.87 17
1995 2.59 8.45 161,414 1.01 5.02 32
1994 (11.43) (1.27) 100,888 .94 4.82 17
12/17/92 to
7/31/93 2.25 5.44 105,494 .92* 3.73* 15
=======================================================================================================================
See notes on page 58.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS (UNAUDITED) - CONTINUED
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 &
NET ASSET NET UNREALIZED
VALUE INVEST- GAIN (LOSS) TO TO
BEGINNING MENT FROM INVEST- COMMON PREFERRED
OF PERIOD INCOME MENTS SHAREHOLDERS SHAREHOLDERS+
===========================================================================================================================
<S> <C> <C> <C> <C> <C>
OHIO QUALITY
Six months ended
1/31/98 $16.57 $ .61 $ .26 $ (.49) $(.13)
Year ended 7/31:
1997 15.69 1.23 .88 (.96) (.27)
1996 15.33 1.23 .35 (.95) (.27)
1995 14.84 1.22 .52 (.95) (.30)
1994 15.72 1.19 (.82) (1.03) (.18)
1993 15.02 1.18 .69 (.93) (.19)
Two months ended
7/31/92 14.07 .20 .94 (.15) (.04)
10/17/91 to
5/31/92 14.05 .46 .27 (.37) (.07)
<CAPTION>
TEXAS QUALITY
<S> <C> <C> <C> <C> <C>
Six months ended
1/31/98 15.86 .59 .24 (.47) (.13)
Year ended 7/31:
1997 15.06 1.19 .81 (.94) (.26)
1996 14.91 1.21 .21 (.95) (.27)
1995 14.53 1.22 .42 (.98) (.28)
1994 15.41 1.21 (.83) (1.06) (.17)
1993 15.09 1.20 .31 (.97) (.18)
Two months
ended 7/31/92 14.19 .20 .89 (.15) (.04)
10/17/91 to
5/31/92 14.05 .49 .32 (.38) (.07)
===========================================================================================================================
<PAGE>
<CAPTION>
DISTRIBUTIONS FROM CAPITAL GAINS
PER
ORGANIZATION COMMON
AND OFFERING SHARE
COSTS AND MARKET
TO TO PREFERRED SHARE NET ASSET VALUE
COMMON PREFERRED UNDERWRITING VALUE END END OF
SHAREHOLDERS SHAREHOLDERS+ DISCOUNTS OF PERIOD PERIOD
==========================================================================================================================
<S> <C> <C> <C> <C> <C>
OHIO QUALITY
Six months ended
1/31/98 $-- $-- $-- $16.82 $18.6250
Year ended 7/31:
1997 -- -- -- 16.57 17.3125
1996 -- -- -- 15.69 16.0000
1995 -- -- -- 15.33 15.1250
1994 (.03) (.01) -- 14.84 15.1250
1993 (.04) (.01) -- 15.72 15.7500
Two months ended
7/31/92 -- -- -- 15.02 15.2500
10/17/91 to
5/31/92 -- -- (.27) 14.07 15.0000
<CAPTION>
TEXAS QUALITY
<S> <C> <C> <C> <C> <C>
Six months ended
1/31/98 -- -- -- 16.09 16.0000
Year ended 7/31:
1997 -- -- -- 15.86 15.6250
1996 (.04)+++ (.01)+++ -- 15.06 14.8750
1995 -- -- -- 14.91 13.8750
1994 (.03) -- -- 14.53 14.7500
1993 (.03) (.01) -- 15.41 15.8750
Two months
ended 7/31/92 -- -- -- 15.09 15.3750
10/17/91 to
5/31/92 -- -- (.22) 14.19 14.8750
==========================================================================================================================
<PAGE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------------
TOTAL
INVEST- RATIO OF
MENT NET
RETURN TOTAL NET ASSETS RATIO OF INVESTMENT
ON RETURN ON END OF EXPENSES INCOME PORTFOLIO
MARKET NET ASSET PERIOD (IN TO AVERAGE TO AVERAGE TURNOVER
VALUE** VALUE** THOUSANDS) NET ASSETS++ NET ASSETS++ RATE
========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
OHIO QUALITY
Six months ended
1/31/98 10.54% 4.53% $234,003 .85%* 4.91%* 5%
Year ended 7/31:
1997 14.70 12.14 231,232 .85 5.08 25
1996 12.39 8.68 222,151 .87 5.09 19
1995 6.80 10.16 218,335 .94 5.24 19
1994 2.72 1.06 101,335 .94 5.09 2
1993 9.89 11.64 104,507 1.00 5.13 23
Two months ended
7/31/92 2.66 7.84 100,696 1.00* 5.25* 5
10/17/91 to
5/31/92 2.43 2.79 96,465 .89* 4.40* 4
<CAPTION>
TEXAS QUALITY
<S> <C> <C> <C> <C> <C> <C>
Six months ended
1/31/98 5.49 4.49 220,279 .82* 5.05* 9
Year ended 7/31:
1997 11.76 11.93 217,999 .83 5.27 13
1996 14.60 7.72 210,423 .83 5.36 17
1995 1.14 9.89 208,924 .91 5.54 8
1994 (.27) 1.28 153,724 .86 5.43 10
1993 10.24 9.19 159,329 .89 5.49 6
Two months
ended 7/31/92 4.44 7.46 156,031 .86* 5.60* 4
10/17/91 to
5/31/92 1.68 3.74 149,694 .86* 5.65* --
========================================================================================================================
* 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. Total returns are not annualized.
+ The amounts shown are based on Common share equivalents
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders.
+++ The amounts shown include distributions in excess of capital gains of $.008
for Common shareholders and $.002 for Preferred shareholders.
</TABLE>
<PAGE>
Building Better Portfolios with Nuveen
Reducing the impact of taxes and moderating risk are important goals for
many risk- sensitive investors seeking to build better portfolios. For these
investors, a tax-efficient, risk-resistant investment portfolio often forms the
foundation of a carefully crafted financial plan for building and sustaining
wealth. Nuveen is committed to providing investors and their financial advisers
with a range of products and investment tools to help build better portfolios.
NUVEEN FAMILY
OF MUTUAL FUNDS
Nuveen offers a variety of funds designed to help you reach your financial
goals.
GROWTH
Nuveen Rittenhouse
Growth Fund
GROWTH AND INCOME
Growth and Income Stock Fund
Balanced Stock and Bond Fund
Balanced Municipal and Stock Fund
TAX-FREE INCOME
NATIONAL FUNDS
Long-Term
Insured
Intermediate-Term
Limited Term
STATE FUNDS
Alabama
Arizona
California
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Missouri
New Jersey
New Mexico
New York
North Carolina
Ohio
Pennsylvania
South Carolina
Tennessee
Virginia
Wisconsin
EXCHANGE-TRADED FUNDS
Nuveen Exchange-Traded Funds offer investors actively managed portfolios of
investment-grade quality municipal bonds. The fund shares are listed and traded
on the New York and American stock exchanges. Exchange- traded funds provide the
investment convenience, price visibility and liquidity of common stocks.
MUNIPREFERRED(R)
Nuveen MuniPreferred offers investors a AAA-rated investment with an attractive
tax-free yield for the cash reserves portion of an investment
portfolio. MuniPreferred shares are backed 2-to-1 by the long-term portfolios of
Nuveen dual-class exchange-traded funds and are available for national as well
as a wide variety of state-specific portfolios.
MUTUAL FUNDS
Nuveen Mutual Funds offer investors access to the Nuveen family of premier
advisers, including Nuveen Advisory Corp., Institutional Capital Corp. and
Rittenhouse Financial Services. Our equity, balanced and income funds seek to
provide consistent performance, time-tested strategies to reduce risk and
experienced, professional management.
PRIVATE ASSET MANAGEMENT
Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive,
customized investment management solutions to investors with assets of $250,000
or more. A range of actively managed growth, balanced and municipal
income-oriented portfolios are available, all based upon a disciplined
investment philosophy.
UNIT TRUSTS
Nuveen Unit Trusts are fixed portfolios of quality securities that are a
convenient, attractive alternative to purchasing individual securities. They
provide low-cost diversification to reduce risk, experienced, professional
security selection and surveillance, and daily liquidity at that day's net asset
value for quick access to your assets.
<PAGE>
Fund Information
BOARD OF TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
LEGAL COUNSEL
Fried, Frank, Harris,
Shriver & Jacobson
Washington, D.C.
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
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 January 31, 1998. Any future
repurchases will be reported to shareholders in the next annual or
semiannual report.
<PAGE>
Serving Investors for Generations
Photo of: JOHN NUVEEN, SR.
Since our founding in 1898, John Nuveen &Co. has
been synonymous with investments that withstand the
test of time. Today, we offer a broad range of investments designed for
risk-sensitive individuals seeking to build and sustain wealth. In fact, more
than 1.3 million investors have trusted Nuveen to help them maintain the
lifestyle they currently enjoy.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies focused on providing consistent, attractive
performance over time - with moderated risk. We emphasize quality securities
carefully chosen through in-depth research, and we follow those securities
closely over time to ensure that they continue to meet our exacting standards.
Whether your focus is long-term growth, dependable current income or sustaining
accumulated wealth, Nuveen offers a wide variety of products and services
to help meet your unique circumstances and financial planning needs. Our equity,
balanced, and income funds, along with our unit trusts and private asset
management, can form the foundation of a tax-efficient and risk-resistant
portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you build and sustain your long-term financial
security. Or call us at (800) 257-8787 for more information, including a
prospectus where applicable. Please read that information carefully before you
invest.
GRAPHIC:
1898
1998
NUVEEN
OUR SECOND CENTURY
helping investors sustain the wealth of a lifetime.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
FSA-1-1.98
