NUVEEN Exchange-Traded Funds
OCTOBER 31, 1999
ANNUAL REPORT
DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN.
NPI
Premium Income
NPM
Premium Income 2
NPT
Premium Income 4
Photo of: Man fishing.
<PAGE>
Highlights
As of October 31, 1999
Contents
1 Dear Shareholder
3 Portfolio Manager Roundtable
7 NPI's Performance Overview
8 NPM's Performance Overview
9 NPT's Performance Overview
10 Shareholder Meeting Report
13 Report of Independent Auditors
14 Portfolio of Investments
40 Statement of Net Assets
41 Statement of Operations
42 Statement of Changes in Net Assets
43 Notes to Financial Statements
49 Financial Highlights
52 Build Your Wealth Automatically
53 Fund Information
Credit Quality Performance Highlights
Nuveen Premium Income Municipal Fund, Inc. (NPI)
o Taxable-equivalent yield on share price
of 10.09% *
o Has provided a stable tax-free dividend
for 15 consecutive months
Pie Chart:
AAA/U.S. Guaranteed 62%
AA 20%
A 7%
BBB/NR 11%
Nuveen Premium Income Municipal Fund 2, Inc. (NPM)
o Has provided steady or increasing dividends
since inception
o HHHH Four-star overall Morningstar
RatingTM** (rated among 193 closed-end
municipal bond funds)
Pie Chart:
AAA/U.S. Guaranteed 64%
AA 9%
A 18%
BBB/NR 9%
Nuveen Premium Income Municipal Fund 4, Inc. (NPT)
o Taxable-equivalent yield on share price of
9.48% *
o Only 6% of its portfolio is callable prior
to 2001
Pie Chart:
AAA/U.S. Guaranteed 48%
AA 17%
A 16%
BBB/NR 19%
* For investors in the 31% federal income tax bracket. See your fund's
performance overview in this report for more information.
** Morningstar proprietary ratings reflect historical risk-adjusted
performance as of October 31, 1999. 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 10-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. NPM received 4 stars for the
three- and five-year periods. 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 funds were rated among 193 closed-end municipal bond
funds for the three-year period, 193 funds for the five-year period, and 32
funds for the 10-year period.
<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 annual performance of your Nuveen
Exchange-Traded Fund. Providing a stable, attractive tax-free dividend is the
Fund's main objective, and over the past year, your Fund continued to achieve
this goal. During the period covered by this report, we have seen some shifts in
the U.S. investment climate and the fixed-income environment in which your
Nuveen Exchange-Traded Fund operates. I appreciate the opportunity to review the
current investment environment with you, as does the portfolio manager of your
Fund, who discusses fund performance later in this report.
In addition, I would like to welcome the shareholders of the former Nuveen
Washington Premium Income Municipal Fund (NPW), which was merged into the Nuveen
Premium Income Municipal Fund 4, Inc. (NPT). In August 1999, the shareholders of
both funds voted to approve this reorganization, and the merger took place on
September 9, 1999. As expected, the shareholders of the combined fund are now
benefiting from several advantages resulting from the merger: reduced management
fees per share, lower administrative expenses, and increased efficiency and
flexibility in portfolio management. Over time, the lowered expense ratio can
contribute to increased earnings for common shareholders. In addition, a larger
asset base, such as that of NPT following the merger, typically leads to higher
daily trading volume, which in turn can help increase the liquidity of the
trading market for NPT's common shares.
A CHALLENGING INVESTMENT ENVIRONMENT
Over the past 12 months, the U.S. economy continued to be characterized by
surprisingly robust growth, benign inflation, and unemployment levels that
remained among the lowest in three decades. However, concerns about the
persistent pace of the economy's 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. With
investors watching and reacting to each announcement concerning economic
statistics, volatility increased, especially in the equity markets, and the
spectre of inflation seemed to lurk behind every report. 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 three separate occasions between June and
November 1999. This brought the federal funds rate - which represents the
amount banks charge one another on overnight loans, establishing the standard
for other short-term rates - from 4.75% to 5.50%, thereby erasing the three rate
cuts enacted by the Fed a year earlier. At its November meeting, the Fed
announced that it would shift to a neutral stance following the latest interest
rate increase. With Y2K on the horizon, followed by the politics of an election
year, investors had some hope that the Fed would put any additional rate hikes
on hold. However, the Fed's indication that it would renew its close attention
to the rate of economic growth left the door open for another tightening.
MUNICIPAL BOND PERFORMANCE
Over the past fiscal 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 October 1999, the ratio between long-term municipal yields and
30-year Treasury yields stood at 100.3%, compared with the historical average of
86% for the period 1986-1999. For investors, this meant that quality long-term
municipal bonds offered yields slightly higher than those of long Treasury bonds
- - even before the tax advantages of municipals were taken into account. On an
after-tax basis, municipal bonds continued to present an exceptionally
attractive investment option relative to Treasuries.
<PAGE>
During 1999, we have seen the supply of municipal bonds drop off from the
near-record levels of 1998. This was largely due to the increase in interest
rates, which deterred municipal governments from issuing new debt and removed
much of the incentive to refund existing bonds. To date, municipal supply has
declined by approximately 20% from the levels of a year ago. This, in turn,
enhanced the attractiveness of the municipal bonds that were brought to market,
as demand - especially from individual investors - remained strong. We
anticipate that this demand will continue to strengthen as investors
increasingly look at rebalancing their portfolios. With the outlook for tighter
supply and continued demand in the months ahead, Nuveen's established market
position as the leading sponsor of exchange-traded municipal bond funds ensures
that we will have excellent access to the bond offerings that have the potential
to add value for our shareholders.
A BALANCED PORTFOLIO:
ENHANCED GROWTH WITH REDUCED RISK
If you are like most investors in the market-place today, your goals for
tax-free investing probably include capturing high after-tax total returns while
moderating risk. To demonstrate the role that municipal bonds can play in
achieving this goal, Nuveen tracked a balanced portfolio consisting of equities
and municipal bonds and compared its hypothetical investment performance -
based on appropriate market indexes and tax rates - with that of a balanced
portfolio composed of equities and taxable bonds.
Our research showed that, over the past 20 years, the pairing of equities with
municipal bonds provided both superior after-tax total returns and lower levels
of risk than the combination of equities and taxable bonds. Incorporating even a
20% allocation of municipal bonds into an all-equity portfolio cut risk
substantially, with only a small reduction in after-tax total return. Purchasing
shares of a Nuveen Exchange-Traded Municipal Bond Fund provides an easy way to
incorporate the benefits of municipal bonds into a balanced portfolio.
NUVEEN FUNDS:
AN ANSWER TO YOUR INVESTMENT NEEDS
In light of the recent shifts in the investment environment, your financial
adviser can serve as a valuable resource in helping you determine if adjustments
are needed in your current asset allocation plan and suggesting investments that
can help diversify your portfolio. By investing in other Nuveen funds, you can
bring balance to your portfolio and provide exposure to the different types of
investments that may enhance your potential for success. Your adviser can also
set up a reinvestment plan designed 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) 621-7227. Please read the prospectus carefully
before you invest or send money.
THE NEW MILLENNIUM
Since this is my last opportunity to talk with you before we enter the new
millennium, I wanted to take a moment to discuss the status of Nuveen's
preparations for that event. We believe that Nuveen is fully prepared for the
upcoming transition, from an operational as well as an investment perspective.
During 1999, Nuveen tested all critical operating systems, and we anticipate no
problems with year-end processing. As we evaluated potential investments over
the year, Nuveen carefully reviewed the progress of each issuer toward Y2K
compliance. Last summer, we requested information from the issuers of all bonds
in the funds' portfolios, with special attention to the largest and more
volatile holdings. In the following months, we continued to monitor issuers'
progress in this area, assisted by securities industry oversight organizations,
including the Municipal Securities Rulemaking Board and the Securities and
Exchange Commission, as well as rating agencies and insurance companies. Based
on our review, we believe that the majority of issuers are Y2K-compliant. The
diligence of the financial industry as a whole in dealing with this transition
should prove to have ongoing benefits for investors.
Since 1898, Nuveen has been synonymous with investments that stand the test of
time. As we enter the 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
December 15, 1999
Sidebar text: "Purchasing shares of a Nuveen Exchange-Traded Municipal Bond Fund
provides an easy way to incorporate the benefits of municipal bonds into a
balanced portfolio."
<PAGE>
Nuveen Exchange-Traded Funds
Portfolio Manager Roundtable
Portfolio managers Tom Futrell, Steve Peterson, and Ted Neild discuss the
municipal market environment, fund performance, and key investment strategies
for the Nuveen Premium Income exchange-traded funds. Tom assumed portfolio
management duties for NPI in 1988, while Steve has served as portfolio manager
of NPM since 1994. Ted has managed NPT since its inception in 1993.
WHAT FACTORS CONTRIBUTED TO THE PERFORMANCE OF THE MUNICIPAL MARKET DURING THE
PAST 12 MONTHS ENDED OCTOBER 31, 1999?
Over the past year, the U.S. economy continued to forge ahead with few signs of
slowing. Among the statistics showing surprising strength in recent months was
gross domestic product (GDP) growth, which rose 5.5% in the third quarter, well
ahead of projections. The growth in GDP was fueled by rising inventories, an
improved trade balance, and strong consumer spending, which continues to serve
as the main engine powering U.S. economic expansion. Commodity prices,
particularly oil and gold, and raw material prices also continued to rise. For
the most part, however, these increases did not translate into higher consumer
prices. Through the end of October 1999, the Consumer Price Index showed
inflation maintaining its low profile, with an annualized increase of 2.8%.
Labor markets remained among the tightest in 30 years, as the national
unemployment average dropped to 4.1% in October 1999, down from 4.5% in October
1998. Also in October, U.S. personal income surged 1.3%, its biggest jump in
more than five years.
Concerned about the potential for an overheated economy, the Federal Reserve
raised short-term interest rates twice during the fiscal year covered by this
report. A third increase, announced on November 16, occurred after the reporting
period for the Funds. According to the Fed's theory, the impact of the two rate
increases on the stock market during the period covered by this report should
have caused consumer confidence to fall and consumer spending to slow, thereby
pre-empting any reemergence of inflation. Despite the evidence of the Fed's
continued vigilance on the inflation front, the cumulative effect of 1999's
economic events has been negative for the fixed-income markets, including
municipal bonds.
HOW DID THESE EVENTS IMPACT SUPPLY AND DEMAND IN THE MUNICIPAL MARKET?
For the first 10 months of 1999, municipal supply across the nation fell just
over 20% from the levels recorded during the same period in 1998. Some of this
decline can be attributed to the rise in interest rates, which deterred
municipalities from issuing long-term debt at higher interest costs. In
addition, the refunding activity involving older debt typically declines in a
rising interest rate environment. Among the states, California and New York
remained the most active issuers in the nation. Although we expect to see
adequate municipal supply for the remainder of the year, Y2K concerns are
expected to affect the new issuance calendar to some extent. To avoid any
potential problems as 1999 turns to 2000, some municipal bond issuers have
accelerated this year's issuance, while others have decided to delay issues
until next year. Issuance should gradually return to a more normal level
following January, with issuance in 2000 expected to be on par with that of
1999.
Over recent months, institutional demand for municipal paper has been weakened
by several events outside the municipal market that have limited the cashflow
available for bond purchases. Insurance companies, which have historically been
major buyers of municipal bonds, have been hit hard by claims from natural
disasters and further hampered by price cutting on insurance premiums in the
property casualty sector, which has hurt earnings. At the same time, fund
redemptions have limited the demand from mutual fund companies, another major
source of institutional demand. In addition, an accelerated corporate bond
issuance calendar, timed to avoid any problems with Y2K, resulted in heavy
corporate bond supply, which vied with municipal bonds for institutional
investor attention.
<PAGE>
On the other hand, demand from individual investors has been a bright spot for
municipal bonds during most of 1999, as investors actively worked to rebalance
their portfolios by redirecting assets from equity investments into the
fixed-income market. In 1998, individual investors held more than 30% of
outstanding municipal debt, making them the largest owner class, and statistics
indicate that municipal bond sales to retail investors in 1999 are on track to
beat 1998's record levels.
HOW DID THE NUVEEN EXCHANGE-TRADED FUNDS PERFORM IN THIS ENVIRONMENT?
For the 12 months ended October 31, 1999, the Nuveen Premium Income funds
produced total returns on net asset value (NAV) ranging from -8.59% to -3.66%,
providing taxable-equivalent total returns1 between -6.07% and -0.96% for
shareholders in the 31% federal income tax bracket, as shown in the accompanying
table. The annual total returns for the Funds' benchmark, the Lehman Brothers
Municipal Bond Index2, and for their Lipper Peer Group3 are also provided.
Lehman Lipper Peer
Index Total Group
Total Return on NAV Return2 Average3
---------------------------------------------------------
1-Year Ended Taxable- 1-Year Ended 1-Year Ended
10/31/99 Equivalent1 10/31/99 10/31/99
---------------------------------------------------------
NPI -8.59% -6.07% -1.78% -6.48%
---------------------------------------------------------
NPM -3.66% -0.96% -1.78% -6.48%
---------------------------------------------------------
NPT -5.03% -2.49% -1.78% -6.48%
---------------------------------------------------------
The underperformance of the Funds' total returns on NAV relative to their Lehman
benchmark can be attributed largely to their durations4. Duration measures a
bond fund's price volatility, or reaction to interest rate movements (prices
fall when rates rise and vice versa). 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 longer duration enables a fund's NAV to participate
more fully in market gains. However, when interest rates rise, as they did over
the last year, a longer duration can make the fund's NAV more vulnerable to
price declines. As of October 31, 1999, the Funds' durations ranged from 9.78 to
14.86, compared with 7.52 for the Lehman index. Between November 1, 1998, and
October 31, 1999, the yield on the Bond Buyer Revenue Bond Index5 rose from
5.28% to 6.18%. This meant that funds with longer durations, like the Funds in
this report, were more likely to underperform the market, as represented by the
Lehman Brothers Municipal Bond Index.
Over the past 12 months, the durations of the Nuveen Premium Income funds have
lengthened considerably due to market action, trading activity, and bond calls
that removed shorter bonds from each fund. Proceeds from the sold or called
bonds were reinvested in issues with longer durations, which provided attractive
yields and better call protection. Lengthening the Funds' durations should help
position the Funds to regain net asset value as the bond market recovers.
In 1999, rising interest rates, inflation worries, and the uncertainty
surrounding the timing of the Federal Reserve's moves 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 tax-swap
season, as investors attempt to offset profits in the equity markets by selling
fixed-income investments at a loss. All of these factors have negatively
impacted the market demand for exchange-traded funds such as the Nuveen Premium
Income funds. This resulted in declines in share price across the board. Since
the prevailing interest rate environment in October 1999 was higher than that of
a year earlier, the Funds' NAVs also declined, as bond prices fell while
interest rates rose. As a result of these factors, NPM saw its premium (share
price above NAV) move to a discount (share price below NAV), and the discounts
on NPI and NPT widened over the past 12 months.
Premium/ Total Return
Market Yield Discount6 on Share Price
-------------------------------------------------------------------------
Taxable- 1-Year Ended Taxable-
10/31/99 Equivalent1 10/31/98 10/31/99 10/31/99 Equivalent1
-------------------------------------------------------------------------
NPI 6.96% 10.09% -3.02% -8.99% -14.03% -11.44%
-------------------------------------------------------------------------
NPM 6.54% 9.48% 4.49% -0.75% -8.59% -6.02%
-------------------------------------------------------------------------
NPT 6.54% 9.48% -1.58% -5.56% -8.77% -6.19%
-------------------------------------------------------------------------
HOW WERE THE FUNDS' DIVIDENDS AFFECTED?
During the past 12 months, good call protection helped support the dividends of
the Nuveen Premium Income Funds and shield their income from erosion. In
addition, strategic dividend management, including the prudent use of leverage,
enabled us to increase the dividends of NPT in February 1999 and NPM in May
1999. As of October 31, 1999, NPM and NPT had provided share2unholders with
steady or increasing dividends for 85 and 54 consecutive months, respectively,
and NPI had produced 15 consecutive months of stable dividends. All of these
funds continued to provide competitive market yields.
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 cur-rent market yield and a
federal income tax rate of 31%, while the taxable-equivalent total return
is based on the annual-ized total return and the 31% federal income tax
rate.
2 The Premium Income funds are compared with the Lehman Brothers Municipal
Bond Index, an unleveraged index compris-ing a broad range of investment-
grade municipal bonds. Results for the index do not reflect any initial or
ongoing expenses.
3 The returns for the funds are compared with the average annualized return
of the 46 funds in the Lipper General Leveraged Closed-End Municipal Debt
Funds category. Fund and Lipper returns assume reinvest-ment of dividends.
4 Fund duration, also known as leverage-adjusted duration, takes into account
the leverag-ing process for each fund and therefore differs from the
dura-tion 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 Revenue Bond Index is an unmanaged index of long-term
municipal revenue bonds.
6 A fund's premium or discount represents the percentage dif-ference between
the fund's share price and its net asset value (NAV).
<PAGE>
All of the Nuveen Premium Income funds issue Muni-Preferred shares that pay
short-term interest rates to investors seeking short-term liquidity. The
proceeds from the preferred shares are used to buy additional long-term bonds
for the Funds' portfolios, which can generate additional income for the
portfolio but which may increase volatility, including lengthening duration.
When short-term interest rates remain below long-term rates, common shareholders
can potentially earn extra income from the difference between the rate earned on
the Fund's long-term portfolio and the short-term rate paid to preferred
shareholders. While leveraged funds carry higher risk than non-leveraged funds,
they are compensated for this additional risk in the form of higher yields.
During the past year, the leverage ratios of all three funds fell below the
Nuveen guideline of 35%. This led to the issuance of new MuniPreferred shares
for NPI and NPM in May and for NPT in June. Nuveen relever-aged the Funds both
to restore the original leverage ratio of 35% and to provide the potential for
increased incremental tax-free income for common shareholders.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE FUNDS DURING THE PAST 12 MONTHS?
Over the past year, these Funds were managed with the goals of maintaining high
levels of income in high-quality and diversified portfolios, supporting and
strengthening the Funds' long-term dividend capabilities, and enhancing total
return potential by discovering and exploiting undervalued sectors and
securities. In addition, we focused on improving call protection and enhancing
the Funds' tax efficiency by offsetting potential capital gains with capital
losses.
Enhanced tax efficiency has been an increasing focus for us over the past six
months, as the rising interest rate environment offered opportunities to benefit
the Funds through active trading. The increased level of recent trading activity
is reflected in the transaction volume figure for the Nuveen Exchange-Traded
Funds for the third quarter of 1999, which was 10 times that of the same period
in 1998. The strategy we are employing involves selling selected bonds that are
trading at a loss, recognizing the capital losses, and then rolling the proceeds
into bonds with similar characteristics, but offering current market 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 this year that were now producing a lower income stream
than that recently available in the market. This trading not only gave us
capital losses with which to offset current and future capital gains, 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.
Although new issue supply in the municipal market has declined from last year's
levels, we were able to identify attractive bonds in several sectors that added
to the Funds' diversification. Among these were utilities and transportation,
especially the airline industry. We also continue to watch for opportunities in
the more traditional issuer sectors, including water and sewer bonds and general
obligation debt. In NPT, we increased our exposure to multifamily housing from
8% in October 1998 to 14% in October 1999. Multifamily housing is a complex
sector that is often overlooked by the rest of the market. The resources of
Nuveen research are critical to understanding the tax-credit and Section 8
offerings in this sector, enabling us to make informed purchase decisions. In
addition to enhancing diversification, these bonds provide attractive income,
with the potential of being an excellent example of the types of purchases we
made to support the Funds' dividends.
During the past year, Nuveen has kept a close watch on the healthcare sector, a
dynamic and volatile area of the market that has been beset with concerns about
deregulation and profitability. This has created credit and rating pressures
for certain healthcare organizations and caused some investors to avoid the
sector entirely. Since one of Nuveen's strategies is to find value in sectors
and bonds that have been overlooked by the rest of the market, the healthcare
sector has been an area where Nuveen research and our prudent investment
approach enable us to find and exploit opportunities that can add value for our
shareholders. As credit spreads (or the difference between higher credit quality
securities and those of lower credit quality) widened in recent months,
rewarding investors with higher yields for assuming incremental risk, we
selectively purchased attractive issues with good future total return prospects.
In NPI, which was underweighted in this sector, we purchased
<PAGE>
some A rated healthcare issues that added incremental yield, while NPM added
some BBB rated hospital bonds. The prospects of this sector should be further
enhanced when Washington acts on proposals affecting federal reimbursements for
Medicare, which should improve the creditworthiness of some healthcare
organizations.
All three funds offer excellent credit quality, with the portion of the Funds'
assets invested in bonds rated AAA/U.S. guaranteed and AA ranging from 65% to
82% at the end of October 1999. The Funds also had substantial allocations (9%
to 19%) of BBB and non-rated bonds. Over the past year, NPT increased its
exposure to this sector from 11% to 19%, primarily in multifamily housing bonds.
These lower-rated bonds generally provided enhanced levels of yield, especially
as credit spreads widened. Nuveen's research expertise, along with our presence
in the municipal market, means that shareholders can be assured that the
creditworthiness of all issuers is subjected to Nuveen's stringent review
process before bonds are purchased for the Funds' portfolios.
In the area of bond calls, all three Funds currently provide excellent levels of
call protection, with less than 11% of NPI and NPT and approximately 7% of NPM
subject to calls through the end of 2001. This should provide additional
protection and stability for the Funds' dividends over this period. To reduce
the impact of any calls, we continuously work on strategies designed to enhance
call protection. 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 can also benefit the Funds by extending call protection.
Given the current level of bond yields, we have been evaluating suitable
replacements for older bonds, focusing on bonds that we believe are undervalued
and have the potential to support the Funds' dividends and enhance portfolio
structure. This should enable us to continue providing a competitive level of
dividends for our shareholders.
WHAT IS NUVEEN'S OUTLOOK FOR THE FUNDS?
In the months ahead, we plan to take advantage of the higher yields currently
available in the municipal market to enhance our portfolio holdings and the
dividend capabilities of the Funds. We will continue to watch for attractive
opportunities in sectors that are under pressure, as the current market is
presenting the perfect environment in which to execute this strategy. We will
also continue to monitor the Funds' durations, which we will move to more
market-neutral positions as the market allows if we can do so without impacting
the portfolio's total return. While credits spreads remain wider, we will
continue to monitor the BBB and non-rated sector, watching for additional
opportunities to take advantage of higher yields, especially in NPM.
The ability to implement strategies with the potential to benefit the Funds
demonstrates the value that can be added by an active bond manager such as
Nuveen. As an experienced investment manager knowledgeable about the unique
aspects of the municipal market, we are in the marketplace every day, monitoring
market dynamics, looking for opportunities, and trying to capitalize on them to
the benefit of shareholders.
<PAGE>
Nuveen Premium Income Municipal Fund, Inc.
Performance Overview
As of October 31, 1999
NPI
Portfolio Statistics
Inception Date 7/88
- --------------------------------------------------
Share Price $12 1/4
- --------------------------------------------------
Net Asset Value $13.46
- --------------------------------------------------
Market Yield 6.96%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Tax Rate)1 10.09%
- --------------------------------------------------
Fund Net Assets ($000) $1,383,491
- --------------------------------------------------
Average Effective Maturity (Years) 21.60
- --------------------------------------------------
Leverage-Adjusted Duration 14.86
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -14.03% -8.59%
- --------------------------------------------------
5-Year 5.29% 5.67%
- --------------------------------------------------
10-Year 5.38% 6.45%
- --------------------------------------------------
Taxable-Equivalent Total Return2
On Share Price On NAV
- --------------------------------------------------
1-Year -11.44% -6.07%
- --------------------------------------------------
5-Year 8.31% 8.56%
- --------------------------------------------------
10-Year 8.63% 9.68%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
Utilities 21%
- --------------------------------------------------
Tax Obligation/General 14%
- --------------------------------------------------
Tax Obligation/Limited 13%
- --------------------------------------------------
Housing/Single Family 12%
- --------------------------------------------------
Transportation 10%
- --------------------------------------------------
Bar Chart:
1998-1999 Monthly Tax-Free Dividends Per Share3
11/98 0.071
12/98 0.071
1/99 0.071
2/99 0.071
3/99 0.071
4/99 0.071
5/99 0.071
6/99 0.071
7/99 0.071
8/99 0.071
9/99 0.071
10/99 0.071
Line Chart:
Share Price Performance
11/6/98 15.13
15.25
15.25
15.31
15.19
15.13
15.31
15.25
15.19
15.25
15.25
15.38
15.25
15.31
15.13
15.06
15.06
14.94
15.19
15.1875
15.13
15.13
15.19
15.13
14.63
14.44
14.63
14.38
14.38
14.44
14.31
14.25
14.31
14.19
14.13
14.13
14.06
13.44
13.31
13.44
13.19
12.94
12.75
12.69
12.75
12.38
12.13
10/31/99 12.25
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 tax rate is based on the current market yield and a federal income
tax rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and
a federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
3 The Fund also paid shareholders capital gains distributions in December
1998 of $0.0678 per share.
<PAGE>
Nuveen Premium Income Municipal Fund 2, Inc.
Performance Overview
As of October 31, 1999
NPM
Portfolio Statistics
Inception Date 7/92
- --------------------------------------------------
Share Price $14 1/2
- --------------------------------------------------
Net Asset Value $14.61
- --------------------------------------------------
Market Yield 6.54%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Tax Rate)1 9.48%
- --------------------------------------------------
Fund Net Assets ($000) $947,481
- --------------------------------------------------
Average Effective Maturity (Years) 15.17
- --------------------------------------------------
Leverage-Adjusted Duration 9.78
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -8.59% -3.66%
- --------------------------------------------------
5-Year 12.01% 8.94%
- --------------------------------------------------
Since Inception 6.11% 6.94%
- --------------------------------------------------
Taxable-Equivalent Total Return2
On Share Price On NAV
- --------------------------------------------------
1-Year -6.02% -0.96%
- --------------------------------------------------
5-Year 15.07% 11.81%
- --------------------------------------------------
Since Inception 9.05% 9.74%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
U.S. Guaranteed 33%
- --------------------------------------------------
Tax Obligation/General 18%
- --------------------------------------------------
Housing/Single Family 10%
- --------------------------------------------------
Utilities 10%
- --------------------------------------------------
Housing/Multifamily 7%
- --------------------------------------------------
Bar Chart:
1998-1999 Monthly Tax-Free Dividends Per Share3
11/98 0.0775
12/98 0.0775
1/99 0.0775
2/99 0.0775
3/99 0.0775
4/99 0.0775
5/99 0.079
6/99 0.079
7/99 0.079
8/99 0.079
9/99 0.079
10/99 0.079
Line Chart:
Share Price Performance
11/6/98 16.81
16.81
16.75
17
16.81
16.56
16.63
16.75
16.63
16.5
16.31
16.63
16.69
16.69
16.56
16.63
16.44
16.44
16.31
16.3125
16
16.13
16
16
15.88
15.69
16.06
16.06
15.75
15.75
15.56
16
16.06
15.81
15.75
15.63
15.5
15.06
14.94
15.13
15.19
14.5
14.5
14.81
14.75
13.88
13.94
10/31/99 14.5
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 tax rate is based on the current market yield and a federal income
tax rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and
a federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
3 The Fund also paid shareholders capital gains distributions in December
1998 of $0.0448 per share.
<PAGE>
Nuveen Premium Income Municipal Fund 4, Inc.
Performance Overview
As of October 31, 1999
NPT
Portfolio Statistics
Inception Date 2/93
- --------------------------------------------------
Share Price $12 3/4
- --------------------------------------------------
Net Asset Value $13.50
- --------------------------------------------------
Market Yield 6.54%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Tax Rate)1 9.48%
- --------------------------------------------------
Fund Net Assets ($000) $921,941
- --------------------------------------------------
Average Effective Maturity (Years) 17.87
- --------------------------------------------------
Leverage-Adjusted Duration 11.41
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -8.77% -5.03%
- --------------------------------------------------
5-Year 10.12% 8.37%
- --------------------------------------------------
Since Inception 3.78% 5.29%
- --------------------------------------------------
Taxable-Equivalent Total Return2
On Share Price On NAV
- --------------------------------------------------
1-Year -6.19% -2.49%
- --------------------------------------------------
5-Year 13.11% 11.10%
- --------------------------------------------------
Since Inception 6.61% 7.95%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
Utilities 18%
- --------------------------------------------------
Housing/Multifamily 14%
- --------------------------------------------------
Healthcare 13%
- --------------------------------------------------
U.S. Guaranteed 13%
- --------------------------------------------------
Tax Obligation/General 11%
- --------------------------------------------------
Bar Chart::
1998-1999 Monthly Tax-Free Dividends Per Share
11/98 0.068
12/98 0.068
1/99 0.068
2/99 0.0695
3/99 0.0695
4/99 0.0695
5/99 0.0695
6/99 0.0695
7/99 0.0695
8/99 0.0695
9/99 0.0695
10/99 0.0695
Line Chart:
Share Price Performance
11/6/98 14.94
15.06
15.06
14.94
14.88
14.94
14.69
14.69
14.63
14.63
14.63
14.94
14.63
14.88
14.81
14.88
14.81
14.56
14.69
14.8125
14.5
14.44
14.44
14.31
14.06
14
13.94
13.88
13.88
14.06
14.06
14.06
14.31
14.25
14.06
14.13
13.75
13.31
13.56
13.31
13
12.88
12.56
12.44
12.25
12.25
10/31/99 12.75
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 tax rate is based on the current market yield and a federal income
tax rate of 31%.
2 Taxable-equivalent total return is based on the annualized total return and
a federal income tax rate of 31%. It represents the return on a taxable
investment necessary to equal the return of the Nuveen fund on an after-tax
basis.
<PAGE>
<TABLE>
Shareholder Meeting Report
The Shareholder Meeting was held July 28, 1999.
<CAPTION>
NPI
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred Preferred Preferred Preferred Preferred
Common Shares Shares Shares Shares Shares Shares
Shares Series-M Series-M2 Series-T Series-W Series-TH Series-F
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert P. Bremner
For 53,722,258 3,372 1,993 3,210 2,755 3,278 3,525
Withhold 802,369 4 7 24 5 1 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 54,524,627 3,376 2,000 3,234 2,760 3,279 3,529
====================================================================================================================================
Lawrence H. Brown
For 53,749,593 3,376 1,993 3,230 2,755 3,278 3,529
Withhold 775,034 -- 7 4 5 1 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 54,524,627 3,376 2,000 3,234 2,760 3,279 3,529
====================================================================================================================================
Anne E. Impellizzeri
For 53,747,800 3,376 1,993 3,230 2,755 3,278 3,529
Withhold 776,827 -- 7 4 5 1 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 54,524,627 3,376 2,000 3,234 2,760 3,279 3,529
====================================================================================================================================
Peter R. Sawers
For 53,787,053 3,376 1,993 3,230 2,755 3,278 3,529
Withhold 737,574 -- 7 4 5 1 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 54,524,627 3,376 2,000 3,234 2,760 3,279 3,529
====================================================================================================================================
William J. Schneider
For -- 3,372 1,993 3,210 2,755 3,278 3,525
Withhold -- 4 7 24 5 1 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 3,376 2,000 3,234 2,760 3,279 3,529
====================================================================================================================================
Timothy R. Schwertfeger
For -- 3,372 1,993 3,210 2,755 3,278 3,525
Withhold -- 4 7 24 5 1 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 3,376 2,000 3,234 2,760 3,279 3,529
====================================================================================================================================
Judith M. Stockdale
For 53,793,910 3,376 1,993 3,230 2,755 3,278 3,529
Withhold 730,717 -- 7 4 5 1 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 54,524,627 3,376 2,000 3,234 2,760 3,279 3,529
====================================================================================================================================
Ratification of auditors was reached as follows:
For 53,682,537 3,374 1,993 3,226 2,744 3,266 3,525
Against 287,011 -- -- 4 -- 6 --
Abstain 555,079 2 7 4 16 7 4
- ------------------------------------------------------------------------------------------------------------------------------------
Total 54,524,627 3,376 2,000 3,234 2,760 3,279 3,529
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
Shareholder Meeting Report
<CAPTION>
NPM
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred Preferred Preferred Preferred Preferred
Common Shares Shares Shares Shares Shares Shares
Shares Series-M Series-T Series-W Series-TH Series-F Series-F2
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Robert P. Bremner
For 37,691,313 1,897 2,735 1,402 2,514 1,840 1,492
Withhold 379,991 9 28 2 122 2 52
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,071,304 1,906 2,763 1,404 2,636 1,842 1,544
====================================================================================================================================
Lawrence H. Brown
For 37,713,173 1,897 2,735 1,402 2,514 1,840 1,492
Withhold 358,131 9 28 2 122 2 52
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,071,304 1,906 2,763 1,404 2,636 1,842 1,544
====================================================================================================================================
Anne E. Impellizzeri
For 37,735,693 1,897 2,735 1,402 2,514 1,840 1,492
Withhold 335,611 9 28 2 122 2 52
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,071,304 1,906 2,763 1,404 2,636 1,842 1,544
====================================================================================================================================
Peter R. Sawers
For 37,746,251 1,897 2,735 1,402 2,514 1,840 1,492
Withhold 325,053 9 28 2 122 2 52
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,071,304 1,906 2,763 1,404 2,636 1,842 1,544
====================================================================================================================================
William J. Schneider
For -- 1,897 2,735 1,402 2,514 1,840 1,492
Withhold -- 9 28 2 122 2 52
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,906 2,763 1,404 2,636 1,842 1,544
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,897 2,735 1,402 2,514 1,840 1,492
Withhold -- 9 28 2 122 2 52
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,906 2,763 1,404 2,636 1,842 1,544
====================================================================================================================================
Judith M. Stockdale
For 37,750,468 1,897 2,735 1,402 2,514 1,840 1,492
Withhold 320,836 9 28 2 122 2 52
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,071,304 1,906 2,763 1,404 2,636 1,842 1,544
====================================================================================================================================
Ratification of auditors was reached as follows:
For 37,666,270 1,904 2,761 1,404 2,510 1,824 1,492
Against 132,224 -- -- -- 2 2 --
Abstain 272,810 2 2 -- 124 16 52
- ------------------------------------------------------------------------------------------------------------------------------------
Total 38,071,304 1,906 2,763 1,404 2,636 1,842 1,544
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
Shareholder Meeting Report
<CAPTION>
NPT NPW
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred Preferred Preferred Preferred Preferred Preferred Preferred
Common Shares Shares Shares Shares Shares Shares Shares Common Shares
Shares Series-M Series-T Series-T2 Series-W Series-TH Series-F Series-F2 Shares Series-TH
- ------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner
<S> <C> <C> <C> <C> <C> <C> <C> <C>
For 36,533,289 1,898 1,463 1,025 1,645 1,971 1,584 1,252 -- --
Withhold 599,831 22 13 10 20 9 8 6 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 37,133,120 1,920 1,476 1,035 1,665 1,980 1,592 1,258 -- --
====================================================================================================================================
Lawrence H. Brown
For 36,538,990 1,898 1,463 1,025 1,645 1,973 1,584 1,252 -- --
Withhold 594,130 22 13 10 20 7 8 6 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 37,133,120 1,920 1,476 1,035 1,665 1,980 1,592 1,258 -- --
====================================================================================================================================
Anne E. Impellizzeri
For 36,529,615 1,898 1,464 1,025 1,645 1,974 1,584 1,252 -- --
Withhold 603,505 22 12 10 20 6 8 6 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 37,133,120 1,920 1,476 1,035 1,665 1,980 1,592 1,258 -- --
====================================================================================================================================
Peter R. Sawers
For 36,550,245 1,898 1,472 1,025 1,645 1,974 1,584 1,252 -- --
Withhold 582,875 22 4 10 20 6 8 6 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 37,133,120 1,920 1,476 1,035 1,665 1,980 1,592 1,258 -- --
====================================================================================================================================
William J. Schneider
For -- 1,898 1,472 1,025 1,645 1,974 1,584 1,252 -- --
Withhold -- 22 4 10 20 6 8 6 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,920 1,476 1,035 1,665 1,980 1,592 1,258 -- --
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,898 1,472 1,025 1,645 1,974 1,584 1,252 -- --
Withhold -- 22 4 10 20 6 8 6 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,920 1,476 1,035 1,665 1,980 1,592 1,258 -- --
====================================================================================================================================
Judith M. Stockdale
For 36,571,291 1,898 1,472 1,025 1,645 1,974 1,584 1,252 -- --
Withhold 561,829 22 4 10 20 6 8 6 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 37,133,120 1,920 1,476 1,035 1,665 1,980 1,592 1,258 -- --
====================================================================================================================================
Approval of an Agreement and Plan of Reorganization of Nuveen Washington
Premium Income Municipal Fund into Nuveen Premium Income Municipal Fund 4, Inc.
For -- 1,798 1,434 907 1,562 1,914 1,436 1,234 1,244,498 670
Against -- 64 19 -- -- 14 33 16 65,644 --
Abstain -- 58 23 128 103 52 123 8 65,188 9
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,920 1,476 1,035 1,665 1,980 1,592 1,258 1,375,330 679
====================================================================================================================================
Approval of an Amendment to the Fund's Statement Establishing and Fixing the
Rights and Preferences of Municipal Auction Rate Cumulative Preferred Stock:
For 20,744,878 1,798 1,420 897 1,557 1,906 1,425 1,234 -- --
Against 1,036,483 64 19 -- -- 14 44 16 -- --
Abstain 1,079,772 58 37 138 108 60 123 8 -- --
Broker
Non-Vote 14,271,987 -- -- -- -- -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 37,133,120 1,920 1,476 1,035 1,665 1,980 1,592 1,258 -- --
====================================================================================================================================
Ratification of auditors was reached as follows:
For 36,453,627 1,877 1,465 984 1,625 1,966 1,583 1,251 -- --
Against 278,649 23 -- -- -- 5 2 4 -- --
Abstain 400,844 20 11 51 40 9 7 3 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 37,133,120 1,920 1,476 1,035 1,665 1,980 1,592 1,258 -- --
====================================================================================================================================
</TABLE>
<PAGE>
Report of Independent Auditors
The Boards of Directors and Shareholders
Nuveen Premium Income Municipal Fund, Inc.
Nuveen Premium Income Municipal Fund 2, Inc.
Nuveen Premium Income Municipal Fund 4, Inc.
We have audited the accompanying statements of net assets, including the
portfolios of investments, of Nuveen Premium Income Municipal Fund, Inc., Nuveen
Premium Income Municipal Fund 2, Inc. and Nuveen Premium Income Municipal Fund
4, Inc. as of October 31, 1999, and the related statements of operations,
changes in net assets and the financial highlights for the years indicated
therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of
October 31, 1999, by correspondence with the custodian and brokers. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Premium Income Municipal Fund, Inc., Nuveen Premium Income Municipal Fund
2, Inc. and Nuveen Premium Income Municipal Fund 4, Inc. at October 31, 1999,
and the results of their operations, changes in their net assets and financial
highlights for the years indicated therein in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
December 20, 1999
<PAGE>
<TABLE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND, INC. (NPI)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona - 1.0%
<S> <C> <C> <C> <C>
$ 10,730,000 The Industrial Development Authority of the County of Pima, 1/02 at 103 AAA $ 11,543,978
Industrial Development Lease Obligation Refunding Revenue Bonds,
1988 Series A (Irvington Project), 7.250%, 7/15/10
2,020,000 The Industrial Development Authority of the County of Pima, Single 3/00 at 101 AAA 2,052,461
Family Mortgage Revenue Bonds (GNMA Mortgage-Backed
Securities Program), Series 1988, 8.125%, 9/01/20
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Arkansas - 0.7%
4,250,000 Arkansas Development Finance Authority, Drivers License Revenue 6/07 at 100 AAA 4,014,083
Bonds (Arkansas State Police - Headquarters and Wireless Data
Equipment), Series 1997, 5.400%, 6/01/18
500,000 City of Fort Smith, Arkansas, Water and Sewer Revenue Bonds, 10/09 at 100 AAA 483,450
Series 1999, 5.650%, 10/01/19
6,245,000 Board of Trustees of the University of Arkansas, Athletic 9/09 at 100 Aaa 5,542,875
Facilities Revenue Bonds (Razorback Stadium Project),
Series 1999, 5.050%, 9/15/20
- ------------------------------------------------------------------------------------------------------------------------------------
California - 12.7%
13,000,000 State of California, Various Purpose General Obligation Refunding 10/03 at 102 AA- 11,757,070
Bonds, 5.150%, 10/01/19
10,250,000 State of California, Veterans General Obligation Bonds, Series BH, 12/08 at 101 AAA 9,989,240
5.250%, 12/01/12 (Alternative Minimum Tax)
15,975,000 State of California Department of Transportation, East Bay State 3/01 at 102 A1*** 16,809,534
Building Authority, Certificates of Participation, Series 1991A,
6.500%, 3/01/16 (Pre-refunded to 3/01/01)
23,725,000 State Public Works Board of the State of California, Lease 6/03 at 102 Aa3 22,148,948
Revenue Refunding Bonds (The Regents of the University of
California), 1993 Series A (Various University of California Projects),
5.500%, 6/01/21
11,395,000 State Public Works Board of the State of California, Lease Revenue No Opt. Call A+ 11,189,890
Bonds (Department of Corrections), 1993 Series E (California
State Prison-Madera County (II)), 5.500%, 6/01/15
15,420,000 Los Angeles Convention and Exhibition Center Authority, Lease 8/03 at 102 AAA 14,548,153
Revenue Bonds, 1993 Refunding Series A, The City of Los Angeles
(California), 5.375%, 8/15/18
5,000,000 Department of Water and Power of the City of Los Angeles, 11/03 at 102 AAA 4,268,900
California, Electric Plant Refunding Revenue Bonds, Second
Issue of 1993, 4.750%, 11/15/19
12,250,000 Los Angeles County Transportation Commission (California), 7/01 at 100 AA- 11,914,350
Sales Tax Revenue Refunding Bonds, Series 1991-B,
5.750%, 7/01/18
1,285,000 City of Martinez (California), Home Mortgage Revenue Bonds, No Opt. Call AAA 1,838,848
1983 Issue A, 10.750%, 2/01/16
4,125,000 Redevelopment Agency of the City of Moorpark, Moorpark 10/03 at 102 N/R*** 4,452,030
Redevelopment Project, 1993 Tax Allocation Bonds,
6.125%, 10/01/18 (Pre-refunded to 10/01/03)
20,000,000 City of Pomona, California, Single Family Mortgage Revenue No Opt. Call AAA 23,663,800
Refunding Bonds (GNMA and FNMA Mortgage-Backed Securities),
Series 1990A, 7.600%, 5/01/23
5,000,000 Sacramento, California, Municipal Utility District, Electric 11/03 at 102 AAA 4,596,900
Revenue Refunding Bonds, 1993 Series D, 5.250%, 11/15/20
San Bernardino Joint Powers Financing Authority, Tax Allocation
Refunding Bonds, Series 1995A:
6,675,000 5.750%, 10/01/15 10/05 at 102 AAA 6,706,239
11,500,000 5.750%, 10/01/25 10/05 at 102 AAA 11,189,960
10,000,000 San Joaquin Hills Transportation Corridor Agency, Toll Road 1/07 at 102 AAA 8,876,300
Refunding Revenue Bonds, Series 1997A, 5.250%, 1/15/30
15,540,000 Regents of the University of California, Refunding Revenue Bonds 9/03 at 102 AAA 13,133,165
(Multiple Purpose Projects), Series B, 4.750%, 9/01/21
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado - 4.1%
$ 2,795,000 Colorado Housing and Finance Authority, Single Family Program, 5/07 at 105 Aa2 $ 2,972,846
1997 Series B-2 Senior Bonds, 7.000%, 5/01/26
(Alternative Minimum Tax)
4,500,000 Colorado Housing and Finance Authority, Single Family Program, 11/07 at 105 Aa2 4,783,410
1997 Series C-2 Senior Bonds, 6.875%, 11/01/28
(Alternative Minimum Tax)
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991D:
9,450,000 7.750%, 11/15/13 (Alternative Minimum Tax) No Opt. Call BBB+ 11,091,276
1,725,000 7.750%, 11/15/21 (Alternative Minimum Tax) 11/01 at 102 Aaa 1,873,816
(Pre-refunded to 11/15/01)
6,550,000 7.750%, 11/15/21 (Alternative Minimum Tax) 11/01 at 102 BBB+ 6,976,012
City and County of Denver, Colorado, Airport System Revenue
Bonds, Series 1992B:
715,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 Aaa 784,012
(Pre-refunded to 11/15/02)
2,785,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 BBB+ 2,965,412
City and County of Denver, Colorado, Airport System Revenue
Bonds, Series 1992C:
1,830,000 6.750%, 11/15/22 (Alternative Minimum Tax) 11/02 at 102 Aaa 1,981,927
(Pre-refunded to 11/15/02)
6,870,000 6.750%, 11/15/22 (Alternative Minimum Tax) 11/02 at 102 BBB+ 6,933,754
15,505,000 City and County of Denver, Colorado, Special Facilities Airport 10/02 at 102 Baa3 15,510,272
Revenue Bonds (United Air Lines Project), Series 1992A,
6.875%, 10/01/32 (Alternative Minimum Tax)
540,265 El Paso County, Colorado, Single Family Mortgage Revenue No Opt. Call Aaa 571,865
Tax-Exempt Refunding Bonds, Series 1992A, Class A-2,
8.750%, 6/01/11
- ------------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 2.0%
7,505,000 District of Columbia (Washington, D.C.), General Obligation Bonds, No Opt. Call AAA 7,535,395
Series 1998B, 6.000%, 6/01/20
14,800,000 District of Columbia Housing Finance Agency, Collateralized Single 12/04 at 103 AAA 15,046,420
Family Mortgage Revenue Bonds, Series 1988E-4,
6.375%, 6/01/26 (Alternative Minimum Tax)
5,850,000 District of Columbia, Revenue Bonds (Association of American 8/07 at 102 AAA 5,242,712
Medical Colleges Issue), Series 1997A, 5.375%, 2/15/27
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 0.7%
9,290,000 State of Florida, Full Faith and Credit Department of 7/05 at 101 AAA 9,842,941
Transportation, Right-of-Way Acquisition and Bridge Construction
Bonds, Series 1995, 5.800%, 7/01/21
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia - 2.4%
9,950,000 City of Atlanta (Georgia), Water and Wastewater Revenue Bonds, No Opt. Call AAA 9,542,946
Series 1999A, 5.500%, 11/01/22
23,420,000 Development Authority of Monroe County (Georgia), Pollution 4/00 at 102 A+ 23,910,415
Control Revenue Bonds (Georgia Power Company - Plant Scherer
Project), Second Series 1994, 6.750%, 10/01/24
- ------------------------------------------------------------------------------------------------------------------------------------
Illinois - 7.7%
19,220,000 Chicago School Reform Board of Trustees of the Board of Education 12/07 at 102 AAA 16,884,578
of the City of Chicago, Illinois, Unlimited Tax General Obligation
Bonds (Dedicated Tax Revenues), Series 1997A, 5.250%, 12/01/27
10,000,000 City of Chicago, Chicago O'Hare International Airport, Special 11/00 at 102 Baa2 10,414,600
Facility Revenue Bonds (American Airlines, Inc. Project),
Series 1990A, 7.875%, 11/01/25 (Alternative Minimum Tax)
6,280,000 City of Chicago, Chicago O'Hare International Airport, General 1/04 at 102 AAA 5,467,808
Airport Second Lien Revenue Refunding Bonds, 1993 Series C,
5.000%, 1/01/18
4,645,000 City of Chicago, Collateralized Single Family Mortgage Revenue 3/06 at 105 Aaa 4,936,474
Bonds, Series 1996-A, 7.000%, 9/01/27 (Alternative Minimum Tax)
10,000,000 The County of Cook, Illinois, General Obligation Bonds, 11/03 at 100 AAA 8,449,600
Series 1993A, 5.000%, 11/15/23
8,740,000 Illinois Development Finance Authority, Pollution Control Refunding 2/04 at 102 AAA 8,311,041
Revenue Bonds, 1994 Series A (Illinois Power Company Project),
5.700%, 2/01/24
7,650,000 Illinois Educational Facilities Authority, Revenue Bonds, 7/08 at 101 Aa1 6,482,151
The University of Chicago, Series 1998A, 5.125%, 7/01/38
8,500,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds, 7/03 at 102 Aa1 8,272,200
The University of Chicago, Series 1993B, 5.600%, 7/01/24
5,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1992 10/02 at 102 AAA 5,009,950
(Highland Park Hospital Project), 6.200%, 10/01/22
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND, INC. (NPI) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Illinois (continued)
$ 2,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1997A 10/07 at 102 AAA $ 1,886,520
(Highland Park Hospital Project), 5.750%, 10/01/26
17,545,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1997 8/07 at 101 AAA 15,207,480
(Sherman Health Systems), 5.250%, 8/01/27
9,500,000 Metropolitan Pier and Exposition Authority (Illinois), McCormick 12/09 at 101 AAA 8,765,555
Place Expansion Project Bonds, Series 1999A, 5.500%, 12/15/24
4,925,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 6,008,155
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1992A, 9.000%, 6/01/06
785,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 957,645
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1992B, 9.000%, 6/01/06
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana - 1.3%
4,300,000 Indiana State Office Building Commission, Correctional Facilities 7/05 at 102 AAA 4,015,512
Program Revenue Bonds, 1995A, 5.500%, 7/01/20
8,000,000 Metropolitan School District of Steuben County Middle School 7/05 at 102 AAA 8,754,720
Building Corporation, First Mortgage Bonds, Series 1995,
Steuben County, Indiana, 6.375%, 7/15/16
(Pre-refunded to 7/15/05)
5,300,000 Whitley County Middle School Building Corporation, First Mortgage 1/04 at 102 AAA 5,702,535
Bonds, Series 1994, Columbia City, Indiana, 6.250%, 7/15/15
(Pre-refunded to 1/15/04)
- ------------------------------------------------------------------------------------------------------------------------------------
Iowa - 1.5%
3,000,000 Iowa Finance Authority, Private College Refunding Revenue Bonds 12/05 at 102 AAA 2,832,630
(Drake University Project), Series 1996, 5.400%, 12/01/16
5,435,000 Iowa Finance Authority, Industrial Revenue Refunding Bonds, 7/14 at 100 AAA 6,884,623
Series A 1989 (Urbandale Hotel Corporation Project), Remarketed,
8.500%, 8/01/16 (Alternative Minimum Tax)
(Pre-refunded to 7/15/14)
12,085,000 Iowa Finance Authority, Hospital Facilities Revenue Bonds, 7/08 at 102 AAA 10,349,473
Series 1998 A (Iowa Health System), 5.125%, 1/01/28
- ------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 0.2%
3,070,000 Kentucky Development Finance Authority (St. Elizabeth Medical No Opt. Call AAA 3,147,333
Center), 9.000%, 11/01/00
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 3.2%
5,700,000 Louisiana Public Facilities Authority, Hospital Revenue Bonds 7/08 at 101 AAA 4,760,013
(Franciscan Missionaries of Our Lady Health System Project),
Series 1998C, 5.000%, 7/01/28
1,150,000 Louisiana Public Facilities Authority, Hospital Revenue Refunding 10/08 at 102 AAA 980,398
Bonds (Louisiana Health System Corporation Project), Series 1998,
5.000%, 10/01/22
11,860,000 Louisiana Stadium and Exposition District, Hotel Occupancy 7/05 at 102 AAA 12,973,773
Tax Bonds, Series 1995-B, 6.375%, 7/01/25
Louisiana Stadium and Exposition District, Hotel Occupancy
Tax Refunding Bonds, Series 1998B:
3,000,000 4.750%, 7/01/21 7/09 at 102 AAA 2,505,300
14,735,000 5.000%, 7/01/26 7/09 at 102 AAA 12,568,808
7,660,000 Louisiana Public Facilities Authority, Extended Care Facilities No Opt. Call BBB 9,955,702
Revenue Bonds (Comm-Care Corporation Project), Series 1994,
11.000%, 2/01/14
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 3.3%
20,000,000 Massachusetts Bay Transportation Authority, General Transportation 3/07 at 101 AA- 16,942,200
System Bonds, 1998 Series B, 5.000%, 3/01/28
2,890,000 Massachusetts Industrial Finance Agency, Resource Recovery 7/01 at 103 N/R 3,113,224
Revenue Bonds, Semass Project, Series 1991B, 9.250%, 7/01/15
(Alternative Minimum Tax)
2,825,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue 12/08 at 102 BBB 2,664,540
Refunding Bonds (Ogden Haverhill Project), Series 1998A,
5.450%, 12/01/12 (Alternative Minimum Tax)
15,000,000 Massachusetts Industrial Finance Agency, General Obligation Bonds, 7/07 at 102 AAA 13,368,750
Suffolk University, Series 1997, 5.250%, 7/01/27
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts (continued)
$ 8,800,000 Massachusetts Water Resources Authority, General Revenue Bonds, 7/02 at 100 Aaa $ 9,047,632
1992 Series A, 5.500%, 7/15/22 (Pre-refunded to 7/15/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 4.1%
4,000,000 School District of the City of Detroit, Wayne County, Michigan, 5/03 at 102 AA+ 3,857,720
School Building and Site Improvement and Refunding Bonds
(Unlimited Tax General Obligation), Series 1993, 5.400%, 5/01/13
13,000,000 School District of the City of Detroit, Wayne County, Michigan, No Opt. Call AAA 11,726,910
School Building and Site Improvement Bonds (Unlimited Tax
General Obligation), Series 1998A, 5.250%, 5/01/25
10,550,000 City of Detroit, Michigan, Sewage Disposal System Revenue 7/05 at 100 AAA 9,071,734
Refunding Bonds, Series 1995-B, 5.000%, 7/01/25
Hudsonville Public Schools, Counties of Ottawa and Allegan,
State of Michigan, 1997 School Building and Site and Refunding
Bonds (General Obligation Unlimited Tax):
10,510,000 5.150%, 5/01/22 5/08 at 100 Aaa 9,345,807
8,045,000 5.150%, 5/01/27 5/08 at 100 Aaa 7,043,639
9,625,000 Livonia Public School District, County of Wayne, State of Michigan, 5/03 at 102 AAA 9,097,743
1993 Refunding Bonds (General Obligation Unlimited Tax),
5.500%, 5/01/21
6,600,000 Michigan State Housing Development Authority, Limited Obligation No Opt. Call AAA 6,207,036
Multi-Family Mortgage Revenue Refunding Bonds, Series 1999A
(Forest Hills Regency Square Project), 5.750%, 7/01/29
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 2.1%
2,870,000 The Minneapolis/St. Paul Housing Finance Board, Single Family 11/04 at 102 AAA 2,978,859
Mortgage Revenue Bonds Paul Family Housing Program, Phase X,
FNMA and GNMA Mortgage-Backed Securities Program),
Series 1994, 7.500%, 11/01/27 (Alternative Minimum Tax)
21,045,000 The Housing and Redevelopment Authority of the City of St. Paul, 11/15 at 103 AAA 23,874,500
Minnesota, Sales Tax Revenue Refunding Bonds (Civic Center
Project), Series 1996, 7.100%, 11/01/23
1,492,000 The Housing and Redevelopment Authority of the City of St. Paul, No Opt. Call Aaa 1,542,116
Minnesota, Single Family Mortgage Revenue Bonds, Refunding
Series 1991-B, 7.250%, 9/01/11
- ------------------------------------------------------------------------------------------------------------------------------------
Missouri - 2.8%
6,245,000 Missouri Housing Development Commission, Single Family 3/07 at 105 AAA 6,730,799
Mortgage Revenue Bonds (Homeownership Loan Program),
1996 Series C, 7.450%, 9/01/27 (Alternative Minimum Tax)
17,775,000 Missouri Housing Development Commission, Single Family 3/09 at 103 AAA 18,922,021
Mortgage Revenue Bonds (Homeownership Loan Program),
1999 Series B-1, 6.700%, 9/01/30 (Alternative Minimum Tax)
11,120,000 Francis Howell School District, St. Charles County, Missouri, No Opt. Call AAA 12,934,784
General Obligation Refunding Bonds, Series 1994A,
7.800%, 3/01/08
- ------------------------------------------------------------------------------------------------------------------------------------
Nevada - 2.0%
29,410,000 State of Nevada, Colorado River Commission General Obligation 7/04 at 101 AA 27,154,841
(Limited Tax), Revenue Supported Bonds, Series 1994,
5.500%, 7/01/27
- ------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 1.9%
9,915,000 New Hampshire Housing Finance Authority, Single Family Mortgage 7/03 at 102 Aa3 9,956,445
Revenue Bonds, 1993 Series B, 6.050%, 7/01/25
10,000,000 Business Finance Authority of the State of New Hampshire, 10/03 at 102 BBB+ 8,930,100
Pollution Control Refunding Revenue Bonds (The United Illuminating
Company Project), 1993 Series A, 5.875%, 10/01/33
7,950,000 New Hampshire Housing Finance Authority, Single Family Mortgage 7/06 at 102 Aa3 8,012,169
Acquisition Revenue Bonds, 1996 Series B, 6.400%, 1/01/27
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
New Jersey - 1.6%
New Jersey Health Care Facilities Financing Authority, Revenue and
Refunding Bonds (Saint Barnabas Health Care System Issue),
Series 1998B:
1,600,000 5.250%, 7/01/12 1/09 at 101 AAA 1,562,992
6,490,000 5.250%, 7/01/15 1/09 at 101 AAA 6,134,802
15,000,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/07 at 101 1/2 AAA 14,289,000
Revenue Bonds, 1997 Series U, 5.850%, 4/01/29
(Alternative Minimum Tax)
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND, INC. (NPI) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New Mexico - 0.3%
$ 3,815,000 New Mexico Mortgage Finance Authority, Single Family Mortgage 7/02 at 102 Aa1 $ 3,921,439
Purchase Refunding Senior Bonds, 1992 Series A2, 6.900%, 7/01/24
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 9.1%
20,700,000 Long Island Power Authority (New York), Electric System General 6/08 at 101 A- 18,097,182
Revenue Bonds, Series 1998A, 5.250%, 12/01/26
7,500,000 The City of New York, General Obligation Bonds, Fiscal 1991 No Opt. Call A- 8,639,550
Series B, 9.500%, 6/01/03
10,000,000 The City of New York, General Obligation Bonds, Fiscal 1996 2/06 at 101 1/2 A- 10,337,100
Series G, 5.750%, 2/01/07
The City of New York, General Obligation Bonds, Fiscal 1997 Series G:
100,000 6.000%, 10/15/26 (Pre-refunded to 10/15/07) 10/07 at 101 A-*** 107,481
9,900,000 6.000%, 10/15/26 10/07 at 101 A- 9,814,761
16,000,000 New York City Municipal Water Finance Authority, Water and 6/06 at 101 AAA 15,480,480
Sewer System Revenue Bonds, Fiscal 1996 Series B,
5.750%, 6/15/26
31,625,000 New York City Transitional Finance Authority, Future Tax Secured 5/08 at 101 AA 26,142,174
Bonds, Fiscal 1998 Series C, 4.750%, 5/01/23
12,365,000 New York State Energy Research and Development Authority, 3/03 at 102 A+ 12,255,817
Facilities Revenue Bonds, Series 1993 A (Consolidated Edison
Company of New York, Inc. Project), 6.000%, 3/15/28
(Alternative Minimum Tax)
10,000,000 New York Local Government Assistance Corporation, 4/04 at 100 A+ 8,565,600
Series 1993 B, Refunding Bonds, 5.000%, 4/01/23
17,820,000 New York State Medical Care Facilities Finance Agency, Hospital 2/04 at 102 AAA 16,596,301
and Nursing Home FHA-Insured Mortgage Revenue Bonds,
1993 Series B, 5.500%, 2/15/22
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio - 0.9%
12,360,000 State of Ohio, Turnpike Revenue Bonds, 1994 Series A, Issued 2/04 at 102 Aaa 13,083,184
by the Ohio Turnpike Commission, 5.750%, 2/15/24
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 2.6%
12,875,000 Allegheny County Hospital Development Authority (Pennsylvania), 11/02 at 100 AAA 13,533,170
Health Center Revenue Bonds, Series 1992A (Presbyterian University
Health System, Inc. Project), 6.250%, 11/01/23 (Pre-refunded
to 11/01/02)
10,000,000 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/03 at 102 AA+ 9,463,500
Revenue Bonds, Series 1993 - 37A, 5.450%, 10/01/17
8,405,000 Redevelopment Authority of the City of Philadelphia (Pennsylvania), 4/08 at 103 N/R 7,769,750
Multifamily Housing Mortgage Revenue Bonds, Series 1998A
(Cricket Court Commons Project), 6.200%, 4/01/25 (Alternative
Minimum Tax)
5,295,000 The School District of Philadelphia, Pennsylvania, General 9/05 at 101 AAA 4,952,361
Obligation Bonds, Series B of 1995, 5.500%, 9/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico - 0.4%
5,250,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/05 at 100 BBB+ 4,846,748
Series X, 5.500%, 7/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
Rhode Island - 0.8%
13,200,000 Rhode Island Health and Educational Building Corporation, 5/07 at 102 AAA 11,553,696
Hospital Financing Revenue Bonds, Lifespan Obligated Group Issue,
Series 1996, 5.250%, 5/15/26
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 1.1%
17,250,000 South Carolina Jobs - Economic Development Authority, 2/06 at 102 AAA 15,127,043
Hospital Revenue Bonds (Anderson Area Medical Center, Inc.),
Series 1996, 5.250%, 2/01/26
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 7.8%
15,155,000 Alliance Airport Authority, Inc., Special Facilities Revenue Bonds, 12/00 at 102 Baa2 15,772,112
Series 1990 (American Airlines, Inc. Project), 7.500%, 12/01/29
(Alternative Minimum Tax) (DD1)
11,020,000 Brazos River Authority (Texas), Collateralized Pollution Control 3/01 at 102 BBB+ 11,562,955
Revenue Bonds (Texas Utilities Electric Company Project),
Series 1994A, 7.875%, 3/01/21 (Alternative Minimum Tax)
12,800,000 Brazos River Authority (Texas), Revenue Refunding Bonds 5/08 at 102 AAA 11,224,960
(Houston Industries Incorporated Project), Series 1998C,
5.125%, 5/01/19
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Texas (continued)
$ 5,615,000 Dallas-Fort Worth International Airport Facility Improvement 11/00 at 102 Baa2 $ 5,830,279
Corporation, American Airlines, Inc. Revenue Bonds, Series 1990,
7.500%, 11/01/25 (Alternative Minimum Tax)
20,000,000 Dallas-Fort Worth International Airport Facility Improvement 11/02 at 102 Baa2 21,075,200
Corporation, American Airlines, Inc. Revenue Bonds, Series 1992,
7.250%, 11/01/30 (Alternative Minimum Tax)
15,000,000 Harris County, Texas, Toll Road Senior Lien Revenue Refunding Bonds, 8/04 at 102 AAA 14,568,750
Series 1994, 5.300%, 8/15/13
10,000,000 City of Houston, Texas, Water and Sewer System Junior Lien 12/05 at 100 AAA 10,750,200
Revenue Refunding Bonds, Series 1995A, 6.200%, 12/01/20
(Pre-refunded to 12/01/05)
4,750,000 Matagorda County Navigation, District Number One (Texas), 7/00 at 102 AAA 4,756,793
Pollution Control Revenue Refunding Bonds (Central Power and
Light Company Project), Series 1995, 6.100%, 7/01/28
13,350,000 Texas Department of Housing and Community Affairs, Residential 1/09 at 101 AAA 11,766,824
Mortgage Revenue Bonds, Series 1998A, 5.350%, 7/01/30
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 2.1%
20,000,000 Intermountain Power Agency (Utah), Power Supply Revenue 7/08 at 101 AAA 17,212,400
Refunding Bonds, 1998 Series A, 5.000%, 7/01/20
7,930,000 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/07 at 101 1/2 AAA 7,514,468
1997 Series F, 5.750%, 7/01/28 (Alternative Minimum Tax)
4,780,000 Utah Housing Finance Agency, Single Family Mortgage Senior Bonds, 7/08 at 101 1/2 AAA 3,992,065
Series 1998F2, 5.100%, 7/01/28 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Vermont - 0.9%
12,510,000 Vermont Housing Finance Agency, Single Family Housing Bonds, 6/07 at 101 1/2 AAA 12,256,547
Series 9, 5.900%, 5/01/29 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia - 1.1%
10,000,000 Prince William County Service Authority (Virginia), Water and Sewer 7/03 at 102 AAA 8,724,200
System Refunding Revenue Bonds, Series 1993, 5.000%, 7/01/21
5,000,000 City of Virginia Beach Development Authority, Multifamily Housing 10/14 at 100 N/R 4,968,150
Revenue Bonds, Series 1999, 7.500%, 10/01/39
1,000,000 Virginia Housing Development Authority, Commonwealth Mortgage 1/00 at 101 AA+ 1,001,070
Bonds, 1987 Series C, Subseries C-7, 8.375%, 1/01/28
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 15.4%
Public Utility District No.1 of Chelan County, Washington,
Chelan Hydro Consolidated System Revenue Bonds, Series 1997A:
11,820,000 5.650%, 7/01/32 (Alternative Minimum Tax) 7/07 at 102 AA 11,109,145
(Optional put 7/01/09) (Mandatory put 7/01/24)
8,000,000 5.650%, 7/01/32 (Alternative Minimum Tax) 7/07 at 102 AA 7,495,680
(Optional put 7/01/09) (Mandatory put 7/01/27)
8,525,000 King County, Washington, Limited Tax General Obligation Refunding 1/08 at 101 AA+ 7,249,916
Bonds (Payable from Sewer Revenues), Series 1998B,
4.750%, 1/01/18
13,450,000 Public Hospital District No. 2, King County, Washington (Evergreen 12/08 at 101 AAA 11,169,284
Community Health Care), Limited Tax General Obligation Bonds,
Series 1998, 5.000%, 12/01/28
16,050,000 Municipality of Metropolitan Seattle, Washington, Sewer Refunding 1/03 at 102 AAA 14,527,337
Revenue Bonds, Series Z, 5.500%, 1/01/33
6,360,000 Public Utility District No. 1 of Snohomish County, Washington, 1/03 at 100 AAA 6,161,822
Generation System Revenue Bonds, Series 1993, 5.500%, 1/01/14
10,000,000 Washington Health Care Facilities Authority, Revenue Bonds, 11/08 at 101 Aaa 8,619,200
Series 1998 (Swedish Health Services), 5.125%, 11/15/22
11,000,000 Washington Health Care Facilities Authority, Revenue Bonds, 8/13 at 102 AAA 9,118,450
Series 1998 (Harrison Memorial Hospital), 5.000%, 8/15/28
4,300,000 Washington Public Power Supply System, Nuclear Project 1/00 at 102 AAA 4,409,650
No. 1 Refunding Revenue Bonds, Series 1989B, 7.250%, 7/01/15
(Pre-refunded to 1/01/00)
12,950,000 Washington Public Power Supply System, Nuclear Project No. 1 7/03 at 102 AAA 12,571,601
Refunding Revenue Bonds, Series 1993A, 5.700%, 7/01/17
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND, INC. (NPI) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Washington (continued)
$ 29,870,000 Washington Public Power Supply System, Nuclear Project No. 1 7/03 at 102 AAA $ 28,973,900
Refunding Revenue Bonds, Series 1993B, 5.600%, 7/01/15
7,500,000 Washington Public Power Supply System, Nuclear Project No. 2 7/01 at 100 Aaa 7,713,450
Refunding Revenue Bonds, Series 1991A, 6.000%, 7/01/12
(Pre-refunded to 7/01/01)
14,440,000 Washington Public Power Supply System, Nuclear Project No. 2 7/03 at 102 Aa1 14,476,678
Refunding Revenue Bonds, Series 1993A, 5.750%, 7/01/12
6,770,000 Washington Public Power Supply System, Nuclear Project No. 2 7/03 at 102 Aa1 6,643,261
Refunding Revenue Bonds, Series 1993B, 5.625%, 7/01/12
14,500,000 Washington Public Power Supply System, Nuclear Project No. 2 7/08 at 102 Aa1 13,486,450
Refunding Revenue Bonds, Series 1998A, 5.000%, 7/01/12
13,500,000 Washington Public Power Supply System, Nuclear Project No. 3 1/00 at 102 AAA 13,844,250
Refunding Revenue Bonds, Series 1989B, 7.250%, 7/01/15
(Pre-refunded to 1/01/00)
22,880,000 Washington Public Power Supply System, Nuclear Project No. 3 7/03 at 102 Aa1 21,273,590
Refunding Revenue Bonds, Series 1993C, 5.375%, 7/01/15
9,350,000 Washington Public Power Supply System, Nuclear Project No. 3 7/07 at 102 Aa1 8,558,803
Refunding Revenue Bonds, Series 1997A, 5.250%, 7/01/15
7,275,000 Washington Public Power Supply System, Nuclear Project No. 3 7/08 at 102 Aa1 6,368,972
Refunding Revenue Bonds, Series 1998A, 5.125%, 7/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
West Virginia - 1.1%
15,000,000 West Virginia Housing Development Fund, Housing Finance Bonds, 5/02 at 102 AAA 15,681,750
1992 Series D, 7.050%, 11/01/24
- ------------------------------------------------------------------------------------------------------------------------------------
$1,418,717,265 Total Investments - (cost $1,409,839,188) - 98.9% 1,367,998,044
============== --------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.1% 15,492,815
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $1,383,490,859
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** 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.
(DD1) Portion of security purchased on a delayed delivery
basis (note 1).
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND 2, INC. (NPM)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alaska - 0.5%
$ 3,500,000 Anchorage Parking Authority, Lease Revenue Refunding Bonds, 12/02 at 102 A- $ 3,666,425
Series 1993 (5th Avenue Garage Project), 6.750%, 12/01/08
530,000 City of Valdez, Alaska, Home Mortgage Revenue Refunding Bonds, 8/02 at 102 A1 554,778
1992 Series, 7.900%, 2/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
Arizona - 2.9%
The Industrial Development Authority of the County of Mohave,
Hospital System Revenue Refunding Bonds (Medical Environments, Inc.
and Phoenix Baptist Hospital and Medical Center Inc.), Series 1993:
5,705,000 6.250%, 7/01/03 No Opt. Call Aaa 5,963,437
3,000,000 6.750%, 7/01/08 (Pre-refunded to 7/01/03) 7/03 at 102 Aaa 3,272,040
9,000,000 City of Phoenix (Arizona), Civic Improvement Corporation, 7/03 at 102 AAA 9,640,530
Wastewater System Lease Revenue Bonds, Series 1993,
6.125%, 7/01/14 (Pre-refunded to 7/01/03)
3,880,000 City of Phoenix Civic Improvement Corporation (Arizona), Wastewater 7/04 at 102 Aa3 3,221,719
System Lease Revenue Refunding Bonds, Series 1993, 4.750%, 7/01/23
4,655,000 The Industrial Development Authority of the County of Pima 1/02 at 103 AAA 5,008,128
(Arizona), Industrial Development Lease Obligation Refunding
Revenue Bonds, 1988 Series A (Irvington Project), 7.250%, 7/15/10
- ------------------------------------------------------------------------------------------------------------------------------------
California - 12.9%
7,710,000 State of California, Veterans General Obligation Bonds, Series BH, 12/08 at 101 AAA 7,513,858
5.250%, 12/01/12 (Alternative Minimum Tax)
State Public Works Board of the State of California, Lease
Revenue Bonds (the Trustees of The California State University),
1992 Series A (Various California State University Projects):
15,480,000 6.625%, 10/01/10 (Pre-refunded to 10/01/02) 10/02 at 102 Aaa 16,813,757
10,500,000 6.700%, 10/01/17 (Pre-refunded to 10/01/02) 10/02 at 102 AAA 11,426,205
7,150,000 State Public Works Board of the State of California, Lease Revenue 10/04 at 102 A+*** 7,868,933
Bonds (the Trustees of the California State University),
1994 Series A (Various California State University Projects),
6.375%, 10/01/19 (Pre-refunded to 10/01/04)
17,500,000 State Public Works Board of the State of California, Lease Revenue 11/04 at 102 Aaa 19,695,725
Bonds (Department of Corrections), 1994 Series A (California State
Prison-Monterey County (Soledad II)), 6.875%, 11/01/14
(Pre-refunded to 11/01/04)
30,000,000 Foothil/Eastern Transportation Corridor Agency (California), No Opt. Call Aaa 8,519,400
Toll Road Revenue Bonds, Series 1995A, 0.000%, 1/01/21
5,000,000 City of Loma Linda, California, Hospital Revenue Bonds 12/03 at 102 N/R 4,794,250
(Loma Linda University Medical Center Project), Series 1993-A,
6.500%, 12/01/18
3,365,000 Community Redevelopment Financing Authority of the Community 9/02 at 102 N/R*** 3,578,005
Redevelopment Agency of the City of Los Angeles, California,
Pooled Financing Bonds, Series D (Crenshaw Redevelopment
Project), 7.000%, 9/01/14 (Pre-refunded to 9/01/02)
7,000,000 Los Angeles State Building Authority, Lease Revenue Refunding No Opt. Call A+ 7,197,120
Bonds (State of California Department of General Services Lease),
1993 Series A, 5.625%, 5/01/11
5,000,000 Los Angeles County Public Works Finance Authority, Revenue Bonds, 10/04 at 102 AA*** 5,448,050
Series 1994A (Los Angeles County Regional Park and Open Space
District), 6.125%, 10/01/10 (Pre-refunded to 10/01/04)
10,000,000 Los Angeles County Transportation Commission (California), 7/02 at 102 Aaa 10,839,000
Proposition C Sales Tax Revenue Bonds, Second Senior Bonds,
Series 1992-A, 6.750%, 7/01/19 (Pre-refunded to 7/01/02)
2,035,000 Parlier Redevelopment Agency (Parlier Redevelopment Project), 8/02 at 102 BBB*** 2,207,894
1992 Tax Allocation Bonds, Series A, 6.750%, 8/01/22
(Pre-refunded to 8/01/02)
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND 2, INC. (NPM) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
California (continued)
Redevelopment Agency of the City and County of San Francisco
(California), Hotel Tax Revenue Bonds, Series 1994:
$ 2,390,000 6.750%, 7/01/15 (Pre-refunded to 7/01/04) 7/04 at 102 AAA $ 2,663,153
5,905,000 6.750%, 7/01/25 (Pre-refunded to 7/01/04) 7/04 at 102 AAA 6,579,882
960,000 6.750%, 7/01/25 7/04 at 102 AAA 1,026,326
5,605,000 County of San Joaquin, California, Certificates of Participation 4/04 at 102 A 5,883,569
(1994 Solid Waste System Facilities Project), 6.600%, 4/01/19
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado - 8.0%
9,870,000 Colorado Health Facilities Authority, Insured Hospital Revenue 2/01 at 102 AAA 10,312,472
Bonds (PSL Healthcare System Project), Series 1991A,
6.250%, 2/15/21 (Pre-refunded to 2/15/01)
755,000 Colorado Housing and Finance Authority, Single Family Program 12/04 at 105 Aa2 804,120
Senior Bonds, 1994 Series E, 8.125%, 12/01/24
(Alternative Minimum Tax)
Colorado Housing and Finance Authority, General Obligation Bonds,
1994 Series A:
5,785,000 6.850%, 8/01/24 8/02 at 102 A 6,009,284
2,295,000 6.875%, 8/01/30 8/02 at 102 A 2,379,617
3,565,000 Colorado Housing and Finance Authority, Single Family Program 12/05 at 105 Aa2 3,801,253
Senior Bonds, 1995 Series D, 7.375%, 6/01/26
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991D:
400,000 7.750%, 11/15/13 (Alternative Minimum Tax) No Opt. Call BBB+ 469,472
3,155,000 7.750%, 11/15/21 (Alternative Minimum Tax) 11/01 at 102 Aaa 3,427,182
(Pre-refunded to 11/15/01)
12,115,000 7.750%, 11/15/21 (Alternative Minimum Tax) 11/01 at 102 BBB+ 12,902,960
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992B:
1,445,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 Aaa 1,584,471
(Pre-refunded to 11/15/02)
5,635,000 7.250%, 11/15/23 (Alternative Minimum Tax) 11/02 at 102 BBB+ 6,000,035
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1992C:
2,125,000 6.750%, 11/15/13 (Alternative Minimum Tax) 11/02 at 102 Aaa 2,301,418
(Pre-refunded to 11/15/02)
16,120,000 6.750%, 11/15/13 (Alternative Minimum Tax) at 102 BBB+ 16,663,728
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991A:
1,925,000 8.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Aaa 2,064,678
(Pre-refunded to 11/15/01)
5,315,000 8.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 BBB+ 5,590,530
1,700,000 City and County of Denver, Colorado, Multifamily Housing 10/07 at 102 AAA 1,609,713
Revenue Bonds (FHA-Insured Mortgage Loan - The Boston Lofts
Project), Series 1997A, 5.750%, 10/01/27 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Connecticut - 0.3%
3,170,000 Connecticut Housing Finance Authority, Housing Mortgage Finance 5/06 at 102 AA 3,237,109
Program Bonds, 1996 Series C-2, 6.250%, 11/15/18
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 2.5%
1,750,000 Alachua County Health Facilities Authority, Health Facilities Revenue 11/00 at 102 AAA 1,849,908
Bonds, Series 1992 (Santa Fe Healthcare Facilities Project),
7.600%, 11/15/13 (Pre-refunded to 11/15/00)
5,000,000 Dade County, Florida, Aviation Bonds, Series 1996A, 10/06 at 102 AAA 4,829,300
5.750%, 10/01/18 (Alternative Minimum Tax)
2,850,000 State of Florida, Full Faith and Credit, Department of Transportation, 7/05 at 101 AAA 3,030,149
Right-of-Way Acquisition and Bridge Construction Bonds,
Series 1995, 5.875%, 7/01/24
12,500,000 City of Tampa, Florida, Revenue Bonds (The Florida Aquarium Project), 5/02 at 102 N/R*** 13,640,250
Series 1992, 7.750%, 5/01/27 (Pre-refunded to 5/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia - 2.4%
5,500,000 City of Atlanta (Georgia), Water and Sewerage Revenue Bonds, 1/04 at 100 AAA 5,467,660
Series 1993, 4.500%, 1/01/18 (Pre-refunded to 1/01/04)
7,000,000 Development Authority of Burke County, Georgia, Pollution 1/03 at 103 AAA 7,892,850
Control Revenue Bonds (Oglethorpe Power Corporation - Vogtle
Project), Series 1992, 8.000%, 1/01/15 (Pre-refunded to 1/01/03)
650,000 Housing Authority of Fulton County, Georgia, Single Family Mortgage 9/06 at 102 AAA 656,974
Revenue Refunding Bonds (GNMA Mortgage-Backed Securities
Program), Series 1996A, 6.200%, 9/01/27 (Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Georgia (continued)
Georgia Housing and Finance Authority, Single Family Mortgage
Bonds, 1994 Series B:
$ 5,485,000 6.650%, 12/01/20 (Alternative Minimum Tax) 9/04 at 102 AAA $ 5,660,301
3,010,000 6.700%, 12/01/25 (Alternative Minimum Tax) 9/04 at 102 AAA 3,106,049
- ------------------------------------------------------------------------------------------------------------------------------------
Idaho - 0.2%
2,280,000 Idaho Housing and Finance Association, Single Family Mortgage 7/06 at 102 Aaa 2,314,633
Bonds, 1996 Series G, 6.350%, 7/01/26 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Illinois - 13.1%
5,000,000 City of Chicago, General Obligation Bonds (Emergency Telephone 1/03 at 102 AAA 5,248,750
System), Series 1993, 5.625%, 1/01/23 (Pre-refunded to 1/01/03)
17,000,000 City of Chicago, General Obligation Bonds, Series A of 1992, 1/02 at 102 AAA 17,874,820
6.250%, 1/01/12 (Pre-refunded to 1/01/02)
18,200,000 City of Chicago, General Obligation Bonds, Series 1995A-1, 1/06 at 102 AAA 15,754,466
5.125%, 1/01/25
1,000,000 City of Chicago, General Obligation Bonds, Series 1998, 7/08 at 102 AAA 900,420
5.250%, 1/01/20
Chicago School Reform Board of Trustees of the Board of
Education of the City of Chicago, Illinois, Unlimited Tax
General Obligation Bonds (Dedicated Tax Revenues), Series 1998A:
23,800,000 0.000%, 12/01/20 No Opt. Call AAA 6,486,690
61,300,000 0.000%, 12/01/21 No Opt. Call AAA 15,675,023
5,000,000 Chicago School Reform Board of Trustees of the Board of Education No Opt. Call AAA 1,362,750
of the City of Chicago, Illinois, Unlimited Tax General Obligation
Bonds (Dedicated Tax Revenues), Series 1999A, 0.000%, 12/01/20
8,270,000 City of Chicago, Mortgage Revenue Bonds, Series 1992 6/02 at 102 AAA 8,552,503
(FHA-Insured Mortgage Loan-Lakeview Towers Project),
6.650%, 12/01/33
1,175,000 City of Chicago, Multifamily Housing Revenue Bonds, 6/09 at 102 Aaa 1,121,267
Series 1997 (GNMA Collateralized -Bryn Mawr/Belle Shores
Project), 5.800%, 6/01/23 (Alternative Minimum Tax)
5,500,000 Chicago Park District, General Obligation Capital Improvement 1/02 at 102 AA*** 5,859,590
Bonds and Aquarium and Museum Bonds, Series 1991,
6.700%, 1/01/11 (Pre-refunded to 1/01/02)
10,900,000 Public Building Commission of Chicago, Building Revenue 12/03 at 102 AAA 11,570,241
Bonds, Series A of 1993 (Board of Education of the City of Chicago),
5.750%, 12/01/18 (Pre-refunded to 12/01/03)
4,475,000 City of Chicago, Tax Increment Allocation Bonds (Read-Dunning 1/07 at 102 N/R 4,615,694
Redevelopment Project), Series 1996B, 7.250%, 1/01/14
3,530,000 City of Chicago, Tax Increment Allocation Bonds (Sanitary 1/07 at 102 N/R 3,700,640
Drainage and Ship Canal Redevelopment Project),
Series 1997A, 7.750%, 1/01/14
2,850,000 City of East St. Louis, Mortgage Revenue Refunding Bonds, 7/03 at 102 AAA 2,938,037
Series 1994A (FHA-Insured Mortgage Loan - Dawson Manor
Apartments, Section 8 Assisted Project), 6.500%, 7/01/24
6,900,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 10/03 at 102 A- 6,138,378
Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19
3,000,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, No Opt. Call A+ 3,001,500
Series 1993C (Lutheran General HealthSystem), 6.000%, 4/01/18
11,510,000 The Illinois State Toll Highway Authority, Toll Highway Priority 1/03 at 102 AA-*** 12,320,880
Revenue Bonds, 1992 Series A, 6.375%, 1/01/15
(Pre-refunded to 1/01/03)
585,000 Village of Wheeling, Cook and Lake Counties, Illinois, Single 11/02 at 102 AAA 603,398
Family Mortgage Revenue Refunding Bonds, Series 1992,
6.850%, 11/01/09
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana - 7.4%
8,000,000 East Chicago Elementary School Building Corporation (Lake County, 1/03 at 102 A*** 8,710,160
Indiana), First Mortgage Bonds, Series 1992, 7.000%, 1/15/16
(Pre-refunded to 1/15/03)
13,630,000 Hospital Authority of the City of Fort Wayne, Indiana, Revenue 11/02 at 102 A+*** 14,615,040
Bonds, Series 1992 (Parkview Memorial Hospital, Inc. Project),
6.400%, 11/15/22 (Pre-refunded to 11/15/02)
6,031,000 City of Greenfield, Indiana, Multifamily Housing Revenue Bonds, 12/05 at 105 Aaa 6,078,705
Series 1996 A (Pedcor Investments, 1988-V, L.P. Project),
6.200%, 12/01/28 (Alternative Minimum Tax)
10,675,000 Highland School Building Corporation (Highland, Indiana), First 1/02 at 102 AAA 11,398,018
Mortgage Bonds, Series 1992A, 6.750%, 1/15/20
(Pre-refunded to 1/15/02)
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND 2, INC. (NPM) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Indiana (continued)
$ 8,200,000 Indiana Bond Bank, State Revolving Fund Program Bonds, 2/03 at 102 AAA $ 8,694,952
Series 1993A Guarantee Revenue Bonds, 6.250%, 2/01/09
2,875,000 Indiana Bond Bank, State Revolving Fund Program Bonds, 2/05 at 102 AAA 3,091,631
Series 1994B Guarantee Revenue Bonds, 6.750%, 2/01/17
6,000,000 Indiana Development Finance Authority, Environmental Revenue 2/03 at 102 AAA 5,617,800
Bonds, Series 1993B (PSI Energy, Inc.), 5.750%, 2/15/28
(Alternative Minimum Tax)
5,250,000 Indiana Transportation Finance Authority, Aviation Technology Center 3/03 at 102 A+ 5,476,013
Lease Revenue Bonds, Series A, 6.500%, 3/01/18
5,905,000 Muncie School Building Corporation, First Mortgage Bonds, 7/01 at 102 N/R*** 6,238,987
Series 1992, 6.625%, 7/15/14 (Pre-refunded to 7/15/01)
- ------------------------------------------------------------------------------------------------------------------------------------
Kansas - 0.4%
1,465,000 Johnson County, Kansas, Single Family Mortgage Revenue 5/04 at 103 A2 1,535,130
Refunding Bonds, Series 1994, 7.100%, 5/01/12
1,665,000 Sedgwick County, Kansas and Shawnee County, Kansas, Collateralized No Opt. Call Aaa 1,800,081
Single Family Mortgage Refunding Revenue Bonds (GNMA Certificates),
Series 1994A1, 7.900%, 5/01/24 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 0.7%
6,585,000 Kentucky Housing Corporation, Housing Revenue Bonds, 7/06 at 102 AAA 6,709,259
1996 Series A, 6.375%, 7/01/28 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 2.8%
4,000,000 Bossier Public Trust Financing Authority, Single Family Mortgage 8/05 at 102 AAA 4,005,640
Revenue Refunding Bonds, Series 1995B, 6.125%, 8/01/28
12,750,000 East Baton Rouge Mortgage Finance Authority, Single Family 10/05 at 102 Aaa 12,889,358
Mortgage Revenue Bonds (GNMA and FNMA Mortgage Backed
Securities Program), Series 1994C, 6.350%, 10/01/28
(Alternative Minimum Tax)
4,980,000 New Orleans Home Mortgage Authority, Single Family Mortgage 6/05 at 102 Aaa 5,143,145
Revenue Bonds, Series 1995A, 6.300%, 6/01/28
(Alternative Minimum Tax)
4,360,000 Orleans Levee District (A Political Subdivision of the State of 12/05 at 103 AAA 4,391,654
Louisiana), Public Improvement Bonds, Series 1986,
5.950%, 11/01/15
- ------------------------------------------------------------------------------------------------------------------------------------
Maine - 1.0%
1,065,000 Maine State Housing Authority, Mortgage Purchase Bonds, 11/05 at 102 AA 1,077,674
1995 Series B-2, 6.300%, 11/15/26 (Alternative Minimum Tax)
7,925,000 Maine State Housing Authority, Mortgage Purchase Bonds, 8/02 at 102 Aa2 8,002,744
1990 Series A-4, 6.400%, 11/15/24 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Maryland - 0.3%
2,560,000 Community Development Administration, Department of Housing 5/03 at 102 Aa2 2,662,502
and Community Development, State of Maryland, Multi-Family
Housing Revenue Bonds (Insured Mortgage Loans), 1993
Series C, 6.625%, 5/15/23
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 1.0%
3,080,000 Massachusetts Industrial Finance Agency, Revenue Bonds 3/06 at 102 AAA 2,925,846
(College of the Holy Cross - 1996 Issue), 5.625%, 3/01/26
Massachusetts Water Resources Authority, General Revenue Bonds,
1993 Series C:
3,295,000 5.250%, 12/01/20 (Pre-refunded to 12/01/04) 12/04 at 102 AAA 3,433,390
3,605,000 5.250%, 12/01/20 12/04 at 102 AAA 3,277,702
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 1.4%
8,000,000 Michigan State Hospital Finance Authority, Hospital Revenue 11/03 at 102 AAA 7,614,720
Refunding Bonds (Oakwood Hospital Obligated Group), Series 1993A,
5.625%, 11/01/18
5,285,000 Michigan State Housing Development Authority, Rental Housing 10/02 at 102 AA- 5,563,308
Revenue Bonds, 1992 Series A, 6.650%, 4/01/23
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Minnesota - 2.3%
$ 3,560,000 Housing and Redevelopment Authority of the City of Saint Paul, 12/02 at 102 BBB+ $ 3,600,192
Minnesota and City of Minneapolis, Minnesota, Health Care
Facility Revenue Bonds, Series 1992 (Group Health Plan, Inc.
Project), 6.900%, 10/15/22
3,200,000 Minnesota Housing Finance Agency, Rental Housing Bonds, 2/05 at 102 AAA 3,212,736
1995 Series D (Non-AMT), 5.950%, 2/01/18
4,590,000 Minnesota Housing Finance Agency, Single Family Mortgage Bonds, 1/06 at 102 AA 4,633,330
1996 Series G, 6.250%, 7/01/26 (Alternative Minimum Tax)
2,000,000 Southern Minnesota Municipal Power Agency, Power Supply System 1/03 at 102 Aaa 2,064,680
Revenue Bonds, Series 1992B, 5.750%, 1/01/11
2,350,000 Washington County Housing and Redevelopment Authority, Pooled 1/03 at 102 BBB 2,411,664
Housing and Redevelopment Limited Annual Appropriation Tax
and Revenue Bonds (Pooled Refunding Project), Series 1992,
7.200%, 1/01/22
5,170,000 Washington County Housing and Redevelopment Authority, Lease 12/02 at 100 A3*** 5,604,590
Revenue Bonds (South Washington County Schools Project),
Series 1992, 7.400%, 12/01/14 (Pre-refunded to 12/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.4%
4,000,000 Mississippi Hospital Equipment and Facilities Authority, Revenue 10/02 at 102 AAA 4,247,720
Bonds, Series 1992A (Wesley Health Systems), 6.050%, 4/01/12
(Pre-refunded to 10/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Missouri - 2.2%
4,645,000 Missouri State Health and Educational Facilities Authority, 6/08 at 101 AAA 4,025,218
Revenue Bonds (SSM Health Care), Series 1998A, 5.000%, 6/01/22
5,500,000 The Industrial Development Authority of the City of St. Louis, 12/02 at 102 N/R 5,761,580
Missouri, Industrial Revenue Refunding Bonds (Kiel Center
Multipurpose Arena Project), Series 1992, 7.625%, 12/01/09
(Alternative Minimum Tax)
11,000,000 St. Louis Municipal Finance Corporation, Leasehold Revenue 7/03 at 102 AAA 11,038,280
Refunding Bonds, 6.000%, 7/15/13
- ------------------------------------------------------------------------------------------------------------------------------------
Nevada - 0.4%
4,000,000 Clark County, Nevada, Industrial Development Revenue Bonds 6/02 at 102 AAA 4,225,560
(Nevada Power Company Project), Series 1992A, 6.700%, 6/01/22
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.5%
4,505,000 New Hampshire Higher Educational and Health Facilities Authority, 1/00 at 102 A- 4,603,029
Hospital Revenue Bonds, Catholic Medical Center Issue,
Series 1989, 8.000%, 7/01/04
- ------------------------------------------------------------------------------------------------------------------------------------
New Jersey - 2.5%
4,500,000 New Jersey Economic Development Authority, Insured Revenue 5/05 at 102 AAA 4,841,775
Bonds (Educational Testing Service Issue), Series 1995A,
6.000%, 5/15/25
8,720,000 New Jersey Housing and Mortgage Finance Agency, Multi-Family 11/07 at 101 1/2 AAA 8,011,674
Housing Revenue Bonds, 1997 Series A, 5.650%, 5/01/40
(Alternative Minimum Tax)
4,145,000 New Jersey Housing and Mortgage Finance Agency, Housing Revenue 11/02 at 102 A+ 4,339,732
Refunding Bonds, 1992 Series One, 6.700%, 11/01/28
1,000,000 Toms River Board of Education, General Obligation Bonds, 7/07 at 100 AAA 1,054,290
Series 1997, 5.750%, 7/15/21 (Pre-refunded to 7/15/07)
5,920,000 The Union County Utilities Authority (New Jersey), Solid Waste 6/08 at 101 AAA 5,407,446
Bonds, County Deficiency Agreement, Series 1998A,
5.350%, 6/01/23 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
New Mexico - 0.4%
3,990,000 New Mexico Mortgage Finance Authority, Single Family 7/05 at 102 AAA 4,062,339
Mortgage Program Bonds, 1995 Series E, 6.300%, 7/01/17
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 15.5%
22,400,000 Long Island Power Authority, Electric System General Revenue 6/08 at 101 AAA 19,828,704
Bonds, Series 1998A, 5.125%, 12/01/22
7,695,000 The City of New York, General Obligation Bonds, No Opt. Call A- 8,179,477
Fiscal 1995 Series E, 6.600%, 8/01/03
17,365,000 The City of New York, General Obligation Bonds, No Opt. Call A- 19,086,913
Fiscal 1996 Series F, 7.000%, 2/01/06
11,130,000 The City of New York, General Obligation Bonds, 3/06 at 101 1/2 A- 10,920,867
Fiscal 1996 Series I, 5.875%, 3/15/18
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND 2, INC. (NPM) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
New York (continued)
$ 9,000,000 The City of New York, General Obligation Bonds, 2/06 at 101 1/2 A- $ 8,806,140
Fiscal 1996 Series J (Subseries J-1), 5.875%, 2/15/19
8,000,000 The City of New York, General Obligation Bonds, Fiscal 1997, 8/06 at 101 1/2 A- 7,805,600
Series E, 5.875%, 8/01/24
The City of New York, General Obligation Bonds, Fiscal 1993 Series A:
3,140,000 6.375%, 8/01/08 (Pre-refunded to 8/01/02) 8/02 at 101 1/2 Aaa 3,343,755
660,000 6.500%, 8/01/11 (Pre-refunded to 8/01/02) 8/02 at 101 1/2 Aaa 704,946
The City of New York, General Obligation Bonds, Fiscal 1993 Series A:
6,860,000 6.375%, 8/01/08 8/02 at 101 1/2 A- 7,234,556
1,340,000 6.500%, 8/01/11 8/02 at 101 1/2 A- 1,417,439
The City of New York, General Obligation Bonds, Fiscal 1997 Series I:
6,950,000 6.250%, 4/15/27 (Pre-refunded to 4/15/07) 4/07 at 101 A-*** 7,553,747
5,070,000 6.250%, 4/15/27 4/07 at 101 A- 5,118,114
The City of New York, General Obligation Bonds, Fiscal 1995 Series D:
285,000 6.600%, 2/01/03 No Opt. Call A-*** 302,274
10,465,000 6.600%, 2/01/03 No Opt. Call A- 11,049,680
1,370,000 New York City, Municipal Water Finance Authority, Water and 6/07 at 101 AAA 1,273,675
Sewer System Revenue Bonds, Fiscal 1997 Series B,
5.500%, 6/15/27
3,150,000 New York City, Municipal Water Finance Authority, Water and 6/05 at 101 AAA 3,104,609
Sewer System Revenue Bonds, Fiscal 1996 Series A,
5.875%, 6/15/25
4,000,000 The Trust for Cultural Resources of the City of New York, Revenue 4/07 at 101 AAA 3,831,720
Bonds, Series 1997A (American Museum of Natural History),
5.650%, 4/01/27
2,500,000 Dormitory Authority of the State of New York, City University System 7/06 at 102 BBB+ 2,454,775
Consolidated Revenue Bonds, 1996 Series 2, 6.000%, 7/01/20
16,200,000 New York State Energy Research and Development Authority, 12/01 at 101 AAA 16,328,952
Facilities Revenue Bonds, Series 1992B (Consolidated Edison
Company of New York, Inc. Project), 6.375%, 12/01/27
(Alternative Minimum Tax)
7,635,000 New York State Medical Care Facilities Finance Agency, 5/05 at 102 AA- 8,132,191
Mercy Medical Center Project Revenue Bonds, 1995 Series A,
5.875%, 11/01/15
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina - 1.4%
7,000,000 County of Cumberland, North Carolina, Hospital Facility Revenue 10/09 at 101 A- 6,125,280
Bonds (Cumberland County Hospital System Inc.), Series 1999
(Cape Fear Valley Health System), 5.250%, 10/01/19
5,185,000 City of Durham Urban Redevelopment, Mortgage Revenue Bonds 8/07 at 105 AAA 5,522,440
(Durham Hosiery Mill Project) (FHA-Insured), Series 1987,
7.500%, 8/01/29 (Alternative Minimum Tax)
1,825,000 North Carolina Housing Finance Agency, Single Family Revenue 3/06 at 102 AA 1,863,690
Bonds, Series JJ (1985 Resolution), 6.450%, 9/01/27
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
North Dakota - 0.4%
4,095,000 Mercer County, North Dakota, Pollution Control Revenue 1/00 at 102 1/2 A 4,221,617
Bonds (Basin Electric Power Cooperative - Antelope Valley
Station), 1984 Series B, 7.000%, 1/01/19
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio - 1.4%
2,000,000 Ohio Housing Finance Agency, Multifamily Housing Mortgage 1/08 at 102 Aa2 1,808,180
Revenue Bonds, Series 1998B-1 (FHA- Insured Mortgage
Loan - Courtyards of Kettering Project), 5.550%, 1/01/40
(Alternative Minimum Tax)
5,250,000 Ohio Air Quality Development Authority, Air Quality Development 4/07 at 102 AAA 4,902,240
Revenue Bonds (JMG Funding, Limited Partnership Project),
Series 1997, 5.625%, 1/01/23 (Alternative Minimum Tax)
6,750,000 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/08 at 102 N/R 6,107,603
Bonds (Bay Shore Power Project), Convertible Series 1998B,
5.875%, 9/01/20 (Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Oklahoma - 0.4%
$ 1,000,000 Tulsa County Industrial Authority (Tulsa, Oklahoma), Recreational 9/02 at 102 A- $ 1,058,880
Facilities Revenue Bonds, Refunding Series 1992, 6.600%, 9/01/08
2,990,000 Tulsa County Public Facilities Authority (Tulsa, Oklahoma), 11/02 at 102 A- 3,172,659
Recreational Facility Refunding Revenue Bonds, Series 1992,
6.600%, 11/01/08
- ------------------------------------------------------------------------------------------------------------------------------------
Oregon - 2.5%
13,350,000 State of Oregon, General Obligation Bonds, Elderly and Disabled 8/02 at 102 AA 13,845,686
Housing Bonds, 1992 Series B, 6.375%, 8/01/24
5,450,000 State of Oregon, General Obligation Bonds, Veterans Welfare Bonds, 10/05 at 102 AA 5,449,673
Series 75, 6.000%, 4/01/27
1,750,000 State of Oregon, Housing and Community Services Department, 7/07 at 101 1/2 Aa2 1,610,595
Mortgage Revenue Bonds (Single-Family Mortgage Program),
1997 Series H, 5.650%, 7/01/28 (Alternative Minimum Tax)
3,005,000 City of Portland, Oregon, Limited Tax Improvement Bonds, 6/06 at 100 Aa 2,957,190
1996 Series A, 5.550%, 6/01/16
- ------------------------------------------------------------------------------------------------------------------------------------
Pennsylvania - 0.4%
2,400,000 Beaver County Industrial Development Authority (Pennsylvania), 7/05 at 102 A 2,725,128
Collateralized Pollution Control Revenue Refunding Bonds,
Series 1995-A (The Cleveland Electric Illuminating Company -
Beaver Valley Project), 7.750%, 7/15/25
1,000,000 Delaware Valley Regional Finance Authority, Local Government No Opt. Call AAA 960,290
Revenue Bonds, Series 1997B, 5.700%, 7/01/27
- ------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico - 0.6%
5,000,000 Commonwealth of Puerto Rico, Public Improvement Refunding Bonds, 7/08 at 101 AAA 4,066,200
Series 1998 (General Obligation Bonds), 4.500%, 7/01/23
1,375,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/05 at 100 BBB+ 1,269,386
Series X, 5.500%, 7/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 0.2%
2,135,000 School District No. 4 of Lexington County, South Carolina, 7/04 at 102 Baa2 2,268,736
Certificates of Participation, Series 1994, 7.000%, 7/01/12
- ------------------------------------------------------------------------------------------------------------------------------------
South Dakota - 1.2%
South Dakota Building Authority, Revenue Bonds, Series 1992:
510,000 6.700%, 9/01/17 (Pre-refunded to 9/01/02) 9/02 at 102 AAA 550,173
9,860,000 6.700%, 9/01/17 (Pre-refunded to 9/01/04) 9/04 at 100 AAA 10,559,961
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee - 0.4%
4,850,000 The Health and Educational Facilities Board of the City of 1/09 at 101 AAA 4,220,373
Johnson City, Tennessee, Hospital Revenue Refunding and
Improvement Bonds, Series 1998C (Johnson City Medical Center
Hospital), 5.125%, 7/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 2.1%
1,150,000 Baytown Housing Finance Corporation, Single Family Mortgage 9/02 at 103 Aa2 1,243,668
Revenue Refunding Bonds, Series 1992-A, 8.500%, 9/01/11
3,000,000 Brazos River Authority (Texas), Revenue Refunding Bonds No Opt. Call AAA 2,643,810
(Houston Lighting and Power Company Project), Series 1998,
5.050%, 11/01/18 (Alternative Minimum Tax)
1,320,000 Hidalgo County Housing Finance Corporation (Florida), Single Family 4/04 at 102 Aaa 1,362,478
Mortgage Revenue Bonds (GNMA and FNMA Collateralized),
Series 1994A, 7.000%, 10/01/27 (Alternative Minimum Tax)
1,385,000 Houston Independent School District Public Facility Corporation No Opt. Call AAA 612,212
(Harris County, Texas), Lease Revenue Bonds (Cesar E. Chavez
High School), Series 1998A, 0.000%, 9/15/13
6,630,000 Houston Independent School District Public Facility Corporation No Opt. Call AAA 2,930,659
(Harris County, Texas), Lease Revenue Bonds (West Side
High School), Series 1998B, 0.000%, 9/15/13
1,000,000 Humble Independent School District (Harris County, Texas), 2/10 at 100 AAA 697,100
Unlimited Tax Schoolhouse Bonds, Series II 1997, 3.500%, 2/15/18
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND 2, INC. (NPM) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Texas (continued)
$ 2,000,000 Port Arthur Housing Finance Corporation, Single Family Mortgage 9/02 at 103 A $ 2,132,160
Revenue Refunding Bonds, Series 1992, 8.700%, 3/01/12
7,490,000 State of Texas, Veterans Housing Assistance Bonds, Series 1993, 12/03 at 102 Aa1 7,806,827
General Obligation Bonds, 6.800%, 12/01/23 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 1.5%
6,000,000 Redevelopment Agency of Salt Lake County, Utah, Central 3/02 at 102 A 5,972,340
Business District Neighborhood Redevelopment, Junior Lien
Tax Increment Bonds, Series 1992A, 5.800%, 3/01/15
2,185,000 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/04 at 102 AAA 2,230,972
1994 Issue B (Federally Insured or Guaranteed Mortgage Loans),
6.450%, 7/01/14
1,240,000 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/07 at 101 1/2 AAA 1,214,766
1997 Series E2 Class I, 5.875%, 1/01/19 (Alternative Minimum Tax)
1,550,000 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/09 at 101 1/2 AAA 1,455,140
1997 Series C, 5.600%, 7/01/18 (Alternative Minimum Tax)
3,000,000 Municipal Building Authority of Weber County, Utah, 12/04 at 102 AAA 3,428,100
Lease Revenue Bonds, Series 1994, 7.500%, 12/15/19
(Pre-refunded to 12/15/04)
- ------------------------------------------------------------------------------------------------------------------------------------
Vermont - 0.7%
6,620,000 Vermont Housing Finance Agency, Single Family Housing Bonds, 5/02 at 102 A+ 6,710,231
Series 4, 6.400%, 11/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
West Virginia - 0.8%
7,000,000 The County Commission of Harrison County, West Virginia, 5/03 at 102 AAA 7,033,880
Solid Waste Disposal Revenue Bonds (The Potomac Edison
Company - Harrison Station Project), Series B, 6.250%, 5/01/23
(Alternative Minimum Tax)
1,000,000 The County Commission of Pleasants County, West Virginia, 4/09 at 101 AAA 907,640
Pollution Control Revenue Bonds (West Penn Power
Company - Pleasants Station Project), 1999 Series E,
5.500%, 4/01/29 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 1.2%
8,410,000 Wisconsin Housing and Economic Development Authority, 1/05 at 102 AA 8,718,896
Home Ownership Revenue Bonds, 1995 Series B,
7.100%, 9/01/15 (Alternative Minimum Tax)
3,215,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/07 at 102 AAA 3,071,061
Bonds, Series 1997 (Marshfield Clinic Project), 5.625%, 2/15/17
- ------------------------------------------------------------------------------------------------------------------------------------
$ 993,436,000 Total Investments - (cost $894,078,607) - 97.2% 920,728,695
=============
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Short-Term Investments - 0.9%
$ 3,000,000 California Health Facilities Financing Authority, Refunding VMIG-1 $ 3,000,000
Revenue Bonds (St. Joseph Health System), Series 1985B,
Variable Rate Demand Bonds, 3.500%, 7/01/13+
3,000,000 Port Authority of Cincinnati and Hamiltion County, Daily Adjustable VMIG-1 3,000,000
Economic Development Revenue Bonds (Kenwood Office
Associates Project), Series 1985, Variable Rate Demand Bonds,
3.750%, 9/01/25+
3,000,000 The City of New York, General Obligation Bonds, Fiscal VMIG-1 3,000,000
1995 Series B, Variable Rate Demand Bonds, 3.500%, 8/15/05+
- ------------------------------------------------------------------------------------------------------------------------------------
$ 9,000,000 Total Short-Term Investments - (cost $9,000,000) 9,000,000
============= --------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.9% 17,752,358
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 947,481,053
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** 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
NUVEEN PREMIUM INCOME MUNICIPAL FUND 4, INC. (NPT)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Alabama - 4.2%
$ 8,000,000 Alabama Higher Education Loan Corporation, Student Loan Revenue No Opt. Call AAA $ 8,298,880
Refunding Bonds, Series 1994-D, 5.850%, 9/01/04
(Alternative Minimum Tax)
11,745,000 Alabama Special Care Facilities Financing Authority of Birmingham, 11/05 at 101 Aa2 10,173,636
Hospital Revenue Bonds (Daughters of Charity National Health
System - Providence Hospital and St. Vincent's Hospital),
Series 1995, 5.000%, 11/01/25
11,000,000 The DCH Health Care Authority, Health Care Facilities Revenue 12/02 at 102 A+ 10,204,150
Bonds, Series 1993-B, 5.750%, 6/01/23
11,000,000 Jefferson County, Alabama, Sewer Revenue Capital Improvement 2/09 at 101 AAA 10,470,020
Warrants, Series 1999-A, 5.750%, 2/01/38
- ------------------------------------------------------------------------------------------------------------------------------------
Arkansas - 0.2%
475,000 Arkansas Development Finance Authority, Single Family Mortgage 8/01 at 103 AA 489,345
Revenue Refunding Bonds, 1991 Series A (FHA-Insured or VA
Guaranteed Mortgage Loans), 8.000%, 8/15/11
366,303 City of Jacksonville, Arkansas, Residential Housing Facilities 7/03 at 103 Aaa 389,014
Board, Single Family Mortgage Revenue Refunding Bonds, Series 1993A,
7.900%, 1/01/11
584,499 Residential Housing Facilities Board of Lonoke County, Arkansas, 4/05 at 103 Aaa 618,283
Single Family Mortgage Revenue Refunding Bonds, Series 1993A,
7.900%, 4/01/11
- ------------------------------------------------------------------------------------------------------------------------------------
California - 2.8%
4,780,000 Foothill/Eastern Transportation Corridor Agency (California), No Opt. Call Aaa 2,150,809
Toll Road Revenue Bonds, Series 1995A, 0.000%, 1/01/14
Community Redevelopment Financing Authority of the City of
Los Angeles, California, Grand Central Square Multifamily Housing
Bonds, 1993 Series A:
500,000 5.750%, 12/01/13 (Alternative Minimum Tax) 6/03 at 102 BB 477,225
3,705,000 5.900%, 12/01/26 (Alternative Minimum Tax) 11/99 at 100 A 3,548,093
4,500,000 Los Angeles County Transportation Commission (California), 7/02 at 102 Aaa 4,877,550
Proposition C Sales Tax Revenue Bonds, Second Senior Bonds,
Series 1992-A, 6.750%, 7/01/19 (Pre-refunded to 7/01/02)
1,715,000 Housing Authority of the County of Merced (California), Multifamily 1/04 at 102 Aaa 1,684,867
Housing Refunding Revenue Bonds, Series 1993A (Belmont Park
Apartments Project), 5.875%, 1/01/19
2,500,000 Transmission Agency of Northern California, California-Oregon 5/02 at 102 AAA 2,600,075
Transmission Project Revenue Bonds, 1992 Series A, 6.500%, 5/01/16
5,000,000 Airports Commission of the City and County of San Francisco, 5/04 at 101 AAA 5,061,750
California, San Francisco International Airport, Second Series
Revenue Bonds, Issue 8, 6.300%, 5/01/25 (Alternative Minimum Tax)
3,545,000 Redevelopment Agency of the City of San Leandro, Plaza 1 and 6/03 at 102 A- 3,563,044
Plaza 2 Redevelopment Projects, 1993 Tax Allocation Bonds,
Series A, 6.125%, 6/01/23
1,945,000 South Gate Public Financing Authority (Los Angeles County, No Opt. Call AAA 2,068,313
California), Water Revenue Refunding Bonds, 1996 Series A,
6.000%, 10/01/12
- ------------------------------------------------------------------------------------------------------------------------------------
Colorado - 3.5%
4,000,000 Colorado Housing and Finance Authority, Single-Family Program 10/09 at 105 Aa2 4,309,200
Bonds, 1999 Series C-3, Senior Bonds (Non-AMT),
6.750%, 10/01/21
City and County of Denver, Colorado, Airport System Revenue Bonds,
Series 1991D:
6,000,000 7.500%, 11/15/02 (Alternative Minimum Tax) 11/01 at 102 BBB+ 6,370,440
3,040,000 7.750%, 11/15/13 (Alternative Minimum Tax) No Opt. Call BBB+ 3,567,987
865,000 7.750%, 11/15/21 (Alternative Minimum Tax) 11/01 at 102 Aaa 939,624
(Pre-refunded to 11/15/01)
3,280,000 7.750%, 11/15/21 (Alternative Minimum Tax) 11/01 at 102 BBB+ 3,493,331
210,000 7.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 Aaa 221,252
(Pre-refunded to 11/15/01)
790,000 7.000%, 11/15/25 (Alternative Minimum Tax) 11/01 at 100 BBB+ 813,526
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Colorado (continued)
City and County of Denver, Colorado, Airport System
Revenue Bonds, Series 1992C:
$ 1,100,000 6.750%, 11/15/22 (Alternative Minimum Tax) 11/02 at 102 Aaa $ 1,191,322
(Pre-refunded to 11/15/02)
4,140,000 6.750%, 11/15/22 (Alternative Minimum Tax) 11/02 at 102 BBB+ 4,178,419
City and County of Denver, Colorado, Airport System
Revenue Bonds, Series 1991A:
315,000 8.750%, 11/15/23 (Alternative Minimum Tax) 11/01 at 102 Aaa 348,170
(Pre-refunded to 11/15/01)
885,000 8.750%, 11/15/23 (Alternative Minimum Tax) 11/01 at 102 BBB+ 959,490
City and County of Denver, Colorado, Airport System
Revenue Bonds, Series 1990A:
405,000 8.500%, 11/15/23 (Alternative Minimum Tax) 11/00 at 102 Aaa 431,536
(Pre-refunded to 11/15/00)
3,695,000 8.500%, 11/15/23 (Alternative Minimum Tax) 11/00 at 102 BBB+ 3,886,918
115,000 8.000%, 11/15/25 (Alternative Minimum Tax) 11/00 at 102 Aaa 121,959
(Pre-refunded to 11/15/00)
1,190,000 8.000%, 11/15/25 (Alternative Minimum Tax) 11/00 at 102 BBB+ 1,245,835
- ------------------------------------------------------------------------------------------------------------------------------------
Connecticut - 0.6%
3,000,000 Connecticut Housing Finance Authority, Housing Mortgage Finance 5/06 at 102 AA 3,063,510
Program Bonds, 1996 Series C-2, 6.250%, 11/15/18
2,400,000 Connecticut Development Authority, Water Facilities Revenue Refunding 12/03 at 102 AAA 2,564,592
Bonds (The Connecticut Water Company Project), 1993 Series,
6.650%, 12/15/20
- ------------------------------------------------------------------------------------------------------------------------------------
District of Columbia - 4.1%
6,000,000 District of Columbia (Washington, D.C.), General Obligation No Opt. Call AAA 5,997,300
Refunding Bonds, Series 1993 B, 5.500%, 6/01/10
3,240,000 District of Columbia (Washington, D.C.), Hospital Revenue Refunding 8/02 at 102 A-*** 3,482,870
Bonds (Medlantic Healthcare Group, Inc. Issue), Series 1992B,
6.750%, 8/15/07 (Pre-refunded to 8/15/02)
4,250,000 District of Columbia (Washington, D.C.), Hospital Revenue Refunding 8/06 at 102 AAA 4,277,455
Bonds (Medlantic Healthcare Group, Inc. Issue), Series 1993A,
5.750%, 8/15/14
9,500,000 District of Columbia (Washington,D.C.), General Obligation No Opt. Call AAA 9,984,431
Refunding Bonds, Series 1993A, 6.000%, 6/01/07
District of Columbia (Washington D.C.), General Obligation Bonds,
Series 1993E:
185,000 6.000%, 6/01/09 (Pre-refunded to 6/01/03) 6/03 at 102 AAA 196,772
4,815,000 6.000%, 6/01/09 6/03 at 102 AAA 5,013,667
4,130,000 District of Columbia (Washington D.C.), Housing Finance Agency, 12/04 at 103 AAA 4,065,985
Collateralized Single Family Mortgage Revenue Bonds,
Series 1988F-1, 5.850%, 12/01/14 (Alternative Minimum Tax)
4,500,000 District of Columbia (Washington D.C.), University Revenue 10/02 at 102 AAA 4,861,530
Refunding Bonds (The Howard University Issue), Series 1992A,
6.750%, 10/01/12 (Pre-refunded to 10/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Florida - 0.9%
9,500,000 City of Sunrise, Florida, Utility System Revenue Refunding Bonds, 10/18 at 100 AAA 8,220,065
Series 1998, 5.000%, 10/01/28
- ------------------------------------------------------------------------------------------------------------------------------------
Georgia - 2.1%
3,400,000 City of Atlanta (Georgia), Water and Wastewater Revenue Bonds, No Opt. Call AAA 3,260,906
Series 1999A, 5.500%, 11/01/22
2,425,000 Development Authority of Burke County, Georgia, Pollution Control No Opt. Call AAA 2,543,752
Revenue Bonds (Oglethorpe Power Corporation - Vogtle Project),
Series 1992, 7.500%, 1/01/03
2,880,000 Municipal Electric Authority of Georgia, General Power Revenue No Opt. Call A 3,472,416
Bonds, 1992B Series, 8.250%, 1/01/11
4,185,000 Municipal Electric Authority of Georgia, Power Revenue Bonds, No Opt. Call AAA 4,910,261
Series EE, 7.250%, 1/01/24
5,500,000 Municipal Electric Authority of Georgia, General Power Revenue No Opt. Call AAA 5,402,045
Bonds, 1993B Series, 5.700%, 1/01/19
- ------------------------------------------------------------------------------------------------------------------------------------
Hawaii - 0.7%
1,500,000 State of Hawaii, Airports System Revenue Bonds, Series of 1990 7/00 at 102 AAA 1,555,290
(Payable Solely from the Receipts of the Aviation Fuel Tax and the
Revenues of the State of Hawaii Airports System), 7.300%, 7/01/20
(Alternative Minimum Tax)
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND 4, INC. (NPT) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Hawaii (continued)
City and County of Honolulu, Hawaii, General Obligation Bonds,
Refunding and Improvement, Series 1993B:
$ 1,580,000 5.000%, 10/01/13 No Opt. Call Aaa $ 1,498,630
3,420,000 5.000%, 10/01/13 No Opt. Call AA- 3,187,235
- ------------------------------------------------------------------------------------------------------------------------------------
Illinois - 11.7%
4,000,000 Board of Education of the City of Chicago, General Obligation No Opt. Call AAA 4,206,480
Lease Certificates, 1992 Series A, 6.250%, 1/01/15
5,000,000 City of Chicago, Sales Tax Revenue Bonds, Series 1998, 7/08 at 102 AAA 4,391,600
5.250%, 1/01/28
Cook County School District 99 (Cicero), General Obligation School
Bonds, Series 1997:
1,345,000 8.500%, 12/01/12 No Opt. Call Aaa 1,702,636
1,455,000 8.500%, 12/01/13 No Opt. Call Aaa 1,848,287
1,685,000 8.500%, 12/01/15 No Opt. Call Aaa 2,170,145
2,685,000 Illinois Development Finance Authority, Child Care Facility Revenue 9/02 at 102 N/R 2,741,734
Bonds, Series 1992 (Illinois Facilities Fund Project), 7.400%, 9/01/04
2,240,000 Illinois Educational Facilities Authority, Revenue Bonds, Chicago No Opt. Call AAA 2,512,182
College of Osteopathic Medicine, Series A, 8.750%, 7/01/05
10,360,000 Illinois Educational Facilities Authority, Revenue Refunding Bonds, 7/01 at 102 A1*** 11,024,698
Loyola University of Chicago, Series 1991-A, 7.125%, 7/01/21
(Pre-refunded to 7/01/01)
3,000,000 Illinois Health Facilities Authority, Revenue Refunding Bonds, 10/03 at 102 A- 2,668,860
Series 1993 (Illinois Masonic Medical Center), 5.500%, 10/01/19
2,000,000 Illinois Health Facilities Authority, Revenue Bonds, 7/02 at 102 BBB+ 2,152,300
Series 1992 (Trinity Medical Center), 7.000%, 7/01/12
Illinois Health Facilities Authority, Revenue Refunding Bonds,
Series 1993C (Lutheran General Healthsystem):
5,705,000 7.000%, 4/01/08 No Opt. Call A+ 6,332,151
4,075,000 7.000%, 4/01/14 No Opt. Call A+ 4,574,188
8,190,000 Illinois Housing Development Authority, Multi-Family Program Bonds, 9/04 at 102 A+ 8,586,969
Series 5, 6.650%, 9/01/14
3,410,000 Illinois Housing Development Authority, Section 8 Elderly Housing 11/02 at 102 A 3,494,500
Revenue Bonds (Skyline Towers Apartments), Series 1992B,
6.875%, 11/01/17
3,115,000 Illinois Housing Development Authority, Section 8 Elderly Housing 1/03 at 102 A*** 3,342,488
Revenue Bonds (Morningside North Development), Series 1992D,
6.600%, 1/01/07 (Pre-refunded to 1/01/03)
5,000,000 Illinois Health Facilities Authority, Revenue Bonds, Series 1990 11/00 at 102 A3*** 5,265,450
(Riverside Senior Living Center Project), 7.500%, 11/01/20
(Pre-refunded to 11/01/00)
11,375,000 Illinois Health Facilities Authority, Refunding Revenue Bonds, 11/00 at 102 AAA 12,190,474
Series 1990-B (Hinsdale Hospital), 9.000%, 11/15/15
2,025,000 Long Creek Township, Macon County, Illinois, Waterworks 5/03 at 100 N/R 2,056,955
Refunding Revenue Bonds, Series 1993, 7.250%, 5/01/23
3,050,000 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 3,505,762
McHenry and Will Counties, Illinois, General Obligation Bonds,
Series 1990A, 7.200%, 11/01/20
14,375,000 Village of Wheeling, Illinois, Multifamily Housing Revenue Bonds, 2/03 at 100 AAA 14,562,163
Series 1993A (FHA-Insured Mortgage Loan - Arlington Club Project),
6.400%, 2/01/40
4,510,000 Town of Wood River, Wood River Township Hospital, Madison 2/04 at 102 N/R 4,564,977
County, Illinois, General Obligation Bonds (Alternate Revenue
Source), Series 1993, 6.625%, 2/01/14
4,295,000 Town of Wood River, Wood River Township Hospital, Madison 2/04 at 102 N/R 4,320,040
County, Illinois, General Obligation Tort Immunity Bonds,
Series 1993, 6.500%, 2/01/14
- ------------------------------------------------------------------------------------------------------------------------------------
Indiana - 3.8%
2,250,000 Indiana Bond Bank, Special Program Bonds, Series 1992B, 2/03 at 102 A+ 2,393,483
6.750%, 8/01/12
3,200,000 Indiana Health Facility Financing Authority, Hospital Revenue 9/02 at 102 A 3,406,336
Refunding Bonds, Series 1992 (The Methodist Hospitals, Inc.),
6.750%, 9/15/09
2,100,000 City of Indianapolis, Indiana, Economic Development Revenue 7/03 at 103 N/R 1,966,566
Bonds, Series 1993A (The Meadows - Section 8 Assisted Project),
6.000%, 7/01/23 (Alternative Minimum Tax)
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND 4, INC. (NPT) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Indiana (continued)
$ 6,065,000 City of Indianapolis, Indiana, Multifamily Housing First Mortgage 5/09 at 102 A3 $ 5,674,050
Revenue Bonds, Series 1999A (Keystone at Fall Creek Apartments),
6.500%, 5/01/31 (Alternative Minimum Tax)
2,000,000 Hospital Authority of the City of Kokomo (Indiana), Hospital No Opt. Call N/R*** 2,104,920
Revenue Refunding Bonds, Series 1993 (St. Joseph Hospital
and Health Center of Kokomo), 6.250%, 8/15/05
3,615,000 Mooresville Consolidated School Building Corporation, First Mortgage 1/04 at 101 N/R*** 3,837,323
Bonds, Series 1994A (Morgan County, Indiana), 6.200%, 7/15/15
(Pre-refunded to 1/15/04)
5,900,000 Muncie School Building Corporation, First Mortgage Bonds, 7/01 at 102 N/R*** 6,233,704
Series 1992, 6.625%, 7/15/14 (Pre-refunded to 7/15/01)
9,500,000 City of Petersburg, Indiana, Pollution Control Refunding Revenue 1/03 at 102 Aa2 9,604,975
Bonds, Series 1993A (Indianapolis Power and Light Company Project),
6.100%, 1/01/16
- ------------------------------------------------------------------------------------------------------------------------------------
Iowa - 0.5%
585,000 City of Davenport, Iowa, Home Ownership Mortgage Revenue 9/04 at 102 A1 604,943
Refunding Bonds, Series 1994, 7.900%, 3/01/10
3,810,000 Iowa Finance Authority, Hospital Revenue Bonds (Trinity Regional 7/02 at 102 N/R*** 4,101,122
Hospital Project), Series 1993, 7.000%, 7/01/12
(Pre-refunded to 7/01/02)
- ------------------------------------------------------------------------------------------------------------------------------------
Kansas - 1.3%
1,095,000 Johnson County, Kansas, Single Family Mortgage Revenue Refunding 5/04 at 103 A2 1,147,418
Bonds, Series 1994, 7.100%, 5/01/12
Kansas Development Finance Authority, Multifamily Housing Refunding
Revenue Bonds (First Kansas State Partnership, L.P. Project), Series 1998Y:
7,910,000 6.000%, 12/01/20 (Alternative Minimum Tax) 12/08 at 101 N/R 7,339,294
2,460,000 6.125%, 12/01/28 (Alternative Minimum Tax) 12/08 at 101 N/R 2,269,448
875,000 Labette County, Kansas, Single Family Mortgage Revenue Refunding 6/03 at 103 Aa2 910,018
Bonds, 1993 Series A, 8.400%, 12/01/11
- ------------------------------------------------------------------------------------------------------------------------------------
Kentucky - 0.7%
6,585,000 Kentucky Housing Corporation, Housing Revenue Bonds, 1996 Series A, 7/06 at 102 AAA 6,709,259
6.375%, 7/01/28 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Louisiana - 1.1%
3,375,000 Clover Dale Housing Corporation, 1995 Multifamily Mortgage Revenue 4/01 at 100 AA- 3,391,706
Refunding Bonds (Clover Dale Plaza - FHA-Insured Mortgage,
Section 8 Assisted Project), Series A, 6.550%, 2/01/22
6,325,000 Orleans Levee District (A Political Subdivision of the State of 12/05 at 103 AAA 6,415,448
Louisiana), Public Improvement Bonds, Series 1986, 5.950%, 11/01/14
- ------------------------------------------------------------------------------------------------------------------------------------
Maine - 0.8%
7,520,000 Maine Educational Loan Marketing Corporation, Subordinate Student No Opt. Call A 7,530,528
Loan Revenue Bonds, Series 1994-2, 6.250%, 11/01/06
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Maryland - 1.6%
5,000,000 Community Development Administration, Maryland Department of 1/07 at 102 Aa2 4,939,400
Housing and Community Development Revenue Bonds,
Series 1996A, 5.875%, 7/01/16
2,000,000 Maryland Health and Higher Educational Facilities Authority, 7/03 at 102 Baa1 1,838,100
Project and Refunding Revenue Bonds, Doctors Community
Hospital Issue, Series 1993, 5.750%, 7/01/13
540,000 Maryland Transportation Authority, Special Obligation Revenue 7/04 at 102 AAA 543,051
Bonds, Baltimore/Washington International Airport Projects,
Series 1994-A (Qualified Airport Bonds), 6.400%, 7/01/19
(Alternative Minimum Tax)
6,800,000 Housing Opportunities Commission of Montgomery County 7/06 at 102 Aaa 7,018,212
(Montgomery County, Maryland), Multifamily Housing Revenue
Bonds, 1996 Series B, 6.400%, 7/01/28 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Massachusetts - 1.3%
2,000,000 Massachusetts Health and Educational Facilities Authority, 7/03 at 102 Baa1*** 2,115,800
Revenue Bonds, Faulkner Hospital Issue, Series C,
6.000%, 7/01/13 (Pre-refunded to 7/01/03)
2,000,000 Massachusetts Housing Finance Agency, Housing Project 4/03 at 102 A+ 2,068,360
Revenue Bonds, 6.300%, 10/01/13
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND 4, INC. (NPT) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Massachusetts (continued)
$ 4,195,000 Massachusetts Health and Educational Facilities Authority, 2/04 at 102 Aa2 $ 4,038,485
Revenue Refunding Bonds, Youville Hospital Issue (FHA-Insured
Project), Series B, 6.000%, 2/15/34
3,290,000 Massachusetts Industrial Finance Agency, Resource Recovery 7/01 at 103 N/R 3,544,120
Revenue Bonds, SEMASS Project, Series 1991B, 9.250%, 7/01/15
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Michigan - 4.7%
5,000,000 City of Detroit, Michigan, Convention Facility Limited Tax Revenue 9/03 at 102 AAA 4,807,050
Refunding Bonds (Cobo Hall Expansion Project), Series 1993,
5.250%, 9/30/12
10,225,000 City of Detroit, Michigan, Water Supply System Revenue (Senior Lien) 7/07 at 101 AAA 8,760,167
Bonds, Series 1997-A, 5.000%, 7/01/27
3,500,000 Hamilton Community Schools, County of Allegan, State of Michigan, 5/08 at 100 AAA 3,015,565
1998 School Building and Site and Refunding Bonds (General
Obligation - Unlimited Tax), 5.000%, 5/01/24
2,545,000 City of Hancock Hospital Finance Authority, FHA-Insured Mortgage 8/08 at 100 AAA 2,391,766
Hospital Revenue Bonds (Portage Health System, Inc.),
Series 1998, 4.625%, 8/01/18
1,000,000 City of Kalamazoo Hospital Finance Authority, Hospital Revenue 5/06 at 102 AAA 975,500
Refunding and Improvement Bonds (Bronson Methodist Hospital),
Series 1996, 5.750%, 5/15/16
2,000,000 Michigan State Hospital Finance Authority, Hospital Revenue and No Opt. Call BBB 1,962,060
Refunding Bonds (The Detroit Medical Center Obligated Group),
Series 1993B, 5.000%, 8/15/03
3,200,000 Michigan State Hospital Finance Authority, Hospital Revenue and 8/02 at 102 AAA 3,205,568
Refunding Bonds, Series 1992 (Bon Secours Health System Project),
6.100%, 8/15/22
10,500,000 Michigan State Hospital Finance Authority, Hospital Revenue Bonds 8/08 at 101 BBB 8,353,905
(The Detroit Medical Center Obligated Group), Series 1998A,
5.250%, 8/15/23
3,750,000 Michigan Strategic Fund, Limited Obligation Refunding Revenue 6/03 at 102 AAA 3,843,225
Bonds (Consumers Power Company Project), Collateralized
Series 1993B, 5.800%, 6/15/10
6,000,000 County of Monroe, Michigan, Pollution Control Revenue Bonds 9/03 at 102 AAA 6,236,160
(The Detroit Edison Company Project), Series CC-1992,
6.550%, 9/01/24 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Minnesota - 1.3%
5,000,000 Minneapolis/St. Paul, Minnesota, Housing Finance Board, Single 11/07 at 102 AAA 4,739,100
Family Mortgage Revenue Bonds, FNMA/GNMA Backed Program,
Phase XI-AB, 5.800%, 11/01/30 (Alternative Minimum Tax)
4,000,000 Minneapolis Community Development Agency, Limited Tax 12/02 at 102 A- 4,258,360
Supported Development Revenue Bonds, Series 1992G-3,
7.375%, 12/01/12
2,720,000 City of Minnetonka, Minnesota, Multifamily Housing Revenue 6/04 at 102 AAA 2,823,550
Refunding Bonds, Series 1994A (GNMA Collateralized Mortgage
Loan - Brier Creek Project), 6.450%, 6/20/24
- ------------------------------------------------------------------------------------------------------------------------------------
Mississippi - 0.9%
2,000,000 Mississippi Higher Education Assistance Corporation, Student Loan 9/02 at 102 Aaa 2,027,560
Revenue Bonds, Senior Series 1993-B, 5.800%, 9/01/06
(Alternative Minimum Tax)
1,080,000 Mississippi Housing Finance Corporation, Single Family Mortgage 4/00 at 102 AAA 1,103,101
Purchase Revenue Bonds, Series 1989 (GNMA Mortgage-Backed
Securities Program), 8.250%, 10/15/18 (Alternative Minimum Tax)
1,965,000 Mississippi Home Corporation, Single Family Mortgage Revenue 4/05 at 102 Aaa 2,005,302
Bonds, Series 1995B, 6.550%, 4/01/21 (Alternative Minimum Tax)
1,695,000 Mississippi Regional Housing Authority No. V, Multifamily Housing 7/00 at 105 AAA 1,753,020
Revenue Refunding Bonds, Series 1993A (FHA-Insured Mortgage
Loan - Deville Apartments Section 8 Assisted Project),
7.050%, 7/01/21
1,785,000 Mississippi Educational Facilities Authority, For Private, 6/03 at 102 N/R 1,791,158
Nonprofit Institutions of Higher Learning, Educational Facilities
Revenue Bonds (Tougaloo College Project), Series 1993A,
6.500%, 6/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
Nebraska - 2.6%
10,000,000 Energy America (Nebraska) , Natural Gas Revenue Note No Opt. Call N/R 9,648,900
(Metropolitan Utility District Project), Series 1997B,
5.700%, 7/01/08
9,000,000 Nebraska Higher Education Loan Program Inc., Senior Subordinate No Opt. Call AAA 8,882,640
Bonds, Series A-5A, 6.250%, 6/01/18 (Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Nebraska (continued)
$ 5,075,000 Airport Authority of the City of Omaha (Nebraska), Airport Facilities 1/02 at 102 A1 $ 5,506,933
Revenue Refunding Bonds, Series 1991, 8.375%, 1/01/14
- ------------------------------------------------------------------------------------------------------------------------------------
Nevada - 0.7%
4,500,000 Clark County School District, Nevada, General Obligation - Limited No Opt. Call AAA 5,084,325
Tax School Improvement Bonds (Current Coupon Bonds),
Series 1991A, 7.000%, 6/01/10
1,725,000 Nevada Housing Division, Single Family Program Senior Bonds, 4/04 at 102 A1 1,743,975
1993 Issue B, 6.200%, 10/01/15
- ------------------------------------------------------------------------------------------------------------------------------------
New Hampshire - 0.4%
2,090,000 New Hampshire Housing Finance Authority, Single Family Residential 7/00 at 102 Aa3 2,147,078
Mortgage Bonds, 1990 Series A, 7.950%, 7/01/22
(Alternative Minimum Tax)
1,780,000 New Hampshire Housing Finance Authority, Single Family Mortgage 1/07 at 102 Aa3 1,790,805
Acquisition Revenue Bonds, 1996 Series C, 6.200%, 7/01/16
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
New Mexico - 0.3%
365,000 New Mexico Educational Assistance Foundation, Student Loan Revenue 12/02 at 101 A 374,570
Bonds, Student Loan Revenue Bonds, Subordinate 1992 Series
One B, 6.850%, 12/01/05 (Alternative Minimum Tax)
1,910,000 New Mexico Mortgage Finance Authority, Single Family Mortgage 7/02 at 102 Aa1 1,963,289
Purchase Refunding Senior Bonds, 1992 Series A2, 6.900%, 7/01/24
- ------------------------------------------------------------------------------------------------------------------------------------
New York - 14.4%
30,050,000 Atlas Community Housing Opportunity Trust, Series 1999-1, No Opt. Call N/R 28,739,520
Class A Certificates, 6.750%, 6/01/34 (Optional put 6/01/09)
10,000,000 Erie County Industrial Development Agency, Solid Waste Disposal 12/10 at 103 N/R 10,696,800
Facility Revenue Bonds (1998 CanFibre of Lackawanna Project),
9.050%, 12/01/25 (Alternative Minimum Tax)
14,000,000 Long Island Power Authority (New York), Electric System General 6/03 at 101 A- 12,591,460
Revenue Bonds, Series 1998A, 5.500%, 12/01/29
1,000,000 The City of New York, General Obligation Bonds, Fiscal 1995 No Opt. Call A- 1,089,130
Series A, 7.000%, 8/01/04
3,500,000 The City of New York, General Obligation Bonds, Fiscal 1996 No Opt. Call A- 3,740,485
Series B, 6.750%, 8/15/03
14,310,000 The City of New York, General Obligation Bonds, Fiscal 1996 No Opt. Call A- 15,286,514
Series F, 6.500%, 2/01/05
The City of New York, General Obligation Bonds, Fiscal 1991 Series D:
4,315,000 9.500%, 8/01/02 (Pre-refunded to 8/01/01) 8/01 at 101 1/2 Aaa 4,756,640
85,000 9.500%, 8/01/02 8/01 at 101 1/2 A- 92,970
16,915,000 New York City Transitional Finance Authority, Future Tax Secured Bonds,
Fiscal 1998 Series C, 5/08 at 101 AA 14,435,938
5.000%, 5/01/26
Dormitory Authority of the State of New York, The New York and
Presbyterian Hospital FHA-Insured Mortgage Hospital Revenue
Bonds, Series 1998:
4,350,000 5.500%, 8/01/10 No Opt. Call AAA 4,365,356
5,000,000 5.500%, 8/01/11 No Opt. Call AAA 4,993,100
10,445,000 New York State Medical Care Facilities Finance Agency, Hospital 8/02 at 102 AAA 10,583,919
and Nursing Home FHA-Insured Mortgage Revenue Bonds,
1992 Series B, 6.200%, 8/15/22
4,200,000 New York State Medical Care Facilities Finance Agency, FHA-Insured 2/05 at 102 AA 4,254,852
Mortgage Project Revenue Bonds, 1995 Series B, 6.150%, 2/15/35
New York State Medical Care Facilities Finance Agency, Hospital
and Nursing Home FHA-Insured Mortgage Revenue Bonds,
1994 Series A:
4,875,000 6.200%, 2/15/21 (Pre-refunded to 2/15/04) 2/04 at 102 AA*** 5,230,924
3,365,000 6.200%, 2/15/21 2/04 at 102 AA 3,398,953
7,500,000 New York State Thruway Authority, General Revenue Bonds, Series C, 1/05 at 102 AAA 8,026,500
6.000%, 1/01/15 (Pre-refunded to 1/01/05)
- ------------------------------------------------------------------------------------------------------------------------------------
North Carolina - 0.2%
2,000,000 North Carolina Municipal Power Agency Number 1, Catawba Electric No Opt. Call AAA 2,078,240
Revenue Bonds, Series 1992, 6.000%, 1/01/11
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND 4, INC. (NPT) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
North Dakota - 1.0%
$ 8,045,000 Mercer County, North Dakota, Pollution Control Revenue Bonds 1/00 at 102 1/2 A $ 8,293,751
(Basin Electric Power Cooperative - Antelope Valley Station),
1984 Series B, 7.000%, 1/01/19
625,000 City of Minot, North Dakota, Single Family Mortgage Revenue 8/03 at 102 Aa 653,381
Refunding Bonds, Series 1993, 7.700%, 8/01/10
- ------------------------------------------------------------------------------------------------------------------------------------
Ohio - 2.1%
4,500,000 Akron, Bath and Copley Joint Township Hospital District, Ohio, 11/02 at 102 Baa1 4,573,575
Hospital Facilities Revenue Bonds, Series 1992 (Summa Health
System Project), 6.250%, 11/15/07
1,995,000 County of Franklin, Ohio, Multifamily Housing Mortgage Revenue 1/05 at 103 Aa 1,832,028
Bonds, Series 1994A (FHA-Insured Mortgage Loan, Hamilton
Creek Apartments Project), 5.550%, 7/01/24
(Alternative Minimum Tax)
3,705,000 Ohio Housing Finance Agency, Residential Mortgage Revenue 3/05 at 102 AAA 3,816,335
Bonds (GNMA Mortgage-backed Securities Programs),
1995 Series A-1, 6.300%, 9/01/17
4,215,000 The Student Loan Funding Corporation, Cincinnati, Ohio, Student No Opt. Call A1 4,237,044
Loan Revenue Bonds, Series 1986A, 5.500%, 12/01/01
(Alternative Minimum Tax)
4,370,000 City of Toledo, Ohio, General Obligation - Limited Tax, Various 12/04 at 102 AAA 4,525,179
Purpose Improvement Bonds, Series 1994, 5.750%, 12/01/09
- ------------------------------------------------------------------------------------------------------------------------------------
Oklahoma - 2.5%
Oklahoma County Finance Authority, Multifamily Housing First
Mortgage Revenue Bonds, Series 1998A (Multiple Apartments
Project):
3,495,000 7.000%, 4/01/18 4/06 at 102 N/R 3,358,730
7,000,000 7.125%, 4/01/28 4/06 at 102 N/R 6,684,720
10,000,000 Tulsa County Industrial Authority (Oklahoma), First Mortgage 3/11 at 101 N/R 9,289,200
Multifamily Housing Revenue Bonds, Series 1999 (Stoneridge
Apartments Project), 6.125%, 3/01/39 (Alternative Minimum Tax)
3,340,000 Tulsa Industrial Authority, Hospital Revenue and Refunding Bonds No Opt. Call AAA 3,686,959
(Hillcrest Medical Center Project), Series 1996, 6.500%, 6/01/09
- ------------------------------------------------------------------------------------------------------------------------------------
Puerto Rico - 1.9%
12,390,000 Commonwealth of Puerto Rico, Public Improvement Bonds No Opt. Call AAA 13,612,521
of 1997 (General Obligation Bonds), 6.500%, 7/01/13
5,000,000 Commonwealth of Puerto Rico, Public Improvement Refunding 7/08 at 101 AAA 4,066,200
Bonds, Series 1998 (General Obligation Bonds), 4.500%, 7/01/23
- ------------------------------------------------------------------------------------------------------------------------------------
South Carolina - 0.7%
5,750,000 Piedmont Municipal Power Agency, Electric Revenue Refunding 1/01 at 100 AAA 4,146,325
Bonds, Series 1991, 4.000%, 1/01/23
2,460,000 Piedmont Municipal Power Agency, Electric Revenue Bonds, No Opt. Call AAA 2,417,983
1998A Refunding Series, 5.500%, 1/01/13
- ------------------------------------------------------------------------------------------------------------------------------------
Tennessee - 0.8%
5,000,000 The Metropolitan Government of Nashville and Davidson County 5/08 at 102 AA 4,438,550
(Tennessee), Electric System Revenue Bonds, 1998 Series A,
5.200%, 5/15/23
2,400,000 Tennessee Housing Development Agency, Mortgage Finance 7/04 at 102 A+ 2,477,184
Program Bonds, 1994 Series A, 6.900%, 7/01/25
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Texas - 5.8%
1,000,000 Alliance Airport Authority, Inc., Special Facilities Revenue 12/00 at 102 Baa2 1,040,720
Bonds, Series 1990 (American Airlines, Inc. Project),
7.500%, 12/01/29 (Alternative Minimum Tax)
9,950,000 Alliance Airport Authority, Inc., Special Facilities Revenue No Opt. Call Baa2 10,645,605
Bonds, Series 1991 (American Airlines, Inc. Project),
7.000%, 12/01/11 (Alternative Minimum Tax)
3,345,000 Columbia-Brazoria Independent School District (Brazoria 2/09 at 100 AAA 2,742,599
County, Texas), Unlimited Tax School Building Bonds,
Series 1999, 4.750%, 2/01/25
6,000,000 Dallas-Fort Worth International Airport Facility Improvement 11/00 at 102 Baa2 6,230,040
Corporation, American Airlines, Inc. Revenue Bonds, Series 1990,
7.500%, 11/01/25 (Alternative Minimum Tax)
2,500,000 City of Houston, Texas, Airport System Subordinate Lien 7/01 at 102 AAA 2,612,275
Revenue Bonds, Series 1991A, 6.750%, 7/01/21
(Alternative Minimum Tax)
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Texas (continued)
$ 5,000,000 City of Houston, Texas, Water and Sewer System Junior Lien Revenue 12/07 at 102 AAA $ 4,277,450
Refunding Bonds, Series 1997D, 5.000%, 12/01/25
5,000,000 Lower Neches Valley Authority Industrial Development Corporation 3/08 at 101 AA 4,560,100
(Texas), Refunding Revenue Bonds, Series 1998 (Mobil Oil Refining
Corporation Project), 5.550%, 3/01/33
1,122,457 The Midland Housing Finance Corporation (Midland, Texas), 11/05 at 103 Aaa 1,199,761
Single Family Mortgage Revenue Refunding, Series 1992A,
8.450%, 12/01/11
2,215,000 North Texas Higher Education Authority Inc., Student Loan Revenue 4/03 at 102 A 2,232,521
Bonds, Series 1993D, 6.300%, 4/01/09 (Alternative Minimum Tax)
3,410,000 Ratama Development Corporation, Special Facilities Revenue No Opt. Call AAA 4,469,487
Bonds (Retama Park Racetrack Project), Series 1993,
8.750%, 12/15/12
4,618,965 General Services Commission (An Agency of the State of Texas), 9/05 at 100 A 4,873,701
as Lessee, Participation Interests, 7.500%, 9/01/22
8,500,000 Travis County Health Facilities Development Corporation, 11/03 at 102 Aa 8,523,290
Hospital Revenue Bonds (Daughters of Charity National Health
System - Daughters of Charity Health Services of Austin),
Series 1993B, 6.000%, 11/15/22
- ------------------------------------------------------------------------------------------------------------------------------------
Utah - 1.9%
3,595,000 City of Bountiful, Davis County, Utah, Hospital Revenue Refunding 12/08 at 101 N/R 3,133,402
Bonds (South Davis Community Hospital Project), Series 1998,
5.750%, 12/15/18
8,000,000 Intermountain Power Agency (Utah), Power Supply Revenue Bonds, 7/06 at 102 A+ 8,251,120
Series 1996A, 6.150%, 7/01/14
6,000,000 Intermountain Power Agency (Utah), Power Supply Revenue 7/07 at 102 AAA 5,830,920
Refunding Bonds, 1997 Series B, 5.750%, 7/01/19
- ------------------------------------------------------------------------------------------------------------------------------------
Virginia - 1.1%
2,645,000 Suffolk Redevelopment and Housing Authority, Multifamily Housing 7/02 at 104 Baa2 2,797,326
Revenue Refunding Bonds, Series 1994 (Chase Heritage at
Dulles Project), 7.000%, 7/01/24 (Mandatory put 7/01/04)
9,405,000 Upper Occoquan Sewage Authority (Virginia), Regional Sewerage 7/06 at 100 AAA 7,645,325
System Revenue Bonds, Series of 1995A, 4.750%, 7/01/29
- ------------------------------------------------------------------------------------------------------------------------------------
Washington - 11.7%
1,050,000 City of Bellevue, King County, Washington, Water and Sewer Revenue 7/04 at 100 Aa2 1,085,564
Refunding Bonds, Series 1994, 5.875%, 7/01/09
1,035,000 Covington Water District, King County, Washington, Water 3/05 at 100 AAA 1,038,405
Improvement and Refunding Revenue Bonds, Series 1995,
6.050%, 3/01/20
1,655,000 City of Everett, Washington, Limited Tax General Obligation Bonds, 9/07 at 100 Aaa 1,495,226
Series 1997, 5.125%, 9/01/17
2,000,000 Housing Authority of the County of King, Washington, Housing 5/05 at 100 AA+ 2,028,660
Revenue Bonds, Series 1995 (Woodridge Park Project),
6.350%, 5/01/25 (Alternative Minimum Tax)
1,000,000 Federal Way School District No. 210, King County, Washington, No Opt. Call AAA 1,025,400
Unlimited Tax General Obligation and Refunding Bonds,
Series 1993, 5.750%, 12/01/12
1,360,000 Tahoma School District No. 409, King County, Washington, No Opt. Call Aaa 1,439,560
Unlimited Tax General Obligation Improvement and Refunding
Bonds, Series 1997, 6.000%, 12/01/10
800,000 Kitsap County, Washington, Sewer Revenue Bonds, Series 1996, 7/06 at 100 AAA 786,056
5.750%, 7/01/16
1,100,000 Public Utility District No. 1 of Klickitat County, Washington, 10/05 at 101 AAA 1,073,677
Electric Revenue Bonds, Series 1995, 5.650%, 10/01/15
1,000,000 Lewis County Public Utility District, Cowlitz Falls Hydroelectric 10/03 at 102 Aa1 937,520
Project Revenue Refunding Bonds, Series 1993, 5.500%, 10/01/22
1,300,000 Port of Seattle, Washington, Revenue Bonds, Series 1996A, 9/06 at 101 AAA 1,213,108
5.500%, 9/01/21
1,000,000 Port of Seattle, Washington, Revenue Bonds, Series 1990A, 12/00 at 100 AA-*** 1,022,320
6.000%, 12/01/14 (Pre-refunded to 12/01/00)
1,000,000 Port of Vancouver, Clark County, Washington, Limited Tax General No Opt. Call AAA 1,057,030
Obligation Bonds, 1994 Series B, 6.000%, 12/01/04
(Alternative Minimum Tax)
<PAGE>
Portfolio of Investments
NUVEEN PREMIUM INCOME MUNICIPAL FUND 4, INC. (NPT) (continued)
October 31, 1999
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Washington (continued)
$ 1,000,000 The City of Renton, Washington, Limited Tax General Obligation 6/07 at 100 AAA $ 982,850
Bonds, General Purpose/Public Improvement Bonds, Series 1997B,
5.750%, 12/01/17
900,000 City of Richland, Washington, Water and Sewer Improvement 4/03 at 101 AAA 938,169
Revenue Bonds, Series 1993, 5.625%, 4/01/12
(Pre-refunded to 4/01/03)
1,200,000 Sammamish Plateau Water and Sewer District, King County, 12/06 at 100 AAA 1,144,344
Washington, Water and Sewer Revenue Refunding Bonds,
Series 1996, 5.500%, 12/01/16
Seattle Indian Services Commission, Special Obligation Bonds,
Series 1994:
1,000,000 6.000%, 11/01/16 11/04 at 100 AA+ 1,005,780
750,000 6.150%, 11/01/24 11/04 at 100 AA+ 754,185
1,000,000 The City of Seattle, Washington, Municipal Light and Power 10/06 at 102 AAA 948,140
Revenue Bonds, 5.625%, 10/01/21
500,000 The City of Seattle, Washington, Municipal Light and Power 8/02 at 102 AA 504,390
Revenue Bonds, Series 1992A, 5.750%, 8/01/12
500,000 The City of Seattle, Washington, Water System and Refunding 6/03 at 101 AA 446,395
Revenue Bonds, Series 1993, 5.250%, 12/01/23
1,640,000 Housing Authority of Skagit County, Low- Income Housing Assistance 11/04 at 104 AAA 1,741,746
Revenue Bonds, Series 1993 (GNMA Collateralized Mortgage
Loan - Sea Mar Project), 7.000%, 6/20/35
1,385,000 Public Utility District No. 1 of Snohomish County, Washington, 1/04 at 102 A+ 1,399,543
Generation System Revenue Bonds, Series 1993B,
5.750%, 1/01/09 (Alternative Minimum Tax)
1,500,000 Mukilteo School District No. 6 of Snohomish County, Washington, No Opt. Call AAA 1,538,220
Unlimited Tax General Obligation and Refunding Bonds,
Series 1993, 5.700%, 12/01/12
500,000 Edmonds School District No. 15 of Snohomish County, Washington, No Opt. Call AA- 546,765
Unlimited Tax General Obligation Bonds, Series 1994,
6.500%, 12/01/08
980,000 Central Valley School District No.356 of Spokane County, No Opt. Call AAA 370,391
Washington, Unlimited Tax Deferred Interest General Obligation
Bonds, Series 1998B, 0.000%, 12/01/15
1,675,000 Spokane Downtown Foundation, Parking Revenue Bonds, 8/08 at 102 BBB- 1,480,449
Series 1998 (River Park Square Project), 5.600%, 8/01/19
4,705,000 City of Tacoma, Washington, Sewer Revenue Refunding Bonds, No Opt. Call AAA 5,639,836
1994 Series B, 8.000%, 12/01/08
1,000,000 University of Washington, Housing and Dining System Revenue 12/06 at 102 AAA 912,080
Refunding Bonds, Junior Lien Series 1996, 5.125%, 12/01/15
2,000,000 State of Washington, General Obligation Bonds, Series 1994B, 5/04 at 100 AA+ 2,004,280
6.000%, 5/01/19
1,000,000 Washington Health Care Facilities Authority, Revenue Bonds, 8/04 at 102 AA- 1,060,220
Series 1993A (The Heart Institute of Spokane), 5.800%, 8/15/18
1,250,000 Washington Health Care Facilities Authority, Revenue Bonds, 7/02 at 102 AAA 1,340,400
Refunding Series 1992 (Franciscan Health System/ St. Clare
Hospital, Tacoma), 6.625%, 7/01/20 (Pre-refunded to 7/01/02)
2,000,000 Washington Health Care Facilities Authority, Revenue Bonds, 10/02 at 102 AAA 2,126,780
Series 1992 (The Children's Hospital and Medical Center,
Seattle), 6.125%, 10/01/13
1,400,000 Washington Health Care Facilities Authority, Revenue Bonds, 11/02 at 102 AAA 1,498,056
Series 1992 (Swedish Hospital Medical Center, Seattle),
6.300%, 11/15/22 (Pre-refunded to 11/15/02)
955,000 Washington State Housing Finance Commission, Multifamily 1/00 at 102 AAA 976,287
Mortgage Revenue Bonds (GNMA Mortgage Backed Securities
Program), Series 1989A, 7.700%, 7/01/32
(Alternative Minimum Tax)
1,470,000 Washington State Housing Finance Commission, Single-Family No Opt. Call AAA 1,494,872
Mortgage Revenue Bonds (Mortgage Backed Securities Program),
Series 1992D-1, 6.150%, 1/01/26 (Alternative Minimum Tax)
2,000,000 Washington Health Care Facilities Authority, Revenue Bonds, 8/08 at 102 AA 1,665,980
Series 1998 (Highline Community Hospital), 5.000%, 8/15/21
1,000,000 Washington Health Care Facilities Authority, Revenue Bonds, 8/13 at 102 AAA 828,950
Series 1998 (Harrison Memorial Hospital), 5.000%, 8/15/28
470,000 Washington State Housing Finance Commission, Single Family 6/07 at 102 Aaa 470,987
Program Bonds, 1997 Series 2A, 6.050%, 12/01/16
Washington Public Power Supply System, Nuclear Project No. 1 Refunding
Revenue Bonds, Series 1993A:
4,500,000 5.750%, 7/01/13 7/03 at 102 Aa1 4,476,465
1,000,000 5.700%, 7/01/17 7/03 at 102 AAA 970,780
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Washington (continued)
$ 23,000,000 Washington Public Power Supply System (Bonneville), Nuclear 7/03 at 102 Aa1 $ 21,385,170
Project No. 1 Refunding Revenue Bonds, Series 1993C,
5.375%, 7/01/15
Washington Public Power Supply System, Nuclear Project No. 2
Refunding Revenue Bonds, Series 1992A:
5,710,000 6.250%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 102 Aaa 6,069,616
1,540,000 6.250%, 7/01/12 7/02 at 102 Aa1 1,605,850
6,475,000 Washington Public Power Supply System, Nuclear Project No. 2 No Opt. Call Aa1 7,239,762
Refunding Revenue Bonds, Series 1990A, 7.250%, 7/01/06
11,000,000 Washington Public Power Supply System, Nuclear Project No. 3 No Opt. Call Aa1 12,298,220
Refunding Revenue Bonds, Series 1993B, 7.000%, 7/01/09
3,700,000 Washington Public Power Supply System, Nuclear Project No. 3 7/08 at 102 Aa1 3,239,202
Refunding Revenue Bonds, Series 1998A, 5.125%, 7/01/18
1,400,000 Washington State University, Housing and Dining System Revenue 10/04 at 101 AAA 1,434,464
and Refunding Bonds, Series 1994, 6.375%, 10/01/18
65,000 Western Washington University, Housing and Dining System 10/02 at 101 AAA 66,221
Revenue Bonds, Series 1992, 6.375%, 10/01/22
1,000,000 Yakima-Tieton Irrigation District, Yakima County, Washington, 6/03 at 102 AAA 1,042,100
Refunding Revenue Bonds, Series 1992, 6.125%, 6/01/13
- ------------------------------------------------------------------------------------------------------------------------------------
Wisconsin - 0.0%
95,000 Wisconsin Housing and Economic Development Authority, 5/02 at 102 A1 97,531
Home Improvement Revenue Bonds, 1992 Series A
7.000%, 5/01/10 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 896,172,224 Total Investments - (cost $896,451,218) - 96.9% 892,953,125
============= --------------------------------------------------------------------------------------------------------------------
Short-Term Investments - 1.8%
2,000,000 Jackson County, Mississippi, Pollution Control Refunding P-1 2,000,000
Revenue Bonds (Chevron U.S.A. Inc. Project), Series 1993,
Variable Rate Demand Bonds, 3.500%, 6/01/23+
5,000,000 Long Island Power Authority (New York), Electric System Revenue VMIG-1 5,000,000
Bonds, Series 6 of 1998, Subordinate Lien, Variable Rate Demand
Obligations, 3.650%, 5/01/33+
3,500,000 Orange County Sanitation District, Certificates of Participation, VMIG-1 3,500,000
Variable Rate Demand Bonds, 3.500%, 8/01/17+
6,000,000 Sublette County, Adjustable Tender Pollution Control A-1+ 6,000,000
(Exxon Project), Variable Rate Demand Bonds,
3.550%, 7/01/17+ (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
$ 16,500,000 Total Short-Term Investments - (cost $16,500,000) 16,500,000
============= --------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 12,487,604
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 921,940,729
====================================================================================================================
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
*** 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>
Statement of Net Assets
October 31, 1999
<CAPTION>
Premium Income Premium Income 2 Premium Income 4
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in municipal securities, at market value (note 1) $1,367,998,044 $920,728,695 $892,953,125
Temporary investments in short-term municipal securities, at
amortized cost, which approximates market value (note 1) -- 9,000,000 16,500,000
Receivables:
Interest 27,451,026 17,506,970 18,615,442
Investments sold 4,644,152 5,577,688 1,100,000
Other assets 153,195 62,319 81,705
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 1,400,246,417 952,875,672 929,250,272
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Cash overdraft 5,977,687 1,139,341 3,100,965
Payable for investments purchased 5,209,401 -- --
Accrued expenses:
Management fees (note 6) 728,754 503,955 498,565
Other 19,816 390,852 552,643
Preferred share dividends payable 291,143 114,086 155,806
Common share dividends payable 4,528,757 3,246,385 3,001,564
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 16,755,558 5,394,619 7,309,543
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $1,383,490,859 $947,481,053 $921,940,729
====================================================================================================================================
Preferred shares, at liquidation value $ 525,000,000 $347,000,000 $338,400,000
====================================================================================================================================
Preferred shares outstanding 21,000 13,880 13,536
====================================================================================================================================
Common shares outstanding 63,785,431 41,093,661 43,236,705
====================================================================================================================================
Net asset value per Common share outstanding (net assets less
Preferred shares at liquidation value, divided by Common
shares outstanding) $ 13.46 $ 14.61 $ 13.50
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Statement of Operations
Year Ended October 31, 1999
<TABLE>
<CAPTION>
Premium Income Premium Income 2 Premium Income 4
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income (note 1) $ 80,686,409 $ 56,083,074 $ 52,169,072
- ------------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees (note 6) 8,944,447 5,992,737 5,709,018
Preferred shares - auction fees 1,219,006 749,998 781,685
Preferred shares - dividend disbursing agent fees 52,521 52,521 73,945
Shareholders' servicing agent fees and expenses 218,527 72,496 108,374
Custodian's fees and expenses 186,805 132,845 142,903
Directors' fees and expenses (note 6) 12,972 9,052 8,738
Professional fees 22,372 21,112 21,017
Shareholders' reports - printing and mailing expenses 321,636 210,166 211,040
Stock exchange listing fees 54,582 35,449 35,511
Investor relations expense 125,677 75,186 77,365
Other expenses 58,640 42,895 41,725
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 11,217,185 7,394,457 7,211,321
Custodian fee credit (note 1) (20,847) (11,251) (21,825)
- ------------------------------------------------------------------------------------------------------------------------------------
Net expenses 11,196,338 7,383,206 7,189,496
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 69,490,071 48,699,868 44,979,576
- ------------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investment transactions (notes 1 and 4) (3,286,652) 660,037 1,550,458
Change in net unrealized appreciation (depreciation) of investments (130,843,202) (61,112,453) (66,400,219)
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (134,129,854) (60,452,416) (64,849,761)
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $ (64,639,783) $(11,752,548) $(19,870,185)
===================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets
<CAPTION>
Premium Income Premium Income 2 Premium Income 4
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended Year Ended Year Ended
10/31/99 10/31/98 10/31/99 10/31/98 10/31/99 10/31/98
- ------------------------------------------------------------------------------------------------------------------------------------
Operations
<S> <C> <C> <C> <C> <C> <C>
Net investment income $ 69,490,071 $ 73,113,768 $ 48,699,868 $ 47,792,561 $ 44,979,576 $ 43,819,541
Net realized gain (loss)
from investment
transactions (notes 1 and 4) (3,286,652) 5,695,107 660,037 2,300,084 1,550,458 4,094,161
Change in net unrealized
appreciation (depreciation)
of investments (130,843,202) 22,102,303 (61,112,453) 16,299,650 (66,400,219) 12,806,701
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in
net assets from operations (64,639,783) 100,911,178 (11,752,548) 66,392,295 (19,870,185) 60,720,403
- ------------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
(note 1)
From undistributed net
investment income:
Common shareholders (54,345,201) (56,136,763) (38,507,522) (37,981,891) (34,088,309) (33,322,374)
Preferred shareholders (15,095,799) (16,253,788) (9,888,106) (9,776,494) (9,968,342) (10,741,953)
From accumulated net realized
gains from investment
transactions:
Common shareholders (4,324,653) (3,623,618) (1,832,537) (3,704,032) -- --
Preferred shareholders (1,245,222) (801,154) (465,930) (896,110) -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (75,010,875) (76,815,323) (50,694,095) (52,358,527) (44,056,651) (44,064,327)
- ------------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions
(note 2)
Common shares:
Net proceeds from shares issued
in acquisition of NPW (note 1) -- -- -- -- 32,550,416 --
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions -- -- 3,673,867 2,218,879 559,088 583,436
Preferred shares:
Net proceeds from sale
of shares 49,386,100 -- 46,413,934 -- 12,754,386 --
Net proceeds from shares
issued in acquisition
of NPW (note 1) -- -- -- -- 17,000,000 --
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
capital share transactions 49,386,100 -- 50,087,801 2,218,879 62,863,890 583,436
====================================================================================================================================
Net increase (decrease)
in net assets (90,264,558) 24,095,855 (12,358,842) 16,252,647 (1,062,946) 17,239,512
Net assets at the
beginning of year 1,473,755,417 1,449,659,562 959,839,895 943,587,248 923,003,675 905,764,163
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of year $1,383,490,859 $1,473,755,417 $947,481,053 $959,839,895 $921,940,729 $923,003,675
====================================================================================================================================
Balance of undistributed net
investment income at the
end of year $ 1,528,690 $ 1,479,619 $ 2,414,732 $ 2,110,492 $ 2,151,560 $ 1,228,635
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The National Funds (the "Funds") covered in this report and their corresponding
New York Stock Exchange symbols are Nuveen Premium Income Municipal Fund, Inc.
(NPI), Nuveen Premium Income Municipal Fund 2, Inc. (NPM) and Nuveen Premium
Income Municipal Fund 4, Inc. (NPT).
Each Fund invests primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities. The Funds are registered under
the Investment Company Act of 1940 as closed-end, diversified management
investment companies.
On September 9, 1999, NPT acquired all of the net assets of Nuveen Washington
Premium Income Municipal Fund (NPW) pursuant to a plan of reorganization
approved by the common shareholders of NPW and the preferred shareholders of NPT
and NPW on August 17, 1999. The acquisition was accomplished by a tax-free
exchange of 2,351,909 common shares of NPT for the 2,320,051 common shares of
NPW outstanding on September 9, 1999. NPW's net assets at that date of
$49,550,416 included $1,045,588 of net unrealized appreciation and $17,000,000
of preferred shares at liquidation value which were combined with that of NPT.
The combined net assets of NPT immediately after the acquisition were
$936,836,305.
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. 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
October 31, 1999, Premium Income had an outstanding delayed delivery purchase
commitment of $5,209,401. There were no such outstanding purchase commitments in
Premium Income 2 and Premium Income 4.
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.
Federal 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 income tax, to retain such
tax-exempt status when distributed to shareholders of the Funds. All monthly
tax-exempt income dividends paid during the fiscal year ended October 31, 1999,
have been designated Exempt Interest Dividends. Net realized capital gain and
market discount distributions are subject to federal taxation.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend and payment
is made or reinvestment is credited to shareholder accounts on the first
business day 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.
<PAGE>
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 more than one Series. The dividend
rate on each Series may change every seven days, as set by the auction agent.
The number of shares outstanding, by Series and in total, for each of the Funds
is as follows:
Premium Premium Premium
Income Income 2 Income 4
- --------------------------------------------------------------------------------
Number of Shares:
Series M 3,800 2,000 2,200
Series M2 2,000 -- --
Series T 3,800 3,000 2,000
Series T2 -- -- 1,328
Series W 3,800 2,000 1,680
Series W2 -- -- 520
Series Th 3,800 3,000 2,680
Series F 3,800 2,000 1,800
Series F2 -- 1,880 1,328
- --------------------------------------------------------------------------------
Total 21,000 13,880 13,536
================================================================================
Effective May 21, 1999, Premium Income issued 2,000 Series M2 $25,000 stated
value Preferred shares.
Effective May 28, 1999, Premium Income 2 issued 1,880 Series F2 $25,000 stated
value Preferred shares.
Effective June 18, 1999, Premium Income 4 issued 520 Series W2 $25,000 stated
value Preferred shares.
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 fiscal year ended October 31, 1999.
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.
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>
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
<TABLE>
<CAPTION>
Premium Income Premium Income 2
- -----------------------------------------------------------------------------------------------------------
Year Ended Year Ended Year Ended Year Ended
10/31/99 10/31/98 10/31/99 10/31/98
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common shares:
Shares issued to shareholders due to
reinvestment of distributions -- -- 225,414 137,128
- -----------------------------------------------------------------------------------------------------------
-- -- 225,414 137,128
===========================================================================================================
Preferred shares sold 2,000 -- 1,880 --
===========================================================================================================
<CAPTION>
Premium Income 4
- -----------------------------------------------------------------------------------------------------------
Year Ended Year Ended
10/31/99 10/31/98
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C>
Common shares:
Shares issued in acquisition of NPW 2,351,909 --
Shares issued to shareholders due to
reinvestment of distributions 37,115 39,216
- -----------------------------------------------------------------------------------------------------------
2,389,024 39,216
===========================================================================================================
Preferred shares sold 520 --
===========================================================================================================
</TABLE>
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 1, 1999, to shareholders of record
on November 15, 1999, as follows:
<TABLE>
<CAPTION>
Premium Premium Premium
Income Income 2 Income 4
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dividend per share $.0710 $.0790 $.0695
===========================================================================================================
</TABLE>
<PAGE>
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities for the fiscal year ended October
31, 1999, were as follows:
<TABLE>
<CAPTION>
Premium Premium Premium
Income Income 2 Income 4
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Purchases:
Long-term municipal securities $263,279,163 $80,591,250 $134,656,344
Long-term municipal securities
acquired in the acquisition of NPW -- -- 46,971,333
Short-term municipal securities 146,250,000 51,800,000 41,200,000
Sales and maturities:
Long-term municipal securities 207,928,617 45,901,543 129,703,785
Short-term municipal securities 148,250,000 43,600,000 26,700,000
=========================================================================================================
</TABLE>
At October 31, 1999, the identified cost of investments owned for federal income
tax purposes were as follows:
<TABLE>
<CAPTION>
Premium Premium Premium
Income Income 2 Income 4
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1,409,841,124 $903,449,882 $912,956,496
=========================================================================================================
</TABLE>
At October 31, 1999, 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>
Premium Premium
Income Income 4
- ----------------------------------------------------------------------------------------------------------
Expiration year:
<S> <C> <C>
2002 $ -- $ 6,769,037
2003 -- 5,281,759
2004 -- --
2005 -- --
2006 -- --
2007 3,163,437 --
- ----------------------------------------------------------------------------------------------------------
Total $3,163,437 $12,050,796
===========================================================================================================
</TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
for federal income tax purposes at October 31, 1999, were as follows:
<TABLE>
<CAPTION>
Premium Premium Premium
Income Income 2 Income 4
- ----------------------------------------------------------------------------------------------------------
Gross unrealized:
<S> <C> <C> <C>
appreciation $17,254,626 $ 43,666,001 $ 20,801,357
depreciation (59,097,706) (17,387,188) (24,304,728)
- ----------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $(41,843,080) $ 26,278,813 $ (3,503,371)
==========================================================================================================
</TABLE>
<PAGE>
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund
pays 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:
<TABLE>
<CAPTION>
Average Daily Net Assets Management Fee
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
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
==========================================================================================================
</TABLE>
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
7. COMPOSITION OF NET ASSETS
At October 31, 1999, net assets consisted of:
<TABLE>
<CAPTION>
Premium Premium Premium
Income Income 2 Income 4
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $ 525,000,000 $347,000,000 $338,400,000
Common shares, $.01 par value per share 637,854 410,937 432,367
Paid-in surplus 901,330,832 570,717,420 596,510,969
Balance of undistributed net investment income 1,528,690 2,414,732 2,151,560
Accumulated net realized gain (loss) from
investment transactions (3,165,373) 287,876 (12,056,074)
Net unrealized appreciation (depreciation) of investments (41,841,144) 26,650,088 (3,498,093)
- ---------------------------------------------------------------------------------------------------------
Net assets $1,383,490,859 $947,481,053 $921,940,729
=========================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000
Preferred 1,000,000 1,000,000 1,000,000
=========================================================================================================
</TABLE>
<PAGE>
8. Investment Composition
At October 31, 1999, the revenue sources by municipal purpose, expressed as a
percent of long-term investments, were as follows:
Premium Premium Premium
Income Income 2 Income 4
- ---------------------------------------------------------------------------
Education and Civic Organizations 6% 3% 4%
Health Care 8 6 13
Housing/Multifamily 1 7 14
Housing/Single Family 12 10 5
Tax Obligation/General 14 18 11
Tax Obligation/Limited 13 7 7
Transportation 10 5 7
U.S. Guaranteed 10 33 13
Utilities 21 10 18
Water and Sewer 4 1 7
Other 1 -- 1
- ---------------------------------------------------------------------------
100% 100% 100%
===========================================================================
Certain long-term and intermediate-term investments owned by the Funds are
either covered by insurance issued by several private insurers or are backed by
an escrow or trust containing U.S. government or U.S. government agency
securities, both of which ensure the timely payment of principal and interest in
the event of default (52% for Premium Income, 54% for Premium Income 2 and 40%
for Premium Income 4). Such insurance or escrow, however, does not guarantee the
market value of the municipal securities or the value of any of the Funds'
shares.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
<PAGE>
Financial Highlights
<PAGE>
<TABLE>
Financial Highlights
Selected data for a Common share outstanding throughout each year:
<CAPTION>
Investment Operations
-------------------------------------
Net
Realized/
Beginning Net Unrealized
Net Asset Investment Investment
Value Income Gain (Loss) Total
---------------------------------------------------
<S> <C> <C> <C> <C>
Premium Income
Year Ended 10/31:
1999 $15.66 $1.09 $(2.10) $1.01
1998 15.28 1.15 .43 1.58
1997 14.96 1.14 .37 1.51
1996 15.11 1.16 (.09) 1.07
1995 14.14 1.24 1.01 2.25
<CAPTION>
Premium Income 2
<S> <C> <C> <C> <C>
Year Ended 10/31:
1999 16.15 1.18 (1.48) (.30)
1998 15.80 1.17 .46 1.63
1997 15.16 1.18 .65 1.83
1996 14.89 1.19 .27 1.46
1995 13.03 1.20 1.88 3.08
<CAPTION>
Premium Income 4
<S> <C> <C> <C> <C>
Year Ended 10/31:
1999 15.05 1.09 (1.56) (.47)
1998 14.64 1.07 .42 1.49
1997 14.07 1.08 .58 1.66
1996 13.87 1.10 .19 1.29
1995 12.09 1.10 1.81 2.91
=======================================================================
<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
------------------------------------------------------------------
Premium Income
Year Ended 10/31:
<S> <C> <C> <C> <C> <C>
1999 $ (.85) $(.24) $(.07) $(.02) $(1.18)
1998 (.88) (.25) (.06) (.01) (1.20)
1997 (.94) (.20) (.03) -- (1.17)
1996 (.97) (.20) (.05) -- (1.22)
1995 (1.06) (.22) -- -- (1.28)
<CAPTION>
Premium Income 2
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1999 (.94) (.24) (.04) (.01) (1.23)
1998 (.93) (.24) (.09) (.02) (1.28)
1997 (.93) (.26) -- -- (1.19)
1996 (.93) (.26) -- -- (1.19)
1995 (.92) (.30) -- -- (1.22)
<CAPTION>
Premium Income 4
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1999 (.83) (.24) -- -- (1.07)
1998 (.82) (.26) -- -- (1.08)
1997 (.82) (.27) -- -- (1.09)
1996 (.82) (.27) -- -- (1.09)
1995 (.84) (.29) -- -- (1.13)
=========================================================================================
<PAGE>
<CAPTION>
Total Returns
------------------
Organization
and Offering
Costs Based
and Preferred Ending Based on
Share Net Ending on Net
Underwriting Asset Market Market Asset
Discounts Value Value Value* Value*
--------------------------------------------------------------
Premium Income
Year Ended 10/31:
<S> <C> <C> <C> <C> <C>
1999 $(.01) $13.46 $12.2500 (14.03)% (8.59)%
1998 -- 15.66 15.1875 10.60 8.86
1997 (.02) 15.28 14.6250 7.81 8.89
1996 -- 14.96 14.5000 8.24 5.92
1995 -- 15.11 14.3750 16.88 14.84
<CAPTION>
Premium Income 2
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1999 (.01) 14.61 14.5000 (8.59) (3.66)
1998 -- 16.15 16.8750 15.98 8.93
1997 -- 15.80 15.5000 16.76 10.72
1996 -- 15.16 14.1250 14.94 8.28
1995 -- 14.89 13.1250 24.22 22.06
<CAPTION>
Premium Income 4
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1999 (.01) 13.50 12.7500 (8.77) (5.03)
1998 -- 15.05 14.8125 14.54 8.58
1997 -- 14.64 13.6875 14.70 10.20
1996 -- 14.07 12.6875 11.57 7.53
1995 -- 13.87 12.1250 21.32 22.41
========================================================================================
<PAGE>
<CAPTION>
Ratios/Supplemental Data
-------------------------------------------------------
Before Credit/Reimbursement
------------------------------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Expenses Income Expenses Income
to Average to Average to Average to Average
Ending Net Assets Net Assets Total Total
Net Applicable Applicable Net Assets Net Assets
Asset to Common to Common Including Including
(000) Shares++ Shares++ Preferred++ Preferred++
--------------------------------------------------------------------
Premium Income
Year Ended 10/31:
<S> <C> <C> <C> <C> <C>
1999 $1,383,491 1.18% 7.28% .77% 4.79%
1998 1,473,755 1.14 7.41 .77 5.00
1997 1,449,660 1.05 7.58 .76 5.51
1996 1,304,192 1.03 7.76 .75 5.67
1995 1,313,673 1.05 8.42 .76 6.13
<CAPTION>
Premium Income 2
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1999 947,481 1.15 7.60 .77 5.07
1998 959,840 1.13 7.35 .77 5.03
1997 943,587 1.14 7.73 .77 5.23
1996 917,603 1.15 7.97 .77 5.34
1995 906,547 1.17 8.54 .77 5.60
<CAPTION>
Premium Income 4
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1999 921,941 1.20 7.51 .79 4.92
1998 923,004 1.19 7.23 .79 4.79
1997 905,764 1.21 7.62 .79 4.98
1996 882,563 1.22 7.89 .79 5.11
1995 874,337 1.27 8.44 .80 5.35
==========================================================================================
<PAGE>
<CAPTION>
After Credit/Reimbursement**
------------------------------------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Expenses Income Expenses Income
to Average to Average to Average to 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
------------------------------------------------------------------------
Premium Income
Year Ended 10/31:
<S> <C> <C> <C> <C> <C>
1999 1.17% 7.29% .77% 4.79% 15%
1998 1.14 7.41 .77 5.00 19
1997 1.05 7.58 .76 5.51 10
1996 1.03 7.76 .75 5.67 16
1995 1.05 8.42 .76 6.13 12
<CAPTION>
Premium Income 2
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1999 1.15 7.60 .77 5.07 5
1998 1.13 7.35 .77 5.03 7
1997 1.14 7.73 .77 5.23 19
1996 1.15 7.97 .77 5.34 24
1995 1.17 8.54 .77 5.60 27
<CAPTION>
Premium Income 4
<S> <C> <C> <C> <C> <C>
Year Ended 10/31:
1999 1.20 7.51 .79 4.92 14
1998 1.19 7.23 .79 4.79 21
1997 1.21 7.62 .79 4.98 26
1996 1.22 7.89 .79 5.11 20
1995 1.27 8.44 .80 5.35 32
==============================================================================================
* Total Return on Market Value is the combination of reinvested dividend
income, reinvested capital gains distributions, if any, and changes in
stock price per share. Total Return on Net Asset Value is the combination
of reinvested dividend income, reinvested capital gains distributions, if
any, and changes in net asset value per share. Total returns are not
annualized.
** After custodian fee credit and expense reimbursement where applicable
(notes 1 and 6).
+ 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.
</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.
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.
To be effective, dollar cost averaging requires that you invest over a long
period of time and does not assure that you will profit.
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
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
YEAR 2000
The concern that computer systems may have problems processing date-related
information in the year 2000 and beyond has challenged businesses and
organizations to thoroughly review all aspects of their operations. We have
undertaken just such an approach at Nuveen in preparation for the millennium.
Over the last 10 years, we have updated or replaced our trading, fund
management, and pricing systems at Nuveen - systems that directly affect our
investors and their financial advisers - to address Year 2000 concerns.
We continue to work closely with our transfer agent, custodian, firms through
whom we buy and sell portfolio securities, and other service partners to monitor
the Year 2000 readiness of their systems, while addressing other remaining
systems issues.
In addition, the Funds hold securities of issuers whose business operations
leave them susceptible to Year 2000 concerns. We seek to evaluate an issuer's
Year 2000 readiness as part of our initial and ongoing research of these
issuers. This is only one of the many factors considered in determining whether
to buy, sell, or continue holding a particular security.
Our Year 2000 review, repair, and testing program has been substantially
completed. This program included industry-wide testing of critical systems and
receipt of satisfactory assurances from critical service providers, vendors, and
issuers regarding their Year 2000 readiness. We will continue more refined
testing of our systems and their relationships with other parties' systems and
will regularly discuss the results of this testing with those parties. We are
also making Year 2000 contingency plans to guide recovery efforts in the event
that, despite our remediation attempts, Year 2000 issues adversely affect the
Funds. Although we can never have complete assurance that the steps we take will
be sufficient to prevent any problems that would impact the Nuveen
Exchange-Traded Funds, we can assure you that we will take all reasonable steps
to prevent disruption of the services provided by your Fund.
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 12-month period ended October 31, 1999. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
Serving Investors for Generations
Photo of: John Nuveen, Sr.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today we offer a broad range of
quality investments designed for individuals seeking to build and sustain
wealth. In fact, more than 1.3 million investors have trusted Nuveen to help
them pursue their financial goals.
The cornerstone of Nuveen's investment philosophy is a commitment to disciplined
long-term investment strategies focused on providing consistent, attractive
performance over time - with moderated risk. We emphasize quality securities
carefully chosen through in-depth research, and we follow those securities
closely over time to ensure that they continue to meet our exacting standards.
Whether your focus is long-term growth, dependable current income or sustaining
accumulated wealth, Nuveen offers a wide variety of investments and services to
help meet your unique circumstances and financial planning needs. Our equity,
balanced, and tax-free income funds, along with our defined portfolios and
private asset management, can help you build a better, well-diversified
portfolio.
Talk with your financial adviser to learn more about how Nuveen investment
products and services can help you. Or call us at (800) 257-8787 for more
information, including a prospectus where applicable. Please read that
information carefully before investing.
LOGO:
NUVEEN
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
FAN-5-10-99
