NUVEEN Exchange-Traded Funds
JANUARY 31, 2000
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: People looking into canyon.
<PAGE>
Financial Information
As of January 31, 2000
Contents
1 Dear Shareholder
4 NAZ's Portfolio Manager's Comments & Performance Overview
7 NUM/NMP's Portfolio Manager's Comments & Performance Overview
12 NUO's Portfolio Manager's Comments & Performance Overview
16 NTX's Portfolio Manager's Comments & Performance Overview
19 Shareholder Meeting Report
23 Portfolio of Investments
44 Statement of Net Assets
45 Statement of Operations
46 Statement of Changes in Net Assets
48 Notes to Financial Statements
54 Financial Highlights
56 Build Your Wealth Automatically
57 Fund Information
Credit Quality
Nuveen Arizona Premium Income Municipal Fund, Inc. (NAZ)
o Dividend per share of $.0705
o Market yield on share price of 5.99%
o Taxable-equivalent yield on share price of 9.15%*
Pie Chart:
AAA/U.S. Guaranteed 70%
AA 15%
A 6%
BBB/NR 5%
Other 4%
Nuveen Michigan Quality Income Municipal Fund, Inc. (NUM)
o Dividend per share of $.0765
o Market yield on share price of 6.96%
o Taxable-equivalent yield on share price of 10.55%*
Pie Chart:
AAA/U.S. Guaranteed 77%
AA 14%
A 5%
BBB/NR 4%
Nuveen Michigan Premium Income Municipal Fund, Inc. (NMP)
o Dividend per share of $.069
o Market yield on share price of 6.79%
o Taxable-equivalent yield on share price of 10.29%*
Pie Chart:
AAA/U.S. Guaranteed 64%
AA 24%
A 5%
BBB/NR 7%
Nuveen Ohio Quality Income Municipal Fund, Inc. (NUO)
o Dividend per share of $.082
o Market yield on share price of 6.32%
o Taxable-equivalent yield on share price of 9.88%*
Pie Chart:
AAA/U.S. Guaranteed 71%
AA 15%
A 4%
BBB/NR 10%
Nuveen Texas Quality Income Municipal Fund (NTX)
o Dividend per share of $.076
o Market yield on share price of 7.48%
o Taxable-equivalent yield on share price of 10.84%*
Pie Chart:
AAA/U.S. Guaranteed 62%
AA 10%
A 9%
BBB/NR 19%
Past performance is not predictive of future results.
* For investors in the 31% federal plus, if applicable, state income tax
bracket. See your Fund's Performance Overview in this report for more
information.
<PAGE>
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sidebar text: Wealth takes a lifetime to build. Once achieved, it should be
preserved.
Dear Shareholder
I am pleased to report to you on the performance of your Nuveen Exchange-Traded
Fund. Providing a stable, attractive tax-free dividend is the Fund's main
objective, and over the past six months, your Fund continued to achieve this
goal. I appreciate the opportunity to review with you the current investment
climate in which your Nuveen Exchange-Traded Fund operates, as does the
portfolio manager of your Fund, who discusses fund performance later in this
report.
A CHALLENGING INVESTMENT ENVIRONMENT
The U.S. economy enjoyed its ninth consecutive year of continuous expansion in
1999, characterized by robust growth, benign inflation, and unemployment levels
that ranked as the lowest in three decades. These patterns remained in place as
we moved into the year 2000.
However, concerns about the persistent pace of economic expansion continued to
test the new paradigm, which holds that the improvements in productivity
achieved through technology enable us to have both economic growth and low
inflation at the same time. As investors watched and reacted to every economic
report, market volatility increased, and the spectre of inflation seemed to lurk
behind each statistic. Especially worrisome to the Federal Reserve was the
possibility that tight labor markets would eventually have an inflationary
effect on wages and, consequently, on consumer prices.
In an effort to pre-empt this threat of inflation, the Fed moved to raise
interest rates by a quarter-point on four separate occasions between June 1999
and February 2000. This increased the federal funds rate, which represents the
amount banks charge one another on overnight loans, setting the standard for
short-term market rates by a full percentage point, from 4.75% to 5.75%.
The series of rate increases, however, had little impact on consumer
confidence, which hit a 31-year high in January, or on consumer spending, which
continued to serve as the main engine powering the country's economic expansion.
Economic growth for the fourth quarter of 1999, as measured by the change in
gross domestic product (GDP), rose at an annual rate of 6.9%, the biggest gain
since 1996 and more than twice the
<PAGE>
3% growth rate the Fed finds comfortable. Fed Chairman Alan Greenspan indicated
during his Humphrey-Hawkins testimony in February that the Fed would continue
closely watching the pace of economic growth for signs of inflationary pressure,
particularly the ratio between consumer spending and personal income. Mr.
Greenspan's comments left the door wide open for additional tightenings
throughout 2000.
MUNICIPAL BOND PERFORMANCE
Despite the evidence of the Federal Reserve's continued vigilance on the
inflation front, the cumulative effect of these economic events was negative for
the fixed-income markets, including municipal bonds. As the Fed's monetary
tightenings prompted a rise in market yields, bond prices slumped, and all but
the shortest maturity bond funds suffered losses.
On a more positive note, over the past year our exchange-traded municipal bond
funds continued to offer attractive, stable income in a market that places a
high premium on yield. At the end of January 2000, long-term municipal yields,
represented by the Bond Buyer 25 Revenue Index, offered 97.7% of 30-year
Treasury yields, compared with the historical average of 86% for the period
1986-1999. For investors, this meant that yields on quality long-term municipal
bonds were comparable to those of long-term Treasury bonds - even before the tax
advantages of municipals were taken into account. Of course, Treasuries are
backed by the full faith and credit of the U.S. government. Even so, on an
after-tax basis, municipal bonds continued to present an exceptionally
attractive investment option relative to Treasuries.
In addition, the economic prosperity of the past decade has benefited all
sectors of the municipal bond market, resulting in continued upgrades in debt
ratings. In 1999, upgrades by Standard & Poor's outnumbered downgrades by a
ratio of almost 4 to 1. In fact, the fourth quarter of 1999 marked the 17th
consecutive quarter in which upgrades exceeded downgrades. The tax-backed
sector, which includes general obligation bonds issued by states, local
municipalities, and school and special purpose districts, fared par-
<PAGE>
ticularly well in 1999, with upgrades outnumbering downgrades 30 to 1.
During 1999, we saw the national supply of municipal bonds decline 21% from the
near-record levels of 1998. This was generally due to the increase in interest
rates, which deterred municipalities from issuing new debt and removed much of
the incentive to refund existing bonds. We anticipate that demand from
individual investors will strengthen as they increasingly look at rebalancing
their portfolios. With the outlook for tighter supply and stronger demand in the
months ahead, Nuveen's established market position as the leading sponsor of
exchange-traded municipal bond funds should give us excellent access to bond
offerings that have the potential to add value for our shareholders.
NUVEEN FUNDS:
AN ANSWER TO YOUR INVESTMENT NEEDS
In light of the current investment environment, your financial adviser can serve
as a valuable resource in helping you determine if adjustments are needed in
your asset allocation plan and suggesting investments that can add
diversification to your portfolio. By investing in other Nuveen funds, you can
bring balance to your portfolio and gain exposure to the different types of
investments that can enhance your potential for success. Your adviser can also
establish a reinvestment plan which will allow you to purchase additional shares
of your Nuveen Exchange-Traded Fund. For more information on Nuveen's expanding
array of funds, contact your financial adviser for a prospectus detailing all
charges and expenses, or call Nuveen at (800) 257-8787. Please read the
prospectus carefully before you invest or send money.
Since 1898, Nuveen has been synonymous with investments that stand the test of
time. As we embark on a new millennium, we remain committed to maintaining that
reputation and finding the best ways to serve your evolving investment needs.
Thank you for your continued confidence.
Sincerely,
/s/TIMOTHY R. SCHWERTFEGER
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
March 15, 2000
Sidebar text: "With the outlook for tighter supply and stronger demand in the
months ahead, Nuveen's established market position as the leading sponsor of
exchange-traded municipal bond funds should give us excellent access to bond
offerings that have the potential to add value for our shareholders."
<PAGE>
Nuveen Arizona Premium Income Municipal Fund, Inc. (NAZ)
Portfolio Manager's Comments
Portfolio manager Mike Davern examines the Arizona municipal market, recent fund
performance, and the outlook for the Nuveen Arizona Premium Income Municipal
Fund, Inc. (NAZ). Mike has 17 years of experience as an investment professional,
including eight years at Nuveen, and has managed NAZ since July 1998.
WHAT FACTORS AFFECTED ARIZONA'S ECONOMY OVER THE 12 MONTHS ENDED JANUARY 31,
2000?
During the past 12 months, Arizona outpaced many other states in terms of
economic and employment growth. While this growth came at a slightly slower pace
than in previous years, the consensus was that the current rate may be more
sustainable over the long term. As of January 31, 2000, unemployment in the
state was 4.1%, which was slightly higher than the national average of 4%.
Strong job growth was seen in the construction industry, both commercial and
residential, prompted by Arizona's continued population growth. In 1999,
construction represented almost 20% of all new jobs created in the state.
Although tight labor markets in other states threatened to dampen economic
growth, Arizona's rapid population growth served to offset the state's
unemployment numbers and prevent labor shortages. One negative aspect of the
employment picture, however, was that much of the state's job growth occurred in
lower-paying industries, which left Arizona's per capita income lagging the U.S.
average. As the result of the tobacco suit settlement, the state is slated to
receive approximately $3 billion in payments over the next 25 years, and
discussion is underway on the ways this money can best be spent to benefit the
state's residents.
HOW DID THESE EVENTS IMPACT THE MUNICIPAL MARKET IN ARIZONA?
In 1999, new municipal issuance in Arizona was down 20% from 1998, closely
tracking the decline in national supply, which fell 21% from 1998 levels. Many
of the new state bonds were transportation-related issues, in support of
Arizona's growing need for transportation improvements. Some of the supply
drop-off we saw in 1999 can be attributed to the rising interest rate
environment, as refunding activity involving older debt typically declines as
interest rates move higher. The lower level of supply helped to offset some of
the negative impact that rising interest rates and equity market activity had on
the demand for municipal bonds.
HOW WAS THE FUND'S DIVIDEND AFFECTED BY THIS ENVIRONMENT?
Good call protection helped to support the dividend of NAZ and shield the income
of this fund from erosion. In addition, Nuveen's dividend management strategies
and our prudent use of leverage enabled us to increase NAZ's dividend in
February 1999. As of January 31, 2000, the Fund had provided shareholders with
steady or increasing dividends for 75 consecutive months. On January 31, 2000,
the market yield for NAZ was 5.99%, equivalent to a taxable yield of 9.15%1.
As a leveraged fund, NAZ issues MuniPreferred shares that pay short-term
interest rates to investors seeking short-term liquidity. Short-term municipal
rates are usually, but not always, lower than long-term rates. The proceeds from
the preferred shares are used to buy additional long-term bonds for the Fund's
portfolio. When short-term interest rates remain below long-term rates, common
shareholders can potentially earn extra net income from the difference between
the rate earned on a fund's long-term portfolio and the short-term rate paid to
preferred shareholders. While the use of leverage can increase the volatility of
a fund's net asset value (NAV), thereby adding higher risk than that associated
with non-leveraged funds, the leveraged fund is usually compensated for this
additional risk in the form of higher yields.
OVERALL, HOW DID NAZ PERFORM OVER THE PAST YEAR?
NAZ's total return on NAV for the 12 months ended January 31, 2000 is shown in
the accompanying table. For comparison purposes, the annual returns for the
Fund's benchmark - the Lehman Brothers Municipal Bond Index2 - and the Fund's
Lipper Peer Group3 are also presented.
Lehman Lipper
Total Return on NAV Total Return2 Average3
------------------------- --------------------------
1-Year Ended Taxable- 1-Year Ended 1-Year Ended
1/31/00 Equivalent1 1/31/00 1/31/00
------------ ----------- ------------ ------------
NAZ -7.67% -4.76% -3.63% -10.64%
------------ ----------- ------------ ------------
Past performance is not predictive of future results.
For additional information, see the Performance Overview for NAZ in this report.
The underperformance of the Fund's total return on NAV relative to its Lehman
benchmark can be attributed largely to the Fund's longer duration4. As of
January 31, 2000, the duration of NAZ was 11.13, compared with the Lehman
Brothers Municipal Bond Index's 7.61. Duration measures a bond fund's price
volatility, or reaction to interest rate movements. The longer the duration, the
more sensitive the fund's NAV is to changes in interest rates. During a period
of falling interest rates, a long duration enables a fund's NAV to participate
more fully in market gains. However, when interest rates rise (and bond values
correspondingly fall), a long duration can make the fund's NAV more vulnerable
to price declines. For the 12 months ended January 31, 2000, the yield on the
Bond Buyer 25 Revenue Bond Index5 rose from 5.17% to 6.34%. This meant that
funds
1 The taxable-equivalent yield/total return represents the yield/total return
that must be earned on a taxable investment in order to equal the
yield/total return of the Nuveen fund on an after-tax basis. The
taxable-equivalent yield is based on the fund's current market yield and a
combined federal and state income tax rate of 34.5%, while the
taxable-equivalent total return is based on the annualized total return and
the 34.5% combined federal and state income tax rate.
2 The performance of NAZ is compared with that of the Lehman Brothers
Municipal Bond Index, an unleveraged index comprising a broad range of
investment-grade municipal bonds. Results for the index do not reflect any
expenses.
3 NAZ's total return is compared with the average annualized return of the 19
funds in the Lipper Other States Municipal Debt Funds category. Fund and
Lipper returns assume reinvestment of dividends.
4 Fund duration, also known as leverage-adjusted duration, takes into account
the leveraging process for the fund and therefore differs from the duration
of the actual portfolio of individual bonds that make up the fund. Unless
otherwise noted, references to duration in this commentary are intended to
indicate fund duration.
5 The Bond Buyer 25 Revenue Bond Index is an unmanaged index of long-term
municipal revenue bonds.
<PAGE>
with longer durations, like NAZ, were more likely to underperform the market, as
represented by the unleveraged Lehman Index.
Over the past 12 months, the duration of NAZ lengthened from 7.72, due largely
to market action. In addition, proceeds from sold or called bonds were
reinvested in issues with longer durations, which benefited the Fund by
providing attractive yields and better call protection. The longer duration
should help position NAZ to regain net asset value if the bond market recovers
and interest rates decline.
WHAT ABOUT THE FUND'S SHARE PRICE PERFORMANCE?
Over the past year, rising interest rates, inflation worries, and constant
speculation about the Federal Reserve's next move created a negative environment
in the fixed-income markets. In addition, concerns about the impact of the
transition to the year 2000 precipitated an early start to 1999's tax-swap
season, as investors attempted to offset profits in the equity markets by
selling fixed-income investments at a loss. The liquidity concerns engendered by
Y2K also prompted some investors to opt for money market funds and other
short-term instruments as the best place to park cash over the year end.
All of these factors negatively impacted the market demand for exchange-traded
funds, including NAZ. This resulted in a decline in the Fund's share price.
Since the prevailing interest rate environment in January 2000 was higher than
that of a year earlier, the Fund's NAV also declined, as bond prices fell while
interest rates rose. The following chart illustrates NAZ's share price and NAV
on a quarterly basis over the past 12 months.
NAZ 01/31/99 04/30/99 07/31/99 10/31/99 01/31/00
-------- --------- -------- -------- --------
Share Price $16 5/16 $17 11/16 $17 $15 3/8 $14 1/8
-------- --------- -------- -------- --------
NAV $15.73 $15.51 $14.90 $14.11 $13.70
-------- --------- -------- -------- --------
As a result of these factors, NAZ saw its premium (share price above NAV) narrow
slightly. The fact that NAZ continued to trade at a premium in the current
market is a function of its long record of steady or increasing dividends.
Total Return on Share Price Premium6
--------------------------- ---------------------------
1-Year Ended Taxable-
1/31/00 Equivalent1 1/31/99 1/31/00
------------ ----------- ------------- ------------
NAZ -8.64% -5.84% 3.70% 3.10%
------------ ----------- ------------- ------------
WHAT KEY STRATEGIES WERE USED TO MANAGE NAZ DURING THE PERIOD COVERED BY THIS
REPORT?
The past 12 months represented a difficult period for fixed-income investments,
including leveraged, long-term funds such as NAZ. However, it also provided
opportunities to enhance the Fund's structure by extending call protection.
Taking advantage of those opportunities was done in addition to managing the
Fund toward its primary objective of providing stable tax-free dividends.
During the past year, we took advantage of bonds available in the market to
eliminate the 2% of the portfolio that was scheduled to be called during 2000
and 2001, which helped to protect portfolio income. NAZ now offers excellent
levels of call protection, with no scheduled calls over the next two years. This
should provide additional protection and stability for the Fund's dividend over
this period. An example of the type of trade we executed to accomplish this goal
involved selling bonds issued by Maricopa County for Kyrene Elementary School
District No. 28, which were pre-refunded to July 2002 and provided a 4.45% yield
to call. We then purchased bonds issued for Phoenix Children's Hospital, an A2
credit with a call date of 2009 and a 6.28% yield to maturity. This trade
enabled us to not only extend call protection and maintain income, but it also
allowed us to reestablish the maturity profile of the Fund and help preserve
principal, since we were able to sell the Kyrene School bonds above par.
Over the past seven months, enhanced tax efficiency also became an increasing
focus, as the rising interest rate environment offered opportunities to benefit
the Fund through active trading. Our strategy has been to sell selected bonds
that are trading at a loss, realize the capital losses, and then roll the
proceeds into bonds with similar structure and quality as well as attractive
yields and better call protection. Some of the bonds we sold were due to mature
or scheduled to be called within the next few months, while others were bonds
that we had purchased earlier in 1999 that were now producing a lower income
stream than that recently available in the market. This trading not only gave us
realized capital losses with which to offset current and future realized capital
gains, thereby protecting shareholders from additional taxes, but also, in most
cases, increased the net earnings of the Fund. If current market conditions
persist, we will continue to focus on implementing this strategy.
WHAT IS NUVEEN'S OUTLOOK FOR NAZ?
In the months ahead, we will continue to focus on the same strategies that we
have emphasized over the past six months, including extending call protection
while protecting portfolio distribution income. As credit spreads (or the
difference in yield between higher credit quality securities and those of lower
credit quality) widen, we will also continue to explore opportunities to
purchase lower-rated securities as they become available in the market. As of
January 31, 2000, NAZ offered excellent credit quality, with 85% of the Fund's
assets invested in bonds rated AAA/U.S. guaranteed and AA. This allows us to
assume the incremental risk associated with lower-rated securities and try to
take advantage of the higher yields associated with these credits to enhance the
dividend-paying capabilities of the Fund. Nuveen Research will continue to play
a key role in helping us assess all opportunities. As an experienced investment
manager knowledgeable about the unique aspects of the Arizona municipal market,
Nuveen continues to focus on selecting the appropriate bonds and implementing
the strategies that can add value for our shareholders.
1 The taxable-equivalent yield/total return represents the yield/total return
that must be earned on a taxable investment in order to equal the
yield/total return of the Nuveen fund on an after-tax basis. The
taxable-equivalent yield is based on the fund's current market yield and a
combined federal and state income tax rate of 34.5%, while the
taxable-equivalent total return is based on the annualized total return and
the 34.5% combined federal and state income tax rate.
6 A fund's premium represents the percentage difference between the fund's
share price and its NAV.
<PAGE>
Nuveen Arizona Premium Income Municipal Fund, Inc.
Performance Overview
As of January 31, 2000
NAZ
Portfolio Statistics
Inception Date 11/92
- --------------------------------------------------
Share Price $14 1/8
- --------------------------------------------------
Net Asset Value $13.70
- --------------------------------------------------
Market Yield 5.99%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.68%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.15%
- --------------------------------------------------
Fund Net Assets ($000) $89,731
- --------------------------------------------------
Average Effective Maturity (Years) 16.95
- --------------------------------------------------
Leverage-Adjusted Duration 11.13
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -8.64% -7.67%
- --------------------------------------------------
5-Year 7.19% 6.30%
- --------------------------------------------------
Since Inception 4.69% 5.25%
- --------------------------------------------------
Taxable-Equivalent Total Return2
On Share Price On NAV
- --------------------------------------------------
1-Year -5.84% -4.76%
- --------------------------------------------------
5-Year 10.18% 9.27%
- --------------------------------------------------
Since Inception 7.57% 8.13%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
U.S. Guaranteed 22%
- --------------------------------------------------
Healthcare 14%
- --------------------------------------------------
Tax Obligation/Limited 12%
- --------------------------------------------------
Utilities 11%
- --------------------------------------------------
Tax Obligation/General 9%
- --------------------------------------------------
Bar Chart:
1999-2000 Monthly Tax-Free Dividends3
2/99 0.0705
3/99 0.0705
4/99 0.0705
5/99 0.0705
6/99 0.0705
7/99 0.0705
8/99 0.0705
9/99 0.0705
10/99 0.0705
11/99 0.0705
12/99 0.0705
1/00 0.0705
Line Chart:
Share Price Performance
2/5/99 16.75
16.56
16.69
16.5
16.69
16.81
16.75
17.06
17.31
17.25
17.56
17.69
17.44
17.31
17.13
17.19
17.19
16.88
17.25
17.06
17.06
17.13
16.94
16.94
17
16.75
16.56
16.25
16.25
16.25
15.94
15.5
15.56
15.56
15.38
15.31
15.38
15.44
15.19
15.25
15.19
14.88
14.5
14.13
13.88
13.94
13.69
13.75
14.06
1/31/00 14.125
Weekly Closing Price
Past performance is not predictive of future results.
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 income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 34.5%.
2 Taxable-equivalent total return is based on the annualized total return and
a combined federal and state income tax rate of 34.5%. 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 also paid shareholders a net ordinary income distribution in
December of $0.0131 per share.
<PAGE>
Nuveen Michigan Exchange-Traded Funds (NUM) (NMP)
Portfolio Manager's Comments
Portfolio manager Mike Davern discusses the market environment in Michigan, fund
performance, and key strategies used to manage the Nuveen Michigan Funds. Mike,
who has 17 years of experience as an investment professional, including eight
years at Nuveen, assumed portfolio management responsibility for the Nuveen
Michigan Quality Income Municipal Fund, Inc. (NUM) and the Nuveen Michigan
Premium Income Municipal Fund, Inc. (NMP) in July 1998.
WHAT FACTORS AFFECTED MICHIGAN'S ECONOMY OVER THE 12 MONTHS ENDED JANUARY 31,
2000?
Michigan's economy continued to be dominated by the auto industry, which still
accounts for 11% of the state's employment base, down from more than 20% at its
peak. While the auto sector performed well in 1999, the state's heavy dependence
on a single industry continued to cause economic concern. However, recent growth
in areas such as office furniture production and software development supplied
some much-needed diversification. Construction remained the major driver of the
state's employment growth, and this industry plus the service sector are
expected to provide continued job expansion. As of January 31, 2000,
unemployment in the state was 3.2%, which was slightly below the national
average of 4%. Canada served as Michigan's largest trading partner, providing a
market for about 60% of the state's total exports. During 1999, the state
experienced a net population loss, as those moving out of the state outnumbered
new residents. While this meant less pressure on the state's infrastructure, it
also meant fewer tax revenues. However, the state is scheduled to receive
approximately $8.5 billion from the tobacco suit settlement, which should supply
the funds needed for a variety of projects.
HOW DID THESE EVENTS IMPACT THE MUNICIPAL MARKET IN MICHIGAN?
In 1999, new municipal issuance in Michigan was down 33% from 1998 levels,
compared with a decline of 21% in national supply for the same period. Most of
the decline in Michigan supply occurred during the first six months of 1999, as
state issuance actually increased slightly in the last half of the year. This
increase can be partially attributed to municipalities' efforts to avoid
problems with the transition to 2000 by issuing significant amounts of debt in
advance of year-end 1999. In addition, the economic growth of the 1990s improved
the economies of many municipalities, enabling them to borrow even at the higher
rates prevalent during the last six months of 1999. However, the overall decline
in supply during 1999 helped to somewhat offset the negative impact that rising
interest rates and equity market activity had on the demand for municipal bonds.
HOW WERE THE FUNDS' DIVIDENDS AFFECTED BY THIS ENVIRONMENT?
During the past year, good call protection helped to support the dividends of
the Nuveen Michigan Funds and shield their income from erosion. As of January
31, 2000, NUM had provided shareholders with 18 consecutive months of steady
dividends. In addition, Nuveen's dividend management strategies and our prudent
use of leverage enabled us to increase the dividend of NMP in February 1999. At
the end of January 2000, NMP had provided shareholders with steady or increasing
dividends for 57 consecutive months. Both of the Nuveen Michigan Funds continued
to provide competitive market yields, as shown in the table on page 8.
As leveraged funds, both Michigan Funds issue MuniPreferred shares that pay
short-term interest rates to investors seeking short-term liquidity. Short-term
municipal rates are usually, but not always, lower than long-term rates. The
proceeds from these preferred shares are used to buy additional long-term bonds
for the Funds' portfolios. When short-term interest rates remain below long-term
rates, common shareholders can potentially earn extra net income from the
difference between the rate earned on a fund's long-term portfolio and the
short-term rate paid to preferred shareholders. While the use of leverage can
increase the volatility of a fund's net asset value (NAV), thereby adding higher
risk than that associated with non-leveraged funds, the leveraged fund is
usually compensated for this additional risk in the form of higher yields.
During the past year, the leverage ratio of NUM fell below the Nuveen guideline
of 35%. This led to the issuance of new MuniPreferred shares for the Fund in
June 1999. (NMP's leverage ratio remained above Nuveen's 35% guideline over the
past 12 months.) Nuveen releveraged the Fund both to restore the original
leverage ratio of 35% and to provide the potential for increased incremental
tax-free income for common shareholders.
OVERALL, HOW DID THE NUVEEN MICHIGAN FUNDS PERFORM OVER THE PAST YEAR?
For the 12 months ended January 31, 2000, the Nuveen Michigan Funds produced
total returns on NAV as shown on page 8.
<PAGE>
For comparison purposes, the annual returns for the Funds' benchmark - the
Lehman Brothers Municipal Bond Index1 - and the Funds' Lipper Peer Group2 are
also presented.
Lehman
Total Return Total Lipper
Market Yield on NAV Return1 Average2
-------------------- -------------------- ------- --------
1-Year 1-Year 1-Year
Taxable- Ended Taxable- Ended Ended
1/31/00 Equivalent3 1/31/00 Equivalent3 1/31/00 1/31/00
------- ----------- ------- ----------- ------- -------
NUM 6.96% 10.55% -7.46% -4.44% -3.63% -12.86%
------- ----------- ------- ------ ------ -------
NMP 6.79% 10.29% -9.20% -6.39% -3.63% -12.86%
------- ----------- ------- ------ ------ -------
Past performance is not predictive of future results.
For additional information on NUM and NMP, see the Performance Overview for your
Fund in this report.
The underperformance of the Funds' total returns on NAV relative to their Lehman
benchmark can be attributed largely to the Funds' longer durations4. As of
January 31, 2000, the durations of NUM and NMP were 10.10 and 13.89,
respectively, compared with the Lehman Brothers Municipal Bond Index's 7.61.
Duration measures a bond fund's price volatility, or reaction to interest rate
movements. The longer the duration, the more sensitive the fund's NAV is to
changes in interest rates. During a period of falling interest rates, a long
duration enables a fund's NAV to participate more fully in market gains.
However, when interest rates rise (and bond values correspondingly fall), a long
duration can make the fund's NAV more vulnerable to price declines. For the 12
months ended January 2000, the yield on the Bond Buyer 25 Revenue Bond Index5
rose from 5.17% to 6.34%. This meant that funds with longer durations, like the
Nuveen Michigan Funds, were more likely to underperform the market, as
represented by the unleveraged Lehman Index.
Over the past 12 months, the durations of NUM and NMP lengthened from 7.48 and
7.95, respectively, due largely to market action. In addition, proceeds from
sold or called bonds were reinvested in issues with longer durations, which
benefited the Funds by providing attractive yields and better call protection.
The longer durations should help position the Michigan Funds to regain net asset
value if the bond market recovers and interest rates decline.
WHAT ABOUT THE FUNDS' SHARE PRICE PERFORMANCE?
During the past 12 months, rising interest rates, inflation worries, and
constant speculation about the Federal Reserve's next move created a negative
environment in the fixed-income markets. In addition, concerns about the impact
of the transition to the year 2000 precipitated an early start to 1999's
tax-swap season, as investors attempted to offset profits in the equity markets
by selling fixed-income investments at a loss. The liquidity concerns engendered
by Y2K also prompted some investors with cash to opt for money market funds and
other short-term instruments as the best place to park cash over the year end.
All of these factors negatively impacted the market demand for exchange-traded
funds, including the Nuveen Michigan Funds. This resulted in declines in the
Funds' share prices. The following charts illustrate the Nuveen Michigan Funds'
share price and NAV on a quarterly basis over the past 12 months.
NUM 01/31/99 04/30/99 07/31/99 10/31/99 01/31/00
-------- -------- --------- -------- --------
Share Price $16 7/16 $16 9/16 $16 11/16 $14 3/8 $13 3/16
-------- -------- --------- -------- --------
NAV $16.06 $15.78 $15.20 $14.39 $13.90
-------- -------- --------- -------- --------
NMP 01/31/99 04/30/99 07/31/99 10/31/99 01/31/00
-------- -------- --------- -------- --------
Share Price $14 3/4 $15 3/8 $15 1/16 $13 1/4 $12 3/16
-------- -------- --------- -------- --------
NAV $15.58 $15.32 $14.68 $13.85 $13.36
-------- -------- --------- -------- --------
Since the prevailing interest rate environment in January 2000 was higher than
that of a year earlier, the Funds' NAVs also declined, as bond prices fell while
interest rates rose. Consequently, NUM saw its premium (share price above NAV)
move to a discount (share price below NAV), while the discount on NMP widened
over the past 12 months. With the market prices of these Funds lower than the
actual value of the bonds in the Funds' portfolios, shareholders may want to
consider taking advantage of this opportunity to add to their holdings of the
Nuveen Michigan Funds.
Total Return on Share Price Premium/Discount6
------------------------- -----------------
1-Year Ended Taxable-
1/31/00 Equivalent3 1/31/99 1/31/00
----------- ----------- -------- -------
NUM -14.32% -11.37% 2.35% -5.13%
----------- ----------- -------- -------
NMP -12.35% -9.39% -5.33% -8.78%
----------- ----------- -------- -------
WHAT KEY STRATEGIES WERE USED TO MANAGE THE NUVEEN MICHIGAN FUNDS DURING THE
PERIOD COVERED BY THIS REPORT?
The past 12 months represented a difficult period for fixed-income investments,
including leveraged, long-term funds such as the Nuveen Michigan Funds. However,
it also provided opportunities to enhance the Funds' holdings. Taking advantage
of those opportunities was done in addition to managing the Funds toward their
primary objective of providing stable tax-free dividends.
1 The performance of NUM and NMP is compared with that of the Lehman Brothers
Municipal Bond Index, an unleveraged index comprising a broad range of
investment-grade municipal bonds. Results for the index do not reflect any
expenses.
2 The total returns for the Nuveen Michigan Funds are compared with the
average annualized return of the seven funds in the Lipper Michigan
Municipal Debt Funds category. Fund and Lipper returns assume reinvestment
of dividends.
3 The taxable-equivalent yield/total return represents the yield/total return
that must be earned on a taxable investment in order to equal the
yield/total return of the Nuveen fund on an after-tax basis. The
taxable-equivalent yield is based on the fund's current market yield and a
combined federal and state income tax rate of 34%, while the
taxable-equivalent total return is based on the annualized total return and
the 34% combined federal and state income tax rate.
4 Fund duration, also known as leverage-adjusted duration, takes into account
the leveraging process for the funds and therefore differs from the
duration of the actual portfolio of individual bonds that make up the
funds. Unless otherwise noted, references to duration in this commentary
are intended to indicate fund duration.
5 The Bond Buyer 25 Revenue Bond Index is an unmanaged index of long-term
municipal revenue bonds.
6 A fund's premium/discount represents the percentage difference between the
fund's share price and its NAV.
<PAGE>
As interest rates rose over the past seven months, we have taken advantage of
credit conditions in both the primary and secondary markets to enhance the
Funds' structure. An example of this occurred when the hospital system owned by
the Daughters of Charity merged with that of the Sisters of St. Joseph to form
Ascension Healthcare. As a result of this merger, the Daughters of Charity bonds
held at a substantial discount by both NUM and NMP became pre-refunded at par.
This resulted in a gain of five basis points on each of the $1 million in bonds
held by NUM and the $2 million in bonds in NMP, providing a boost for the Funds'
total returns. Following the merger, we bought bonds issued by the new entity,
picking up credit quality as well as additional income in the purchase. We have
also looked for opportunities to exploit scarcity in the current market. For
example, we added to our position in Detroit Water and Sewage Disposal bonds as
they became available in market. Over the past 12 months, we increased our
allocation to the water and sewer sector from 4% to 9% in NUM and from 7% to 15%
in NMP.
In both Michigan funds, enhanced tax efficiency also became an increasing focus
over the past seven months, as the rising interest rate environment offered
opportunities to benefit the Funds through active trading. Our strategy has been
to sell selected bonds that are trading at a loss, realize the capital losses,
and then roll the proceeds into bonds with similar structure and quality as well
as attractive yields and better call protection. Some of the bonds we sold were
due to mature or scheduled to be called within the next few months, while others
were bonds that we had purchased early in 1999 that were now producing a lower
income stream than that recently available in the market. This trading not only
gave us realized capital losses with which to offset current and future realized
capital gains, thereby protecting shareholders from additional taxes, but also,
in most cases, increased the net earnings of the Funds. If current market
conditions persist, we will continue to focus on implementing this strategy.
In the area of bond calls, we have been actively pursuing opportunities to
benefit the Funds by extending call protection. During 2000, both NUM and NMP
offer excellent levels of protection, with no scheduled calls for NUM and only
2% in NMP. NMP, which was first offered in December 1992, will have 17% of its
portfolio subject to calls in 2001 and 2002.
However, NUM, which was launched in October 1991, is now approaching the normal
part of the bond market cycle when the likelihood of bond calls increases. Ten
years after the original issue date, issuers typically have their first
opportunity to call, or redeem, outstanding bonds. Calls are more likely to
occur if current interest rates are more favorable to the issuer than the rates
that prevailed when the bonds were first issued. In 2001, 29% of NUM's portfolio
is subject to calls. Some of these bonds may be sold out of the portfolio before
their call dates with no loss of income. Market conditions over the next 12
months will determine how we handle the remainder. If conditions remain the
same, we could have opportunities to reinvest any proceeds in higher yielding
bonds. This should help NUM to continue providing competitive levels of
dividends for shareholders.
WHAT IS NUVEEN'S OUTLOOK FOR THE MICHIGAN FUNDS?
In the months ahead, if current market conditions persist, our strategies will
continue to include efforts to enhance the tax efficiency and dividend-paying
capabilities of both Funds. We will also continue to work on extending NUM's
call protection and maintaining the current levels of call protection in NMP. As
of January 31, 2000, both NUM and NMP offered excellent credit quality, with 91%
and 88%, respectively, of the Funds' assets invested in bonds rated AAA/U.S.
guaranteed and AA. This enables us to actively pursue opportunities to add
lower-rated securities to these portfolios in order to take advantage of
widening credit spreads (or the difference in yield between higher credit
quality securities and those of lower credit quality) and try to secure higher
yields for assuming the incremental risk associated with lower-rated credits.
Nuveen Research will continue to play a key role in helping us explore
opportunities in all areas of the market that can add value for our
shareholders.
<PAGE>
Nuveen Michigan Quality Income Municipal Fund, Inc.
Performance Overview
As of January 31, 2000
NUM
Portfolio Statistics
Inception Date 10/91
- --------------------------------------------------
Share Price $13 3/16
- --------------------------------------------------
Net Asset Value $13.90
- --------------------------------------------------
Market Yield 6.96%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 10.09%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.55%
- --------------------------------------------------
Fund Net Assets ($000) $254,023
- --------------------------------------------------
Average Effective Maturity (Years) 16.93
- --------------------------------------------------
Leverage-Adjusted Duration 10.10
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -14.32% -7.46%
- --------------------------------------------------
5-Year 4.46% 5.78%
- --------------------------------------------------
Since Inception 4.77% 6.45%
- --------------------------------------------------
Taxable-Equivalent Total Return2
On Share Price On NAV
- --------------------------------------------------
1-Year -11.37% -4.44%
- --------------------------------------------------
5-Year 7.61% 9.00%
- --------------------------------------------------
Since Inception 7.93% 9.68%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
U.S. Guaranteed 28%
- --------------------------------------------------
Utilities 16%
- --------------------------------------------------
Tax Obligation/General 15%
- --------------------------------------------------
Healthcare 12%
- --------------------------------------------------
Water and Sewer 9%
- --------------------------------------------------
Bar Chart:
1999-2000 Monthly Tax-Free Dividends3
2/99 0.0765
3/99 0.0765
4/99 0.0765
5/99 0.0765
6/99 0.0765
7/99 0.0765
8/99 0.0765
9/99 0.0765
10/99 0.0765
11/99 0.0765
12/99 0.0765
1/00 0.0765
Line Chart:
Share Price Performance
2/5/99 16.81
16.88
16.75
16.75
16.75
16.5
16.69
16.75
16.63
16.56
16.5
16.56
16.94
16.75
16.75
16.94
16.94
16.38
16.44
16.38
16.56
16.63
16.75
16.69
16.69
16.56
16.38
16.38
16.5
16.25
15.75
15.31
15.31
15.25
14.69
14.31
14.38
14.38
14.06
14.13
14.06
13.75
12.81
13.06
12.69
13.06
13.06
12.81
13.13
1/31/00 13.1875
Weekly Closing Price
Past performance is not predictive of future results.
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 income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 34%.
2 Taxable-equivalent total return is based on the annualized total return and
a combined federal and state 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 also paid shareholders capital gains and net ordinary income
distributions in December of $0.0799 per share.
<PAGE>
Nuveen Michigan Premium Income Municipal Fund, Inc.
Performance Overview
As of January 31, 2000
NMP
Portfolio Statistics
Inception Date 12/92
- --------------------------------------------------
Share Price $12 3/16
- --------------------------------------------------
Net Asset Value $13.36
- --------------------------------------------------
Market Yield 6.79%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.84%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.29%
- --------------------------------------------------
Fund Net Assets ($000) $158,845
- --------------------------------------------------
Average Effective Maturity (Years) 18.06
- --------------------------------------------------
Leverage-Adjusted Duration 13.89
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -12.35% -9.20%
- --------------------------------------------------
5-Year 6.35% 6.53%
- --------------------------------------------------
Since Inception 2.89% 4.90%
- --------------------------------------------------
Taxable-Equivalent Total Return2
On Share Price On NAV
- --------------------------------------------------
1-Year -9.39% -6.39%
- --------------------------------------------------
5-Year 9.52% 9.46%
- --------------------------------------------------
Since Inception 5.90% 7.74%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
Utilities 18%
- --------------------------------------------------
Tax Obligation/Limited 18%
- --------------------------------------------------
Healthcare 18%
- --------------------------------------------------
Water and Sewer 15%
- --------------------------------------------------
U.S. Guaranteed 8%
- --------------------------------------------------
Bar Chart:
1999-2000 Monthly Tax-Free Dividends
2/99 0.069
3/99 0.069
4/99 0.069
5/99 0.069
6/99 0.069
7/99 0.069
8/99 0.069
9/99 0.069
10/99 0.069
11/99 0.069
12/99 0.069
1/00 0.069
Line Chart:
Share Price Performance
2/5/99 15.19
15.13
15.25
15.19
15.19
15.25
15
15.38
15.25
15.19
15.31
15.38
15.56
15.19
15.13
15.19
15.38
15.06
15.19
15
15.31
15.31
15.38
15.19
15.06
15
14.63
14.44
14.44
14.31
14.13
14.06
14.13
14
13.63
13.31
13.25
13.63
13.31
13.13
12.75
12.88
12.06
12.13
11.94
12.13
12.06
11.69
12.19
1/31/00 12.1875
Weekly Closing Price
Past performance is not predictive of future results.
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 income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 34%.
2 Taxable-equivalent total return is based on the annualized total return and
a combined federal and state 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, Inc. (NUO)
Portfolio Manager's Comments
Portfolio manager Tom Futrell discusses the Ohio economy, recent fund
performance, and the outlook for the Nuveen Ohio Quality Income Municipal Fund,
Inc. (NUO). A 16-year veteran of Nuveen, Tom has managed NUO since July 1998.
WHAT FACTORS AFFECTED OHIO'S ECONOMY DURING THE 12 MONTHS ENDED JANUARY 31,
2000?
As a state characterized by a highly diversified industrial base, Ohio saw its
economy benefit from strengthening manufacturing activity as well as expansion
in the services and construction sectors over the past 12 months. Production of
electronics, steel, rubber, and fabricated metal products surged in response to
new domestic orders, and the recovery of world markets from the global economic
crisis of 1997-1998 holds strong upside potential for exports by the state's
manufacturers. However, the net migration of Ohio residents - largely to Florida
and the neighboring states of Michigan, Kentucky, and Indiana - produced a tight
labor market and constrained the pace of business expansion. As of January 31,
2000, Ohio's unemployment rate was 4%, which equaled the national average. Many
of the state's higher-paying manufacturing jobs have been replaced by
lower-paying, less skilled jobs in the services and retail trade sectors. These
jobs are concentrated mainly in back-office operations, call centers, and
distribution and warehousing activities. In 1999, these sectors accounted for
more than 80% of the state's new jobs. As a result, both Ohio's per capita and
median household incomes lagged national averages. In an effort to attract and
retain more qualified workers, the state has now launched a job training and
high-tech occupational standards program for schools and businesses.
HOW DID THESE EVENTS IMPACT MUNICIPAL SUPPLY AND DEMAND IN OHIO?
For 1999, Ohio's new municipal issuance was down 19% from 1998 levels, in line
with the 21% decline in new supply nationwide. The last half of 1999, however,
saw a surge in Ohio issuance, which increased 23% over that of the first six
months of the year. This can largely be attributed to efforts by state and local
governments to avoid potential Y2K problems by issuing significant amounts of
debt in advance of the transition to the year 2000. The overall decline in
supply during 1999 helped to offset some of the effects of rising interest rates
and equity market activity, both of which impacted the demand for municipal
bonds. Ohio's status as a specialty state - with its combination of high
marginal income tax rates and the double-exemption of its municipal bonds from
federal and state taxes - also helped to support demand for Ohio municipal
paper, which benefited residents with substantial taxable-equivalent yields.
HOW WAS THE FUND'S DIVIDEND AFFECTED BY THIS ENVIRONMENT?
Supported by good call protection, Nuveen's dividend management strategies, and
our prudent use of leverage, NUO continued its exceptional record of paying
stable, attractive dividends. As of January 2000, NUO had provided shareholders
with steady or increasing dividends for 97 consecutive months. On January 31,
2000, the market yield for NUO was 6.32%, equivalent to a taxable yield of
9.88%1.
NUO is a leveraged fund, which means that it issues MuniPreferred shares that
pay short-term interest rates to investors seeking short-term liquidity. The
proceeds from these preferred shares are used to buy additional long-term bonds
for the Fund's portfolio. Since short-term municipal rates usually, but not
always, remain below long-term rates, common shareholders can potentially earn
extra net income from the difference between the rate earned on a fund's
long-term portfolio and the short-term rate paid to preferred shareholders.
While the use of leverage can increase the volatility of a fund's net asset
value (NAV), thereby adding higher risk than that associated with non-leveraged
funds, the leveraged fund is usually compensated for this additional risk in the
form of higher yields.
OVERALL, HOW DID NUO PERFORM OVER THE PAST YEAR?
NUO's annual total return on NAV, as well as the returns for the Fund's
benchmark - the Lehman Brothers Municipal Bond Index2 - and the Fund's Lipper
Peer Group3 for the 12 months ended January 31, 2000, are presented in the table
on page 13. In recognition of its risk-adjusted performance, NUO was awarded a
Morningstar4 rating of 4 stars, representing the Fund's overall rating among 193
closed-end municipal bond funds, as of January 31, 2000.
1 The taxable-equivalent yield/total return represents the yield/total return
that must be earned on a taxable investment in order to equal the
yield/total return of the Nuveen fund on an after-tax basis. The
taxable-equivalent yield is based on the fund's current market yield and a
combined federal and state income tax rate of 36%, while the
taxable-equivalent total return is based on the annualized total return and
the combined 36% federal and state income tax rate.
2 NUO's performance is compared with that of the Lehman Brothers Municipal
Bond Index, an unleveraged index comprising a broad range of
investment-grade municipal bonds. Results for the index do not reflect any
expenses.
3 The total return for NUO is compared with the average annualized return of
the 19 funds in the Lipper Other States Municipal Debt Funds category. Fund
and Lipper returns assume reinvestment of dividends.
4 Morningstar proprietary ratings reflect historical risk-adjusted
performance as of January 31, 2000. The ratings are subject to change every
month. Past performance is no guarantee of future results. Morningstar
ratings are calculated from the fund's three-, five-, and ten-year average
annual returns (if applicable) in excess of 90-day Treasury bill returns
with appropriate fee adjustments and a risk factor that reflects fund
performance below 90-day T-bill returns. NUO received 4 stars for the
three- and five-year periods, respectively. The top 10% of the funds in a
broad asset class receive 5 stars, the next 22.5% receive 4 stars, and the
next 35% receive 3 stars. The fund was rated among 193 close-end municipal
bond funds for the three-year and five-year periods.
<PAGE>
Lehman Lipper
Total Return on NAV Total Return2 Average3
--------------------------- ------------- ------------
1-Year Ended Taxable- 1-Year Ended 1-Year Ended
1/31/00 Equivalent1 1/31/00 1/31/00
------------ ----------- ------------- ------------
NUO -5.76% -2.40% -3.63% -10.64%
------------ ----------- ------------- ------------
Past performance is not predictive of future results.
For additional information on NUO, see the individual Performance Overview in
this report.
The underperformance of the Fund's total return on NAV relative to its Lehman
benchmark can be attributed largely to the Fund's longer duration5. As of
January 31, 2000, NUO's duration was 9.89, compared with the Lehman Brothers
Municipal Bond Index's 7.61. Duration measures a bond fund's price volatility,
or reaction to interest rate movements. The longer the duration, the more
sensitive the fund's NAV is to changes in interest rates. During a period of
falling interest rates, a long duration enables a fund's NAV to participate more
fully in market gains. However, when interest rates rise (and bond values
correspondingly fall), a long duration can make the fund's NAV more vulnerable
to price declines.
For the 12 months ended January 31, 2000, the yield on the Bond Buyer 25 Revenue
Bond Index6 rose from 5.17% to 6.34%. This meant that funds with longer
durations, like NUO, were more likely to underperform the market, as represented
by the unleveraged Lehman Brothers Municipal Bond Index. Over the past 12
months, NUO's duration lengthened from 6.91, due largely to market action and
the replacement of sold or called bonds with issues having longer durations.
This strategy benefited the Fund by providing both attractive yields and better
call protection. The Fund's longer duration should also help position NUO to
regain net asset value if the bond market recovers and interest rates decline.
NUO benefited from its overall structure and increased allocation to the housing
sector. Over the past six months, we raised our allocation to multifamily
housing bonds from 8% to 13% of the portfolio, and the performance of higher
coupon housing bonds during this period helped the Fund's total return. On the
other hand, the poor showing by the healthcare sector, which underperformed
other sectors of the bond market over the past 12 months, had a negative impact
on total return. Over the past year, we systematically took advantage of
opportunities in the Ohio market to reduce NUO's healthcare exposure from 11% to
9%.
WHAT ABOUT THE FUND'S SHARE PRICE PERFORMANCE?
Over the past year, concerns about rising interest rates, inflation, and the
Federal Reserve's monetary policies created a negative environment in the
fixed-income markets. In addition, worries about the transition to the year 2000
precipitated an early start to the 1999 tax-swap season, as investors attempted
to offset profits in the equity markets by selling fixed-income investments at a
loss. The liquidity concerns engendered by Y2K also prompted some investors to
opt for money market funds and other short-term instruments during the
transition to the new millennium. All of these factors negatively impacted the
market demand for exchange-traded funds, including NUO. This resulted in a
decline in the Fund's share price. The following chart illustrates NUO's share
price and NAV on a quarterly basis over the past 12 months.
NUO 01/31/99 04/30/99 07/31/99 10/31/99 01/31/00
-------- -------- -------- -------- --------
Share Price $18 3/16 $18 5/8 $18 $15 5/8 $15 9/16
-------- -------- -------- -------- --------
NAV $16.95 $16.73 $16.13 $15.40 $15.02
-------- -------- -------- -------- --------
Since interest rates were generally higher in January 2000 than a year earlier,
the Fund's NAV also declined, as bond prices fell while interest rates rose.
Consequently, NUO saw its premium (share price above NAV) narrow over the past
12 months. The fact that the Fund continues to trade at premium despite the
negative fixed-income environment is a testament to the exceptional stability of
its dividend record.
Total Return on Share Price Premium7
--------------------------- ------------------
1-Year Ended Taxable-
1/31/00 Equivalent1 1/31/99 1/31/00
------------ ----------- -------- --------
NUO -9.34% -6.22% 7.30% 3.61%
------------ ----------- -------- --------
WHAT KEY STRATEGIES WERE USED TO MANAGE NUO DURING THE PERIOD COVERED BY THIS
REPORT?
Over the past 12 months, fixed-income investments, especially long-term,
leveraged funds such as NUO, faced a difficult market. As we focused on
achieving the Fund's primary objective of providing a stable tax-free dividend,
we also tried to take advantage of the recent market by implementing strategies
designed to improve NUO's structure, enhance the Fund's tax efficiency, and
strengthen its long-term dividend-paying capabilities.
1 The taxable-equivalent yield/total return represents the yield/total return
that must be earned on a taxable investment in order to equal the
yield/total return of the Nuveen fund on an after-tax basis. The
taxable-equivalent yield is based on the fund's current market yield and a
combined federal and state income tax rate of 36%, while the
taxable-equivalent total return is based on the annualized total return and
the combined 36% federal and state income tax rate.
2 NUO's performance is compared with that of the Lehman Brothers Municipal
Bond Index, an unleveraged index comprising a broad range of
investment-grade municipal bonds. Results for the index do not reflect any
expenses.
3 The total return for NUO is compared with the average annualized return of
the 19 funds in the Lipper Other States Municipal Debt Funds category. Fund
and Lipper returns assume reinvestment of dividends.
5 Fund duration, also known as leverage-adjusted duration, takes into account
the leveraging process for the funds and therefore differs from the
duration of the actual portfolio of individual bonds that make up the
funds. Unless otherwise noted, references to duration in this commentary
are intended to indicate fund duration.
6 The Bond Buyer 25 Revenue Bond Index is an unmanaged index of long-term
municipal revenue bonds.
7 A fund's premium represents the percentage difference between the fund's
share price and its NAV.
<PAGE>
Since interest rates started to rise in June 1999, we have found several
opportunities to add bonds with higher yields and better call protection. The
purchase of these bonds was funded by proceeds from called bonds, the sale of
bonds with shorter call protection, and pre-refunded bonds that we sold in an
effort to enhance the Fund's total return prospects. As mentioned earlier, most
of the major purchases we made over the past six months have been in the housing
sector, both single family and multifamily issues. We focused on this sector
because of the incremental yield advantage offered by these bonds as well as the
high credit quality of the issuers in this sector at the time. This includes the
Ohio Housing Finance Agency, which we regard as one of the best-run agencies in
the country.
NUO currently provides good levels of call protection, with less than 1% of its
portfolio subject to calls in 2000 and 11% in 2001, an amount we regard as very
manageable. This should provide additional protection and stability for the
Fund's dividend-paying capabilities over this period. To reduce the effect of
any calls, we continuously work on strategies designed to enhance call
protection. Given the current level of bond yields, we have been evaluating
suitable replacements for older bonds, focusing on undervalued bonds that have
the potential to support the Fund's dividend and enhance portfolio structure.
When we find large blocks of such bonds in the marketplace, we consider
replacing the bonds that are most likely to be called away. This strategy should
enable the Fund to continue providing competitive levels of dividends for
shareholders.
Enhanced tax efficiency has also been a focus for us over the past seven months.
This involved selling selected bonds that were trading at a loss, realizing the
capital losses, and then rolling the proceeds into bonds with similar
characteristics, but offering attractive yields and better call protection. This
trading not only gave us realized capital losses with which to offset current
and future capital gains, thereby protecting shareholders from additional taxes,
but also, in most cases, increased the net earnings of the Fund. If current
market conditions persist, we will continue to focus on implementing this
strategy.
Overall, NUO offered excellent credit quality, with 86% of the Fund's assets
invested in bonds rated AAA/U.S. guaranteed and AA at the end of January 2000.
The Fund also had an allocation of 10% in BBB/non-rated bonds, which generally
provided enhanced levels of yield as credit spreads (or the difference in yield
between higher rated bonds and those with lower credit quality ratings) widened
in recent months.
WHAT IS NUVEEN'S OUTLOOK FOR NUO?
If the conditions of the past 12 months continue, we will also try to take
advantage of higher yields in the municipal market to further enhance the
structure of our portfolio holdings and the dividend-paying capabilities of the
Fund. This will include investigating new issues in the lower-rated credit
categories to determine if they can provide substantial incremental yield,
especially if credit spreads continue to widen. We will continue to rely on
Nuveen Research to help us explore opportunities in all areas of the market. Our
research capabilities and our ability to implement strategies such as these
demonstrate the value that can be added by the experience and active management
approach of an investment manager such as Nuveen.
<PAGE>
Nuveen Ohio Quality Income Municipal Fund, Inc.
Performance Overview
As of January 31, 2000
NUO
Portfolio Statistics
Inception Date 10/91
- --------------------------------------------------
Share Price $15 9/16
- --------------------------------------------------
Net Asset Value $15.02
- --------------------------------------------------
Market Yield 6.32%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.16%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.88%
- --------------------------------------------------
Fund Net Assets ($000) $218,869
- --------------------------------------------------
Average Effective Maturity (Years) 14.97
- --------------------------------------------------
Leverage-Adjusted Duration 9.89
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -9.34% -5.76%
- --------------------------------------------------
5-Year 7.62% 6.80%
- --------------------------------------------------
Since Inception 6.49% 7.09%
- --------------------------------------------------
Taxable-Equivalent Total Return2
On Share Price On NAV
- --------------------------------------------------
1-Year -6.22% -2.40%
- --------------------------------------------------
5-Year 10.95% 10.27%
- --------------------------------------------------
Since Inception 9.82% 10.55%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
U.S. Guaranteed 26%
- --------------------------------------------------
Tax Obligation/General 14%
- --------------------------------------------------
Housing/Multifamily 13%
- --------------------------------------------------
Healthcare 9%
- --------------------------------------------------
Education and Civic Organizations 8%
- --------------------------------------------------
Bar Chart:
1999-2000 Monthly Tax-Free Dividends
2/99 0.082
3/99 0.082
4/99 0.082
5/99 0.082
6/99 0.082
7/99 0.082
8/99 0.082
9/99 0.082
10/99 0.082
11/99 0.082
12/99 0.082
1/00 0.082
Line Chart:
Share Price Performance
2/5/99 18.5
18.5
18.69
18.63
19
18.69
18.63
18.56
18.69
18.56
18.56
18.63
18.5
18.25
17.5
17.44
17.44
17.5
17.5
17.31
17.69
17.81
17.81
18
18
17.75
17.25
17.25
17.44
17.06
16.81
16.56
16.38
16.19
15.94
15.63
15.63
15.75
15.94
15.88
15.69
15.5
15.44
15.31
15.13
15.5
15.38
15.44
15.5
1/31/00 15.5625
Weekly Closing Price
Past performance is not predictive of future results.
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 income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 36%.
2 Taxable-equivalent total return is based on the annualized total return and
a combined federal and state income tax rate of 36%. 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 (NTX)
Portfolio Manager's Comments
Portfolio manager Mike Davern discusses the Texas economy and municipal market,
fund performance, and the outlook for the Nuveen Texas Quality Income Municipal
Fund (NTX). Mike has 17 years of experience as an investment professional,
including eight years at Nuveen, and has managed NTX since July 1998.
WHAT FACTORS AFFECTED TEXAS'S ECONOMY OVER THE 12 MONTHS ENDED JANUARY 31, 2000?
Over the past 12 months, Texas continued to diversify its economy away from the
oil-related dominance of previous years, most notably through its expansion into
high-tech manufacturing. The state's proximity to Mexico and Latin America also
provided a boost for the Texas economy, especially as those markets began to
recover from the global financial crisis of 1997-1998. This recovery boded well
for the state's export industry, as Mexico is the state's largest trading
partner, accounting for 42% of the Texas export market. As of January 31, 2000,
unemployment in the state was 4.3%, which was above the national average of 4%.
The state's population continued to grow in 1999, largely as the result of
migration from California, Florida, and Louisiana, drawn by Texas's strong job
climate and, in the case of Californians, lower cost of living. The negative
side of this rapid population expansion was the strain placed on the state's
housing supply and infrastructure. While construction is a leading source of
employment growth in Texas, the state must carefully balance the demand for more
commercial and industrial space with the potential for over-development.
HOW DID THESE EVENTS IMPACT THE MUNICIPAL MARKET IN TEXAS?
In 1999, new municipal issuance in Texas countered the trend toward lower supply
seen nationally and in most individual states, declining just 2.6% from 1998
levels. This compared with a 21% drop in national supply for the same period.
The decline in Texas supply occurred largely in the first six months of 1999, as
state issuance actually increased 15% in the last half of the year. Some of this
increase can be attributed to municipalities' efforts to avoid problems with the
transition to 2000 by issuing significant amounts of debt in advance of year-end
1999. In addition, the economic growth of the 1990s improved the economies of
many municipalities, enabling them to borrow even at the higher rates prevalent
during the last half of 1999. Overall, demand could not keep pace with the
supply of municipal bonds in Texas. This, in turn, had a negative impact on the
prices of bonds issued by Texas municipalities.
HOW WAS THE FUND'S DIVIDEND AFFECTED BY THIS ENVIRONMENT?
Good call protection helped to support the dividend of NTX and shield the income
of this Fund from erosion. In addition, Nuveen's dividend management strategies
and our prudent use of leverage enabled us to increase NTX's dividend in May
1999. As of January 2000, the Fund had provided shareholders with steady or
increasing dividends for 21 consecutive months. On January 31, 2000, the market
yield for NTX was 7.48%, equivalent to a taxable yield of 10.84%1.
As a leveraged fund, NTX issues MuniPreferred shares that pay short-term
interest rates to investors seeking short-term liquidity. Short-term municipal
rates are usually, but not always, lower than long-term rates. The proceeds from
these preferred shares are used to buy additional long-term bonds for the Fund's
portfolio. When short-term interest rates remain below long-term rates, common
shareholders can potentially earn extra net income from the difference between
the rate earned on a fund's long-term portfolio and the short-term rate paid to
preferred shareholders. While the use of leverage can increase the volatility of
a fund's net asset value (NAV), thereby adding higher risk than that associated
with non-leveraged funds, the leveraged fund is usually compensated for this
additional risk in the form of higher yields.
OVERALL, HOW DID NTX PERFORM OVER THE PAST YEAR?
NTX's total return on NAV for the 12 months ended January 31, 2000, is shown in
the accompanying table, along with the annual returns for the Fund's benchmark -
the Lehman Brothers Municipal Bond Index2 - and the Fund's Lipper Peer Group3.
Lehman Lipper
Total Return on NAV Total Return2 Average3
---------------------------- -----------------------------
1-Year Ended Taxable- 1-Year Ended 1-Year Ended
1/31/00 Equivalent1 1/31/00 1/31/00
-------------- ----------- -------------- ------------
NTX -8.88% -6.27% -3.63% -10.64
-------------- ----------- -------------- ------------
Past performance is not predictive of future results.
For additional information, see the Performance Overview for NTX in this report.
The underperformance of the Fund's total return on NAV relative to its Lehman
benchmark can be attributed largely to the Fund's longer duration4. As of
January 31, 2000, the duration of NTX was 11.70, compared with the Lehman
Brothers Municipal Bond Index's 7.61. Duration measures a bond fund's price
volatility, or reaction to interest rate movements. The longer the duration, the
more sensitive the fund's NAV is to changes in interest rates. During a period
of falling interest rates, a long duration enables a fund's NAV to participate
more fully in market gains. However, when interest rates rise (and bond values
correspondingly fall), a long duration can make the fund's NAV more vulnerable
to price declines. For the 12 months ended January 31, 2000, the yield on the
Bond Buyer 25
1 The taxable-equivalent yield/total return represents the yield/total return
that must be earned on a taxable investment in order to equal the
yield/total return of the Nuveen fund on an after-tax basis. The
taxable-equivalent yield is based on the fundcurrent market yield and a
federal income tax rate of 31%, while the taxable-equivalent total return
is based on the annualized total return and the 31% federal income tax
rate.
2 The performance of NTX is compared with that of the Lehman Brothers
Municipal Bond Index, an unleveraged index comprising a broad range of
investment-grade municipal bonds. Results for the index do not reflect any
expenses.
3 NTX's total return is compared with the average annualized return of the 19
funds in the Lipper Other States Municipal Debt Funds category. Fund and
Lipper returns assume reinvestment of dividends.
4 Fund duration, also known as leverage-adjusted duration, takes into account
the leveraging process for the fund and therefore differs from the duration
of the actual portfolio of individual bonds that make up the fund. Unless
otherwise noted, references to duration in this commentary are intended to
indicate fund duration.
<PAGE>
Revenue Bond Index5 rose from 5.17% to 6.34%. This meant that funds with longer
durations, like NTX, were more likely to underperform the market, as represented
by the unleveraged Lehman Index.
Over the past 12 months, the duration of NTX lengthened from 8.46, due largely
to market action. In addition, proceeds from sold or called bonds were
reinvested in issues with longer durations, which benefited the Fund by
providing attractive yields and better call protection. The longer duration
should help position NTX to regain net asset value if the bond market recovers
and interest rates decline.
WHAT ABOUT THE FUND'S SHARE PRICE PERFORMANCE?
During the past 12 months, rising interest rates, inflation worries, and
constant speculation about the Federal Reserve's next move created a negative
environment in the fixed-income markets. In addition, concerns about the impact
of the transition to the year 2000 precipitated an early start to 1999's
tax-swap season, as investors attempted to offset profits in the equity markets
by selling fixed-income investments at a loss. The liquidity concerns engendered
by Y2K also prompted some investors with cash to opt for money market funds and
other short-term instruments as the best place to park cash over the year end.
All of these factors negatively impacted the market demand for exchange-traded
funds, including NTX. This resulted in a decline in the Fund's share price. The
following chart illustrates NTX's share price and NAV on a quarterly basis over
the past 12 months.
NTX 01/31/99 04/30/99 07/31/99 10/31/99 01/31/00
--------- -------- -------- -------- --------
Share Price $15 11/16 $15 1/2 $15 3/16 $13 1/4 $12 3/16
--------- -------- -------- -------- --------
NAV $16.03 $15.79 $15.13 $14.20 $13.65
--------- -------- -------- -------- --------
Since the prevailing interest rate environment in January 2000 was higher than
that of a year earlier, the Fund's NAV also declined, as bond prices fell while
interest rates rose. The supply/demand imbalance in Texas also hurt the prices
of bonds held by the Fund. As a result of these factors, NTX saw its discount
(share price below NAV) widen. With the market price of this Fund lower than the
actual value of the bonds in the Fund's portfolio, shareholders may want to
consider taking advantage of this opportunity to add to their holdings of NTX.
Total Return on Share Price Discount6
---------------------------- ----------------------
1-Year Ended Taxable-
1/31/00 Equivalent1 1/31/99 1/31/00
-------------- ----------- --------- -----------
NTX -16.57% -13.89% -2.14% -10.71%
-------------- ----------- --------- -----------
WHAT KEY STRATEGIES WERE USED TO MANAGE NTX DURING THE PERIOD COVERED BY THIS
REPORT?
The past 12 months represented a difficult period for fixed-income investments,
including leveraged, long-term funds such as NTX. However, it also provided
opportunities to enhance the Fund's structure and tax efficiency. These
strategies, of course, were in addition to managing the Fund toward its primary
objective of providing stable tax-free dividends.
As interest rates rose over the past seven months, the municipal market began to
offer bonds with substantially higher yields than those seen a year ago. We took
advantage of opportunities in both the primary and secondary markets to secure
these higher-yielding bonds for NTX, including several purchases of BBB rated
bonds issued by Dallas-Ft. Worth International Airport for American Airlines at
a blended yield of 6.7%.
In the area of bond calls, NTX has 16% of its portfolio scheduled to be called
in 2000 and 2001. If any of these bonds are called from our portfolio, we will
reinvest the proceeds in the best structured bonds available in the market at
the time the redemption is made. This should help the Fund continue to provide
competitive levels of dividends for shareholders. As mentioned earlier, we have
been active buyers in the current market as we try to take advantage of the
higher interest rate environment. These recent purchases should also benefit the
Fund by extending call protection.
Over the past seven months, enhanced tax efficiency also became an increasing
focus, as the rising interest rate environment offered opportunities to benefit
the Fund through active trading. Our strategy has been to sell selected bonds
that are trading at a loss, realize the capital losses, and then roll the
proceeds into bonds with similar structure and quality as well as attractive
yields and better call protection. This trading not only gave us realized
capital losses with which to offset current and future realized capital gains,
thereby protecting shareholders from additional taxes, but also - in most cases
- - increased the net earnings of the Fund. If current market conditions persist,
we will continue to focus on implementing this strategy.
NTX offered excellent credit quality, with 72% of the Fund's assets invested in
bonds rated AAA/U.S. guaranteed and AA at the end of January 2000. Over the past
year, we took advantage of widening credit spreads (or the difference in yield
between higher credit quality securities and those of lower credit quality) to
reduce our allocations of AAA and AA bonds and increase our exposure to BBB
bonds from 11% to 19%. As credit spreads widened, we were rewarded with higher
yields for assuming the incremental risk associated with these lower-rated
securities.
WHAT IS NUVEEN'S OUTLOOK FOR NTX?
In the months ahead, we will try to take advantage of the higher yields
currently available in the municipal market to enhance our portfolio holdings
and the dividend-paying capabilities of the Fund. If current market conditions
persist, our strategies will continue to include efforts to enhance NTX's tax
efficiency and extend call protection. Nuveen Research will continue to play a
key role in helping us explore opportunities in all areas of the market. As an
experienced investment manager knowledgeable about the unique aspects of the
Texas municipal market, Nuveen will continue to focus on selecting the
appropriate bonds and implementing the strategies that can add value for our
shareholders.
1 The taxable-equivalent yield/total return represents the yield/total return
that must be earned on a taxable investment in order to equal the
yield/total return of the Nuveen fund on an after-tax basis. The
taxable-equivalent yield is based on the fundcurrent market yield and a
federal income tax rate of 31%, while the taxable-equivalent total return
is based on the annualized total return and the 31% federal income tax
rate.
5 The Bond Buyer 25 Revenue Bond Index is an unmanaged index of long-term
municipal revenue bonds.
6 A fund's discount represents the percentage difference between the fund's
share price and its NAV.
<PAGE>
Nuveen Texas Quality Income Municipal Fund
Performance Overview
As of January 31, 2000
NTX
Portfolio Statistics
Inception Date 10/91
- --------------------------------------------------
Share Price $12 3/16
- --------------------------------------------------
Net Asset Value $13.65
- --------------------------------------------------
Market Yield 7.48%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 10.84%
- --------------------------------------------------
Fund Net Assets ($000) $197,874
- --------------------------------------------------
Average Effective Maturity (Years) 18.82
- --------------------------------------------------
Leverage-Adjusted Duration 11.70
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -16.57% -8.88%
- --------------------------------------------------
5-Year 4.36% 5.70%
- --------------------------------------------------
Since Inception 4.02% 6.19%
- --------------------------------------------------
Taxable-Equivalent Total Return1
On Share Price On NAV
- --------------------------------------------------
1-Year -13.89% -6.27%
- --------------------------------------------------
5-Year 7.23% 8.49%
- --------------------------------------------------
Since Inception 6.87% 9.02%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
U.S. Guaranteed 20%
- --------------------------------------------------
Transportation 14%
- --------------------------------------------------
Tax Obligation/General 13%
- --------------------------------------------------
Healthcare 11%
- --------------------------------------------------
Education and Civic Organizations 8%
- --------------------------------------------------
Bar Chart:
1999-2000 Monthly Tax-Free Dividends2
2/99 0.075
3/99 0.075
4/99 0.075
5/99 0.076
6/99 0.076
7/99 0.076
8/99 0.076
9/99 0.076
10/99 0.076
11/99 0.076
12/99 0.076
1/00 0.076
Line Chart:
Share Price Performance
2/5/99 15.88
15.94
16.06
16.06
16.06
16.06
15.88
15.81
15.81
15.38
15.5
15.5
15.69
15.44
15.25
15.38
15.38
15.25
15.5
15.13
15.38
15.5
15.44
15.31
15.19
15.13
14.69
14.75
14.75
14.63
14.38
14.13
14.13
14.13
13.88
13.31
13.25
13.56
13.31
12.94
12.63
12.5
11.75
11.88
11.94
12.25
11.94
12.13
12.25
1/31/00 12.1875
Weekly Closing Price
Past performance is not predictive of future results.
1 A taxable-equivalent represents the yield or return on a taxable investment
necessary to equal that of the Nuveen fund on an after-tax basis. Taxable
equivalent yield is based on current market yield and a federal income tax
rate of 31%. Taxable equivalent total return is based on the annualized
total return and a federal income tax rate of 31%.
2 The Fund also paid shareholders capital gains distributions in December of
$0.0927 per share.
<PAGE>
Shareholder Meeting Report
The annual shareholder meeting was held in Chicago, Illinois on October 13,
1999.
<TABLE>
<CAPTION>
NAZ NUM
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred Preferred
Common Shares Common Shares Shares
Shares Series-TH Shares Series-TH Series-F
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert P. Bremner
For 3,911,913 1,012 10,093,139 3,097 524
Withhold 36,214 3 175,181 6 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 3,948,127 1,015 10,268,320 3,103 524
====================================================================================================================================
Lawrence H. Brown
For 3,911,913 1,012 10,093,499 3,097 524
Withhold 36,214 3 174,821 6 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 3,948,127 1,015 10,268,320 3,103 524
====================================================================================================================================
Anne E. Impellizzeri
For 3,910,913 1,012 10,091,799 3,097 524
Withhold 37,214 3 176,521 6 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 3,948,127 1,015 10,268,320 3,103 524
====================================================================================================================================
Peter R. Sawers
For 3,911,913 1,012 10,093,514 3,097 524
Withhold 36,214 3 174,806 6 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 3,948,127 1,015 10,268,320 3,103 524
====================================================================================================================================
Judith M. Stockdale
For 3,896,513 1,012 10,091,961 3,097 524
Withhold 51,614 3 176,359 6 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 3,948,127 1,015 10,268,320 3,103 524
====================================================================================================================================
William J. Schneider
For -- 1,012 -- 3,097 524
Withhold -- 3 -- 6 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,015 -- 3,103 524
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,012 -- 3,097 524
Withhold -- 3 -- 6 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,015 -- 3,103 524
====================================================================================================================================
Ratification of auditors was reached as follows:
For 3,894,390 1,014 10,097,304 3,096 524
Against 17,605 1 42,874 3 --
Abstain 36,132 -- 128,142 4 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 3,948,127 1,015 10,268,320 3,103 524
====================================================================================================================================
<PAGE>
Shareholder Meeting Report (continued)
<PAGE>
<CAPTION>
NMP
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred
Common Shares Shares
Shares Series-M Series-TH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert P. Bremner
For 6,755,366 815 1,345
Withhold 99,205 3 10
- ------------------------------------------------------------------------------------------------------------------------------------
Total 6,854,571 818 1,355
====================================================================================================================================
Lawrence H. Brown
For 6,748,046 815 1,345
Withhold 106,525 3 10
- ------------------------------------------------------------------------------------------------------------------------------------
Total 6,854,571 818 1,355
====================================================================================================================================
Anne E. Impellizzeri
For 6,747,446 815 1,345
Withhold 107,125 3 10
- ------------------------------------------------------------------------------------------------------------------------------------
Total 6,854,571 818 1,355
====================================================================================================================================
Peter R. Sawers
For 6,751,646 815 1,345
Withhold 102,925 3 10
- ------------------------------------------------------------------------------------------------------------------------------------
Total 6,854,571 818 1,355
====================================================================================================================================
Judith M. Stockdale
For 6,742,466 815 1,345
Withhold 112,105 3 10
- ------------------------------------------------------------------------------------------------------------------------------------
Total 6,854,571 818 1,355
====================================================================================================================================
William J. Schneider
For -- 815 1,345
Withhold -- 3 10
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 818 1,355
====================================================================================================================================
Timothy R. Schwertfeger
For -- 815 1,345
Withhold -- 3 10
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 818 1,355
====================================================================================================================================
Ratification of auditors was reached as follows:
For 6,748,883 817 1,349
Against 29,691 1 6
Abstain 75,997 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 6,854,571 818 1,355
====================================================================================================================================
<PAGE>
<CAPTION>
NUO
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred Preferred
Common Shares Shares Shares
Shares Series-M Series-TH Series-TH2
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Robert P. Bremner
For 8,242,055 669 1,357 987
Withhold 90,845 -- -- 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,332,900 669 1,357 989
====================================================================================================================================
Lawrence H. Brown
For 8,242,096 669 1,357 987
Withhold 90,804 -- -- 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,332,900 669 1,357 989
====================================================================================================================================
Anne E. Impellizzeri
For 8,233,258 669 1,357 987
Withhold 99,642 -- -- 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,332,900 669 1,357 989
====================================================================================================================================
Peter R. Sawers
For 8,242,655 669 1,357 987
Withhold 90,245 -- -- 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,332,900 669 1,357 989
====================================================================================================================================
Judith M. Stockdale
For 8,232,898 669 1,357 987
Withhold 100,002 -- -- 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,332,900 669 1,357 989
====================================================================================================================================
William J. Schneider
For -- 669 1,357 987
Withhold -- -- -- 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 669 1,357 989
====================================================================================================================================
Timothy R. Schwertfeger
For -- 669 1,357 987
Withhold -- -- -- 2
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 669 1,357 989
====================================================================================================================================
Ratification of auditors was reached as follows:
For 8,207,502 664 1,355 989
Against 44,138 -- -- --
Abstain 81,260 5 2 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,332,900 669 1,357 989
====================================================================================================================================
<PAGE>
<CAPTION>
Shareholder Meeting Report (continued)
NTX
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Trustees was reached as follows:
Preferred Preferred
Common Shares Shares
Shares Series-M Series-TH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Robert P. Bremner
For 8,340,969 706 1,678
Withhold 82,179 -- 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,423,148 706 1,682
====================================================================================================================================
Lawrence H. Brown
For 8,340,219 706 1,678
Withhold 82,929 -- 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,423,148 706 1,682
====================================================================================================================================
Anne E. Impellizzeri
For 8,337,588 706 1,678
Withhold 85,560 -- 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,423,148 706 1,682
====================================================================================================================================
Peter R. Sawers
For 8,340,980 706 1,678
Withhold 82,168 -- 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,423,148 706 1,682
====================================================================================================================================
Judith M. Stockdale
For 8,339,427 706 1,678
Withhold 83,721 -- 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,423,148 706 1,682
====================================================================================================================================
William J. Schneider
For -- 706 1,678
Withhold -- -- 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 706 1,682
====================================================================================================================================
Timothy R. Schwertfeger
For -- 706 1,678
Withhold -- -- 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 706 1,682
====================================================================================================================================
Ratification of auditors was reached as follows:
For 8,299,771 706 1,682
Against 50,376 -- --
Abstain 73,001 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 8,423,148 706 1,682
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments (Unaudited)
NUVEEN ARIZONA PREMIUM INCOME MUNICIPAL FUND, INC. (NAZ)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic Materials - 4.2%
$ 5,000 The Industrial Development Authority of the County of Gila, 1/08 at 102 B+ $3,781,700
Arizona, Environmental Revenue Refunding Bonds (ASARCO
Incorporated Project), Series 1998, 5.550%, 1/01/27
- ------------------------------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 3.3%
1,750 Student Loan Acquisition Authority of Arizona, Student Loan Revenue 5/04 at 102 Aa 1,826,510
Bonds, Subordinated Fixed Rate Bonds, Series 1994B,
6.600%, 5/01/10 (Alternative Minimum Tax)
100 University of Arizona Telecommunications System, Certificates of 7/02 at 102 A+ 104,969
Participation, Series 1991, 6.500%, 7/15/12
1,000 Arizona Board of Regents, University of Arizona, System Revenue 6/02 at 102 AA 1,041,120
Refunding Bonds, Series 1992, 6.250%, 6/01/11
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 14.0%
1,000 Arizona Health Facilities Authority, Hospital Revenue Bonds 11/09 at 100 A2 927,130
(Phoenix Children's Hospital), Series 1999A, 6.125%, 11/15/22
2,000 Arizona Health Facilities Authority, Revenue Bonds (Catholic 7/10 at 101 BBB+ 1,915,660
Healthcare West), Series 1999A, 6.625%, 7/01/20
1,500 The Industrial Development Authority of the County of Maricopa, 7/02 at 102 AAA 1,505,415
Arizona, Insured Health Facility Revenue Bonds (Catholic
Healthcare West), Series 1992A, 5.750%, 7/01/11
600 The Industrial Development Authority of the County of Maricopa, 9/05 at 101 AAA 563,034
Arizona, Baptist Hospital System Revenue Refunding Bonds,
Series 1995, 5.500%, 9/01/16
3,000 The Industrial Development Authority of the City of Mesa, Arizona, 1/10 at 101 AAA 2,756,040
Revenue Bonds (Discovery Health System), Series 1999A,
5.625%, 1/01/29
2,000 Hospital District No. One, Mohave County, Arizona, Refunding 6/02 at 101 AAA 2,050,920
General Obligation Bonds (Kingman Regional Medical Center
Project), Series 1992, 6.500%, 6/01/15
2,000 University Medical Center Corporation (Tucson, Arizona), 7/02 at 102 AAA 2,017,100
Hospital Revenue Refunding Bonds, Series 1992, 6.250%, 7/01/16
1,055 The Industrial Development Authority of the City of Winslow, 6/08 at 101 N/R 822,214
Arizona, Hospital Revenue Bonds (Winslow Memorial Hospital
Project), Series 1998, 5.500%, 6/01/22
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 7.2%
1,500 The Industrial Authority of the County of Maricopa, Arizona, 10/09 at 102 Aaa 1,249,515
Multifamily Housing Revenue Bonds (Arborwood Apartments
Project), Series 1999A, 5.050%, 10/01/29
1,670 The Industrial Development Authority of the City of Phoenix, 12/05 at 103 AAA 1,439,206
Arizona, Multifamily Housing Revenue Bonds (Heather Ridge
Apartments Project), Series 1998A, 5.200%, 12/15/21
(Alternative Minimum Tax)
4,000 The Industrial Development Authority of the City of Tucson, 12/06 at 102 AAA 3,801,880
Arizona, Tax-Exempt Multifamily Housing Revenue Refunding
Bonds, Series 1996, 5.900%, 12/20/31
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 3.3%
385 The Industrial Development Authority of the City of Phoenix, 6/05 at 102 AAA 396,858
Arizona, Statewide Single Family Mortgage Revenue Bonds,
Series 1995, 6.150%, 6/01/08 (Alternative Minimum Tax)
320 The Industrial Development Authority of the County of Pima, 8/05 at 102 A 321,882
Arizona, Single Family Mortgage Revenue Refunding Bonds,
Series 1995A, 6.500%, 2/01/17
2,205 The Industrial Development Authority of the County of Pima, 5/07 at 102 AAA 2,204,735
Arizona, Single Family Mortgage Revenue Bonds, Series 1997A,
6.250%, 11/01/30 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Care - 1.1%
1,000 The Industrial Development Authority of the County of Mohave, 5/06 at 103 AAA 970,630
Arizona, Health Care Revenue Refunding Bonds (GNMA
Collateralized - Chris Ridge and Silver Ridge Village Projects),
Series 1996, 6.375%, 11/01/31
<PAGE>
<CAPTION>
Portfolio of Investments (Unaudited)
NUVEEN ARIZONA PREMIUM INCOME MUNICIPAL FUND, INC. (NAZ) (continued)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Obligation/General - 8.8%
$ 1,400 Chandler Unified School District No. 80 of Maricopa County, 7/03 at 101 AAA $1,448,160
Arizona, General Obligation Refunding Bonds, Series 1993,
5.950%, 7/01/10
3,625 City of Mesa, Arizona, General Obligation Bonds, Series 1999, 7/09 at 100 AAA 3,214,795
5.000%, 7/01/18
2,500 City of Phoenix, Arizona, General Obligation Refunding Bonds, 7/02 at 102 AA+ 2,623,325
Series 1992, 6.375%, 7/01/13
585 Tempe Union High School District No. 213 of Maricopa County, 7/04 at 101 AAA 601,398
Arizona, School Improvement and Refunding Bonds, Series 1994,
6.000%, 7/01/12
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 11.5%
City of Bullhead, Bullhead Parkway Improvement District Improvement Bonds:
910 6.100%, 1/01/08 1/03 at 103 Baa2 927,690
970 6.100%, 1/01/09 1/03 at 103 Baa2 986,228
1,600 City of Lake Havasu, City Municipal Property Corporation, Municipal 6/02 at 101 AAA 1,661,312
Facilities Revenue Bonds, Series 1993, 6.000%, 6/01/08
1,500 Hospital District No. One, Maricopa County, Arizona, General 6/08 at 102 AAA 1,492,815
Obligation Bonds, Series 1998, 5.000%, 6/01/21
2,150 Phoenix Civic Plaza Building Corporation, Senior Lien Excise Tax 7/05 at 101 AA+ 2,184,701
Revenue Bonds, Series 1994, 6.000%, 7/01/14
1,750 City of Phoenix Civic Improvement Corporation, Arizona, Senior 7/09 at 101 AA+ 1,552,460
Lien Excise Tax Revenue Bonds, Series 1999A (Phoenix Municipal
Courthouse Project), 5.375%, 7/01/29
1,000 Puerto Rico Highway and Transportation Authority, Transportation 7/08 at 101 A 798,870
Revenue Bonds, Series A, 5.000%, 7/01/38
725 City of Tucson, Arizona, Certificates of Participation, Series 1994, 7/04 at 100 AA 757,611
6.375%, 7/01/09
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - 5.6%
5,000 Tucson Airport Authority, Inc. (Arizona), Airport Revenue Bonds, 6/03 at 102 AAA 5,007,500
Refunding Series 1993, 5.700%, 6/01/13
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 21.8%
3,500 The Industrial Development Authority of the County of Maricopa, No Opt. Call AAA 3,947,965
Arizona, Samaritan Health Services, Hospital System Revenue
Refunding Bonds, Series 1990A, 7.000%, 12/01/16
The Industrial Development Authority of the County of Mohave,
Arizona, Hospital System Revenue Refunding Bonds (Medical
Environments, Inc. and Phoenix Baptist Hospital and Medical
Center Inc.), Series 1993:
5,000 6.750%, 7/01/08 (Pre-refunded to 7/01/03) 7/03 at 102 Aaa 5,381,250
1,000 7.000%, 7/01/16 (Pre-refunded to 7/01/03) 7/03 at 102 Aaa 1,084,040
2,700 City of Phoenix, Arizona, Civic Improvement Corporation, 7/03 at 102 AAA 2,856,843
Wastewater System Lease Revenue Bonds, Series 1993,
6.125%, 7/01/23 (Pre-refunded to 7/01/03)
1,510 Metropolitan Domestic Water Improvement District of Pima 1/03 at 101 AAA 1,581,438
County, Arizona, Special Assessment and Water Revenue Bonds,
Series 1992, 6.200%, 1/01/12 (Pre-refunded to 1/01/03)
1,415 Tempe Union High School District No. 213 of Maricopa County, 7/04 at 101 AAA 1,487,788
Arizona, School Improvement and Refunding Bonds,
Series 1994, 6.000%, 7/01/12 (Pre-refunded to 7/01/04)
3,000 City of Tucson, Arizona, General Obligation Bonds, 7/04 at 101 AAA 3,183,780
Series 1984-G, 6.250%, 7/01/18 (Pre-refunded to 7/01/04)
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 10.9%
2,000 The Industrial Development Authority of the County of Mohave, 11/03 at 101 A-1 2,009,020
Arizona, Industrial Development Revenue Bonds (Citizen Utilities
Company Projects), 1994 Series, 6.600%, 5/01/29 (Alternative
Minimum Tax)
1,000 Navajo County, Arizona, Pollution Control Corporation, Pollution 8/03 at 102 AAA 965,400
Control Revenue Refunding Bonds (Arizona Public Service Company),
1993 Series A, 5.875%, 8/15/28
1,580 The Industrial Development Authority of the County of Pima, 1/02 at 103 AAA 1,684,754
Arizona, Industrial Development Lease Obligation Refunding
Revenue Bonds (Irvington Project), 1988 Series A, 7.250%, 7/15/10
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Utilities (continued)
$ 2,030 Salt River Project, Agricultural Improvement and Power District, 1/02 at 100 AA $1,956,291
Arizona, Electric System Revenue Bonds, 1992 Series D,
5.750%, 1/01/19
1,650 Salt River Project, Agricultural Improvement and Power District, 1/04 at 102 AA 1,458,254
Arizona, Electric System Revenue Refunding Bonds,
1993 Series C, 5.000%, 1/01/16
2,000 The Industrial Development Authority of the County of Yavapai, 6/07 at 101 A1 1,725,400
Arizona, Industrial Development Revenue Bonds (Citizens
Utilities Company Project), 1998 Series, 5.450%, 6/01/33
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 6.7%
2,150 Arizona Municipal Financing Program of 1992, Refunding Certificates 8/02 at 101 AAA 2,151,677
of Participation, Series 1, 6.000%, 8/01/17
500 The Industrial Development Authority of the County of Maricopa, 12/07 at 102 AAA 440,420
Water System Improvement Revenue Bonds (Chaparral City
Water Company Project), Series 1997A, 5.400%, 12/01/22
(Alternative Minimum Tax)
3,500 City of Tucson, Arizona, Water System Revenue Refunding Bonds, 7/02 at 102 A+ 3,427,864
Series 1992A, 5.750%, 7/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
$ 90,335 Total Investments - (cost $89,376,458) - 98.4% 88,295,567
=============
Short-Term Investments - 0.9%
500 Maricopa County, Pollution Control Corporation, Pollution Control A-1+ 500,000
Revenue Refunding Bonds (Arizona Public Service Company -
Palo Verde Project), 1994 Series A, Variable Rate Demand Bonds,
3.600%, 5/01/29+
300 Maricopa County, Pollution Control Corporation, Pollution Control A-1+ 300,000
Revenue Refunding Bonds, (Arizona Public Service Company -
Palo Verde Project), 1994 Series B, Variable Rate Demand Bonds,
3.550%, 5/01/29+
- ------------------------------------------------------------------------------------------------------------------------------------
$ 800 Total Short-Term Investments - (cost $800,000) 800,000
=============
Other Assets Less Liabilities - 0.7% 635,737
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $89,731,304
====================================================================================================================
* 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.
+ 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)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Goods - 0.4%
$ 1,000 Michigan Strategic Fund, Limited Obligation Revenue Bonds 12/03 at 102 BBB $ 900,720
(WMX Technologies, Inc. Project), Series 1993,
6.000%, 12/01/13 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 2.9%
5,020 Board of Trustees of Ferris State University, Michigan, General 4/08 at 100 AAA 4,203,447
Revenue Bonds, Series 1998, 5.000%, 10/01/23
965 Michigan Higher Education Student Loan Authority, Student Loan 10/02 at 102 A 995,243
and Refunding Revenue Bonds, Series XV-A, 6.800%, 10/01/07
(Alternative Minimum Tax)
1,000 Board of Trustees of Oakland University, Michigan, General Revenue 5/05 at 102 AAA 986,410
Bonds, Series 1995, 5.750%, 5/15/15
1,450 Board of Trustees of Western Michigan University, General 7/03 at 102 AAA 1,220,059
Revenue Bonds, Series 1993A, 5.000%, 7/15/21
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 11.5%
2,235 City of Hancock Hospital Finance Authority, FHA-Insured Mortgage 8/08 at 100 AAA 1,889,290
Hospital Revenue Bonds (Portage Health System, Inc.),
Series 1998, 5.450%, 8/01/47
8,800 Michigan State Hospital Finance Authority, Hospital Revenue 5/01 at 100 AA- 8,970,192
Bonds (Mercy Mount Clemens Corporation), Series 1992,
6.000%, 5/15/17
1,000 Michigan State Hospital Finance Authority, Revenue Refunding 11/09 at 101 A 935,270
Bonds (OSF Healthcare System), Series 1999, 6.125%, 11/15/19
2,500 Michigan State Hospital Finance Authority, Revenue Bonds 11/09 at 101 AA 2,398,275
(Ascension Health Credit Group), Series 1999A, 6.125%, 11/15/26
1,700 Michigan State Hospital Finance Authority, Revenue and Refunding 8/09 at 101 AAA 1,613,062
Bonds (Mercy Health Services Obligated Group),
1999 Series X, 5.750%, 8/15/19
Michigan State Hospital Finance Authority, Hospital Revenue and
Refunding Bonds (Mercy Mount Clemens Corporation Obligated
Group), Series 1999A:
3,385 5.750%, 5/15/17 5/09 at 101 AAA 3,257,386
500 5.750%, 5/15/29 5/09 at 101 AAA 459,965
4,500 Michigan State Hospital Finance Authority, Hospital Revenue 8/08 at 101 BBB- 3,186,585
Bonds (The Detroit Medical Center Obligated Group), Series 1998A,
5.250%, 8/15/28
1,000 Michigan State Hospital Finance Authority, Revenue and Refunding 11/09 at 101 BBB+ 837,980
Bonds (Memorial Healthcare Center Obligated Group), Series 1999,
5.875%, 11/15/21
5,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 11/09 at 101 AA- 4,520,500
(Henry Ford Health System), Series 1999A, 6.000%, 11/15/24
2,195 Regents of the University of Michigan, Medical Service Plan Revenue No Opt. Call Aa2 1,186,485
Bonds, Series 1991, 0.000%, 12/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 6.0%
5,250 Michigan State Housing Development Authority, Limited Obligation 10/02 at 103 AAA 5,462,310
Revenue Bonds (Parkway Meadows Project), Series 1991,
6.850%, 10/15/18
310 Michigan State Housing Development Authority, Rental Housing 1/02 at 102 AA- 323,714
Revenue Bonds, 1991 Series A, 7.150%, 4/01/10
(Alternative Minimum Tax)
3,695 Michigan State Housing Development Authority, Rental Housing 1/02 at 102 AA- 3,838,070
Revenue Bonds, 1991 Series B, 7.100%, 4/01/21
6,795 Michigan State Housing Development Authority, Rental Housing 4/09 at 101 AAA 5,710,314
Revenue Bonds, 1999 Series A, 5.300%, 10/01/37
(Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing/Single Family - 0.8%
$ 1,720 Michigan State Housing Development Authority, Single Family 12/01 at 102 AA+ $1,749,171
Mortgage Revenue Bonds, 1991 Series B, 6.950%, 12/01/20
270 Michigan State Housing Development Authority, Single Family 6/02 at 102 AA+ 271,990
Mortgage Revenue Bonds, 1992 Series A, 6.875%, 6/01/23
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Care - 3.6%
2,000 The Economic Development Corporation of the Charter Township of 7/09 at 101 A 1,591,700
Grand Rapids (Michigan), Limited Obligation Revenue Bonds (Porter
Hills Obligated Group, Cook Valley Estate Project), Series 1999,
5.450%, 7/01/29
1,250 Michigan State Hospital Finance Authority, Revenue Bonds 1/07 at 102 N/R 1,105,075
(Presbyterian Villages of Michigan Obligated Group), Series 1997,
6.375%, 1/01/25
1,300 Michigan Strategic Fund, Limited Obligation Revenue Bonds (Porter 7/08 at 101 A 1,024,283
Hills Presbyterian Village Inc. Project), Series 1998,
5.375%, 7/01/28
5,280 The Economic Development Corporation of the City of Warren, Nursing 3/02 at 101 Aaa 5,336,443
Home Revenue Refunding Bonds (GNMA Mortgage-Backed
Security - Autumn Woods Project), Series 1992, 6.900%, 12/20/22
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 15.1%
1,000 Belding Area Schools, Counties of Ionia, Kent and Montcalm, State 5/08 at 100 AAA 831,270
of Michigan, 1998 Refunding Bonds (General Obligation -
Unlimited Tax), 5.000%, 5/01/26
1,000 Charlotte Public Schools, County of Easton, State of Michigan, No Opt. Call AAA 870,870
1999 School Building and Site Bonds (General Obligation - Unlimited
Tax), 5.250%, 5/01/25
1,000 Chippewa Valley Schools, County of Macomb, State of Michigan, 5/03 at 102 AAA 847,230
1993 Refunding Bonds (General Obligation - Unlimited Tax),
5.000%, 5/01/21
2,250 Clarkston Community Schools, County of Oakland, State of Michigan, 5/07 at 100 AAA 1,974,600
1997 School Building and Site (General Obligation -
Unlimited Tax), 5.250%, 5/01/23
250 Coopersville Area Public Schools, Counties of Ottawa and Muskegon, 5/09 at 100 AAA 205,793
State of Michigan, 1999 School Building and Site Bonds (General
Obligation - Unlimited Tax), 5.000%, 5/01/29
5,720 School District of the City of Detroit, Wayne County, State of 5/09 at 101 AAA 4,504,729
Michigan, School Building and Site Improvement Bonds (General
Obligation - Unlimited Tax), Series 1998A, 4.750%, 5/01/28
1,355 Township of Blair, County of Grand Traverse, State of Michigan, 11/10 at 100 AAA 1,178,051
1998 Water System Improvements Project (General Obligation -
Limited Tax), 5.200%, 11/01/23
725 Lake Orion Community School District, County of Oakland, State of 5/05 at 101 AAA 675,135
Michigan, 1995 Refunding Bonds (General Obligation - Unlimited
Tax), 5.500%, 5/01/20
1,000 School District of the City of Lincoln Park, County of Wayne, 5/07 at 100 AAA 879,170
State of Michigan, 1997 Refunding (Unlimited Tax),
5.000%, 5/01/17
1,000 Mancelona Public School District, General Obligation Bonds, 5/06 at 100 AAA 906,380
Series 1997 (Antrim and Kalkaska Counties), 5.200%, 5/01/17
6,650 Mattawan Consolidated School, Counties of Van Buren and 5/02 at 102 AA+ 6,799,226
Kalamazoo, State of Michigan, 1992 Refunding Bonds (General
Obligation - Unlimited Tax), 6.300%, 5/01/17
2,500 Montrose Township School District, State of Michigan, School No Opt. Call AAA 2,501,250
Building and Site Bonds, Series 1997, 6.000%, 5/01/22
1,000 Muskegon Heights Public Schools, County of Muskegon, State of 5/09 at 100 AAA 823,170
Michigan, 1999 School Building and Site Bonds (General
Obligation - Unlimited Tax), 5.000%, 5/01/29
1,045 Nice Community School District, Counties of Marquette and Baraga, 5/04 at 101 AAA 929,622
State of Michigan, 1995 School Building and Site Bonds (General
Obligation - Unlimited Tax), 5.250%, 5/01/20
1,225 North Branch Area Schools, County of Lapeer, State of Michigan, 5/03 at 101 1/2 AAA 1,107,069
1993 Refunding Bonds (General Obligation - Unlimited Tax),
5.375%, 5/01/21
1,470 Parchment School District, County of Kalamazoo, State of Michigan, No Opt. Call AAA 1,245,413
1998 School Building and Site Bonds (General Obligation -
Unlimited Tax), 5.000%, 5/01/25
685 Reeths-Puffer Schools, County of Muskegon, State of Michigan, 5/05 at 101 AAA 680,465
1995 School Building and Site and Refunding Bonds,
5.750%, 5/01/15
<PAGE>
Portfolio of Investments (Unaudited)
NUVEEN MICHIGAN QUALITY INCOME MUNICIPAL FUND, INC. (NUM) (continued)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Obligation/General (continued)
$ 600 Rockford Public Schools, Kent County, 1997 School Building and 5/07 at 100 AAA $ 519,294
Site Bonds (General Obligation - Unlimited Tax), 5.250%, 5/01/27
1,980 Washtenaw County Building Authority, Michigan, Building Authority 9/07 at 100 AAA 1,844,786
Bonds (General Obligation - Limited Tax), Series 1999,
5.400%, 9/01/17
Western Townships Utilities Authority, Sewage Disposal System
Refunding Bonds, Series 1991:
1,500 6.750%, 1/01/15 1/02 at 100 AAA 1,546,365
5,040 6.500%, 1/01/19 1/02 at 100 AAA 5,140,750
1,725 Williamston Community School District (General Obligation - No Opt. Call AAA 1,587,173
Unlimited Tax), Series 1996, 5.500%, 5/01/25
1,000 Wyoming Public Schools, County of Kent, State of Michigan, 5/09 at 100 AAA 843,880
1999 Refunding Bonds (General Obligation - Unlimited Tax),
5.000%, 5/01/22
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 6.0%
2,000 Michigan Municipal Bond Authority, Local Government Loan Program 5/02 at 102 A 2,089,960
Revenue Bonds, Series 1992D, 6.650%, 5/01/12
3,800 Michigan State Building Authority, 1991 Revenue Refunding Bonds, 10/01 at 102 AA 3,818,696
Series I, 6.250%, 10/01/20
895 Michigan State Building Authority, 1991 Revenue Bonds, Series II, 10/01 at 102 AA 930,236
6.800%, 10/01/21
1,000 Michigan State Building Authority (Facilities Program), 1998 Revenue
Bonds, Series I, 10/09 at 100 AA 807,280
4.750%, 10/15/21
State of Michigan, State Trunk Line Fund Refunding Bonds, Series 1998A:
1,350 4.750%, 11/01/20 11/08 at 101 AAA 1,100,669
1,500 5.000%, 11/01/26 11/08 at 101 AAA 1,245,030
Puerto Rico Highway and Transportation Authority, Highway Revenue
Bonds, Series Y of 1996:
4,100 5.500%, 7/01/36 7/16 at 100 A 3,638,791
2,000 5.000%, 7/01/36 7/16 at 100 A 1,604,160
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - 1.0%
2,505 Charter County of Wayne, Michigan, Airport Revenue Bonds (Detroit 12/01 at 102 AAA 2,613,341
Metropolitan Wayne County Airport), Subordinate Lien,
Series 1991B, 6.750%, 12/01/21 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 27.1%
3,935 Anchor Bay School District, Counties of Macomb and St. Clair, 5/03 at 101 1/2 AAA 4,073,355
State of Michigan, 1993 School Building and Site Bonds
(General Obligation - Unlimited Tax), 5.550%, 5/01/19
(Pre-refunded to 5/01/03)
1,930 Central Michigan University, Revenue Bonds, Series 1997, 4/07 at 101 AAA 1,983,905
5.500%, 10/01/17 (Pre-refunded to 4/01/07)
2,000 School District of the City of Detroit, Wayne County, Michigan, 5/06 at 102 AAA 2,089,820
School Building and Site Improvement Bonds (General Obligation -
Unlimited Tax), Series 1996A, 5.700%, 5/01/25
(Pre-refunded to 5/01/06)
1,000 Essexville-Hampton Public Schools, County of Bay, State of Michigan, 5/07 at 100 AAA 1,021,170
1997 School Building and Site Bonds (General Obligation -
Unlimited Tax), 5.500%, 5/01/17 (Pre-refunded to 5/01/07)
1,600 Gaylord Community Schools, Counties of Ostego and Antrim, State 5/02 at 102 AA+*** 1,692,688
of Michigan, 1992 School Building and Site and Refunding Bonds,
6.600%, 5/01/21 (Pre-refunded to 5/01/02)
1,325 Greenville Public Schools, Counties of Montcalm, Kent and Ionia, 5/04 at 101 AAA 1,378,305
State of Michigan, 1995 School Building and Site Bonds (General
Obligation - Unlimited Tax), 5.750%, 5/01/14
(Pre-refunded to 5/01/04)
1,000 Grosse Ile Township School District, School Improvement Refunding 5/07 at 100 AAA 1,051,100
Bonds, General Obligation, Series 1996, 6.000%, 5/01/22
(Pre-refunded to 5/01/07)
1,250 Gull Lake Community Schools, Counties of Kalamazoo, Barry and 5/01 at 102 AAA 1,310,163
Calhoun, State of Michigan, 1991 School Building and Site Bonds,
6.800%, 5/01/21 (Pre-refunded to 5/01/01)
3,100 Hemlock Public School District, Counties of Saginaw and Midland, 5/02 at 102 AA+*** 3,294,184
State of Michigan, 1992 School Building and Site and Refunding
Bonds, 6.750%, 5/01/21 (Pre-refunded to 5/01/02)
1,000 Huron Valley School District, Counties of Oakland and Livingston, 5/07 at 100 AAA 1,043,620
State of Michigan, 1996 School Building and Site Bonds
(General Obligation - Unlimited Tax), 5.875%, 5/01/16
(Pre-refunded to 5/01/07)
2,000 Lincoln Park School District, General Obligation Bonds, Series 1996, 5/06 at 101 AAA 2,100,780
5.900%, 5/01/26 (Pre-refunded to 5/01/06)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Guaranteed (continued)
$ 1,000 Marquette Area Public Schools, County of Marquette, State of 5/01 at 102 AAA $1,046,930
Michigan, 1991 School Building and Site Bonds (General Obligation -
Unlimited Tax), Series B, 6.700%, 5/01/21 (Pre-refunded to 5/01/01)
3,100 Michigan Municipal Bond Authority, State Revolving Fund Revenue 10/02 at 102 AA+*** 3,296,509
Bonds, Series 1992A, 6.600%, 10/01/18 (Pre-refunded to 10/01/02)
3,035 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 12/02 at 102 AAA 3,257,526
(Mid-Michigan Obligated Group), Series 1992,
6.900%, 12/01/24 (Pre-refunded to 12/01/02)
1,450 Michigan State Hospital Finance Authority, Hospital Revenue 9/01 at 102 Aaa 1,544,613
Bonds (McLaren Obligated Group), Series 1991A,
7.500%, 9/15/21 (Pre-refunded to 9/15/01)
9,355 Michigan State Hospital Finance Authority, Hospital Revenue 11/01 at 102 Aa2*** 9,909,752
Bonds (Daughters of Charity National Health System - Providence
Hospital), Series 1991, 7.000%, 11/01/21 (Pre-refunded to 11/01/01)
2,150 North Branch Area Schools, County of Lapeer, State of Michigan, 5/02 at 102 AA+*** 2,274,550
1992 School Building and Site and Refunding Bonds (General
Obligation - Unlimited Tax), 6.600%, 5/01/17
(Pre-refunded to 5/01/02)
1,500 Perry Public Schools, Counties of Shiawassee and Ingham, State 5/02 at 101 1/2 AAA 1,574,340
of Michigan, 1992 School Building and Site Bonds (General
Obligation - Unlimited Tax), 6.375%, 5/01/22
(Pre-refunded to 5/01/02)
4,650 Plymouth-Canton Community Schools, Counties of Wayne and 5/01 at 101 AA+*** 4,829,165
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)
620 Reeths-Puffer Schools, County of Muskegon, State of Michigan, 5/05 at 101 AAA 646,114
1995 School Building and Site and Refunding Bonds, 5.750%, 5/01/15
(Pre-refunded to 5/01/05)
4,845 Saginaw-Midland Municipal Water Supply Corporation, State of 9/04 at 102 A2*** 5,287,494
Michigan, Water Supply Revenue Bonds (General Obligation -
Limited Tax), Series 1992, 6.875%, 9/01/16 (Pre-refunded to 9/01/04)
9,250 Regents of the University of Michigan, Medical Service Plan Revenue 12/01 at 102 Aa2*** 9,728,595
Bonds, Series 1991, 6.500%, 12/01/21 (Pre-refunded to 12/01/01)
4,200 Warren Consolidated Schools, Counties of Macomb and Oakland, 5/01 at 102 Aa*** 4,396,560
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)
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 15.4%
6,425 The Economic Development Corporation of the City of Detroit, 5/01 at 102 AAA 6,691,766
Resource Recovery Revenue Bonds, Series 1991A,
6.875%, 5/01/09 (Alternative Minimum Tax)
2,390 Michigan South Central Power Agency, Power Supply System Revenue 11/01 at 102 Baa1 2,485,457
Refunding Bonds, 1991 Series, 6.750%, 11/01/10
3,630 Michigan Strategic Fund, Adjustable Rate Demand Limited Obligation No Opt. Call AAA 4,059,937
Refunding Revenue Bonds (The Detroit Edison Company Pollution
Control Bonds Project), Series 1990BB, 7.000%, 5/01/21
4,330 Michigan Strategic Fund, Limited Obligation Refunding Revenue 9/01 at 102 AAA 4,529,526
Bonds (The Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1991CC, 6.950%, 9/01/21
7,600 Michigan Strategic Fund, Limited Obligation Refunding Revenue 12/01 at 102 AAA 7,962,140
Bonds (The Detroit Edison Company Pollution Control Bonds Project),
Collateralized Series 1991DD, 6.875%, 12/01/21
7,000 County of Monroe, Michigan, Pollution Control Revenue Bonds 9/02 at 102 AAA 7,394,380
(The Detroit Edison Company Monroe and Fermi Plants Project),
Collateralized Series 1992-1, 6.875%, 9/01/22
(Alternative Minimum Tax)
1,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/05 at 100 BBB+ 906,820
Series X, 5.500%, 7/01/25
5,000 City of Wyandotte, County of Wayne, State of Michigan, 10/02 at 102 AAA 5,052,750
1992 Electric Revenue Refunding Bonds, 6.250%, 10/01/17
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 8.5%
5,250 City of Detroit, Michigan, Sewage Disposal System Revenue Refunding 7/05 at 100 AAA 4,347,101
Bonds, Series 1995-B, 5.000%, 7/01/25
City of Detroit, Michigan, Sewage Disposal System Revenue Bonds,
Series 1997-A:
3,000 5.500%, 7/01/20 7/07 at 101 AAA 2,786,310
7,000 5.000%, 7/01/27 7/07 at 101 AAA 5,797,610
1,000 City of Detroit, Michigan, Sewage Disposal System Revenue Bonds, 1/10 at 101 AAA 962,820
Series 1999-A, 5.875%, 7/01/27
<PAGE>
Portfolio of Investments (Unaudited)
NUVEEN MICHIGAN QUALITY INCOME MUNICIPAL FUND, INC. (NUM) (continued)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Water and Sewer (continued)
$ 6,000 City of Detroit, Michigan, Water Supply System Revenue and Revenue 7/04 at 102 AAA $4,996,920
Refunding Bonds, Series 1993, 5.000%, 7/01/23
2,000 City of Detroit, Michigan, Water Supply System Revenue Bonds 1/10 at 101 AAA 1,892,320
(Senior Lien), Series 1999-A, 5.750%, 7/01/26
1,000 City of Grand Rapids, Michigan, Sanitary Sewer System Improvement 7/08 at 101 AAA 789,260
and Refunding Revenue Bonds, Series 1998A, 4.750%, 1/01/28
- ------------------------------------------------------------------------------------------------------------------------------------
$ 258,910 Total Investments - (cost $250,960,202) - 98.3% 249,750,148
=============
Short-Term Investments - (cost $700,000) - 0.3%
University of Michigan, Refunding Hospital Bonds, Variable Rate VMIG-1 700,000
$ 700 Demand Bonds, Series A-2, 3.600%, 12/01/24+
=============
Other Assets Less Liabilities - 1.4% 3,572,920
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $254,023,068
====================================================================================================================
* 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.
+ 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)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Goods - 2.6%
$ 3,050 Michigan Strategic Fund, Limited Obligation Revenue Bonds 12/02 at 102 BBB $2,936,357
(Waste Management, Inc. Project), Series 1992, 6.625%, 12/01/12
(Alternative Minimum Tax)
1,370 Michigan Strategic Fund, Limited Obligation Revenue Bonds 12/03 at 102 BBB 1,233,986
(WMX Technologies, Inc. Project), Series 1993, 6.000%, 12/01/13
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 4.5%
3,000 Board of Regents of Eastern Michigan University, General Revenue 12/06 at 101 AAA 2,704,140
Bonds, Series 1997, 5.500%, 6/01/27
1,250 Michigan Higher Education Student Loan Authority, Student Loan 10/02 at 102 A 1,288,863
and Refunding Revenue Bonds, Series XV-A, 6.700%, 10/01/05
(Alternative Minimum Tax)
1,130 Board of Trustees of Oakland University, Michigan, General Revenue 5/05 at 102 AAA 1,114,643
Bonds, Series 1995, 5.750%, 5/15/15
2,500 Board of Governors of Wayne State University, Michigan, General 11/09 at 101 AAA 2,102,875
Revenue Bonds, Series 1999, 5.125%, 11/15/29
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 17.5%
2,200 City of Hancock Hospital Finance Authority, FHA-Insured Mortgage 8/08 at 100 AAA 1,859,704
Hospital Revenue Bonds (Portage Health System, Inc.),
Series 1998, 5.450%, 8/01/47
2,500 City of Kalamazoo Hospital Finance Authority, Hospital Revenue 5/06 at 102 AAA 2,426,500
Refunding and Improvement Bonds (Bronson Methodist Hospital),
Series 1996, 5.750%, 5/15/16
Michigan State Hospital Finance Authority, Revenue and Refunding
Bonds (The Detroit Medical Center Obligated Group), Series
1993A:
3,000 6.250%, 8/15/13 8/03 at 102 BBB- 2,644,950
3,200 6.500%, 8/15/18 8/03 at 102 BBB- 2,815,488
4,000 Michigan State Hospital Finance Authority, Hospital Revenue and 9/02 at 102 AA- 3,729,680
Refunding Bonds (Henry Ford Health System), Series 1992A,
5.750%, 9/01/17
2,000 Michigan State Hospital Finance Authority, Hospital Revenue and 1/05 at 102 A+ 1,904,840
Refunding Bonds (Otsego Memorial Hospital Gaylord, Michigan),
Series 1995, 6.250%, 1/01/20
2,500 Michigan State Hospital Finance Authority, Revenue Bonds 11/09 at 101 AA 2,398,275
(Ascension Health Credit Group), Series 1999A, 6.125%, 11/15/26
2,500 Michigan State Hospital Finance Authority, Hospital Revenue and 5/09 at 101 AAA 2,299,825
Refunding Bonds (Mercy Mount Clemens Corporation Obligated
Group), Series 1999A, 5.750%, 5/15/29
1,500 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 8/08 at 101 BBB- 1,062,195
(The Detroit Medical Center Obligated Group), Series 1998A,
5.250%, 8/15/28
4,300 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 11/09 at 101 AA- 3,887,630
(Henry Ford Health System), Series 1999A, 6.000%, 11/15/24
3,000 Regents of the University of Michigan, Hospital Revenue Refunding 12/02 at 102 AA 2,705,610
Bonds, Series 1993A, 5.500%, 12/01/21
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 4.5%
2,400 Michigan State Housing Development Authority, Limited Obligation 4/04 at 103 AAA 2,373,576
Revenue Bonds (Walled Lake Villa Project), Series 1993,
6.000%, 4/15/18
1,500 Michigan State Housing Development Authority, Limited Obligation 10/03 at 103 AAA 1,413,030
Revenue Bonds (Brenton Village Green Project), Series 1993,
5.625%, 10/15/18
790 Michigan State Housing Development Authority, Rental Housing Revenue 4/03 at 102 AAA 770,029
Bonds, 1993 Series A, 5.875%, 10/01/17
Mount Clemens Housing Corporation, Multifamily Housing Refunding
Revenue Bonds (FHA-Insured Mortgage Loan - Section 8 Assisted
Project), Series 1992A:
1,000 6.600%, 6/01/13 6/03 at 102 AAA 1,024,650
1,500 6.600%, 6/01/22 6/03 at 102 AAA 1,530,135
<PAGE>
Portfolio of Investments (Unaudited)
NUVEEN MICHIGAN PREMIUM INCOME MUNICIPAL FUND, INC. (NMP) (continued)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Housing/Single Family - 1.2%
$ 1,880 Michigan State Housing Development Authority, Single Family 6/05 at 102 AA+ $1,925,346
Mortgage Revenue Bonds, 1995 Series A, 6.800%, 12/01/16
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 7.8%
1,000 Central Montcalm Public Schools, Counties of Montcalm and Ionia, 5/09 at 100 AAA 950,420
State of Michigan, 1999 School Building and Site Bonds (General
Obligation - Unlimited Tax), 5.750%, 5/01/24
730 Clarkston Community Schools, County of Oakland, State of 5/03 at 102 AA+ 727,277
Michigan, 1993 School Building and Site and Refunding Bonds,
5.900%, 5/01/16
500 Coopersville Area Public Schools, Counties of Ottawa and Muskegon, 5/09 at 100 AAA 411,585
State of Michigan, 1999 School Building and Site Bonds (General
Obligation - Unlimited Tax), 5.000%, 5/01/29
2,500 School District of the City of Detroit, Wayne County, State of 5/01 at 102 AA+ 2,603,800
Michigan, School Building and Site Bonds (General Obligation -
Unlimited Tax), Series 1992, 6.250%, 5/01/12
1,500 School District of the City of Detroit, Wayne County, State of 5/09 at 101 AAA 1,181,310
Michigan, School Building and Site Improvement Bonds (General
Obligation - Unlimited Tax), Series 1998A, 4.750%, 5/01/28
3,000 Dexter Community Schools, Counties of Washtenaw and Livingston, 5/03 at 102 AA+ 2,611,530
State of Michigan, 1993 School Building and Site and Refunding
Bonds (General Obligation - Unlimited Tax), 5.000%, 5/01/17
1,100 Commonwealth of Puerto Rico, Public Improvement Bonds 7/07 at 101 1/2 A 1,072,214
of 1997, 5.750%, 7/01/17
380 Reeths-Puffer Schools, County of Muskegon, State of Michigan, 5/05 at 101 AAA 377,484
1995 School Building and Site Refunding Bonds, 5.750%, 5/01/15
1,500 Romulus Community Schools, County of Wayne, State of Michigan, 5/09 at 100 AAA 1,422,495
1999 School Building and Site Bonds (General Obligation - Unlimited
Tax), 5.750%, 5/01/25
1,000 Western Townships Utilities Authority, Sewage Disposal System 1/02 at 100 AAA 1,028,330
Refunding Bonds, Series 1991, 6.500%, 1/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 17.5%
6,500 City of Detroit, State of Michigan, Convention Facility Limited Tax 9/03 at 102 AAA 6,201,455
Revenue Refunding Bonds (Cobo Hall Expansion Project), Series 1993,
5.250%, 9/30/12
1,400 City of Detroit, State of Michigan, Downtown Development Authority, 7/08 at 100 AAA 1,115,478
Tax Increment Refunding Bonds (Development Area No. 1 Projects),
Series 1998A, 4.750%, 7/01/25
5,500 Detroit/ Wayne County Stadium Authority, State of Michigan, 2/07 at 102 AAA 4,764,650
Building Authority Stadium Bonds (General Obligation - Limited
Tax), Series 1997, 5.250%, 2/01/27
5,000 Michigan Municipal Bond Authority, State Drinking Water Revolving 10/09 at 101 AA+ 4,621,750
Fund Revenue Bonds, Series 1999, 5.500%, 10/01/21
2,750 Michigan State Building Authority, 1991 Revenue Refunding Bonds, 10/01 at 102 AA 2,763,530
Series I, 6.250%, 10/01/20
1,000 Michigan State Building Authority, 1991 Revenue Bonds, Series II, 10/01 at 102 AA 1,004,920
6.250%, 10/01/20
3,275 State of Michigan, Comprehensive Transportation Bonds, Series 1992A, 5/02 at 100 AA 3,287,543
5.750%, 5/15/12
1,000 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/16 at 100 A 802,080
Bonds, Series 1996Y, 5.000%, 7/01/36
3,615 Saginaw-Midland Municipal Water Supply Corporation, State of 9/02 at 101 1/2 A2 3,305,845
Michigan, Water Supply System Revenue Bonds (General
Obligation - Limited Tax), Series 1993, 5.250%, 9/01/16
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - 1.6%
1,000 Puerto Rico Port Authority, Special Facilities Revenue Bonds 6/03 at 102 BBB- 954,140
(American Airlines, Inc. Project), 1993 Series A, 6.300%, 6/01/23
(Alternative Minimum Tax)
2,000 Charter County of Wayne, Michigan, Detroit Metropolitan Wayne 12/08 at 101 AAA 1,601,640
County Airport, Airport Revenue Bonds, Series 1998A,
5.000%, 12/01/28 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 8.3%
2,000 Board of Control of Ferris State University, General Revenue Bonds, 10/03 at 102 AAA 2,128,160
Series 1993, 6.250%, 10/01/19 (Pre-refunded to 10/01/03)
1,950 Michigan Municipal Bond Authority, State Revolving Fund Revenue No Opt. Call AA+*** 2,088,099
Bonds, Series 1994, 7.000%, 10/01/03
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Guaranteed (continued)
$ 3,000 Michigan State Hospital Finance Authority, Hospital Revenue 5/03 at 102 AAA $3,050,520
Refunding Bonds (St. John Hospital), Series 1993A, 6.000%, 5/15/13
2,500 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 11/01 at 102 Aa2*** 2,648,250
(Daughters of Charity National Health System - Providence Hospital),
Series 1991, 7.000%, 11/01/21 (Pre-refunded to 11/01/01)
620 Reeths-Puffer Schools, County of Muskegon, State of Michigan, 5/05 at 101 AAA 646,114
1995 School Building and Site Refunding Bonds, 5.750%, 5/01/15
(Pre-refunded to 5/01/05)
2,650 Regents of the University of Michigan, Hospital Revenue Bonds, 12/00 at 100 AA*** 2,701,066
Series 1990, 6.375%, 12/01/24 (Pre-refunded to 12/01/00)
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 18.1%
6,750 The City of Grand Haven, Michigan, Electric System Revenue Refunding 7/03 at 102 AAA 6,176,183
Bonds, 1993 Series, 5.250%, 7/01/16
4,020 Michigan Public Power Agency, Belle River Project Refunding Revenue 1/03 at 102 AA- 3,612,091
Bonds, 1993 Series A, 5.250%, 1/01/18
1,500 Michigan Public Power Agency, Belle River Project Refunding Revenue 1/03 at 100 AA- 1,282,440
Bonds, 1993 Series B, 5.000%, 1/01/19
7,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue Bonds 6/03 at 102 AAA 7,110,670
(Consumers Power Company Project), Collateralized Series 1993B,
5.800%, 6/15/10
County of Monroe, Michigan, Pollution Control Revenue Bonds (The
Detroit Edison Company Project), 1992 Series CC:
2,500 6.550%, 6/01/24 (Alternative Minimum Tax) 6/03 at 102 AAA 2,562,050
1,500 6.550%, 9/01/24 (Alternative Minimum Tax) 9/03 at 102 AAA 1,538,775
6,000 County of Monroe, Michigan, Pollution Control Revenue Bonds No Opt. Call AAA 6,266,820
(The Detroit Edison Company Project), 1994 Series A,
6.350%, 12/01/04 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 15.2%
1,500 City of Ann Arbor, County of Washtenaw, State of Michigan, 2/03 at 101 1/2 AAA 1,469,355
Water Supply System Revenue Bonds, Series T, 5.500%, 2/01/13
City of Detroit, Michigan, Sewage Disposal System Revenue Bonds,
Series 1997-A:
3,250 5.500%, 7/01/20 7/07 at 101 AAA 3,018,503
1,730 5.000%, 7/01/22 7/07 at 101 AAA 1,455,414
3,755 City of Detroit, Michigan, Sewage Disposal System Revenue and 7/03 at 102 AAA 3,746,101
Revenue Refunding Bonds, Series 1993-A, 5.700%, 7/01/13
City of Detroit, Michigan, Sewage Disposal System Revenue Bonds,
Series 1999-A:
5,000 5.750%, 7/01/26 1/10 at 101 AAA 4,730,800
1,000 5.875%, 7/01/27 1/10 at 101 AAA 962,820
4,500 City of Detroit, Michigan, Water Supply System Revenue and Revenue 7/04 at 102 AAA 3,678,885
Refunding Bonds, Series 1993, 4.750%, 7/01/19
4,000 City of Detroit, Michigan, Water Supply System Revenue Bonds 1/10 at 101 AAA 3,784,640
(Senior Lien), Series 1999-A, 5.750%, 7/01/26
1,600 City of Grand Rapids, Michigan, Sanitary Sewer System Improvement 7/08 at 101 AAA 1,262,815
and Refunding Revenue Bonds, Series 1998-A, 4.750%, 1/01/28
- ------------------------------------------------------------------------------------------------------------------------------------
$ 166,645 Total Investments - (cost $160,379,923) - 98.8% 156,882,374
=============
Other Assets Less Liabilities - 1.2% 1,962,276
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $158,844,650
====================================================================================================================
* 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.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments (Unaudited)
NUVEEN OHIO QUALITY INCOME MUNICIPAL FUND, INC. (NUO)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Goods - 1.2%
$ 2,655 Ohio Water Development Authority, Revenue Bonds, USA Waste 3/02 at 102 N/R $2,665,275
Services, Series 1992, 7.750%, 9/01/07 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 8.2%
825 Bowling Green State University, Ohio, General Receipts Bonds, 6/01 at 102 A 859,444
Series 1991, 6.700%, 6/01/07
3,665 State of Ohio, Education Loan Revenue Bonds (Supplemental 6/07 at 102 AAA 3,485,305
Student Loan Program), Series 1997A, 5.850%, 12/01/19
(Alternative Minimum Tax)
1,000 Ohio Higher Educational Facility Commission, Higher Educational 12/04 at 102 AAA 999,420
Facility Revenue Bonds (University of Dayton, 1994 Project),
5.800%, 12/01/14
2,400 Ohio Higher Educational Facility Commission, Higher Educational 12/03 at 102 AAA 2,519,736
Facility Mortgage Revenue Bonds (University of Dayton, 1992 Project),
6.600%, 12/01/17
1,200 Ohio Higher Educational Facility Commission, Higher Educational 9/06 at 101 N/R 1,158,420
Facility Revenue Bonds (The University of Findlay, 1996 Project),
6.125%, 9/01/16
1,100 Ohio Higher Educational Facility Commission, Higher Educational 10/02 at 102 AA 1,092,487
Facility Revenue Bonds (Case Western Reserve University Project),
Series 1992, 6.000%, 10/01/22
1,575 The Ohio State University, General Receipts Bonds, 12/02 at 102 AA 1,597,302
Series 1992 A1, 5.875%, 12/01/12
2,000 Puerto Rico Industrial, Tourist, Educational, Medical and 10/08 at 101 AAA 1,721,680
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds (Inter - American University of
Puerto Rico Project), 1998 Series A, 5.000%, 10/01/22
3,150 The Student Loan Funding Corporation, Cincinnati, Ohio, Student 7/02 at 100 A 3,162,632
Loan Subordinated Revenue Refunding Bonds, Series 1992D,
6.600%, 7/01/05 (Alternative Minimum Tax)
1,400 University of Cincinnati, Ohio, General Receipts Bonds, 6/07 at 100 AAA 1,283,282
Series AB, 5.375%, 6/01/20
- ------------------------------------------------------------------------------------------------------------------------------------
Energy - 2.0%
2,000 County of Ashtabula, Ohio, Industrial Development Refunding Revenue 5/02 at 102 Baa2 2,059,240
Bonds, 1992 Series A (Ashland Oil, Inc. Project), 6.900%, 5/01/10
2,250 Ohio Air Quality Development Authority, Air Quality Development 4/01 at 102 Baa1 2,336,783
Refunding Revenue Bonds (Ashland Oil, Inc. Project), Series 1992,
6.850%, 4/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 8.3%
1,300 Akron, Bath and Copley Joint Township Hospital District, 11/03 at 102 Baa1 1,137,084
Ohio, Hospital Facilities Revenue Bonds (Summa Health
System Project), Series 1993A, 5.500%, 11/15/13
County of Butler, Ohio, Hospital Facilities Revenue Refunding
and Improvement Bonds (Fort Hamilton-Hughes Memorial Hospital
Center), Series 1991:
125 7.250%, 1/01/01 No Opt. Call Baa1 124,925
1,000 7.500%, 1/01/10 1/02 at 102 Baa1 1,030,620
City of Cambridge, Ohio, Hospital Revenue Refunding Bonds
(Guernsey Memorial Hospital Project), Series 1991:
1,680 8.000%, 12/01/06 12/01 at 102 BBB 1,756,558
750 8.000%, 12/01/11 12/01 at 102 BBB 780,405
2,675 County of Clermont, Ohio, Hospital Facilities Revenue Refunding 1/03 at 102 AAA 2,669,570
Bonds, Series 1993 A (Mercy Health System), 5.875%, 1/01/15
1,000 County of Cuyahoga, Ohio, Hospital Improvement and Refunding 2/07 at 102 AAA 950,580
Revenue Bonds (The MetroHealth System Project), Series 1997,
5.625%, 2/15/17
1,170 County of Cuyahoga, Ohio, Hospital Facilities Revenue Bonds, Health 2/03 at 102 AA- 1,185,280
Cleveland, Inc. (Fairview General Hospital Project), Series 1993,
6.300%, 8/15/15
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Health Care (continued)
County of Franklin, Ohio, Hospital Refunding and Improvement
Revenue Bonds (The Children's Hospital Project), Series 1996A:
$ 1,000 5.750%, 11/01/20 11/06 at 101 Aa $ 943,860
1,500 5.875%, 11/01/25 11/06 at 101 Aa 1,416,390
1,500 County of Franklin, Ohio, Hospital Revenue Refunding and 11/02 at 102 Aa 1,583,220
Improvement Bonds (The Children's Hospital Project),
Series 1992A, 6.600%, 5/01/13
2,500 County of Marion, Ohio, Hospital Refunding and Improvement 5/06 at 102 BBB+ 2,362,375
Revenue Bonds (The Community Hospital), Series 1996,
6.375%, 5/15/11
1,500 County of Montgomery, Ohio, Hospital Facilities Revenue Refunding 4/06 at 102 AAA 1,439,910
and Improvement Bonds (Kettering Medical Center), Series 1996,
5.625%, 4/01/16
750 County of Tuscarawas, Ohio, Hospital Facilities Revenue Bonds 10/03 at 102 Baa2 681,323
(Union Hospital Project), Series 1993A, 6.500%, 10/01/21
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 12.4%
1,385 County of Clermont, Ohio, Mortgage Revenue Bonds (GNMA 8/03 at 103 Aaa 1,327,107
Collateralized - S.E.M. Villa II Project), Series 1994-A,
5.950%, 2/20/30
1,435 County of Cuyahoga, Ohio, Multifamily Housing Revenue Bonds 6/08 at 105 Aaa 1,401,708
(Water Street Associates Project), Series 1997, 6.150%, 12/20/26
(Alternative Minimum Tax)
990 County of Franklin, Ohio, Multifamily Housing Mortgage Revenue 1/05 at 103 Aa 883,347
Bonds, Series 1994A (FHA-Insured Mortgage Loan - Hamilton Creek
Apartments Project), 5.550%, 7/01/24 (Alternative Minimum Tax)
6,170 County of Franklin, Ohio, Mortgage Revenue Bonds, Series 1992A 1/02 at 103 Aa 6,358,802
(FHA-Insured Mortgage Loan - Kensington Place Project),
6.750%, 1/01/34
5,200 Hamilton County, Multifamily Housing Revenue Bonds (Huntington 1/07 at 102 AAA 4,942,340
Meadows Project), Series 1997, 5.700%, 1/01/27
(Alternative Minimum Tax)
4,060 Lucas Northgate Housing Development Corporation, Ohio, 1/04 at 102 Aaa 3,870,114
Mortgage Revenue Refunding Bonds (FHA-Insured Mortgage Loan -
Northgate Apartments Section 8 Assisted Project), Series 1999A,
6.000%, 7/01/24
3,265 Ohio Housing Finance Agency, Multifamily Housing Revenue Bonds 12/09 at 100 AAA 3,199,569
(Timber Lake Apartments Project), Series 1999C, 6.150%, 12/01/24
(Alternative Minimum Tax)
1,000 Ohio Capital Corporation for Housing, Mortgage Revenue Refunding 1/02 at 100 AAA 947,540
Bonds, FHA-Insured Section 8 Assisted Project, Series 1997C,
5.700%, 1/01/24
4,315 Ohio Capital Corporation for Housing, Mortgage Revenue Refunding 2/09 at 102 Aa2 4,106,888
Bonds (FHA-Insured Mortgage Loans - Section 8 Assisted Projects),
Series 1999G, 5.950%, 2/01/24
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 2.8%
3,980 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds 9/07 at 102 Aaa 3,686,356
(Mortgage-Backed Securities Program), 1996 Series B3,
5.750%, 9/01/28 (Alternative Minimum Tax)
3,000 Ohio Housing Finance Agency, Residential Mortgage Revenue Bonds 9/08 at 101 Aaa 2,489,400
(Mortgage-Backed Securities Program), 1999 Series A1,
5.250%, 9/01/30 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Care - 1.0%
1,365 County of Franklin, Ohio, Health Care Facilities Revenue Bonds 7/03 at 102 N/R 1,209,745
(Ohio Presbyterian Retirement Services), Series 1993,
6.500%, 7/01/23
1,000 County of Marion, Ohio, Health Care Facilities Refunding and 11/03 at 102 BBB- 894,140
Improvement Revenue Bonds (United Church Homes, Inc. Project),
Series 1993, 6.300%, 11/15/15
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 13.5%
Berea City School District, Ohio, School Improvement Bonds
(General Obligation - Unlimited Tax), Series 1993:
650 7.500%, 12/15/06 12/03 at 102 AAA 717,808
680 7.450%, 12/15/07 12/03 at 102 AAA 749,754
1,750 Brecksville-Broadview Heights City School District, Ohio, School 12/06 at 102 AAA 1,824,480
Improvement Bonds (General Obligation - Unlimited Tax),
Series 1996, 6.500%, 12/01/16
<PAGE>
Portfolio of Investments (Unaudited)
NUVEEN OHIO QUALITY INCOME MUNICIPAL FUND, INC. (NUO) (continued)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Obligation/General (continued)
$ 2,000 City of Columbus, Ohio, General Obligation Refunding Bonds, 1/02 at 102 Aaa $2,099,480
Series 1992B, 6.500%, 1/01/10
1,300 County of Franklin, Ohio, Refunding Bonds (General Obligation - 12/08 at 102 AAA 1,198,912
Limited Tax), Series 1993, 5.375%, 12/01/20
1,505 Greater Cleveland Regional Transit Authority, General Obligation, 12/06 at 101 Aaa 1,565,892
Capital Improvement Bonds, Series 1996, 5.650%, 12/01/16
North Canton City School District, Ohio, School Improvement
Bonds (General Obligation - Unlimited Tax), Series 1994:
650 9.750%, 12/01/03 No Opt. Call AAA 758,141
715 9.700%, 12/01/04 No Opt. Call AAA 856,742
2,000 Commonwealth of Puerto Rico, Public Improvement Bonds 7/06 at 101 1/2 A 1,780,860
of 1996 (General Obligation Bonds), 5.400%, 7/01/25
1,300 Commonwealth of Puerto Rico, Public Improvement Bonds of 1997 7/07 at 101 1/2 A 1,267,162
(General Obligation Bonds), 5.750%, 7/01/17
2,400 Commonwealth of Puerto Rico, Public Improvement Bonds of 1998 7/08 at 101 A 1,977,000
(General Obligation Bonds), 5.000%, 7/01/27
1,000 Revere Local School District, Ohio, School Improvement Bonds 12/03 at 102 AAA 1,004,050
(General Obligation - Unlimited Tax), Series 1993, 6.000%, 12/01/16
2,870 City of Strongsville, Ohio, Various Purpose Improvement Bonds 12/06 at 102 Aa3 2,841,013
(General Obligation - Limited Tax), Series 1996, 5.950%, 12/01/21
1,000 Sylvania City School District (General Obligation - Unlimited Tax), 12/05 at 101 AAA 1,000,750
Series 1995, 5.800%, 12/01/15
1,135 City of Toledo, Ohio (General Obligation - Limited Tax), Various No Opt. Call AAA 1,220,352
Purpose Improvement Bonds, Series 1994, 7.000%, 12/01/03
1,000 Upper Arlington City School District, General Obligation Improvement 12/06 at 101 AAA 887,480
Bonds, Series 1996, 5.250%, 12/01/22
2,000 Board of Education, Wayne Local School District, County of Warren, 12/06 at 101 AAA 2,012,520
Ohio, School Improvement Bonds (General Obligation - Unlimited Tax),
Series 1996, 6.100%, 12/01/24
3,000 Board of Education, West Clermont Local School District, 12/05 at 100 AAA 3,013,590
County of Clermont, Ohio, School Improvement Bonds (General
Obligation - Unlimited Tax), Series 1995, 6.000%, 12/01/18
1,000 City of Westlake, Ohio, General Obligation Bonds, Various Purpose 12/08 at 101 Aaa 968,370
Improvement and Refunding Bonds, Series 1997, 5.550%, 12/01/17
1,820 Worthington City School District, Franklin County, Ohio, General 6/02 at 102 AAA 1,905,940
Obligation Refunding Bonds (Unlimited Tax), 6.375%, 12/01/12
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 3.5%
1,250 City of Columbus, Ohio, Tax Increment Financing Bonds (Easton 6/09 at 101 AAA 1,020,350
Project), Series 1999, 4.875%, 12/01/24
1,000 Ohio Building Authority, State Facilities Bonds (Juvenile 10/02 at 102 Aa2 1,049,050
Correctional Building Fund Projects), 1992 Series B, 6.000%, 10/01/12
3,000 Ohio Building Authority, State Facilities Bonds (Adult Correctional 10/03 at 102 Aa2 3,067,260
Building Fund Projects), 1993 Series A, 6.125%, 10/01/12
985 Department of Transportation, Certificates of Participation 4/00 at 103 AA- 986,349
(Rickenbacker Port Authority Improvements), 6.125%, 4/15/15
(Alternative Minimum Tax)
1,500 State of Ohio (OPFC), Higher Education Capital Facilities Bonds, 12/01 at 102 Aa2 1,520,340
Series II-1992A, 5.500%, 12/01/06
- ------------------------------------------------------------------------------------------------------------------------------------
Technology - 0.2%
500 County of Franklin, Ohio, Revenue Bonds (Online Computer Library 4/03 at 100 N/R 486,850
Center, Incorporated Project), Series 1993, 6.000%, 4/15/13
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Transportation - 2.9%
$ 3,430 City of Cleveland, Ohio, Parking Facilities Refunding Revenue Bonds, 9/06 at 102 AAA $3,141,709
Series 1996, 5.500%, 9/15/22
Columbus Municipal Airport Authority, Airport Improvement
Revenue Bonds (Port Columbus International Airport Project),
Series 1994A:
830 5.950%, 1/01/08 (Alternative Minimum Tax) 1/04 at 102 AAA 849,231
1,000 6.000%, 1/01/14 (Alternative Minimum Tax) 1/04 at 102 AAA 1,003,140
1,500 City of Dayton, Ohio, Special Facilities Revenue Refunding Bonds 2/08 at 102 BBB 1,300,410
(Emery Air Freight Corporation and Emery Worldwide Airlines, Inc.
Guarantors), Series 1998A, 5.625%, 2/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 25.2%
1,500 City of Akron, Ohio, Waterworks System Mortgage Revenue 3/01 at 102 AAA 1,565,160
Improvement Bonds, Series 1991, 6.550%, 3/01/12 (Pre-refunded
to 3/01/01)
2,000 City of Barberton, Ohio, Hospital Facilities Revenue Bonds 1/02 at 102 N/R*** 2,124,160
(The Barberton Citizens Hospital Company Project), Series 1992,
7.250%, 1/01/12 (Pre-refunded to 1/01/02)
2,000 County of Carroll, Ohio, Hospital Improvement Revenue Bonds 12/01 at 102 AAA 2,126,640
(Timken Mercy Medical Center), Series 1991, 7.125%, 12/01/18
(Pre-refunded to 12/01/01)
2,500 County of Clermont, Ohio, Waterworks System Revenue Bonds, 12/01 at 102 AAA 2,637,500
Clermont County Sewer District, Series 1991, 6.625%, 12/01/14
(Pre-refunded to 12/01/01)
2,000 City of Cleveland, Ohio, Public Power System First Mortgage 11/04 at 102 AAA 2,207,980
Revenue Bonds, Series 1994A, 7.000%, 11/15/24
(Pre-refunded to 11/15/04)
1,575 City of Cleveland, Ohio, Waterworks Improvement First Mortgage 1/02 at 102 AAA 1,657,058
Revenue Bonds, Series F, 1992A, 6.500%, 1/01/21
(Pre-refunded to 1/01/02)
2,745 City of Cleveland, Ohio, First Mortgage Revenue Refunding Bonds, 1/02 at 102 AAA 2,888,015
Series F, 1992-B, 6.500%, 1/01/11 (Pre-refunded to 1/01/02)
3,960 City of Cleveland, Ohio, Waterworks Improvement and Refunding 1/06 at 102 AAA 4,155,901
First Mortgage Revenue Bonds, Series 1996H, 5.750%, 1/01/26
(Pre-refunded to 1/01/06)
1,950 City School District of Columbus, Franklin County, Ohio, School 12/02 at 102 AAA 2,083,419
Building Renovation and Improvement Bonds (General Obligation -
Unlimited Tax), Series 1992, 6.650%, 12/01/12
(Pre-refunded to 12/01/02)
3,250 County of Cuyahoga, Ohio, Hospital Revenue Bonds (Meridia 8/01 at 102 AAA 3,432,878
Health System), Series 1991, 7.000%, 8/15/23
(Pre-refunded to 8/15/01)
1,500 County of Cuyahoga, Ohio, Hospital Improvement Revenue Bonds 1/02 at 102 AA-*** 1,577,955
(University Hospitals Health System, Inc. Project), Series 1992,
6.500%, 1/15/19 (Pre-refunded to 1/15/02)
2,000 Dublin City School District, Franklin, Delaware and Union Counties, 12/02 at 102 AAA 2,111,060
Ohio, Various Purpose School Building Construction and Improvement
Bonds (General Obligation - Unlimited Tax), 6.200%, 12/01/19
(Pre-refunded to 12/01/02)
2,905 County of Franklin, Ohio, First Mortgage Revenue Bonds (Online No Opt. Call AAA 3,176,356
Computer Library Center, Inc. Project), Series 1979, 7.500%, 6/01/09
3,250 City of Garfield Heights, Ohio, Hospital Improvement and Refunding 11/02 at 102 AA-*** 3,464,305
Revenue Bonds (Marymount Hospital Project), Series 1992B,
6.650%, 11/15/11 (Pre-refunded to 11/15/02)
1,000 Hamilton County, Ohio, Sewer System Improvement and Refunding 6/01 at 102 AAA 1,048,370
Revenue Bonds, Series 1991A (The Metropolitan Sewer District
of Greater Cincinnati), 6.700%, 12/01/13 (Pre-refunded to 6/01/01)
3,000 Kent State University (A State University of Ohio), General Receipts 5/02 at 102 AAA 3,171,420
Bonds, Series 1992, 6.500%, 5/01/22 (Pre-refunded to 5/01/02)
1,000 City of Lakewood, Ohio, Various Purpose General Obligation Bonds 12/02 at 102 Aa3*** 1,063,390
(Limited Tax Obligation Bonds), Series 1992, 6.500%, 12/01/12
(Pre-refunded to 12/01/02)
2,100 Lakota Local School District, County of Butler, Ohio, School 12/05 at 100 AAA 2,233,959
Improvement Bonds (General Obligation - Unlimited Tax),
Series 1994, 6.250%, 12/01/14 (Pre-refunded to 12/01/05)
1,400 City of Middleburg Heights, Ohio, Hospital Improvement Revenue 8/01 at 102 AAA 1,472,758
Bonds (Southwest General Hospital Project), Series 1991,
6.750%, 8/15/21 (Pre-refunded to 8/15/01)
1,000 City of Newark, Ohio, Water System Improvement Bonds 12/03 at 102 AAA 1,057,980
(General Obligation - Limited Tax), 6.000%, 12/01/18
(Pre-refunded to 12/01/03)
50 Ohio Water Development Authority, Water Development Revenue 12/00 at 100 AAA 51,501
Refunding Bonds, Refunding and Improvement Series,
8.000%, 12/01/18 (Pre-refunded to 12/01/00)
<PAGE>
Portfolio of Investments (Unaudited)
NUVEEN OHIO QUALITY INCOME MUNICIPAL FUND, INC. (NUO) (continued)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Guaranteed (continued)
$ 2,500 Commonwealth of Puerto Rico, Public Improvement Bonds of 1992 7/02 at 101 1/2 AAA $2,651,625
(General Obligation Bonds), 6.600%, 7/01/13
(Pre-refunded to 7/01/02)
1,400 Reynoldsburg City School District, Ohio, General Obligation Bonds 12/02 at 102 AAA 1,492,120
for School Building Construction and Improvement,
6.550%, 12/01/17 (Pre-refunded to 12/01/02)
1,000 Solon City School District, Ohio, School Improvement Bonds, 12/01 at 102 N/R*** 1,062,020
Series 1990, General Obligation - Unlimited Tax Bonds,
7.150%, 12/01/13 (Pre-refunded to 12/01/01)
3,500 University of Cincinnati, General Receipts Bonds, Series O, 12/02 at 102 AA*** 3,703,525
6.300%, 6/01/12 (Pre-refunded to 12/01/02)
1,000 University of Toledo, Ohio, General Receipts Bonds, Series B, 12/02 at 102 AAA 1,048,760
5.900%, 6/01/20 (Pre-refunded to 12/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 8.0%
3,000 City of Cleveland, Ohio, Public Power System Improvement First 11/01 at 102 AAA 3,161,940
Mortgage Revenue Bonds, Series 1991B, 7.000%, 11/15/17
1,250 City of Hamilton, Ohio, Electric System Mortgage Revenue Bonds, 10/02 at 102 AAA 1,258,275
Series 1992B, 6.300%, 10/15/25
4,000 Ohio Air Quality Development Authority, Collateralized Pollution 6/02 at 103 AAA 4,351,080
Control Revenue Refunding Bonds (The Cleveland Electric
Illuminating Company Project), Series 1992, 8.000%, 12/01/13
Ohio Air Quality Development Authority, Air Quality Development
Revenue Refunding Bonds (JMG Funding, Limited Partnership
Project), Series 1994:
2,000 6.375%, 1/01/29 (Alternative Minimum Tax) 10/04 at 102 AAA 2,007,300
4,000 6.375%, 4/01/29 (Alternative Minimum Tax) 10/04 at 102 AAA 4,014,600
3,000 Ohio Air Quality Development Authority, Air Quality Development 4/07 at 102 AAA 2,723,970
Revenue Bonds (JMG Funding, Limited Partnership Project),
Series 1997, 5.625%, 1/01/23 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 7.9%
1,000 City of Cleveland, Ohio, Waterworks Improvement First Mortgage No Opt. Call AAA 941,380
Refunding Revenue Bonds, Series G of 1993, 5.500%, 1/01/21
City of Cleveland, Ohio, Waterworks Improvement First Mortgage
Revenue Refunding Bonds, Series F of 1992B:
255 6.500%, 1/01/11 1/02 at 102 AAA 267,684
3,720 6.250%, 1/01/16 1/02 at 102 AAA 3,758,911
2,000 City of Cleveland, Ohio, Waterworks Improvement and Refunding 1/08 at 101 AAA 1,662,520
Revenue Bonds, Series I of 1998, 5.000%, 1/01/28
40 City of Cleveland, Ohio, Waterworks Improvement and Refunding 1/06 at 102 AAA 38,062
First Mortgage Revenue Bonds, Series H of 1996, 5.750%, 1/01/26
2,500 City of Columbus, Ohio, Sewerage System Revenue Refunding 6/02 at 102 Aa2 2,597,021
Bonds, Series 1992, 6.250%, 6/01/08
1,000 Greene County, Ohio, Sewer System Revenue Bonds (Governmental 12/08 at 102 AAA 877,750
Enterprise Revenue Bonds), Series 1998, 5.250%, 12/01/25
1,000 County of Montgomery, Ohio, Water Revenue Bonds, Greater Moraine 11/02 at 102 AAA 1,011,610
Beavercreek Sewer District, Series 1992, 6.250%, 11/15/17
2,000 Northeast Ohio Regional Sewer District, Wastewater Improvement 11/05 at 101 AAA 1,951,600
Revenue Refunding Bonds, Series 1995, 5.600%, 11/15/16
1,000 Ohio Water Development Authority, Water Development Revenue 6/05 at 102 AAA 981,740
Bonds, 1995 Fresh Water Series, 5.900%, 12/01/21
1,250 City of Oxford, Ohio, Water Supply System Mortgage Revenue 12/02 at 102 AAA 1,271,600
Refunding Bonds, Series 1992, 6.000%, 12/01/14
2,000 Southwest Regional Water District, Ohio, Waterworks System 12/05 at 101 AAA 1,982,200
Revenue Bonds, Series 1995, 6.000%, 12/01/20
- ------------------------------------------------------------------------------------------------------------------------------------
$ 212,705 Total Investments - (cost $211,993,336) - 97.1% 212,520,205
=============
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Investments - 2.4%
$ 1,600 Ohio Air Quality Development Authority, Air Quality Development VMIG-1 $1,600,000
Revenue Refunding Bonds (The Cincinnati Gas and Electric
Company Project), Variable Rate Demand Bonds, 1995 Series A,
3.550%, 9/01/30+
3,600 Ohio Air Quality Development Authority, Pollution Control Revenue A-1+ 3,600,000
Bonds (The Cincinnati Gas and Electric Company Project),Variable
Rate Demand Bonds, Series 1985A, 3.600%, 12/01/15+
- ------------------------------------------------------------------------------------------------------------------------------------
$ 5,200 Total Short-Term Investments - (cost $5,200,000) 5,200,000
=============
Other Assets Less Liabilities - 0.5% 1,148,447
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $218,868,652
====================================================================================================================
* 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.
+ 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)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Basic Materials - 1.5%
$ 3,000 Guadalupe-Blanco River Authority, Sewage and Solid Waste Disposal 4/06 at 102 AA- $3,000,600
Facility Bonds (E.I. du Pont de Nemours and Company Project),
Series 1996, 6.400%, 4/01/26 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Education and Civic Organizations - 7.7%
2,255 Brazos Higher Education Authority, Inc., Student Loan Revenue 3/02 at 102 A 2,360,534
Refunding Bonds, Series 1992A, 6.875%, 9/01/04
(Alternative Minimum Tax)
1,055 Brazos Higher Education Authority, Inc., Student Loan Revenue No Opt. Call Aaa 1,110,029
Refunding Bonds, Series 1992C-1, 6.650%, 11/01/04
(Alternative Minimum Tax)
205 Brazos Higher Education Authority, Inc., Student Loan Revenue No Opt. Call A 216,209
Refunding Bonds, Subordinate Series 1993A-2, 6.800%, 12/01/04
(Alternative Minimum Tax)
4,035 City of Bryan, Brazos County, Texas, Lease Revenue Bonds (Blinn 10/05 at 100 AAA 3,711,312
College Project), Series 1995, 5.300%, 10/01/16
1,000 City of Georgetown, Higher Education Finance Corporation, Higher 2/04 at 100 A+ 1,018,640
Education Revenue Bonds (Southwestern University Project),
Series 1994, 6.300%, 2/15/14
2,500 North Texas Higher Educational Authority, Inc., Student Loan 4/03 at 102 Aa 2,536,725
Revenue Bonds, Series 1993C, 6.100%, 4/01/08
(Alternative Minimum Tax)
1,000 Southwest Higher Education Authority, Texas, Higher Educational 10/08 at 101 A+ 818,690
Facilities Revenue Bonds (Southern Methodist University),
Series 1998D, 5.000%, 10/01/22
1,445 Tyler Junior College District, Smith and Van Zanlt Counties, Texas, 8/04 at 100 AAA 1,453,800
Combined Fee Improvement Revenue and Refunding Bonds,
Series 1994, 5.900%, 8/15/13
2,000 Board of Regents of the University of Houston System, Consolidated 2/05 at 100 AAA 2,000,360
Revenue Bonds, Series 1995, 6.000%, 2/15/17
- ------------------------------------------------------------------------------------------------------------------------------------
Energy - 5.3%
5,000 Gulf Coast Waste Disposal Authority (Valero Energy Corporation 4/08 at 102 BBB- 4,012,950
Project), Series 1998, 5.600%, 4/01/32 (Alternative Minimum Tax)
5,000 Gulf Coast Industrial Development Authority, Waste Disposal Revenue 6/08 at 102 BBB- 4,023,500
Bonds (Valero Refining and Marketing Company Project),
Series 1997, 5.600%, 12/01/31 (Alternative Minimum Tax)
3,000 Gulf Coast Waste Disposal Authority, Texas, Waste Disposal 4/09 at 101 BBB- 2,449,980
Revenue Bonds (Valero Energy Corporation Project),
Series 1999, 5.700%, 4/01/32 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 10.8%
3,500 Abilene Health Facilities Development Corporation (Texas), 9/05 at 102 AAA 3,435,670
Hospital Revenue Refunding and Improvement Bonds (Hendrick
Medical Center Project), Series 1995C, 6.150%, 9/01/25
2,000 Brazos County Health Facilities Development Corporation, Franciscan 7/07 at 102 AAA 1,717,480
Services Corporation Obligated Group Revenue Bonds, Series 1997B,
5.375%, 1/01/28
1,000 Harris County Health Facilities Development Corporation 10/09 at 101 AA 825,710
(Texas Children's Hospital Project), Hospital Revenue Bonds,
Series 1999A, 5.250%, 10/01/29
5,750 Midland County Hospital District, Hospital Revenue Bonds, No Opt. Call A- 2,879,888
Series 1992, 0.000%, 6/01/11
1,760 Parker County Hospital District, Texas, Hospital Revenue Bonds 8/09 at 102 BBB 1,560,821
(Campbell Health System), Series 1999, 6.250%, 8/15/19
4,500 Port of Corpus Christi Authority of Nueces County (Texas), Pollution 4/02 at 102 BBB 4,493,115
Control Revenue Bonds (Hoechst Celanese Corporation),
Series 1992, 6.875%, 4/01/17 (Alternative Minimum Tax)
5,350 Richardson Hospital Authority (Texas), Hospital Revenue Refunding 12/08 at 101 BBB+ 4,146,304
and Improvement Bonds (Baylor/Richardson Medical Center Project),
Series 1998, 5.625%, 12/01/28
1,050 Tarrant County Health Facilities Development Corporation (Texas), 11/08 at 101 A- 836,304
Hospital Revenue Bonds (Adventist Health System / Sunbelt
Obligated Group), Series 1998, 5.375%, 11/15/20
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Health Care (continued)
$ 1,500 Texas Health Facilities Development Corporation, Hospital Revenue 8/03 at 102 AAA $1,499,055
Bonds (All Saints Episcopal Hospitals of Fort Worth Project),
Series 1993B, 6.250%, 8/15/22
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 6.4%
1,095 Baytown Housing Finance Corporation, Single Family Mortgage 9/02 at 103 Aa2 1,173,818
Revenue Refunding Bonds, Series 1992A, 8.500%, 9/01/11
940 El Paso Housing Finance Corporation, Single Family Mortgage 4/01 at 103 A2 1,004,681
Revenue Refunding Bonds, Series 1991A, 8.750%, 10/01/11
670 City of Galveston Property Finance Authority, Inc., Single Family 9/01 at 103 A3 720,766
Mortgage Revenue Bonds, Series 1991A, 8.500%, 9/01/11
1,800 Harrison County Finance Corporation, Single Family Mortgage 12/01 at 103 A1 1,840,662
Revenue Refunding Bonds, Series 1991, 8.875%, 12/01/11
1,160 Houston Housing Finance Corporation, Single Family Mortgage 6/03 at 102 AAA 1,163,039
Revenue Refunding Bonds, Series 1993A, 5.950%, 12/01/10
720 Port Arthur Housing Finance Corporation, Single Family Mortgage 9/02 at 103 A 776,506
Revenue Refunding Bonds, Series 1992, 8.700%, 3/01/12
2,450 Texas Department of Housing and Community Affairs, Single Family 9/06 at 102 AAA 2,408,105
Mortgage Revenue Bonds, Series 1996E, 6.000%, 9/01/17
2,565 Travis County Housing Finance Corporation (Texas), Residential 12/01 at 103 AAA 2,631,998
Mortgage Bonds (GNMA and FNMA Mortgage-Backed Securities
Program), Senior Bonds, Series 1991A, 7.050%, 12/01/25
970 Victoria Housing Finance Corporation, Single Family Mortgage No Opt. Call Aaa 1,015,435
Revenue Refunding Bonds, Series 1995, 8.125%, 1/01/11
- ------------------------------------------------------------------------------------------------------------------------------------
Long-Term Care - 2.8%
3,400 Bell County Health Facilities Development Corporation, Retirement 11/08 at 101 A- 2,728,772
Facility Revenue Bonds (Buckner Services, Inc., Obligated Group
Project), Series 1998, 5.250%, 11/15/19
Tarrant County Health Facilities Development Corporation, Tax-Exempt
Mortgage Revenue Bonds (South Central Nursing Homes, Inc. Project),
Series 1997A:
1,000 6.000%, 1/01/37 (Mandatory put 1/01/26) 1/08 at 105 AAA 943,140
2,000 6.000%, 1/01/37 1/08 at 105 AAA 1,886,280
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 12.8%
1,000 Caddo Mills Independent School District (Hunt County, Texas), 2/05 at 100 AAA 1,062,610
Unlimited Tax School Building and Refunding Bonds, Series 1995,
6.375%, 8/15/25
4,130 Coppell Independent School District (Dallas County, Texas), 8/09 at 75 11/32 AAA 1,689,129
Unlimited Tax School Building and Refunding Bonds, Series 1992,
0.000%, 8/15/14
1,475 City of Corpus Christi (Texas), General Improvement and Refunding 3/02 at 100 AAA 1,530,445
Bonds, Series 1992, 6.700%, 3/01/08
2,800 City of Ennis (Ennis County, Texas), General Obligation Refunding 8/02 at 100 AAA 2,891,924
and Improvement Bonds, Series 1992, 6.500%, 8/01/13
3,600 Klein Independent School District (Harris County, Texas), Unlimited 8/09 at 100 AAA 3,158,964
Tax Schoolhouse Bonds, Series 1999A, 5.000%, 8/01/18
1,545 Montgomery County (A Political Subdivision of the State of Texas), 9/07 at 72 3/8 AAA 659,236
Refunding Bonds, Series 1997, 0.000%, 3/01/14
1,825 Socorro Independent School District (El Pasco County, Texas), 2/06 at 100 Aaa 1,748,770
Unlimited Tax School Building Bonds, Series 1996, 5.750%, 2/15/21
2,000 State of Texas, Veterans Land Bonds, General Obligation Bonds, 12/04 at 100 Aa1 2,010,060
Series 1994, 6.400%, 12/01/24 (Alternative Minimum Tax)
3,490 State of Texas, Veterans Housing Assistance Bonds, General 12/03 at 102 Aa1 3,592,536
Obligation Bonds, Series 1993, 6.800%, 12/01/23
(Alternative Minimum Tax)
6,290 State of Texas, College Student Loan Bonds, Series 1997, 8/10 at 100 Aa1 5,122,073
5.000%, 8/01/22 (Alternative Minimum Tax)
<PAGE>
Portfolio of Investments (Unaudited)
NUVEEN TEXAS QUALITY INCOME MUNICIPAL FUND (NTX) (continued)
January 31, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Obligation/General (continued)
$ 1,225 Weslaco Independent School District (Hidalgo County, Texas), 2/06 at 100 Aaa $1,205,192
Unlimited Tax School Building and Refunding Bonds,
Series 1996, 5.700%, 2/15/15
West Independent School District (McLennan and Hill Counties,
Texas), Unlimited Tax School Building and Refunding Bonds,
Series 1998:
1,000 0.000%, 8/15/22 8/13 at 61 7/32 AAA 237,040
1,000 0.000%, 8/15/23 8/13 at 57 31/32 AAA 221,860
1,000 0.000%, 8/15/24 8/13 at 54 7/8 AAA 207,620
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 7.7%
4,500 City of Austin, Texas, Hotel Occupancy Tax Subordinate Lien Revenue 11/09 at 100 AAA 4,267,395
Refunding Bonds, Series 1999, 5.800%, 11/15/29
2,915 Canadian River Municipal Water Authority, Texas, Contract Revenue 2/09 at 100 AAA 2,741,878
and Refunding Bonds (Conjunctive Use Groundwater Supply Project),
Series 1999, 5.500%, 2/15/18
1,450 Industrial Development Corporation of the City of Galveston, Sales 9/05 at 100 AAA 1,427,221
Tax Revenue Bonds, Series 1995, 5.750%, 9/01/15
1,575 Harris County, Texas, Toll Road Unlimited Tax and Subordinate 8/02 at 102 Aa1 1,639,827
Lien Revenue Refunding Bonds, Series 1992A, 6.500%, 8/15/15
800 City of Laredo, Webb County, Texas, Combination Tax and Waterworks 8/04 at 100 AAA 822,672
System, Revenue Certificates of Obligation, Series 1994,
5.625%, 8/15/11
4,580 City of San Antonio, Texas, Hotel Occupancy Tax Revenue Bonds 8/06 at 102 AAA 4,260,545
(Henry B. Gonzalez Convention Center Project), 5.700%, 8/15/26
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - 13.5%
5,295 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds 12/00 at 102 Baa1 5,376,119
(American Airlines, Inc. Project), Series 1990, 7.500%, 12/01/29
(Alternative Minimum Tax)
5,020 Dallas-Fort Worth International Airport Facility Improvement 5/02 at 102 AAA 5,128,081
Corporation, Revenue Bonds, United Parcel Service, Inc.,
Series 1992, 6.600%, 5/01/32 (Alternative Minimum Tax)
5,050 Dallas-Fort Worth International Airport Facility Improvement 11/09 at 101 Baa1 4,675,290
Corporation, American Airlines, Inc. Revenue Bonds, Series 1999,
6.375%, 5/01/35 (Alternative Minimum Tax)
3,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, 8/04 at 102 AAA 2,706,570
Series 1994, 5.375%, 8/15/20
220 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, 8/02 at 102 AAA 223,654
Series 1992A, 6.500%, 8/15/17
320 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, 2/00 at 100 AAA 320,400
Series 1992B, 6.625%, 8/15/17
5,000 City of Houston, Texas, Airport System Subordinate Lien Revenue 7/01 at 102 AAA 5,192,350
Bonds, Series 1991A, 6.750%, 7/01/21 (Alternative Minimum Tax)
3,300 City of Houston, Texas, Airport System Special Facilities Revenue 7/07 at 100 AAA 3,047,385
Bonds (Automated People Mover Project), Series 1997A,
5.500%, 7/15/17 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 19.9%
295 Abilene Housing Development Corporation, First Lien Revenue Bonds, No Opt. Call N/R*** 310,688
Series 1978, 7.000%, 7/01/08
4,500 Amarillo Health Facilities Corporation Hospital Revenue Bonds 1/02 at 102 AAA 4,729,320
(High Plains Baptist Hospital Project), Series 1992C,
6.500%, 1/01/07 (Pre-refunded to 1/01/02)
3,500 City of Austin, Texas, Combined Utility Systems Revenue Refunding 5/01 at 102 A*** 3,666,355
Bonds, Series 1991, 6.750%, 5/15/12 (Pre-refunded to 5/15/01)
1,000 The City of Beaumont, Texas, Public Improvement Bonds, Series 1992, 3/02 at 100 AAA 1,031,270
6.250%, 3/01/10 (Pre-refunded to 3/01/02)
2,000 City of Brownsville, Texas, General Obligation Refunding Bonds, 2/01 at 100 AAA 2,051,580
Series 1991, 6.750%, 2/15/12 (Pre-refunded to 2/15/01)
1,500 City of Brownsville, Texas, Utilities System Priority Revenue Bonds, 9/00 at 102 AAA 1,551,525
Series 1990, 6.500%, 9/01/17 (Pre-refunded to 9/01/00)
1,975 City of Corpus Christi, Texas, General Improvement and Refunding 3/02 at 100 AAA 2,054,217
Bonds, Series 1992, 6.700%, 3/01/08 (Pre-refunded to 3/01/02)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
U.S. Guaranteed (continued)
$ 1,500 City of Dallas, Texas (Dallas, Denton and Collin Counties), 1/02 at 100 AAA $1,543,320
Combination Tax and Surplus Revenue, Certificates of Obligation,
Series 1992, 6.250%, 1/01/20 (Pre-refunded to 1/01/02)
1,185 Fort Bend County Levee Improvement District No. 11 (A Political 9/04 at 100 AAA 1,281,080
Subdivision of the State of Texas), Unlimited Tax Levee Improvement
Bonds, Series 1994, 6.900%, 9/01/17 (Pre-refunded to 9/01/04)
1,780 Harris County, Texas, Toll Road Senior Lien Revenue Refunding 8/02 at 102 AAA 1,887,565
Bonds, Series 1992A, 6.500%, 8/15/17 (Pre-refunded to 8/15/02)
425 Harris County, Texas, Toll Road Unlimited Tax and Subordinate Lien 8/02 at 102 Aa1*** 450,262
Revenue Refunding Bonds, Series 1992, 6.500%, 8/15/15
(Pre-refunded to 8/15/02)
6,110 Harris County Health Facilities Development Corporation, Hospital 6/02 at 102 A3*** 6,491,997
Revenue Bonds (Memorial Hospital System Project), Series 1992,
7.125%, 6/01/15 (Pre-refunded to 6/01/02)
485 City of Houston, Texas, Water and Sewer System, Junior Lien 12/01 at 102 AAA 509,478
Revenue Refunding Bonds, Series 1991C, 6.375%, 12/01/17
(Pre-refunded to 12/01/01)
1,000 North Central Texas Health Facilities Development Corporation, No Opt. Call AAA 958,230
Hospital Revenue Bonds (Presbyterian Healthcare System Project),
Series 1996B, 5.750%, 6/01/26
2,500 Retama Development Corporation, Special Facilities Revenue No Opt. Call AAA 3,296,125
Bonds (Retama Park Racetrack Project), Series 1993,
8.750%, 12/15/17
City of San Antonio, Texas, Water System Revenue Refunding Bonds,
Series 1992:
1,310 6.500%, 5/15/10 (Pre-refunded to 5/15/02) 5/02 at 102 AAA 1,384,932
665 6.500%, 5/15/10 No Opt. Call AAA 722,217
5,400 Travis County Health Facilities Development Corporation, Hospital 11/03 at 102 Aa*** 5,362,956
Revenue Bonds (Daughters of Charity National Health System -
Daughters of Charity Health Services of Austin), Series 1993B,
6.000%, 11/15/22
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 5.7%
2,000 Brazos River Authority (Texas), Collateralized Pollution Control 3/01 at 102 BBB+ 2,079,560
Revenue Bonds (Texas Utilities Electric Company Project),
Series 1994A, 7.875%, 3/01/21 (Alternative Minimum Tax)
1,500 Brazos River Authority (Texas), Collateralized Pollution Control 12/02 at 102 AAA 1,507,530
Revenue Refunding Bonds (Texas Utilities Electric Company
Project), Series 1992, 6.500%, 12/01/27 (Alternative Minimum Tax)
2,000 Brazos River Authority (Texas), Pollution Control Revenue Refunding 5/08 at 102 AAA 1,738,680
Bonds (Texas Utilities Electric Company Project), Series 1998A,
5.550%, 5/01/33 (Alternative Minimum Tax)
5,500 Brazos River Authority (Texas), Revenue Refunding Bonds 4/09 at 101 BBB+ 4,648,600
(Reliant Energy, Incorporated Project), Series 1999A,
5.375%, 4/01/19
1,500 Matagorda County Navigation District Number One (Texas), Pollution 7/03 at 102 A- 1,356,750
Control Revenue Refunding Bonds (Central Power and Light
Company Project), Series 1993, 6.000%, 7/01/28
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 4.2%
7,000 City of Houston, Texas, Water and Sewer System, Junior Lien No Opt. Call AAA 1,166,130
Revenue Refunding Bonds, Series 1998A, 0.000%, 12/01/27
1,000 City of Houston, Texas, Water and Sewer System, Prior Lien Revenue 12/02 at 102 A+ 1,022,570
Refunding Bonds, Series 1992B, 6.375%, 12/01/14
3,515 City of Houston, Texas, Water and Sewer System, Junior Lien 12/01 at 102 AAA 3,547,936
Revenue Refunding Bonds, Series 1991C, 6.375%, 12/01/17
2,525 City of San Antonio, Texas, Water System Revenue Refunding 5/02 at 102 AAA 2,651,097
Bonds, Series 1992, 6.500%, 5/15/10
- ------------------------------------------------------------------------------------------------------------------------------------
$ 215,750 Total Investments - (cost $199,038,287) - 98.3% 194,569,694
=============
Other Assets Less Liabilities - 1.7% 3,304,781
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $197,874,475
====================================================================================================================
* 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, 2000
<CAPTION>
ARIZONA MICHIGAN MICHIGAN OHIO TEXAS
PREMIUM QUALITY PREMIUM QUALITY QUALITY
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Assets
Investments in municipal securities,
at market value $88,295,567 $249,750,148 $156,882,374 $212,520,205 $194,569,694
Temporary investments in short-term municipal
securities, at amortized cost, which approximates
market value 800,000 700,000 -- 5,200,000 --
Cash 272,220 950,513 481,886 -- 868,045
Receivables:
Interest 801,340 3,789,450 2,300,490 2,642,261 3,457,813
Investments sold 20,051 -- -- -- --
Other assets 3,200 9,987 1,134 6,526 1,935
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 90,192,378 255,200,098 159,665,884 220,368,992 198,897,487
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Cash overdraft -- -- -- 390,259 --
Accrued expenses:
Management fees 49,545 138,896 87,511 119,820 108,683
Other 92,004 123,445 178,642 181,144 163,116
Preferred share dividends payable 12,164 33,914 24,052 34,468 33,757
Common share dividends payable 307,361 880,775 531,029 774,649 717,456
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 461,074 1,177,030 821,234 1,500,340 1,023,012
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets $89,731,304 $254,023,068 $158,844,650 $218,868,652 $197,874,475
====================================================================================================================================
Preferred shares, at liquidation value $30,000,000 $ 94,000,000 $ 56,000,000 $ 77,000,000 $ 69,000,000
====================================================================================================================================
Preferred shares outstanding 1,200 3,760 2,240 3,080 2,760
====================================================================================================================================
Common shares outstanding 4,360,259 11,514,001 7,695,609 9,447,120 9,440,810
====================================================================================================================================
Net asset value per Common share outstanding
(net assets less Preferred shares
at liquidation value,
divided by Common shares outstanding) $ 13.70 $ 13.90 $ 13.36 $ 15.02 $ 13.65
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS (Unaudited)
Six Months Ended January 31, 2000
<CAPTION>
ARIZONA MICHIGAN MICHIGAN OHIO TEXAS
PREMIUM QUALITY PREMIUM QUALITY QUALITY
<S> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 2,694,293 $ 7,895,897 $ 4,811,151 $ 6,646,090 $ 6,317,466
- -----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 300,641 842,344 531,545 723,424 662,905
Preferred shares - auction fees 37,808 106,768 70,575 97,042 86,958
Preferred shares - dividend disbursing agent fees 5,042 10,081 10,081 15,123 10,081
Shareholders' servicing agent fees and expenses 996 6,892 10,633 12,082 4,442
Custodian's fees and expenses 25,014 46,494 23,570 45,972 40,818
Directors'/Trustees' fees and expenses 2,927 3,883 3,239 3,498 3,403
Professional fees 5,839 8,386 8,188 7,259 7,008
Shareholders' reports - printing and mailing expenses 11,744 25,379 22,965 28,209 23,067
Stock exchange listing fees 7,289 12,413 5,405 5,474 5,412
Investor relations expense 4,141 11,761 7,996 10,678 9,012
Other expenses 4,631 9,870 6,103 12,651 8,362
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 406,072 1,084,271 700,300 961,412 861,468
Custodian fee credit (5,950) (19,781) (7,022) (21,691) (16,680)
- -----------------------------------------------------------------------------------------------------------------------------------
Net expenses 400,122 1,064,490 693,278 939,721 844,788
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 2,294,171 6,831,407 4,117,873 5,706,369 5,472,678
- -----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions 586,162 (69,108) 374,472 (339,786) (966,010)
Change in net unrealized appreciation (depreciation)
of investments (5,708,237) (13,756,835) (10,441,596) (9,980,377) (11,969,238)
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (5,122,075) (13,825,943) (10,067,124) (10,320,163) (12,935,248)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations $(2,827,904) $ (6,994,536) $ (5,949,251) $ (4,613,794) $(7,462,570)
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS (Unaudited)
<CAPTION>
ARIZONA PREMIUM MICHIGAN QUALITY MICHIGAN PREMIUM
------------------------------ ------------------------------- -----------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED 1/31/00 7/31/99 ENDED 1/31/00 7/31/99 ENDED 1/31/00 7/31/99
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 2,294,171 $ 4,613,736 $ 6,831,407 $ 13,203,200 $ 4,117,873 $ 8,041,945
Net realized gain (loss) from
investment transactions 586,162 430,224 (69,108) 1,597,218 374,472 629,510
Change in net unrealized
appreciation
(depreciation) of investments (5,708,237) (2,826,155) (13,756,835) (9,085,760) (10,441,596) (5,477,686)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net
assets from operations (2,827,904) 2,217,805 (6,994,536) 5,714,658 (5,949,251) 3,193,769
- ------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From undistributed net
investment income:
Common shareholders (1,912,781) (3,625,685) (5,343,683) (10,504,407) (3,185,733) (6,315,050)
Preferred shareholders (526,401) (905,767) (1,525,651) (2,399,721) (976,817) (1,644,995)
From accumulated net realized
gains from investment transactions:
Common shareholders -- -- (871,610) (698,100) -- --
Preferred shareholders -- -- (233,861) (176,288) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (2,439,182) (4,531,452) (7,974,805) (13,778,516) (4,162,550) (7,960,045)
- ------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions 223,443 542,570 401,252 1,645,159 104,960 167,049
Preferred shares - net proceeds
from sale of shares -- -- -- 13,750,608 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
capital share transactions 223,443 542,570 401,252 15,395,767 104,960 167,049
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets (5,043,643) (1,771,077) (14,568,089) 7,331,909 (10,006,841) (4,599,227)
Net assets at the
beginning of period 94,774,947 96,546,024 268,591,157 261,259,248 168,851,491 173,450,718
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of period $89,731,304 $94,774,947 $254,023,068 $268,591,157 $158,844,650 $168,851,491
====================================================================================================================================
Balance of undistributed net
investment income at the
end of period $ 148,920 $ 293,931 $ 442,497 $ 480,424 $ 343,771 $ 388,448
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
OHIO QUALITY TEXAS QUALITY
---------------------------------- --------------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED 1/31/00 7/31/99 ENDED 1/31/00 7/31/99
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 5,706,369 $ 11,408,295 $ 5,472,678 $ 10,912,402
Net realized gain (loss) from investment transactions (339,786) 76,311 (966,010) 1,295,649
Change in net unrealized appreciation
(depreciation) of investments (9,980,377) (4,993,222) (11,969,238) (7,972,278)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations (4,613,794) 6,491,384 (7,462,570) 4,235,773
- -----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From undistributed net investment income:
Common shareholders (4,641,983) (9,243,823) (4,305,008) (8,508,627)
Preferred shareholders (1,302,631) (2,225,720) (1,118,499) (2,109,132)
From accumulated net realized gains
from investment transactions:
Common shareholders -- -- (875,163) (701,466)
Preferred shareholders -- -- (214,112) (203,285)
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (5,944,614) (11,469,543) (6,512,782) (11,522,510)
- -----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares issued to shareholders
due to reinvestment of distributions 466,269 998,544 65,432 402,016
Preferred shares - net proceeds from sale of shares -- -- -- --
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from capital share transactions 446,269 998,544 65,432 402,016
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets (10,092,139) (3,979,615) (13,909,920) (6,884,721)
Net assets at the beginning of period 228,960,791 232,940,406 211,784,395 218,669,116
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of period $218,868,652 $228,960,791 $197,874,475 $211,784,395
===================================================================================================================================
Balance of undistributed net investment
income at the end of period $ 337,435 $ 575,680 $ 443,476 $ 394,305
===================================================================================================================================
See accompanying notes to financial statements.
</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, 2000, there were no such outstanding purchase commitments in any of
the Funds.
Investment 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.
<PAGE>
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend 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.
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 --
Series F -- 560 -- -- --
- ---------------------------------------------------------------------------------------------------------
Total 1,200 3,760 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, 2000.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby the custodian fees
and expenses are reduced by credits earned on each Fund's cash on deposit with
the bank. Such deposit arrangements are an alternative to overnight investments.
Reclassification
Certain amounts have been reclassified in the 1999 Financial Highlights to
conform to the 2000 presentation.
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. Actual results may differ
from those estimates.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
<TABLE>
<CAPTION>
ARIZONA PREMIUM MICHIGAN QUALITY
--------------------------- ----------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED 1/31/00 7/31/99 ENDED 1/31/00 7/31/99
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common shares issued to shareholders
due to reinvestment of distributions 14,366 32,273 24,988 97,921
======================================================================================================
Preferred shares sold -- -- -- 560
======================================================================================================
<CAPTION>
MICHIGAN PREMIUM OHIO QUALITY
--------------------------- ----------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED 1/31/00 7/31/99 ENDED 1/31/00 7/31/99
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common shares issued to shareholders
due to reinvestment of distributions 7,104 10,819 28,472 53,929
======================================================================================================
Preferred shares sold -- -- -- --
======================================================================================================
<CAPTION>
TEXAS QUALITY
----------------------------
SIX MONTHS YEAR ENDED
ENDED 1/31/00 7/31/99
- ------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common shares issued to shareholders
due to reinvestment of distributions 4,273 25,102
======================================================================================================
Preferred shares sold -- --
======================================================================================================
</TABLE>
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid March 1, 2000, to shareholders of record on
February 15, 2000, as follows:
<TABLE>
<CAPTION>
ARIZONA MICHIGAN MICHIGAN OHIO TEXAS
PREMIUM QUALITY PREMIUM QUALITY QUALITY
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Dividend per share $.0705 $.0765 $.0690 $.0820 $.0760
=========================================================================================================
</TABLE>
<PAGE>
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities during the six months ended
January 31, 2000, were as follows:
<TABLE>
<CAPTION>
ARIZONA MICHIGAN MICHIGAN OHIO TEXAS
PREMIUM QUALITY PREMIUM QUALITY QUALITY
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Purchases:
Long-term municipal securities $ 9,184,685 $30,532,757 $40,308,801 $11,734,545 $25,733,610
Short-term municipal securities 11,000,000 13,300,000 11,500,000 9,900,000 3,500,000
Sales and maturities:
Long-term municipal securities 10,144,514 29,996,575 40,472,239 16,003,054 27,548,520
Short-term municipal securities 10,200,000 13,600,000 11,500,000 4,700,000 3,500,000
=========================================================================================================
</TABLE>
At January 31, 2000, the identified cost of investments owned for federal income
tax purposes were as follows:
<TABLE>
<CAPTION>
ARIZONA MICHIGAN MICHIGAN OHIO TEXAS
PREMIUM QUALITY PREMIUM QUALITY QUALITY
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
$90,176,458 $251,674,699 $160,379,923 $217,205,905 $199,038,287
=============================================================================================================
</TABLE>
At July 31, 1999, 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
PREMIUM PREMIUM QUALITY
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expiration year:
2002 $ -- $ -- $ 780,558
2003 415,901 152,186 16,493
2004 -- 1,807,234 622,243
- ---------------------------------------------------------------------------------------------------------
Total $415,901 $1,959,420 $1,419,294
=========================================================================================================
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS (Unaudited) (continued)
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
for federal income tax purposes at January 31, 2000, were as follows:
<TABLE>
<CAPTION>
ARIZONA MICHIGAN MICHIGAN OHIO TEXAS
PREMIUM QUALITY PREMIUM QUALITY QUALITY
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Gross unrealized:
appreciation $ 2,155,340 $ 8,530,380 $ 2,056,192 $ 5,364,905 $ 4,232,111
depreciation (3,236,231) (9,754,931) (5,553,741) (4,850,605) (8,700,704)
- ----------------------------------------------------------------------------------------------------------
Net unrealized appreciation
(depreciation) $(1,080,891) $(1,224,551) $(3,497,549) $ 514,300 $(4,468,593)
==========================================================================================================
</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 assets of each Fund as follows:
AVERAGE DAILY NET ASSETS 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 of its 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, 2000, net assets consisted of:
<TABLE>
<CAPTION>
ARIZONA MICHIGAN MICHIGAN
PREMIUM QUALITY PREMIUM
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $30,000,000 $ 94,000,000 $ 56,000,000
Common shares, $.01 par value per share 43,603 115,140 76,956
Paid-in surplus 60,449,411 160,759,917 107,504,120
Balance of undistributed net investment income 148,920 442,497 343,771
Accumulated net realized gain (loss) from investment transactions 170,261 (84,432) (1,582,648)
Net unrealized appreciation (depreciation) of investments (1,080,891) (1,210,054) (3,497,549)
- ------------------------------------------------------------------------------------------------------------
Net assets $89,731,304 $254,023,068 $158,844,650
============================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Preferred 1,000,000 1,000,000 1,000,000
============================================================================================================
<CAPTION>
OHIO TEXAS
QUALITY QUALITY
- ------------------------------------------------------------------------------------------------------------
Preferred shares, $25,000 stated value per share,
at liquidation value $ 77,000,000 $ 69,000,000
Common shares, $.01 par value per share 94,471 94,408
Paid-in surplus 142,681,525 133,771,957
Balance of undistributed net investment income 337,435 443,476
Accumulated net realized gain (loss) from investment transactions (1,771,648) (966,773)
Net unrealized appreciation (depreciation) of investments 526,869 (4,468,593)
- ------------------------------------------------------------------------------------------------------------
Net assets $218,868,652 $197,874,475
============================================================================================================
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:
<CAPTION>
INVESTMENT OPERATIONS
----------------------------------
NET
REALIZED/
BEGINNING NET UNREALIZED
NET ASSET INVESTMENT INVESTMENT
VALUE INCOME GAIN (LOSS) TOTAL
- ----------------------------------------------------------------------
<S> <C> <C> <C> <C>
ARIZONA PREMIUM
Year Ended 7/31:
2000 (a) $14.90 $ .52 $(1.16) $(.64)
1999 15.43 1.07 (.55) .52
1998 15.34 1.05 .10 1.15
1997 14.51 1.06 .81 1.87
1996 14.12 1.05 .38 1.43
1995 13.61 1.07 .49 1.56
<CAPTION>
MICHIGAN QUALITY
<S> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 15.20 .59 (1.20) (.61)
1999 15.91 1.15 (.63) .52
1998 15.95 1.17 (.01) 1.16
1997 15.28 1.18 .72 1.90
1996 15.10 1.19 .27 1.46
1995 15.02 1.21 .19 1.40
<CAPTION>
MICHIGAN PREMIUM
<S> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 14.68 .54 (1.32) (.78)
1999 15.30 1.05 (.64) .41
1998 15.14 1.04 .19 1.23
1997 14.16 1.05 .97 2.02
1996 13.73 1.05 .41 1.46
1995 13.46 1.04 .31 1.35
<CAPTION>
OHIO QUALITY
<S> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 16.13 .60 (1.08) (.48)
1999 16.65 1.21 (.51) .70
1998 16.57 1.22 .09 1.31
1997 15.69 1.23 .88 2.11
1996 15.33 1.23 .35 1.58
1995 14.84 1.22 .52 1.74
<CAPTION>
TEXAS QUALITY
<S> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 15.13 .58 (1.37) (.79)
1999 15.90 1.16 (.72) .44
1998 15.86 1.17 .07 1.24
1997 15.06 1.19 .81 2.00
1996 14.91 1.21 .21 1.42
1995 14.53 1.22 .42 1.64
======================================================================
<PAGE>
<CAPTION>
LESS DISTRIBUTIONS
-----------------------------------------------------------------------
NET NET
INVESTMENT INVESTMENT CAPITAL CAPITAL
INCOME INCOME GAINS GAINS
TO COMMON TO PREFERRED TO COMMON TO PREFERRED
SHAREHOLDERS SHAREHOLDERS+ SHAREHOLDERS SHAREHOLDERS+ TOTAL
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ARIZONA PREMIUM
Year Ended 7/31:
2000 (a) $ (.44) $(.12) $ -- $ -- $ (.56)
1999 (.84) (.21) -- -- (1.05)
1998 (.83) (.23) -- -- (1.06)
1997 (.82) (.22) -- -- (1.04)
1996 (.80) (.24) -- -- (1.04)
1995 (.78) (.27) -- -- (1.05)
<CAPTION>
MICHIGAN QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) (.46) (.13) (.08) (.02) (.69)
1999 (.92) (.21) (.06) (.02) (1.21)
1998 (.95) (.24) (.01) -- (1.20)
1997 (.95) (.24) (.03) (.01) (1.23)
1996 (.95) (.24) (.07) (.02) (1.28)
1995 (1.00) (.26) (.05) (.01) (1.32)
<CAPTION>
MICHIGAN PREMIUM
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) (.41) (.13) -- -- (.54)
1999 (.82) (.21) -- -- (1.03)
1998 (.82) (.25) -- -- (1.07)
1997 (.80) (.24) -- -- (1.04)
1996 (.78) (.25) -- -- (1.03)
1995 (.80) (.28) -- -- (1.08)
<CAPTION>
OHIO QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) (.49) (.14) -- -- (.63)
1999 (.98) (.24) -- -- (1.22)
1998 (.97) (.26) -- -- (1.23)
1997 (.96) (.27) -- -- (1.23)
1996 (.95) (.27) -- -- (1.22)
1995 (.95) (.30) -- -- (1.25)
<CAPTION>
TEXAS QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) (.46) (.12) (.09) (.02) (.69)
1999 (.90) (.22) (.07) (.02) (1.21)
1998 (.93) (.27) -- -- (1.20)
1997 (.94) (.26) -- -- (1.20)
1996 (.95) (.27) (.04)+++ (.01)+++ (1.27)
1995 (.98) (.28) -- -- (1.26)
========================================================================================
<PAGE>
<CAPTION>
TOTAL RETURNS
----------------------
ORGANIZATION
AND OFFERING
COSTS AND BASED
PREFERRED ENDING BASED ON
SHARE NET ENDING ON NET
UNDERWRITING ASSET MARKET MARKET ASSET
DISCOUNTS VALUE VALUE VALUE** VALUE**
- ---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ARIZONA PREMIUM
Year Ended 7/31:
2000 (a) $-- $13.70 $14.1250 (14.48)% (5.18)%
1999 -- 14.90 17.0000 8.67 1.92
1998 -- 15.43 16.4375 12.18 6.14
1997 -- 15.34 15.4375 17.81 11.74
1996 -- 14.51 13.8750 7.83 8.48
1995 -- 14.12 13.6250 10.42 9.98
<CAPTION>
MICHIGAN QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) -- 13.90 13.1875 (17.89) (5.06)
1999 (.02) 15.20 16.6875 2.18 1.62
1998 -- 15.91 17.3125 10.27 5.97
1997 -- 15.95 16.6250 14.02 11.19
1996 -- 15.28 15.5000 11.32 8.07
1995 -- 15.10 14.8750 4.77 8.02
<CAPTION>
MICHIGAN PREMIUM
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) -- 13.36 12.1875 (16.47) (6.24)
1999 -- 14.68 15.0625 5.95 1.23
1998 -- 15.30 15.0000 13.74 6.62
1997 -- 15.14 13.9375 14.95 12.97
1996 -- 14.16 12.8750 14.00 8.88
1995 -- 13.73 12.0000 2.59 8.45
<CAPTION>
OHIO QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) -- 15.02 15.5625 (10.85) (3.87)
1999 -- 16.13 18.0000 5.09 2.74
1998 -- 16.65 18.0625 10.14 6.53
1997 -- 16.57 17.3125 14.70 12.14
1996 -- 15.69 16.0000 12.39 8.68
1995 -- 15.33 15.1250 6.80 10.16
<CAPTION>
TEXAS QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) -- 13.65 12.1875 (16.27) (6.23)
1999 -- 15.13 15.1875 2.97 1.21
1998 -- 15.90 15.6875 6.45 6.27
1997 -- 15.86 15.6250 11.76 11.93
1996 -- 15.06 14.8750 14.60 7.72
1995 -- 14.91 13.8750 1.14 9.89
=====================================================================================
<PAGE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
--------------------------------------------------------------------------
BEFORE CREDIT
--------------------------------------------------------
RATIO OF NET RATIO OF NET
RATIO OF INVESTMENT RATIO OF INVESTMENT
EXPENSES INCOME TO EXPENSES INCOME TO
TO AVERAGE AVERAGE TO AVERAGE AVERAGE
ENDING NET ASSETS NET ASSETS TOTAL TOTAL
NET APPLICABLE APPLICABLE NET ASSETS NET ASSETS
ASSETS TO COMMON TO COMMON INCLUDING INCLUDING
(000) SHARES++ SHARES++ PREFERRED++ PREFERRED++
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ARIZONA PREMIUM
Year Ended 7/31:
2000 (a) $ 89,731 1.30%* 7.32%* .88%* 4.93%*
1999 94,775 1.29 6.88 .89 4.75
1998 96,546 1.28 6.85 .88 4.71
1997 95,731 1.29 7.18 .87 4.86
1996 92,095 1.33 7.22 .90 4.88
1995 90,434 1.30 7.92 .86 5.21
<CAPTION>
MICHIGAN QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 254,023 1.29* 8.11* .83* 5.19*
1999 268,591 1.20 7.27 .83 5.02
1998 261,259 1.19 7.35 .82 5.09
1997 260,247 1.21 7.64 .83 5.23
1996 251,033 1.21 7.77 .83 5.29
1995 247,907 1.26 8.26 .84 5.54
<CAPTION>
MICHIGAN PREMIUM
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 158,845 1.29* 7.59* .85* 4.99*
1999 168,851 1.29 6.82 .87 4.63
1998 173,451 1.29 6.87 .87 4.64
1997 172,275 1.29 7.27 .86 4.83
1996 164,688 1.32 7.38 .87 4.87
1995 161,414 1.57 7.83 1.01 5.02
<CAPTION>
OHIO QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 218,869 1.30* 7.71* .85* 5.05*
1999 228,961 1.26 7.26 .84 4.88
1998 232,940 1.29 7.37 .86 4.92
1997 231,232 1.30 7.73 .85 5.08
1996 222,151 1.32 7.79 .87 5.09
1995 218,335 1.47 8.20 .94 5.24
<CAPTION>
TEXAS QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 197,874 1.26* 8.00* .84* 5.30*
1999 211,784 1.23 7.32 .84 5.00
1998 218,669 1.22 7.40 .83 5.06
1997 217,999 1.22 7.81 .83 5.27
1996 210,423 1.23 7.95 .83 5.36
1995 208,924 1.38 8.35 .91 5.54
====================================================================================
<PAGE>
<CAPTION>
RATIOS/SUPPLEMENTAL DATA
-----------------------------------------------------------------------
AFTER CREDIT***
-----------------------------------------------------------
RATIO OF NET RATIO OF NET
RATIO OF INVESTMENT RATIO OF INVESTMENT
EXPENSES INCOME TO EXPENSES INCOME TO
TO AVERAGE AVERAGE TO AVERAGE AVERAGE
NET ASSETS NET ASSETS TOTAL TOTAL
APPLICABLE APPLICABLE NET ASSETS NET ASSETS PORTFOLIO
TO COMMON TO COMMON INCLUDING INCLUDING TURNOVER
SHARES++ SHARES++ PREFERRED++ PREFERRED++ RATE
- -----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
ARIZONA PREMIUM
Year Ended 7/31:
2000 (a) 1.28%* 7.34%* .86%* 4.95%* 10%
1999 1.29 6.88 .89 4.75 6
1998 1.28 6.85 .88 4.71 17
1997 1.29 7.18 .87 4.86 11
1996 1.33 7.22 .90 4.88 15
1995 1.30 7.92 .86 5.21 11
<CAPTION>
MICHIGAN QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 1.27* 8.14* .81* 5.20* 12
1999 1.19 7.28 .82 5.03 21
1998 1.19 7.35 .82 5.09 8
1997 1.21 7.64 .83 5.23 11
1996 1.21 7.77 .83 5.29 15
1995 1.26 8.26 .84 5.54 18
<CAPTION>
MICHIGAN PREMIUM
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 1.28* 7.61* .84* 5.00* 25
1999 1.28 6.83 .87 4.63 9
1998 1.29 6.87 .87 4.64 6
1997 1.29 7.27 .86 4.83 4
1996 1.32 7.38 .87 4.87 17
1995 1.57 7.83 1.01 5.02 32
<CAPTION>
OHIO QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 1.27* 7.74* .83* 5.07* 5
1999 1.25 7.27 .84 4.88 3
1998 1.29 7.37 .86 4.92 9
1997 1.30 7.73 .85 5.08 25
1996 1.32 7.79 .87 5.09 19
1995 1.47 8.20 .94 5.24 19
<CAPTION>
TEXAS QUALITY
<S> <C> <C> <C> <C> <C>
Year Ended 7/31:
2000 (a) 1.24* 8.02* .82* 5.31* 13
1999 1.23 7.32 .84 5.00 19
1998 1.22 7.40 .83 5.06 17
1997 1.22 7.81 .83 5.27 13
1996 1.23 7.95 .83 5.36 17
1995 1.38 8.35 .91 5.54 8
==================================================================================
* 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 di
stributions, if any, and changes in net asset value per share. Total
returns are not annualized.
*** After custodian fee credit, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
+++ The amounts shown include distributions in excess of capital gains of $.008
for Common shareholders and $.002 for Preferred shareholders.
(a) For the six months ended January 31, 2000.
</TABLE>
<PAGE>
Build Your Wealth Automatically
Sidebar text:
Nuveen offers a number of convenient ways to add to your portfolio and earn the
tax-free income you need to achieve your financial goals.
Sidebar text: Nuveen makes reinvesting easy. A phone call is all it takes to set
up your reinvestment account.
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Exchange-Traded Fund allows you to conveniently reinvest dividends
and/or capital gains distributions in additional fund shares. If you do not
elect to reinvest distributions, all distributions are paid by check or can be
deposited directly into your bank or brokerage account.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. You'll also potentially benefit from dollar-cost averaging, a
technique of investing at regular intervals, which allows you to build a
high-quality, tax-free portfolio conveniently and cost effectively over time.
Dollar-cost averaging does not ensure a profit, nor does it protect you against
loss in a declining market. Because such a plan involves continuous investment
regardless of fluctuating prices, investors should consider their financial
ability to continue purchases through periods of low price levels.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
Income or capital gains taxes may be payable on dividends or distributions that
are reinvested.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBILITY
You may, of course, change your distribution option or withdraw from the Plan at
any time, should your needs or situation change. Should you withdraw, you can
receive a certificate for all whole shares credited to your reinvestment account
and cash payment for fractional shares, or cash payment for all reinvestment
account shares, less brokerage commissions and a $2.50 service fee.
You can also reinvest if your shares are registered in the name of a brokerage
firm, bank, or other nominee. Just ask your investment adviser if the firm will
participate on your behalf. If not, it's easy to have the shares registered in
your name and to apply for a reinvestment account directly. Participants whose
shares are registered in the name of one firm may not be able to transfer the
shares to another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial adviser or call us at (800)
257-8787.
<PAGE>
Fund Information
BOARD OF DIRECTORS/TRUSTEES
Robert P. Bremner
Lawrence H. Brown
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, TRANSFER AGENT
AND SHAREHOLDER SERVICES
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
LEGAL COUNSEL
Morgan, Lewis &
Bockius LLP
Washington, D.C.
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
FUND POLICIES
The Board of Trustees of your Fund recently modified certain investment policies
of the Fund. The Fund was formerly not permitted to invest more than 5% of its
total assets in Municipal Leases that contain "non-appropriation" clauses. In
addition, your Fund was not permitted to invest more than 10% of its total
assets in Municipal Leases and securities that are unmarketable, illiquid or not
readily marketable. The Municipal Lease market has matured since the Fund's
inception, and non-appropriation leases have become more liquid and widely
accepted. The Nuveen Exchange-Traded Fund Board has eliminated the restrictions
noted above, replacing them with requirements that the Funds limit investments
in non-appropriation Municipal Leases to those that meet one or more of six
criteria that indicate that the issuer will be motivated to continue to
appropriate monies to make the payments under the Municipal Lease.
The Board also eliminated the Fund's policy not to invest more than 5% of its
total assets in unsecured obligations of issuers which, together with their
predecessors, have been in operation for less than three years.
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 6-month period ended January 31, 2000. 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.
For over a century, generations of Americans have relied on Nuveen to help them
grow and keep the money they've earned. Financial advisers, investors and their
families have associated Nuveen investments with quality, expertise and
dependability since 1898. That is why financial advisers have entrusted the
assets of more than 1.3 million investors to Nuveen.
With the know-how that comes from a century of experience, Nuveen continues to
build upon its reputation for quality. Now, financial advisers and investors can
count on Nuveen Investments to help them design customized solutions that meet
the far-reaching financial goals unique to family wealth strategies - solutions
that can translate into legacies.
Invest well. Look ahead. Leave your mark.
To find out more about how Nuveen investment products and services can help you
preserve your financial security, talk with your financial adviser, or call us
at (800) 257-8787 for more information, including a prospectus where applicable.
Please read that information carefully before you invest.
Logo:
NUVEEN Investments
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
FSA-1-1-00
