NUVEEN Exchange-Traded Funds
MAY 31, 1998
ANNUAL REPORT
DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN.
NPG
Georgia
NMY
Maryland
NNC
North Carolina
NPV
Virginia
Photo of: Men standing by horses.
<PAGE>
Highlights
As of May 31, 1998
CONTENTS
1 Dear Shareholder
4 NPG Commentary and Overview
6 NMY Commentary and Overview
8 NNC Commentary and Overview
10 NPV Commentary and Overview
12 Report of Independent Auditors
13 Portfolio of Investments
27 Statement of Net Assets
28 Statement of Operations
29 Statement of Changes in Net Assets
30 Notes to Financial Statements
34 Financial Highlights
36 Building Better Portfolios
37 Fund Information
================================================================================
Credit Quality Performance Highlights
Nuveen Georgia Premium Income Municipal Fund (NPG)
o Steady dividend for 10 consecutive months
o Taxable-equivalent yield of 8.10 % *
o One-year total return on net asset value
of 12.43%
Pie Chart:
AAA 59%
AA 24%
A 14%
BBB/NR 3%
Nuveen Maryland Premium Income Municipal Fund (NMY)
o Steady dividend for 19 consecutive months
o Taxable-equivalent yield of 7.77% *
o One-year total return on net asset value
of 11.47%
Pie Chart:
AAA 59%
AA 20%
A 17%
BBB/NR 4%
Nuveen North Carolina Premium Income Municipal Fund (NNC)
o Steady dividend for 19 consecutive months
o Taxable-equivalent yield of 8.29% *
o One-year total return on net asset value
of 13.38%
Pie Chart:
AAA 37%
AA 34%
A 19%
BBB/NR 10%
Nuveen Virginia Premium Income Municipal Fund (NPV)
o Steady dividend for 19 consecutive months
o Taxable-equivalent yield of 7.85% *
o One-year total return on net asset value
of 12.66%
Pie Chart:
AAA 30%
AA 38%
A 25%
BBB/NR 7%
*For investors in the 31% federal and applicable state income tax bracket. See
your fund's performance overview in this report for more information.
================================================================================
A New Benefit for Nuveen Exchange-Traded Fund Shareholders
The benefits of your Nuveen Exchange-Traded Fund just got better. Now investors
with at least $50,000 in Nuveen holdings - including Exchange-Traded Funds - are
eligible for a reduction in the sales charge on purchases of Class A shares of
any Nuveen Mutual Fund.
This program is available for any of Nuveen's collection of Premier AdviserSM
equity and municipal bond investments. Now you can diversify your portfolio with
the quality investments you count on from Nuveen and the benefit of reduced
rates.
For more information, contact your financial adviser and ask for a prospectus.
Or call Nuveen Investor Services at (800) 257-8787. Please read it carefully
before you invest.
<PAGE>
Photo of: TIMOTHY R. SCHWERTFEGER
CHAIRMAN OF THE BOARD
SIDEBAR TEXT: Wealth takes a lifetime to build. Once achieved, it should be
preserved.
Graphic of: Bond Buyer 40 chart
Dear Shareholder
I'm pleased to share with you this performance report for the Nuveen Georgia,
Maryland, North Carolina and Virginia Exchange-Traded Funds. Over the past 12
months, each of these funds continued to perform well and meet their objectives
of providing you with attractive tax-free income and strong after-tax total
returns.
THE ECONOMY IN REVIEW
Fixed-income investments enjoyed bullish performance over the past year, as
declining interest rates and low inflation spurred a bond market rally. The
equity markets also exhibited continued strength despite recent volatility
sparked by Asia's financial problems and their possible effects on U.S.
corporate earnings. Although interest rates have trended slightly upward in
recent months, a year-to-date comparison shows that today's rates are
significantly lower than they were one year ago. As shown in the accompanying
chart, between the end of May 1997 and May 1998, the yield on the Bond Buyer 40,
an unmanaged index of long-term municipal bonds, fell from 5.74% to 5.22%.
Much of the decline in interest rates resulted from expectations that the
financial problems of Asia would restrain the prices of imported goods and
reduce foreign demand for U.S. products and services, thereby keeping inflation
at moderate levels. These inflation expectations were largely fulfilled, as the
Consumer Price Index rose only 1.5% for the 12 months ended May 1998, remaining
at one of its lowest levels in years. The Asian situation also provided
additional strength to the bond market rally, as many investors made a "flight
to quality" by moving assets into high-quality U.S. bonds in the face of the
uncertainty in that region.
In coming months, we will continue to watch closely several key factors that are
likely to affect the future of the economy, including the demand for goods and
services, the availability of qualified employees, the strength of the dollar,
and indications from the Federal Reserve. With many investors still waiting for
the full impact of Asia's difficulties to show up in U.S. economic statistics,
the potential long-term effect of this crisis on American markets continues to
cause concern. We expect that the development of these factors will continue to
influence the tone of the fixed-income markets during the remainder of the year.
MUNICIPAL MARKET REVIEW
As interest rates continued to decline over the past year, bond prices rose.
This price appreciation for the bonds in our portfolios contributed to strong
total returns for the year.
Another major factor in bond performance over the last 12 months was the
continued strength of the U.S. economy, which helped boost the credit quality of
many municipal bonds. With the improvements in the fundamental financial health
of many municipalities and revenue projects financed by bonds, major credit
rating agencies upgraded the credit quality of thousands of issuers over the
past year, while downgrading relatively few. These boosts in credit quality also
contributed to the funds' performance as upgraded bonds increased in value.
The combination of low interest rates and a strong economy set new issuance on a
record pace and stimulated a dramatic increase in the refinancing of existing
bonds as issuers sought to lower their interest costs. The first quarter of 1998
saw $68 billion of new municipal issuance, up 70% from the same period in 1997.
The flood of new issues continued with May's long-awaited sale of the first
segment of Long Island (New York) Power Authority's $7 billion offering, the
largest issuance in municipal bond history. Although the nationwide supply of
municipal bonds remained heavy, the supply of bonds in each state varied
according to local economic conditions. This level of issuance highlights the
value of Nuveen's expertise in the municipal market, as our portfolio management
teams worked diligently to sift through the available issues to select those
undervalued securities that would help the funds achieve their investment
objectives.
DIVERSIFICATION: THE KEY TO A BETTER PORTFOLIO
In view of current market conditions, we believe that investors will find
diversification to be an increasingly important investment strategy in the
months ahead. An appropriately diversified portfolio - one that balances
different types of investments, levels of risk and tax management - can help
cushion your portfolio against volatility and enhance your return potential.
Many investors select Nuveen's municipal bond funds because their emphasis on
dependable tax-free income and attractive after-tax returns makes them ideal for
building and sustaining long-term financial security. These funds also work well
with other Nuveen investments to create the foundation of a diversified,
well-balanced portfolio. In fact, recent studies by Nuveen Research have found
that portfolios combining municipal bonds and stocks generated higher after-tax
returns with lower levels of risk than similar portfolios combining stocks and
Treasury or corporate bonds.
We encourage you to talk to your financial adviser about Nuveen's range of
equity and balanced funds, including the Nuveen European Value Fund. This new
equity mutual fund offers a portfolio of quality European company stocks for
investors seeking long-term growth potential and international diversification.
The fund is just one of an ever-expanding range of Nuveen products and services
designed to help investors achieve diversification while building a
tax-efficient, risk-sensitive investment portfolio. If you'd like to learn more
about the Nuveen European Value Fund or any of our other investments, contact
your financial adviser or call Nuveen Investor Services at (800) 257-8787 for a
prospectus. Please read the information carefully before you invest.
When seeking quality investment solutions that withstand the test of time, we
hope that you continue to think of Nuveen. Today, more than ever, you can count
on Nuveen for a wide range of investments that can help you build a
well-balanced portfolio designed to achieve your financial goals. We thank you
for your continued confidence in us and our family of investments.
Sincerely,
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
July 15, 1998
Sidebar text: "Another major factor in bond performance over the last 12 months
was the continued strength of the U.S. economy, which helped boost the credit
quality of many municipal bonds."
Sidebar text: "Today, more than ever, you can count on Nuveen for a wide range
of investments that can help you build a well-balanced portfolio designed to
achieve your financial goals."
<PAGE>
Nuveen Georgia Premium Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER DAN SOLENDER DISCUSSES FUND PERFORMANCE, THE MUNICIPAL MARKET,
AND KEY INVESTMENT STRATEGIES FOR THE GEORGIA PREMIUM INCOME MUNICIPAL FUND FOR
THE PERIOD COVERED BY THIS REPORT.
ON JULY 1, 1998, NUVEEN MADE SEVERAL CHANGES IN THE MANAGEMENT OF ITS FUNDS TO
MAKE MORE EFFICIENT USE OF STAFF RESOURCES AND PORTFOLIO MANAGER EXPERTISE. AS A
RESULT, TOM O'SHAUGHNESSY ASSUMED MANAGEMENT RESPONSIBILITIES FOR THIS FUND. TOM
IS A 15-YEAR VETERAN OF NUVEEN AND AN EXPERIENCED INVESTMENT PROFESSIONAL WHO
HAS MANAGED A RANGE OF OTHER MUNICIPAL BOND FUNDS.
GEORGIA STATE UPDATE
In August 1997, Georgia joined the ranks of other states with the top rating for
its municipal bonds when Standard & Poor's upgraded the state's general
obligation rating to AAA, citing a strengthened financial position and favorable
economic trends. Since then, Georgia has continued to experience population, tax
base and overall economic growth, especially in the Atlanta metropolitan area,
while maintaining a low debt burden. The presence of several major corporate
headquarters has helped diversify the economy, and the rapidly growing service
sector has offset manufacturing sector losses. In terms of population, Georgia
is expected to remain among the fastest-growing states over the next five years.
With the Atlanta area experiencing rapid growth in school enrollment, many
school districts are making an effort to manage future growth by participating
in a 1% sales tax program designed in part to ease the property tax burden. Use
of these programs should enable school districts to fund necessary capital
projects without overburdening the property tax base.
FUND PERFORMANCE
For the year ended May 31, 1998, the Nuveen Georgia Premium Income Municipal
Fund provided an out standing total return on net asset value of 12.43%, which
is equivalent to a taxable return of 15.63% for investors in the combined 35.1%
federal and state income tax bracket. The total return significantly
outperformed the unleveraged Lehman Brothers Municipal Bond Index's annual
return of 9.38% - a difference of more than 300 basis points.
Much of this outperformance can be attributed to the fund's longer
leverage-adjusted duration of 10.26 years, compared with the index's 7.11 years.
In a year that saw municipal bond yields as measured by the Bond Buyer 40 fall
more than 50 basis points, longer duration proved to be beneficial to
performance. Duration measures a bond fund's price volatility, or reaction to
interest rate movements. The longer the duration, the more sensitive the fund to
changes in interest rates. During a period of falling interest rates and market
rallies, such as that of the past year, longer duration enables a fund to
participate more fully in market gains, but can make the fund more vulnerable to
potential price declines when rates rise. In addition, the fund's leveraged
structure added significantly to these strong total returns.
As a result of good call protection, the fund was able to maintain its
dividend as interest rates dropped during the year. In addition, we were able to
increase the dividend during the year because of the accumulation of income from
bonds purchased over the past several years when interest rates were higher.
Since that increase in August 1997, the fund has provided shareholders with 10
consecutive months of steady income. As of May 31, 1998, the fund offered a very
competitive current market yield of 5.26%, which translates to 8.10% on a
taxable-equivalent basis for investors in the combined 35.1% federal and state
income tax bracket.
KEY STRATEGIES
Despite falling interest rates over the past year, we focused on
increasing the yield of the fund whenever possible, specifically through the
purchase of corporate-backed industrial development bonds as well as insured
health care bonds. Because this portfolio was assembled in 1993, it holds a
number of low-coupon, long maturity bonds purchased in that year's low interest
rate environment. At that time, we purchased long-maturity bonds because they
offered higher yields than shorter-maturity bonds and allowed us to provide a
higher dividend. Since longer-maturity bonds tend to outperform shorter bonds
during a market rally, these bonds helped the fund achieve greater price
appreciation and thus strong total returns over the past year. Also, bonds that
were pre-refunded as interest rates fell over the past year contributed to price
appreciation and improved the credit quality of the fund. In a pre-refunding, a
bond is essentially repaid early and becomes secured by U.S. government or
agency securities until it can be called by the issuer. As a result, its credit
quality typically improves, generally leading to price appreciation.
OUTLOOK FOR THE FUTURE
Looking ahead, we expect the U.S. economy to remain in its current
growth mode, although progress should come at a more modest pace. The Asian
financial crisis will continue to impact U.S. growth, and we expect to see a
slowdown in corporate earnings, a strengthening dollar, especially versus Asian
currencies, and the continuation of benign inflation despite tight labor
markets. This should create less impetus for the Federal Reserve, which
currently remains in a neutral position, to tighten interest rates in the second
half of 1998. We view the economic slowdown and the current direction of the
dollar as positive indicators for the fixed-income markets, including municipal
bonds, and much of our outlook is contingent upon the further development of
these factors.
In the coming months, as we look to further diversify the Georgia fund, we will
watch for changes in the market that make certain sectors and credits more or
less attractive than others. One sector that we continue to find attractive is
health care, where the strength of the state's hospitals enables us to purchase
bonds that offer higher yields than other areas of the market.
<PAGE>
Nuveen Georgia Premium Income Municipal Fund
Performance Overview
As of May 31, 1998
NPG
PORTFOLIO STATISTICS
==================================================
Inception Date 5/93
- --------------------------------------------------
Share Price 15 1/16
- --------------------------------------------------
Net Asset Value Per Share $14.58
- --------------------------------------------------
Current Market Yield 5.26%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.62%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State)(1) 8.10%
- --------------------------------------------------
Fund Net Assets ($000) $82,152
- --------------------------------------------------
Average Weighted Maturity (Years) 21.85
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 10.26
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 14.56% 12.43%
- --------------------------------------------------
3-Year 15.76% 8.84%
- --------------------------------------------------
5-Year 5.74% 6.53%
- --------------------------------------------------
Since Inception 5.74% 6.53%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 17.72% 15.63%
- --------------------------------------------------
3-Year 19.14% 12.00%
- --------------------------------------------------
5-Year 8.85% 9.56%
- --------------------------------------------------
Since Inception 8.85% 9.56%
- --------------------------------------------------
TOP 5 SECTORS
==================================================
Housing (Multifamily) 13%
- --------------------------------------------------
Water and Sewer 13%
- --------------------------------------------------
Health Care 13%
- --------------------------------------------------
Tax Obligation (General) 11%
- --------------------------------------------------
Tax Obligation (Limited) 11%
- --------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state taxes. It is based on a
combined federal and state income tax rate of 35.1%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 35.1%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
Bar Chart:
1997-1998 Monthly Tax-Free Dividends Per Share
June 97 0.065
July 97 0.065
August 97 0.066
September 97 0.066
October 97 0.066
November 97 0.066
December 97 0.066
January 98 0.066
February 98 0.066
March 98 0.066
April 98 0.066
May 98 0.066
<PAGE>
Nuveen Maryland Premium Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER JOHN GAMBLA DISCUSSES FUND PERFORMANCE, THE MUNICIPAL MARKET,
AND KEY INVESTMENT STRATEGIES FOR THE MARYLAND PREMIUM INCOME MUNICIPAL FUND FOR
THE PERIOD COVERED BY THIS REPORT.
ON JULY 1, 1998, NUVEEN MADE SEVERAL CHANGES IN THE MANAGEMENT OF ITS FUNDS TO
MAKE MORE EFFICIENT USE OF STAFF RESOURCES AND PORTFOLIO MANAGER EXPERTISE. AS A
RESULT, DAN SOLENDER ASSUMED MANAGEMENT RESPONSIBILITIES FOR THIS FUND. DAN IS A
6-YEAR VETERAN OF NUVEEN AND AN EXPERIENCED INVESTMENT PROFESSIONAL WHO HAS
MANAGED A RANGE OF OTHER MUNICIPAL BOND FUNDS.
MARYLAND STATE UPDATE
Like many of its peers, Maryland has benefited from the expansion in the
national economy. Higher income and sales tax receipts have flowed into state
and county coffers, bringing increased financial flexibility to many municipal
issuers. The state's once sluggish economy has shown improvement, although
employ-ment and income growth rates remain at or below national averages and
below those of neighboring states. This spring, the Maryland legislature voted
to accelerate the income tax reduction plan passed last year. As a result,
income taxes will be reduced 5% this year, rather than the 2% originally
planned. Because this could present financial challenges in future years, the
tax reduction program remains a credit concern.
FUND PERFORMANCE
For the year ended May 31, 1998, the Nuveen Maryland Premium Income
Municipal Fund provided an outstanding total return on net asset value of
11.47%, which is equivalent to a taxable return of 14.47% for investors in the
combined 34.4% federal and state income tax bracket. The total return
significantly outperformed the unleveraged Lehman Brothers Municipal Bond
Index's annual return of 9.38% - a difference of more than 200 basis points.
Much of this outperformance can be attributed to the fund's longer
leverage-adjusted duration of 9.08 years, compared with the index's 7.11 years.
In a year that saw municipal bond yields as measured by the Bond Buyer 40 fall
more than 50 basis points, longer duration proved to be beneficial to
performance. Duration measures a bond fund's price volatility, or reaction to
interest rate movements. The longer the duration, the more sensitive the fund to
changes in interest rates. During a period of falling interest rates and market
rallies, such as that of the past year, longer duration enables a fund to
participate more fully in market gains, but can make the fund more vulnerable to
potential price declines when rates rise. In addition, the fund's leveraged
structure added significantly to these strong total returns.
Despite the low interest rate environment of the past year, good call
protection helped support the dividend of the Nuveen Maryland Premium Income
Fund and prevent income from being impacted. The fund has now provided
shareholders with 19 consecutive months of steady income. As of May 31, 1998,
the fund offered a competitive current market yield of 5.10%, which translates
to 7.77% on a taxable-equivalent basis for investors in the combined 34.4%
federal and state income tax bracket.
KEY STRATEGIES
Over the past year, we focused on the purchase of insured bonds as well
as bonds issued in the housing sector, which we considered undervalued. Because
the timing of cash flows can be uncertain, housing bonds carry some additional
interest rate risk. However, we believe this is a sector in which our portfolios
are well-compensated for assuming that incremental risk. Multifamily housing
bonds now constitute 14% of the fund, and represent the portfolio's third
largest segment. In addition, the majority of the bonds we added offer
maturities in the range of 15 to 20 years because we felt that they offered the
best values relative to their historical levels of volatility.
OUTLOOK FOR THE FUTURE
Looking ahead, we expect the U.S. economy to remain in its current
growth mode, although progress should come at a more modest pace. The Asian
financial crisis will continue to impact U.S. growth, and we expect to see a
slowdown in corporate earnings, a strengthening dollar, especially versus Asian
currencies, and the continuation of benign inflation despite tight labor
markets. This should create less impetus for the Federal Reserve, which
currently remains in a neutral position, to tighten interest rates in the second
half of 1998. We view the economic slowdown and the current direction of the
dollar as positive indicators for the fixed-income markets, including municipal
bonds, and much of our outlook is contingent upon the further development of
these factors.
Given the current environment of low interest rates and tight yield
spreads between higher- and lower-quality bonds, our primary focus in the months
ahead will be on preserving shareholder capital by upgrading portfolio quality.
Purchasing higher-rated bonds will allow us to enhance the stability of the fund
without sacrificing much yield. We will also seek higher-yielding bonds whenever
possible to support the fund's dividend. In addition, as opportunities arise, we
will continue to extend the duration of the fund.
<PAGE>
Nuveen Maryland Premium Income Municipal Fund
Performance Overview
As of May 31, 1998
NMY
PORTFOLIO STATISTICS
==================================================
Inception Date 3/93
- --------------------------------------------------
Share Price 15 1/16
- --------------------------------------------------
Net Asset Value Per Share $14.54
- --------------------------------------------------
Current Market Yield 5.10%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.39%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State)(1) 7.77%
- --------------------------------------------------
Fund Net Assets ($000) $230,188
- --------------------------------------------------
Average Weighted Maturity (Years) 16.79
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 9.08
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 16.54% 11.47%
- --------------------------------------------------
3-Year 13.24% 8.61%
- --------------------------------------------------
5-Year 5.52% 6.31%
- --------------------------------------------------
Since Inception 5.64% 6.17%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 19.57% 14.47%
- --------------------------------------------------
3-Year 16.40% 11.62%
- --------------------------------------------------
5-Year 8.58% 9.32%
- --------------------------------------------------
Since Inception 8.58% 9.06%
- --------------------------------------------------
TOP 5 SECTORS
==================================================
Utilities 21%
- --------------------------------------------------
Tax Obligation (Limited) 14%
- --------------------------------------------------
Housing (Multifamily) 14%
- --------------------------------------------------
Health Care 13%
- --------------------------------------------------
Tax Obligation (General) 12%
- --------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state taxes. It is based on a
combined federal and state tax rate of 34.4%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 34.4%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
Bar Chart:
1997-1998 Monthly Tax-Free Dividends Per Share
June 97 0.064
July 97 0.064
August 97 0.064
September 97 0.064
October 97 0.064
November 97 0.064
December 97 0.064
January 98 0.064
February 98 0.064
March 98 0.064
April 98 0.064
May 98 0.064
<PAGE>
Nuveen North Carolina Premium Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER BILL FITZGERALD DISCUSSES FUND PERFORMANCE, THE MUNICIPAL
MARKET, AND KEY INVESTMENT STRATEGIES FOR THE NORTH CAROLINA PREMIUM INCOME
MUNICIPAL FUND FOR THE PERIOD COVERED BY THIS REPORT.
ON JULY 1, 1998, NUVEEN MADE SEVERAL CHANGES IN THE MANAGEMENT OF ITS FUNDS TO
MAKE MORE EFFICIENT USE OF STAFF RESOURCES AND PORTFOLIO MANAGER EXPERTISE. AS A
RESULT, TOM O'SHAUGHNESSY ASSUMED MANAGEMENT RESPONSIBILITIES FOR THIS FUND. TOM
IS A 15-YEAR VETERAN OF NUVEEN AND AN EXPERIENCED INVESTMENT PROFESSIONAL WHO
HAS MANAGED A RANGE OF OTHER MUNICIPAL BOND FUNDS.
NORTH CAROLINA STATE UPDATE
North Carolina's economy continues to expand, as the state increases its focus
on high-tech companies and decreases reliance on the furniture manufacturing and
tobacco industries. Population growth has contributed to strong job growth
without burdening financial operations. North Carolina currently ranks tenth in
the country in non-agricultural employment and eighth in manufacturing jobs. The
state also benefits from its prestigious university system, which has helped
attract businesses to the Research Triangle Park in the Raleigh-Durham area.
Reflecting this healthy and growing economy, North Carolina's municipal debt has
received the top credit rating of AAA by Standard & Poor's.
The state has earmarked $1.8 billion of a $2.75 billion bond issue -
the largest in North Carolina history - for school construction. This large
issuance is welcome news in the state's municipal market because, unlike the
situation in the national municipal market, supply of North Carolina bonds
remains tight, making it difficult to uncover value or purchase higher-yielding
bonds in this market.
FUND PERFORMANCE
For the year ended May 31, 1998, the Nuveen North Carolina Premium Income
Municipal Fund provided a superior total return on net asset value of 13.38%,
which is equivalent to a taxable return of 16.81% for investors in the combined
36.3% federal and state income tax bracket. The total return significantly
outperformed the unleveraged Lehman Brothers Municipal Bond Index's annual
return of 9.38% - a difference of 400 basis points.
Much of this outperformance can be attributed to the fund's longer
leverage-adjusted duration of 9.81, which significantly exceeded the index's
7.11 years. In a year that saw municipal bond yields as measured by the Bond
Buyer 40 fall more than 50 basis points, longer duration proved to be beneficial
to performance. Duration measures a bond fund's price volatility, or reaction to
interest rate movements. The longer the duration, the more sensitive the fund to
changes in interest rates. During a period of falling interest rates and market
rallies, such as that of the past year, longer duration enables a fund to
participate more fully in market gains, but can make the fund more vulnerable to
potential price declines when rates rise. In addition, the fund's leveraged
structure added significantly to these strong total returns.
Despite the low interest rate environment of the past year, good call
protection helped support the dividend of the Nuveen North Carolina Premium
Income Fund and prevent income from being impacted. The fund has now provided
shareholders with 19 consecutive months of steady income. As of May 31, 1998,
the fund offered a competitive current market yield of 5.28%, which translates
to 8.29% on a taxable-equivalent basis for investors in the combined 36.3%
federal and state income tax bracket.
KEY STRATEGIES
As volatility in the North Carolina market declined, we made the
decision to hold higher-yielding bonds with approaching call dates, which make
up the majority of the fund. Our preference was to keep these bonds in the
portfolio generating competitive income levels for as long as possible, and
avoid realizing taxable capital gains that would have to be passed along to
shareholders. We also found opportunities to add value in the state's public
power sector by investing in serial bonds issued by the North Carolina Municipal
Power Agency. This agency currently has a very high debt level, and we expect it
will begin to reduce this debt by repurchasing these bonds at attractive prices.
North Carolina's public power bonds are made even more attractive by the state
provision mandating that deregulation must be handled in a way that does not
impair the value of the bonds. During the past year, we also focused efforts on
enhancing the portfolio's call protection and purchasing bonds with longer
maturities.
OUTLOOK FOR THE FUTURE
Looking ahead, we expect the U.S. economy to remain in its current growth mode,
although progress should come at a more modest pace. The Asian financial crisis
will continue to impact U.S. growth, and we expect to see a slowdown in
corporate earnings, a strengthening dollar, especially versus Asian currencies,
and the continuation of benign inflation despite tight labor markets. This
should create less impetus for the Federal Reserve, which currently remains in
a neutral position, to tighten interest rates in the second half of 1998. We
view the economic slowdown and the current direction of the dollar as positive
indicators for the fixed-income markets, including municipal bonds, and much of
our outlook is contingent upon the further development of these factors. We plan
to continue to increase the fund's exposure to the utilities sector, especially
in uninsured bonds. We expect the credit standings of the public power agencies
to improve, and uninsured bonds will enable us to take full advantage of this
improvement to the benefit of shareholders.
<PAGE>
Nuveen North Carolina Premium Income Municipal Fund
Performance Overview As of May 31, 1998
NNC
PORTFOLIO STATISTICS
==================================================
Inception Date 5/93
- --------------------------------------------------
Share Price 15
- --------------------------------------------------
Net Asset Value Per Share $14.48
- --------------------------------------------------
Current Market Yield 5.28%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.65%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State)(1) 8.29%
- --------------------------------------------------
Fund Net Assets ($000) $137,270
- --------------------------------------------------
Average Weighted Maturity (Years) 21.59
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 9.81
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 8.17% 13.38%
- --------------------------------------------------
3-Year 13.46% 9.05%
- --------------------------------------------------
5-Year 5.34% 6.30%
- --------------------------------------------------
Since Inception 5.52% 6.23%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 11.34% 16.81%
- --------------------------------------------------
3-Year 16.82% 12.40%
- --------------------------------------------------
5-Year 8.47% 9.48%
- --------------------------------------------------
Since Inception 8.65% 9.40%
- --------------------------------------------------
TOP 5 SECTORS
==================================================
Health Care 19%
- --------------------------------------------------
Tax Obligation (Limited) 17%
- --------------------------------------------------
Utilities 11%
- --------------------------------------------------
Housing (Single-Family) 11%
- --------------------------------------------------
Education and Civic Organizations 10%
- --------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 36.3%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 36.3%. It represents the return
on a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
Bar Chart:
1997-1998 Monthly Tax-Free Dividends Per Share
June 97 0.066
July 97 0.066
August 97 0.066
September 97 0.066
October 97 0.066
November 97 0.066
December 97 0.066
January 98 0.066
February 98 0.066
March 98 0.066
April 98 0.066
May 98 0.066
<PAGE>
Nuveen Virginia Premium Income Municipal Fund
Portfolio Manager's Comments
PORTFOLIO MANAGER BILL FITZGERALD DISCUSSES FUND PERFORMANCE, THE MUNICIPAL
MARKET, AND KEY INVESTMENT STRATEGIES FOR THE VIRGINIA PREMIUM INCOME MUNICIPAL
FUND FOR THE PERIOD COVERED BY THIS REPORT.
ON JULY 1, 1998, NUVEEN MADE SEVERAL CHANGES IN THE MANAGEMENT OF ITS FUNDS TO
MAKE MORE EFFICIENT USE OF STAFF RESOURCES AND PORTFOLIO MANAGER EXPERTISE. AS A
RESULT, DAN SOLENDER ASSUMED MANAGEMENT RESPONSIBILITIES FOR THIS FUND. HE IS A
6-YEAR VETERAN OF NUVEEN AND AN EXPERIENCED INVESTMENT PROFESSIONAL WHO HAS
MANAGED A RANGE OF OTHER MUNICIPAL BOND FUNDS.
VIRGINIA STATE UPDATE
Virginia's economy continues to run smoothly, with unemployment at its lowest
level in almost three decades and impressive per capita income growth. Both of
these factors were fueled in part by the continued expansion of the state's
retail and high-tech industries. While the commonwealth's financial position has
benefited from recent economic growth, city and county coffers have not profited
to the same degree. Many local governments in Virginia rely heavily on property
taxes and collect very few alternate taxes. As a result, they have not been able
to capture the increases in sales and income tax revenues generated by the
vibrant state economy. Nevertheless, the financial position of most Virginia
municipalities remains solid.
Recently, the Virginia legislature voted to eliminate the personal property tax
on automobiles. This action may present the commonwealth and its municipalities
with some financial challenges going forward. However, a five-year phase-in
period and safeguards that delay cuts in the event of budgetary difficulties
should help ease the transition.
FUND PERFORMANCE
For the year ended May 31, 1998, the Nuveen Virginia Premium Income
Fund provided an outstanding total return on net asset value of 12.66%, which is
equivalent to a taxable return of 15.89% for investors in the combined 35%
federal and state income tax bracket. The total return significantly
outperformed the unleveraged Lehman Brothers Municipal Bond Index's annual
return of 9.38% - a difference of more than 300 basis points.
Much of this outperformance can be attributed to the fund's longer
leverage-adjusted duration of 9.40 years, compared with the index's 7.11 years.
In a year that saw municipal bond yields as measured by the Bond Buyer 40 fall
more than 50 basis points, longer duration proved to be beneficial to
performance. Duration measures a bond fund's price volatility, or reaction to
interest rate movements. The longer the duration, the more sensitive the fund to
changes in interest rates. During a period of falling interest rates and market
rallies, such as that of the past year, longer duration enables a fund to
participate more fully in market gains, but can make the fund more vulnerable to
potential price declines when rates rise. In addition, the fund's leveraged
structure added significantly to these strong total returns.
Despite the low interest rate environment of the past year, good call
protection helped support the dividend of the Nuveen Virginia Premium Income
Fund and prevent income from being impacted. The fund has now provided
shareholders with 19 consecutive months of steady income. As of May 31, 1998,
the fund offered a competitive current market yield of 5.10%, which translates
to 7.85% on a taxable-equivalent basis for investors in the combined 35% federal
and state tax bracket.
KEY STRATEGIES
Over the past year, as the market continued to exhibit low volatility, we moved
to extend the portfolio's call protection to take advantage of the stronger
performance of bonds with longer call protection. We also increased our holdings
of non-rated investments in two sectors: an industrial development issue and one
for a retirement facility. These bonds offered credit characteristics comparable
to higher-rated bonds with more favorable yields, and also offer protection from
bond calls, which helps ensure the strength of the dividend.
OUTLOOK FOR THE FUTURE
Looking ahead, we expect the U.S. economy to remain in its current growth
mode, although progress should come at a more modest pace. The Asian financial
crisis will continue to impact U.S. growth, and we expect to see a slowdown in
corporate earnings, a strengthening dollar, especially versus Asian currencies,
and the continuation of benign inflation despite tight labor markets. This
should create less impetus for the Federal Reserve, which currently remains in a
neutral position, to tighten interest rates in the second half of 1998. We view
the economic slowdown and the current direction of the dollar as positive
indicators for the fixed-income markets, including municipal bonds, and much of
our outlook is contingent upon the further development of these factors.
Depending on market conditions in the coming months, we plan to take advantage
of opportunities to further upgrade the call protection of the Virginia fund to
safeguard the fund's embedded yield and thereby support the dividend. At this
point, the fund should not be subject to bond calls for the next four years.
<PAGE>
Nuveen Virginia Premium Income Municipal Fund
Performance Overview
As of May 31, 1998
NPV
PORTFOLIO STATISTICS
==================================================
Inception Date 3/93
- --------------------------------------------------
Share Price 16 1/8
- --------------------------------------------------
Net Asset Value Per Share $14.96
- --------------------------------------------------
Current Market Yield 5.10%
- --------------------------------------------------
Taxable-Equivalent Yield (Federal Only)(1) 7.39%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State)(1) 7.85%
- --------------------------------------------------
Fund Net Assets ($000) $191,922
- --------------------------------------------------
Average Weighted Maturity (Years) 22.76
- --------------------------------------------------
Leverage-Adjusted Duration (Years) 9.40
- --------------------------------------------------
ANNUALIZED TOTAL RETURN
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 17.30% 12.66%
- --------------------------------------------------
3-Year 14.02% 9.27%
- --------------------------------------------------
5-Year 7.26% 7.17%
- --------------------------------------------------
Since Inception 7.14% 7.07%
- --------------------------------------------------
TAXABLE-EQUIVALENT TOTAL RETURN(2)
==================================================
ON SHARE PRICE ON NAV
- --------------------------------------------------
1-Year 20.43% 15.89%
- --------------------------------------------------
3-Year 17.30% 12.53%
- --------------------------------------------------
5-Year 10.48% 10.43%
- --------------------------------------------------
Since Inception 10.22% 10.20%
- --------------------------------------------------
TOP 5 SECTORS
==================================================
Utilities 18%
- --------------------------------------------------
Water and Sewer 16%
- --------------------------------------------------
U.S. Guaranteed 13%
- --------------------------------------------------
Health Care 13%
- --------------------------------------------------
Housing (Single-family) 9%
- --------------------------------------------------
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state taxes. It is based on a combined
federal and state tax rate of 35%.
2 Taxable-equivalent total return is based on the annualized total return and a
combined federal and state income tax rate of 35%. It represents the return on
a taxable investment necessary to equal the return of the Nuveen fund on an
after-tax basis.
Bar Chart:
1997-1998 Monthly Tax-Free Dividends Per Share
June 97 0.685
July 97 0.685
August 97 0.685
September 97 0.685
October 97 0.685
November 97 0.685
December 97 0.685
January 98 0.685
February 98 0.685
March 98 0.685
April 98 0.685
May 98 0.685
<PAGE>
REPORT OF INDEPENDENT AUDITORS
THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN GEORGIA PREMIUM INCOME MUNICIPAL FUND
NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND
NUVEEN NORTH CAROLINA PREMIUM INCOME MUNICIPAL FUND
NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND
We have audited the accompanying statements of net assets, including the
portfolios of investments, of Nuveen Georgia Premium Income Municipal Fund,
Nuveen Maryland Premium Income Municipal Fund, Nuveen North Carolina Premium
Income Municipal Fund and Nuveen Virginia Premium Income Municipal Fund as of
May 31, 1998, and the related statements of operations, changes in net assets
and the financial highlights for the periods indicated therein. These financial
statements and financial highlights are the responsibility of the Funds'
management. Our responsibility is to express an opinion on these financial
statements and financial highlights based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of investments owned as of May
31, 1998, 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 position of Nuveen
Georgia Premium Income Municipal Fund, Nuveen Maryland Premium Income Municipal
Fund, Nuveen North Carolina Premium Income Municipal Fund and Nuveen Virginia
Premium Income Municipal Fund at May 31, 1998, and the results of their
operations, changes in their net assets and financial highlights for the periods
indicated therein in conformity with generally accepted accounting principles.
Ernst & Young LLP
Chicago, Illinois
July 14, 1998
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN GEORGIA PREMIUM INCOME MUNICIPAL FUND (NPG)
May 31, 1998
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
CONSUMER STAPLES - 6.3%
$ 3,000,000 Albany Dougherty Payroll Development Authority (Georgia), Solid Waste Disposal Revenue Bonds
(The Procter and Gamble Paper Products Company Project), 1998 Series, 5.300%, 5/15/26
(Alternative Minimum Tax) (DD) 5/08 at 101 AA $ 3,007,830
2,000,000 Development Authority of Cartersville (Georgia), Sewage Facilities Refunding Revenue Bonds
(Anheuser-Busch Project), Series 1997, 6.125%, 5/01/27
(Alternative Minimum Tax) 5/07 at 102 A1 2,140,140
- ------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 7.4%
Urban Residential Finance Authority of the City of Atlanta,
Georgia, Dormitory Facility Refunding Revenue Bonds (Morehouse
College Project), Series 1995:
1,210,000 5.750%, 12/01/20 12/05 at 102 Aaa 1,278,934
1,375,000 5.750%, 12/01/25 12/05 at 102 Aaa 1,453,334
1,555,000 Development Authority of DeKalb County Revenue Bonds (Emory University Project), Series 1994-A,
6.000%, 10/01/14 10/04 at 102 Aa1 1,695,821
1,550,000 Private Colleges and Universities Authority Revenue Bonds (Georgia), (Agnes Scott College Project),
Series 1993, 5.625%, 6/01/23 6/03 at 102 AA- 1,621,564
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 12.5%
3,000,000 Hospital Authority of Albany-Dougherty County, Georgia, Revenue Bonds (Phoebe Putney Memorial Hospital),
Series 1993, 5.700%, 9/01/13 9/03 at 102 Aaa 3,163,320
2,000,000 Fulco Hospital Authority Health System Revenue Bonds, Series 1998A (Catholic Health East),
5.000%, 11/15/28 11/08 at 102 Aaa 1,939,140
1,965,000 The Hospital Authority of Hall County and the City of Gainsville, Revenue Anticipation Certificates
(Northeast Georgia Healthcare Project), Series 1995, 6.000%, 10/01/25 10/05 at 102 Aaa 2,124,303
3,000,000 The Glynn-Brunswick Memorial Hospital Authority Revenue Anticipation Certificates (Southeast Georgia
Health Systems Project), Series 1996, 5.250%, 8/01/13 8/06 at 102 Aaa 3,092,820
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 12.7%
1,145,000 Housing Authority of Clayton County (Georgia), Multifamily Housing Revenue Bonds, Series 1995
(The Advantages Project), 5.800%, 12/01/20 12/05 at 102 AAA 1,181,274
3,400,000 Housing Authority of the County of DeKalb, Georgia Multifamily Housing Revenue Bonds (The Lakes at
Indian Creek Apartments Project), Series 1994, 7.150%, 1/01/25
(Alternative Minimum Tax) 1/05 at 102 Aaa 3,720,280
990,000 Housing Authority of the City of Decatur Mortgage Revenue Refunding Bonds, Series 1992A (FHA Insured
Mortgage Loan-Park Trace Apartments, Section 8 Assisted Project),
6.450%, 7/01/25 7/02 at 102 Aaa 1,038,569
3,000,000 Macon-Bibb County Urban Development Authority, Multifamily Housing Refunding Revenue Bonds,
Series 1997A, 5.550%, 1/01/24 1/04 at 103 Aaa 3,048,570
1,500,000 Housing Authority of the City of Marietta, Georgia, Multifamily Housing Refunding Bonds (GNMA
Collateralized - Country Oaks Apartments), Series 1996, 6.150%, 10/20/26
(Alternative Minimum Tax) 1/06 at 102 AAA 1,564,230
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 5.1%
2,995,000 Georgia Housing and Finance Authority, Single Family Mortgage
Bonds, 1994 Series A (FHA Insured or VA Guaranteed Mortgage
Loans), 6.500%, 12/01/17 (Alternative Minimum Tax) 12/04 at 102 AA+ 3,198,810
420,000 Georgia Housing and Finance Authority, Single Family Mortgage Bonds,1996 Series A Subseries A-2,
6.450%, 12/01/27 (Alternative Minimum Tax) 6/06 at 102 AA+ 449,056
475,000 Housing Authority of Fulton County, Georgia, Single Family Mortgage Revenue Bonds (GNMA
Mortgage-Backed Securities Program), Series 1995A, 6.550%, 3/01/18
(Alternative Minimum Tax) 3/05 at 102 AAA 507,875
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/GENERAL - 11.3%
$ 1,175,000 City of Atlanta, Georgia, General Obligation School Improvement Bonds,
Series 1993, 5.60%, 12/01/18 12/03 at 102 AA $ 1,230,531
500,000 City of Atlanta (Georgia), General Obligation Bonds, Public Improvement Bonds, Series 1994A,
6.100%, 12/01/19 12/04 at 102 AA 547,415
500,000 Fulton County School District, General Obligation Refunding Bonds,
Series 1991, 6.375%, 5/01/17 No Opt. Call AA 588,215
1,000,000 Hall County School District (Georgia), General Obligation Refunding School
Bonds, 4.500%, 11/01/14 11/07 at 101 Aa3 947,630
3,500,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1996 (General Obligation Bonds),
5.400%, 7/01/25 7/06 at 101 1/2 A 3,551,485
2,395,000 County Board of Education of Richmond County (Georgia), General Obligation School Bonds,
Series 1997, 5.950%, 11/01/26 11/98 at 100 Aaa 2,415,022
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 11.2%
1,000,000 Downtown Development Authority of the City of Atlanta (Georgia), Refunding Revenue Bonds
(Underground Atlanta Project), Series 1992, 6.250%, 10/01/12 10/02 at 102 AA 1,088,420
3,000,000 Solid Waste Management Authority of the City of Atlanta Revenue Bonds (Landfill Closure Project),
Series 1996, 5.250% 12/06 at 100 AA 3,006,120
1,250,000 Cobb-Marietta Coliseum and Exhibit Hall Authority (Georgia), Revenue Refunding Bonds, Series 1993,
5.500%, 10/01/12 No Opt. Call Aaa 1,353,388
2,000,000 The Fulton-DeKalb Hospital Authority (Georgia), Revenue Refunding Certificates, Series 1993,
5.500%, 1/01/20 7/03 at 102 Aaa 2,044,600
1,000,000 Metropolitan Atlanta Rapid Transit Authority (Georgia), Sales Tax Revenue Bonds, Refunding Series P,
6.250%, 7/01/20 No Opt. Call Aaa 1,168,630
500,000 Puerto Rico Highway and Transportation Authority, Highway Revenue Bonds (Series W),
5.250%, 7/01/20 7/03 at 101 1/2 A 499,975
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.4%
1,000,000 City of Atlanta, Georgia, Airport Facilities Revenue Refunding Bonds,
Series 1994A, 6.500%, 1/01/09 No Opt. Call Aaa 1,166,490
1,500,000 City of Atlanta, Airport Facilities Revenue Bonds, Series 1990,
6.250%, 1/01/21 (Alternative Minimum Tax) 1/01 at 102 Aaa 1,589,760
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 9.1%
3,115,000 City of Albany (Georgia), Sewerage System Revenue Bonds, Series 1992, 6.625%, 7/01/17
(Pre-refunded to 7/01/02) 7/02 at 102 Aaa 3,462,821
500,000 Development Authority of Burke County, Pollution Control Revenue Refunding Bonds (Oglethorpe Power
Corporation Vogtle Project), Series 1992, 7.700%, 1/01/06
(Pre-refunded to 1/01/03) 1/03 at 103 Aaa 585,755
1,000,000 The Medical Center Hospital Authority (Columbus, Georgia), Revenue Anticipation Certificates,
Series 1979, 7.750%, 7/01/10 No Opt. Call AAA 1,218,930
2,000,000 Fulco Hospital Authority, Revenue Anticipation Certificates
(Georgia Baptist Health Care System Project), Series 1992A,
6.375%, 9/01/22 (Pre-refunded to 9/01/02) 9/02 at 102 Baa1*** 2,205,800
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.3%
1,900,000 Municipal Electric Authority of Georgia, General Power Revenue Bonds,
1992B Series, 5.500%, 1/01/18 1/03 at 100 Aaa 1,934,541
1,750,000 Municipal Electric Authority of Georgia, Project One Special Obligation Bonds, Fifth Crossover Series,
6.400%, 1/01/09 No Opt. Call A+ 1,990,362
2,000,000 Development Authority of Monroe County (Georgia), Pollution Control Revenue Bonds (Gulf Power
Company Plant Scherer Project), First Series 1994, 6.300%, 9/01/24 9/99 at 102 AA- 2,074,500
- ------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 12.6%
2,500,000 City of Albany (Georgia), Sewerage System Revenue Bonds, Series 1997,
5.600%, 7/01/19 7/07 at 102 Aaa 2,619,874
3,450,000 Atlanta Water and Sewerage System, 5.000%, 1/01/15 1/04 at 102 A1 3,452,000
1,000,000 Cherokee County Water and Sewerage Authority (Georgia), Revenue Bonds, Series 1997,
5.000%, 8/01/27 8/08 at 102 Aaa 977,410
2,000,000 Douglasville-Douglas County Water and Sewer Authority (Georgia), Water and Sewerage Revenue Bonds,
Series 1993, 5.625%, 6/01/15 No Opt. Call Aaa 2,173,260
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
WATER AND SEWER (continued)
$ 1,000,000 City of Milledgeville (Georgia), Water and Sewerage Revenue and Refunding Bonds,
Series 1996, 6.000%, 12/01/21 No Opt. Call Aaa $ 1,144,910
- ------------------------------------------------------------------------------------------------------------------------------------
$ 77,115,000 Total Investments - (cost $75,314,407) - 98.9% 81,263,714
=============
TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.6%
400,000 Burke County Development Authority, Pollution Control Revenue Bonds, Series 1994 (Georgia Power Company
Plant Vogtle Project), Fifth Series 1994, Variable Rate Demand Bonds, 4.000%, 7/01/24+ VMIG-1 400,000
100,000 Development Authority of Burke County (Georgia), Georgia Power Company Plant Vogtle Project, Second Series 1994,
Variable Rate Demand Bonds, 3.950%, 7/01/24+ VMIG-1 100,000
- ------------------------------------------------------------------------------------------------------------------------------------
$ 500,000 Total Temporary Investments - 0.6% 500,000
=============
Other Assets Less Liabilities - 0.5% 388,194
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 82,151,908
====================================================================================================================
*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.
(DD) Security purchased on a delayed basis (note 1).
+ The security has a maturity of more than one year, but has variable
rate and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND (NMY)
May 31, 1998
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 6.1%
Maryland Health and Higher Educational Facilities Authority,
Refunding Revenue Bonds, Johns Hopkins University Issue, Series
1997:
$ 1,000,000 5.625%, 7/01/17 7/07 at 102 Aa2 $ 1,054,400
2,000,000 5.625%, 7/01/27 7/07 at 102 Aa2 2,098,360
9,445,000 Morgan State University, Maryland, Academic Fees and Auxiliary Facilities Fees,
Revenue Refunding Bonds, 1993 Series, 6.100%, 7/01/20 No Opt. Call Aaa 10,948,172
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 13.0%
1,960,000 Maryland Economic Development Corporation (Health and Mental Hygiene Providers Facilities
Acquisition Program), Revenue Bonds, Series 1996A, 7.625%, 4/01/21 4/11 at 102 N/R 2,007,726
1,875,000 Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Good Samaritan
Hospital Issue, Series 1993, 5.750%, 7/01/19 7/03 at 102 Aaa 1,960,256
2,350,000 Maryland Health and Higher Educational Facilities Authority, Project and Refunding Revenue Bonds,
Sinai Hospital of Baltimore Issue, Series 1993, 5.500%, 7/01/13 7/03 at 102 Aaa 2,439,183
1,855,000 Maryland Health and Higher Educational Facilities Authority, Refunding Revenue Bonds, Francis Scott Key
Medical Center Issue, Series 1993, 5.000%, 7/01/13 7/03 at 102 Aaa 1,863,700
3,125,000 Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Howard County General
Hospital Issue, Series 1993, 5.500%, 7/01/25 7/03 at 102 Baa1 3,165,063
City of Gaithersburg, Maryland, Hospital Facilities Refunding
and Improvement Revenue Bonds (Shady Grove Adventist Hospital),
Series 1995:
2,550,000 6.500%, 9/01/12 No Opt. Call Aaa 3,025,677
6,265,000 5.500%, 9/01/15 9/05 at 102 Aaa 6,508,458
Prince George's County, Maryland, Project and Refunding Revenue
Bonds (Dimensions Health Corporation Issue), Series 1994:
3,000,000 5.375%, 7/01/14 7/04 at 102 A 3,050,010
6,000,000 5.300%, 7/01/24 7/04 at 102 A 5,999,700
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 13.4%
1,150,000 Community Development Administration, Department of Housing and Community Development, State of
Maryland, Multi-Family Housing Revenue Bonds (Insured Mortgage Loans), 1993 Series B,
6.625%, 5/15/23 5/03 at 102 Aa 1,231,340
1,000,000 Community Development Administration, Department of Housing and Community Development, State of
Maryland, Multi-Family Housing Revenue Bonds (Insured Mortgage Loans), 1992 Series A,
6.850%, 5/15/33 (Alternative Minimum Tax) 5/03 at 102 Aa 1,062,100
3,075,000 Community Development Administration, Department of Housing and Community Development, State of
Maryland, Multi-Family Housing Revenue Bonds (Insured Mortgage Loans), 1993 Series D,
6.050%, 5/15/24 5/03 at 102 Aa 3,220,478
4,000,000 Anne Arundel County, Maryland, Multifamily Housing Revenue Bonds (Woodside Apartments Project),
Series 1994, 7.450%, 12/01/24 (Alternative Minimum Tax)
(Mandatory put 12/01/03) No Opt. Call BBB+ 4,235,920
1,795,000 County Commissioners of Charles County, Maryland Mortgage Revenue Refunding Bonds, Series 1995A
(Holly Station IV Townhouses Project - FHA Insured Mortgage Loan),
6.450%, 5/01/26 5/05 at 102 AAA 1,926,968
Howard County, Maryland, Mortgage Revenue Refunding Bonds,
Series 1996A (FHA Insured Mortgage Loan-Normandy WoodsIII
Apartments Project):
700,000 6.000%, 7/01/17 7/06 at 102 AAA 737,310
2,000,000 6.100%, 7/01/25 7/06 at 102 AAA 2,107,700
2,000,000 Housing Opportunities Commission of Montgomery County (Montgomery County, Maryland), Multifamily
Housing Revenue Bonds, 1995 Series A, 5.900%, 7/01/15 7/05 at 102 Aa 2,095,840
1,500,000 Housing Opportunities Commission of Montgomery County (Montgomery County, Maryland), Multifamily
Housing Revenue Bonds, 1996 Series B, 5.900%, 7/01/26 7/06 at 102 Aaa 1,558,845
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING/MULTIFAMILY (continued)
Housing Authority of Prince George's County (Maryland), Mortgage
Revenue Refunding Bonds, Series 1993A (Cherry Hill Apartments
Project):
$ 1,090,000 5.900%, 9/20/10 9/03 at 102 AAA $ 1,141,197
1,930,000 6.000%, 9/20/15 9/03 at 102 AAA 2,006,061
1,000,000 Housing Authority of Prince George's County (Maryland), Mortgage Revenue Refunding Bonds,
Series 1993A (GNMA Collateralized - Stevenson Apartments Project),
6.350%, 7/20/20 1/03 at 102 AAA 1,055,200
1,500,000 Housing Authority of Prince George's County (Maryland), Mortgage Revenue Refunding Bonds,
Series 1995A (GNMA Collateralized - Riverview Terrace Apartments
Project), 6.700%, 6/20/20 12/04 at 102 AAA 1,624,980
Housing Authority of Prince George's County (Maryland), Mortgage
Revenue Refunding Bonds, Series 1995A (GNMA Collateralized -
Overlook Apartments Project):
2,000,000 5.700%, 12/20/15 12/05 at 102 AAA 2,060,820
1,670,000 5.750%, 12/20/19 12/05 at 102 AAA 1,720,668
1,000,000 Housing Authority of Prince George's County (Maryland), Mortgage Revenue Refunding Bonds,
Collateralized - Foxglenn Apartments Project, Series 1998 A,
5.450%, 5/20/14 (Alternative Minimum Tax) 5/00 at 100 AAA 1,000,720
940,000 The Mayor and Council of Rockville (Maryland), Mortgage Revenue Refunding Bonds, Series 1994A
(FHA Insured Mortgage Loan - The Summit Apartments Project),
5.250%, 7/01/09 1/04 at 102 Aaa 956,431
1,000,000 City of Salisbury, Maryland, Mortgage Revenue Refunding Bonds, Series 1995A (FHA Insured Mortgage
Loan - College Lane Apartments Project), 6.600%, 12/01/26 12/04 at 102 AAA 1,071,820
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 6.7%
1,750,000 Community Development Administration, Department of Housing and Community Development, State of
Maryland, Single Family Program Bonds, 1993 Third Series, 4.950%, 4/01/06 4/04 at 102 Aa 1,794,450
885,000 Community Development Administration, Department of Housing and Community Development, State of
Maryland, Single Family Program Bonds, 1992 Fourth Series,
6.800%, 4/01/22 (Alternative Minimum Tax) 4/03 at 102 Aa 947,605
1,465,000 Community Development Administration, Department of Housing and Community Development, State of
Maryland, Single Family Program Bonds, 1994 First Series, 5.900%, 4/01/11 4/04 at 102 Aa2 1,542,733
1,000,000 Community Development Administration, Department of Housing and Community Development, State of
Maryland, Single Family Program Bonds, 1994 Fourth Series,
6.450%, 4/01/14 4/04 at 102 Aa2 1,069,670
2,650,000 Community Development Administration, Department of Housing and Community Development, State of
Maryland, Single Family Program Bonds, 1994 Fifth Series, 6.750%, 4/01/26
(Alternative Minimum Tax) 4/04 at 102 Aa 2,847,743
1,000,000 Community Development Administration, Department of Housing and Community Development, State of
Maryland, Single Family Program Bonds, 1989 Third Series, 7.375%, 4/01/26
(Alternative Minimum Tax) 4/99 at 102 Aa 1,032,250
1,000,000 State of Maryland Community Development Administration Department of Housing and Community Development,
Single Family Program, Sixth Series, Series B, 6.200%, 4/01/22
(Alternative Minimum Tax) 4/06 at 102 Aa 1,061,140
2,000,000 Housing Opportunities Commission of Montgomery County (Montgomery County, Maryland), Single Family
Mortgage Revenue Bonds, 1994 Series A, 6.600%, 7/01/14 7/04 at 102 Aa2 2,148,680
1,165,000 Housing Authority of Prince George's County (Maryland), GNMA/FNMA Collateralized Single Family
Mortgage Revenue Bonds, Series 1994A, 6.350%, 6/01/11 (Alternative
Minimum Tax) 6/04 at 102 AAA 1,237,719
1,725,000 Housing Authority of Prince George's County (Maryland), FHLMC/FNMA/GNMA Collateralized Single
Family Mortgage Revenue Bonds, Series 1997, 5.625%, 8/01/17 (Alternative
Minimum Tax) 8/07 at 102 AAA 1,776,077
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 11.3%
1,000,000 State of Maryland, General Obligation Bonds, State and Local Facilities Loan of 1993, Third Series
(Capital Improvement and Refunding Bonds), 4.600%, 7/15/07 7/03 at 101 1/2 Aaa 1,018,290
The Maryland - National Capital Park and Planning Commission
(Prince George's County, Maryland), General Obligation Bonds,
Park Acquisition and Development Bonds, SeriesM-2:
880,000 5.300%, 7/01/09 7/03 at 102 AA 924,466
800,000 5.300%, 7/01/10 7/03 at 102 AA 836,960
2,000,000 Baltimore County General Obligation Refunding Bonds (Pension Fund),
5.000%, 8/01/10 8/08 at 101 Aaa 2,087,080
2,000,000 Baltimore County, Maryland, General Obligation Bonds, Baltimore County Metropolitan District Bonds
(64th Issue), 4.900%, 8/01/11 8/03 at 102 Aaa 2,029,100
1,000,000 City of Baltimore, Maryland (Mayor and City Council of
Baltimore), General Obligation Serial Bonds, Consolidated
Public Improvement Bonds of 1989 - Series B, 7.150%, 10/15/08 No Opt. Call A1 1,207,470
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TAX OBLIGATION/GENERAL (continued)
City of Baltimore, Maryland (Mayor and City Council of
Baltimore), General Obligation Consolidated Public Improvement
Refunding Bonds of 1993 - Series D:
$ 1,130,000 6.000%, 10/15/03 No Opt. Call Aaa $ 1,229,779
1,305,000 6.000%, 10/15/05 No Opt. Call Aaa 1,443,917
1,415,000 6.000%, 10/15/06 No Opt. Call Aaa 1,577,371
Mayor and City Council of Baltimore (City of Baltimore,
Maryland), General Obligation Consolidated Public Improvement
Refunding Bonds of 1995 - Series A:
1,200,000 7.375%, 10/15/03 No Opt. Call Aaa 1,382,376
5,000,000 7.250%, 10/15/04 No Opt. Call Aaa 5,834,550
1,000,000 City of Baltimore, Maryland (Mayor and City Council of Baltimore), General Obligation Serial Bonds,
Consolidated Public Improvement Bonds, of 1991 - Series C,
6.375%, 10/15/07 No Opt. Call Aaa 1,149,530
2,400,000 Howard County Maryland, Consolidated Public Improvement Project and Refunding Bonds, Series 1998 A,
5.000%, 2/15/06 No Opt. Call Aaa 2,510,712
1,000,000 Prince George's County, Maryland, General Obligation Bonds, ConsolidatedPublic Improvement Bonds,
Series 1993, 5.750%, 3/15/09 3/03 at 102 Aaa 1,073,490
1,500,000 Prince George's County, Maryland, General Obligation, Consolidated Public Improvement Bonds,
Series 1996, 6.000%, 3/15/05 No Opt. Call Aaa 1,650,615
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 13.6%
4,000,000 Department of Transportation of Maryland, County Transportation Revenue Bonds, Series 1993,
4.600%, 12/15/02 No Opt. Call Aa 4,082,080
4,415,000 Maryland Stadium Authority, Sports Facilities Lease Revenue Bonds, Series 1989D, 7.500%, 12/15/10
(Alternative Minimum Tax) 12/99 at 102 Aa 4,704,756
4,955,000 Maryland Stadium Authority, Sports Facilities Lease Revenue Bonds,
Series 1996, 5.750%, 3/01/18 3/06 at 101 Aaa 5,222,669
2,730,000 Anne Arundel County, General Obligation Bonds, Consolidated Water and Sewer Series 1993,
Refunding Series, 5.250%, 4/15/12 4/03 at 102 AA+ 2,802,700
1,000,000 Mayor and City Council of Baltimore (City of Baltimore, Maryland), Certificates of Participation
(Emergency Telecommunications Facilities), Series 1997A, 5.000%, 10/01/17 10/07 at 102 Aaa 1,003,370
2,200,000 Puerto Rico Public Buildings Authority, Public Education and
Health Facilities Refunding Bonds, Series M, Guaranteed by the
Commonwealth of Puerto Rico, 5.750%, 7/01/15 7/03 at 101 1/2 A 2,306,986
2,500,000 Puerto Rico Public Buildings Authority, Revenue Refunding Bonds, Series 1993-L, Commonwealth
Guaranteed, 5.600%, 7/01/08 No Opt. Call Aaa 2,740,050
1,780,000 Washington County Sanitary District, Refunding Bonds of 1993,
Series F (Guaranteed by the Full Faith and Credit Pledge of the
County Commissioners of Washington County), 5.375%, 1/01/15 1/03 at 102 Aaa 1,819,000
Washington Suburban Sanitary District, Maryland (Montgomery and
Prince George's Counties, Maryland), General Construction
Refunding Bonds of 1991 (Second Series):
1,100,000 8.000%, 1/01/02 No Opt. Call Aa1 1,240,591
1,250,000 6.100%, 1/01/04 1/02 at 102 Aa1 1,348,538
1,000,000 Washington Suburban Sanitary District, Maryland (Montgomery and Prince George's Counties, Maryland),
Water Supply Refunding Bonds of 1993, 5.250%, 12/01/11 12/03 at 102 Aa1 1,033,170
1,290,000 Washington Suburban Sanitary District,Montgomery and Prince George's Counties General Construction
Bonds of 1997, 5.000%, 6/01/06 No Opt. Call Aa1 1,347,947
1,500,000 Washington Suburban Sanitary District, Maryland (Montgomery and Prince George's Counties, Maryland),
Sewage Disposal Bonds of 1993, 5.375%, 6/01/12 6/03 at 102 Aa1 1,548,990
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 7.8%
Maryland Transportation Authority, Special Obligation Revenue
Bonds, Baltimore/Washington International Airport Projects,
Series 1994-A (Qualified Airport Bonds):
5,500,000 6.250%, 7/01/14 7/04 at 102 Aaa 5,965,410
2,165,000 6.400%, 7/01/19 7/04 at 102 Aaa 2,302,629
1,500,000 Maryland Transportation Authority, Transportation Facilities Projects, Revenue Bonds, Series 1992,
5.750%, 7/01/15 7/02 at 100 A1 1,554,510
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TRANSPORTATION (continued)
$ 3,000,000 Maryland Transportation Authority, Transportation Facilities Projects, Revenue Bonds, Series 1991,
6.500%, 7/01/06 7/01 at 102 A1 $ 3,263,820
Washington Metropolitan Area Transit Authority (District of
Columbia), Gross Revenue Transit Refunding Bonds, Series 1993:
1,000,000 4.800%, 1/01/04 No Opt. Call Aaa 1,028,570
2,000,000 6.000%, 7/01/07 No Opt. Call Aaa 2,232,740
1,500,000 5.250%, 7/01/14 1/04 at 102 Aaa 1,529,055
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 4.2%
2,000,000 Baltimore County, Maryland, General Obligation Bonds, Baltimore County Pension Funding Bonds,
1991 Refunding Series, 6.700%, 7/01/11 (Pre-refunded to 7/01/98) 7/98 at 102 Aaa 2,044,880
3,000,000 Mayor and City Council of Baltimore, Maryland, Project and Refunding Bonds (Wastewater
Projects), Series 1990-A, 6.500%, 7/01/20 (Pre-refunded to 7/01/00) 7/00 at 100 Aaa 3,154,590
1,000,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1997, 6.000%, 7/01/26
(Pre-refunded to 7/01/07) 7/07 at 101 1/2 Aaa 1,137,330
1,000,000 Puerto Rico Aqueduct and Sewer Authority, Revenue Bonds, Series 1988A, 7.875%, 7/01/17
(Pre-refunded to 7/01/98) 7/98 at 102 Aaa 1,023,460
1,000,000 Washington Suburban Sanitary District, Maryland(Montgomery and Prince George's Counties, Maryland),
Water Supply Bonds of 1988 (Third Series), 7.100%, 12/01/02
(Pre-refunded to 12/01/98) 12/98 at 102 Aaa 1,036,640
1,115,000 Washington Suburban Sanitary District, Maryland (Montgomery and Prince George's Counties, Maryland),
Water Supply Bonds of 1992, 6.200%, 6/01/09 (Pre-refunded to 6/01/02) 6/02 at 102 Aa1*** 1,219,420
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 20.6%
6,000,000 Anne Arundel County, Maryland, Pollution Control Revenue Refunding Bonds (Baltimore Gas and Electric
Company Project), Series 1994, 6.000%, 4/01/24 4/04 at 102 A 6,376,740
7,000,000 Calvert County, Maryland, Pollution Control Revenue Refunding Bonds (Baltimore Gas and Electric Company
Project), Series 1993, 5.550%, 7/15/14 7/04 at 102 A 7,271,180
9,600,000 Montgomery County, Maryland, Solid Waste System Revenue Bonds (1993 Series A), 5.875%, 6/01/13
(Alternative Minimum Tax) 6/03 at 102 Aaa 10,196,064
Northeast Maryland Waste Disposal Authority, Resource Recovery
Revenue Refunding Bonds (Southwest Resource Recovery Facility),
Series 1993:
1,625,000 6.900%, 1/01/00 No Opt. Call Aaa 1,696,728
3,000,000 7.150%, 1/01/04 No Opt. Call Aaa 3,410,880
4,675,000 7.200%, 1/01/05 No Opt. Call Aaa 5,402,009
5,000,000 Prince George's County, Maryland, Pollution Control Revenue Refunding Bonds (Potomac Electric Project),
1993 Series, 6.375%, 1/15/23 1/03 at 102 A1 5,392,450
5,750,000 Prince George's County, Maryland, Solid Waste Management System Revenue Bonds, Series 1993,
5.250%, 6/15/13 6/03 at 102 Aaa 5,834,295
1,000,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series T,
5.500%, 7/01/20 7/04 at 100 Baa1 1,013,870
1,010,000 Puerto Rico Telephone Authority, Revenue Bonds, Series N, 5.500%, 1/01/22 1/03 at 101 1/2 A+ 1,033,452
- ------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 1.2%
1,750,000 City of Baltimore, Maryland (Mayor and City Council of Baltimore), Project and Refunding Revenue Bonds
(Water Projects), Series 1994-A, 5.000%, 7/01/24 No Opt. Call Aaa 1,757,543
1,000,000 City of Baltimore, Maryland (Mayor and City Council of Baltimore), Project and Refunding Revenue Bonds
(Water Projects), Series 1996-A, 5.500%, 7/01/26 7/06 at 101 Aaa 1,035,980
- ------------------------------------------------------------------------------------------------------------------------------------
$ 211,955,000 Total Investments - (cost $212,558,914) - 97.9% 225,463,968
=============
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.2%
$ 400,000 University of Maryland System, Revolving Equipment Loan Program, Variable
============= Rate Demand Bonds, Series A, 3.750%, 7/01/15+ VMIG-1 $ 400,000
Other Assets Less Liabilities - 1.9% 4,323,911
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 230,187,879
====================================================================================================================
*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.
+ The security has a maturity of more than one year, but has variable
rate and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN NORTH CAROLINA PREMIUM INCOME MUNICIPAL FUND (NNC)
May 31, 1998
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
EDUCATION AND CIVIC ORGANIZATIONS - 9.7%
State of North Carolina, State Education Assistance Authority (A
Political Subdivision of the State of North Carolina),
Guaranteed Student Loan Revenue Bonds, 1995 Series A
(Subordinate Lien):
$ 1,000,000 6.050%, 7/01/10 (Alternative Minimum Tax) 7/05 at 102 A $ 1,071,360
2,400,000 6.300%, 7/01/15 (Alternative Minimum Tax) 7/05 at 102 A 2,594,040
5,875,000 State of North Carolina, State Education Assistance Authority (A Political Subdivision of the State
of North Carolina), Guaranteed Student Loan Revenue Bonds, 1996 Series C (Subordinate Lien),
6.350%, 7/01/16 (Alternative Minimum Tax) 7/06 at 102 A 6,389,650
3,300,000 Appalachian State University, Utilities System Revenue Refunding Bonds, Series 1998 of The
Board of Governors of The University of North Carolina, 5.000%, 5/15/18 5/08 at 102 Aaa 3,283,434
- ------------------------------------------------------------------------------------------------------------------------------------
FOREST AND PAPER PRODUCTS - 4.2%
3,500,000 The Haywood County Industrial Facilities and Pollution Control Financing Authority (North Carolina),
Environmental Improvement Revenue Bonds (Champion International Corporation Project),
Series 1995A, 5.750%, 12/01/25 (Alternative Minimum Tax) 12/05 at 102 Baa1 3,611,125
2,000,000 The Haywood County Industrial Facilities and Pollution Control Financing Authority, Variable Rate
Demand Pollution Control Refunding Revenue Bonds (Champion International Corporation Project),
Series 1995, 6.000%, 3/01/20 3/06 at 102 Baa1 2,110,360
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 19.0%
4,090,000 Board of Governors of The University of North Carolina, University of North Carolina Hospitals at
Chapel Hill Revenue Bonds, Series 1996, 5.250%, 2/15/26 2/06 at 102 AA 4,105,092
375,000 North Carolina Medical Care Commission, Hospital Revenue Refunding Bonds (Annie Penn
Memorial Hospital), Series 1998, 5.375%, 1/01/22 1/08 at 102 Baa3 368,340
1,000,000 North Carolina Medical Care Commission, Hospital Revenue Refunding, Series 1992-A (North
Carolina Baptist Hospital Project), 6.000%, 6/01/22 6/02 at 102 AA 1,059,420
3,000,000 North Carolina Medical Care Commission, Hospital Revenue Refunding Bonds (Carolina Medicorp
Project), Series 1992, 5.500%, 5/01/15 5/02 at 102 AA 3,053,640
3,000,000 North Carolina Medical Care Commission, Hospital Revenue Refunding Bonds, Series 1992-A
(Alamance Health Services Inc. Project), 6.375%, 8/15/12 8/02 at 102 Aaa 3,260,070
2,275,000 North Carolina Medical Care Commission, Hospital Revenue Bonds (Wake County Hospital System),
Series 1997, 5.375%, 10/01/26 10/07 at 102 Aaa 2,306,668
2,280,000 University of North Carolina, Chapel Hill, Hospital Revenue Bonds,
Series 1992, 6.000%, 2/15/24 2/02 at 102 AA 2,427,698
The Charlotte-Mecklenburg Hospital Authority (North Carolina), Health Care System Revenue
Bonds, Series 1992:
1,500,000 5.750%, 1/01/12 1/02 at 102 AA 1,590,090
2,150,000 6.250%, 1/01/20 1/02 at 102 AA 2,316,647
3,000,000 Craven Regional Medical Authority, Insured Health Care Facilities, Revenue Bonds, Series 1993,
5.625%, 10/01/17 10/03 at 102 Aaa 3,095,190
2,725,000 County of New Hanover, North Carolina, Hospital Revenue Bonds (New Hanover Regional
Medical Center Project), Series 1993, 4.750%, 10/01/23 10/03 at 102 Aaa 2,553,216
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 2.8%
North Carolina Housing Finance Agency, Multifamily Revenue Bonds
(1993 FHA Insured Mortgage Loan Resolution), Series 1993:
650,000 5.800%, 7/01/14 1/03 at 102 AA 672,588
1,000,000 5.900%, 7/01/26 1/03 at 102 AA 1,032,950
1,000,000 City of Asheville, North Carolina, Water System Revenue Bonds, Series 1996, 5.800%, 11/20/39
(Alternative Minimum Tax) 11/07 at 102 AAA 1,031,270
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
HOUSING/MULTIFAMILY (continued)
$ 1,000,000 City of Charlotte, North Carolina, Mortgage Revenue Refunding Bonds (FHA Insured Mortgage
Loan-Tryon Hills Apartments Project), Series 1993A, 5.875%, 1/01/25 1/03 at 105 Aaa $ 1,038,930
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 10.8%
775,000 North Carolina Housing Finance Agency, Single Family Revenue Bonds, Series-M (1985 Resolution),
7.850%, 9/01/28 (Alternative Minimum Tax) 3/00 at 102 Aa 813,370
3,145,000 North Carolina Housing Finance Agency, Single Family Revenue Bonds, Series V (1985 Resolution),
6.800%, 9/01/25 (Alternative MinimumTax) 9/02 at 102 Aa 3,345,368
5,815,000 North Carolina Housing Finance Agency, Single Family Revenue Bonds,Series X (1985 Resolution),
6.700%, 9/01/26 (Alternative Minimum Tax) 3/04 at 102 AA 6,221,876
4,220,000 North Carolina Housing Finance Agency, Single Family Revenue Bonds, Series HH (1985 Resolution),
6.300%, 3/01/26 (Alternative Minimum Tax) 3/06 at 102 AA 4,475,099
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 6.9%
2,000,000 Orange County, General Obligation School Bonds, Series 1994,
5.500%, 2/01/11 2/05 at 102 Aa1 2,119,740
6,250,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1996 (General Obligation Bonds),
5.400%, 7/01/25 7/06 at 101 1/2 A 6,341,938
1,100,000 County of Transylvania, North Carolina, Refunding Bonds, Series 1998 (General Obligation),
4.750%, 2/01/16 2/08 at 102 Aaa 1,069,167
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 16.5%
2,500,000 Centennial Authority, North Carolina, Hotel Tax Revenue Bonds (Arena Project), Series 1997,
5.125%, 9/01/19 9/07 at 102 Aaa 2,488,575
6,000,000 City of Charlotte, North Carolina, Refunding Certificates of Participation (Convention Facility
Project), Series 1993C, 5.250%, 12/01/20 12/03 at 102 Aaa 6,007,320
2,180,000 The City Concord, North Carolina, Certificates of Participation,
Series 1996A, 6.125%, 6/01/21 6/06 at 102 Aaa 2,396,888
2,390,000 County of Duplin, North Carolina, Certificates of Participation (Law Enforcement Project and
Public Schools Project), Series 1993, 5.250%, 8/01/14 8/03 at 102 Aaa 2,431,228
3,970,000 Durham, North Carolina, Certificates of Participation, Water Utility
Improvements, 6.375%, 7/15/12 7/02 at 102 AA 4,275,928
5,000,000 Puerto Rico Highway and Transportation Authority, Highway Revenue Bonds, Series Y of 1996,
5.500%, 7/01/26 7/06 at 101 1/2 A 5,108,450
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 8.6%
2,855,000 North Carolina Municipal Power Agency Number 1, Catawba Electric Revenue Bonds, Series 1980,
10.500%, 1/01/10 No Opt. Call Aaa 3,942,841
The Charlotte-Mecklenburg Hospital Authority (North Carolina), Health Care System Revenue Bonds,
Series 1992:
1,000,000 5.750%, 1/01/12 (Pre-refunded to 1/01/02) 1/02 at 102 AA*** 1,072,660
2,940,000 6.250%, 1/01/20 (Pre-refunded to 1/01/02) 1/02 at 102 AA*** 3,202,248
2,400,000 Puerto Rico Commonwealth Highway Authority, Highway Revenue Bonds, Series 1990-Q,
6.000%, 7/01/20 (Pre-refunded to 7/01/00) 7/00 at 100 A*** 2,498,856
1,035,000 County of Wake, North Carolina, Hospital System Revenue Bonds,
Series 1993, 5.125%, 10/01/26 No Opt. Call Aaa 1,048,817
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 10.8%
1,500,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, Series 1985-G,
5.750%, 12/01/16 9/03 at 102 1/2 Baa1 1,540,785
5,000,000 North Carolina Eastern Municipal Power Agency, Power System Revenue Bonds, Series 1993-D,
5.600%, 1/01/16 1/03 at 102 Baa1 5,032,550
North Carolina Municipal Power Agency Number 1, Catawba Electric
Revenue Bonds, Series 1992:
1,000,000 6.000%, 1/01/04 1/03 at 102 A- 1,073,860
1,000,000 5.750%, 1/01/15 1/03 at 100 A- 1,023,780
5,250,000 City of Fayetteville, North Carolina, Public Works Commission Revenue Refunding Bonds,
Series 1993, 4.750%, 3/01/14 3/03 at 100 Aaa 5,141,273
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES (continued)
$ 1,000,000 City of Greensboro, North Carolina, Combined Enterprise System, Revenue Bonds, Series 1995A,
5.375%, 6/01/19 6/05 at 102 AA- $ 1,020,380
- ------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.1%
1,000,000 City of Asheville, North Carolina, Water System Revenue Bonds, Series 1996,
5.700%, 8/01/25 8/06 at 102 Aaa 1,055,210
4,250,000 Metropolitan Sewerage District of Buncombe County (North Carolina), Sewerage System Revenue
Refunding Bonds, Series 1993A, 5.500%, 7/01/22 7/03 at 102 Aaa 4,365,132
1,280,000 Lincolnton, North Carolina, Combined Enterprise SystemRevenue Bonds, Series 1996,
5.375%, 5/01/16 11/06 at 102 Aaa 1,320,665
3,400,000 Orange Water and Sewer Authority (North Carolina), Water and Sewer System Revenue and
Revenue Refunding Bonds, Series 1993, 5.200%, 7/01/16 7/03 at 102 AA 3,435,971
2,180,000 County of Union, North Carolina, Enterprise Systems Revenue Bonds,
Series 1996, 5.500%, 6/01/21 6/06 at 102 Aaa 2,256,300
- ------------------------------------------------------------------------------------------------------------------------------------
$ 129,555,000 Total Investments - (cost $127,723,515) - 98.4% 135,098,053
=============
TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.1%
$ 100,000 North Carolina Medical Care Commission, Hospital Revenue Bonds (Duke University Hospital),
=============
(Pooled Financing Project), Series 1991-A (Adjustable Convertible Extendable Securities-Aces),
3.950%, 10/01/20+ VMIG-1 100,000
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.5% 2,072,292
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 137,270,345
====================================================================================================================
*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.
+ The security has a maturity of more than one year, but has variable
rate and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND (NPV)
May 31, 1998
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
BASIC MATERIALS - 1.0%
$ 2,000,000 Virginia Small Business Financing Authority, Industrial Development Revenue Bonds (Albion
Enterprises, L.L.C. Project), Series 1998A, 6.400%, 1/01/14
(Alternative Minimum Tax) 1/03 at 102 N/R $ 2,004,960
- ------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 4.9%
3,000,000 Virginia College Building Authority, Educational Facilities Revenue Bonds (University of Richmond Project),
Series of 1994, 5.550%, 11/01/19 (Optional put 11/01/04) 11/04 at 100 Aa2 3,213,600
Industrial Development Authority of the City of Lynchburg,
Virginia, Educational Facilities Revenue Bonds (Randolph-Macon
Women's College), Series 1993:
2,940,000 5.875%, 9/01/13 9/03 at 102 A- 3,089,205
3,000,000 5.875%, 9/01/23 9/03 at 102 A- 3,109,800
- ------------------------------------------------------------------------------------------------------------------------------------
HEALTH CARE - 12.6%
City of Virginia Beach Development Authority (Virginia),
Hospital Revenue Bonds (Sentara Bayside Hospital), Series 1991:
2,000,000 6.600%, 11/01/09 11/01 at 102 AA 2,182,780
5,000,000 6.300%, 11/01/21 11/01 at 102 AA 5,384,700
4,850,000 Industrial Development Authority of Fairfax County, Virginia, Hospital Revenue Refunding Bonds
(Inova Health System Hospitals Project), Series 1993A, 5.000%, 8/15/23 No Opt. Call AA 4,808,436
1,440,000 Industrial Development Authority of Fairfax County, Virginia, Health Care Revenue Bonds (Inova Health
System Project), Series 1996A, 6.000%, 8/15/26 8/06 at 102 AA 1,549,166
1,000,000 Fairfax County Industrial Development Authority, Health Care Revenue Bonds (Inova Health), Series 1998A,
Revenue Refunding, 5.000%, 8/15/25 2/08 at 101 AA 965,330
4,650,000 Bon Secours Health System Obligated Group Revenue Bonds, Industrial Development Authority of the
County of Hanover (Virginia), Hospital Revenue Bonds, Series 1995 (Bon Secours Health
System Projects), 5.500%, 8/15/25 8/05 at 102 Aaa 4,778,108
1,500,000 Industrial Development Authority of the County of Henrico, Virginia, Health Care Revenue Bonds
(Bon Secours Health), Series 1996, 6.250%, 8/15/20 No Opt. Call Aaa 1,749,195
2,500,000 Hospital Revenue and Refunding Bonds, Industrial Development Authority of the City of Norfolk, Hospital
Revenue and Refunding Bonds (Sentara Hospitals-Norfolk), Series 1994A,
6.500%, 11/01/13 11/04 at 102 AA 2,806,200
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.4%
1,085,000 Industrial Development Authority of Arlington County, Virginia, Multi-Family Housing Mortgage Revenue
Bonds (Arlington Housing Corporation), 1995 Series, 5.700%, 7/01/07 7/05 at 102 A 1,135,843
4,445,000 Hampton Redevelopment and Housing Authority, Multifamily Housing Revenue Refunding Bonds,
Series 1994 (Chase Hampton II Apartments), 7.000%, 7/01/24
(Mandatory put 7/01/04) 7/02 at 104 Baa2 4,807,223
2,355,000 Suffolk Redevelopment and Housing Authority, Mortgage Revenue Refunding Bonds, Series 1993
(FHA Insured Mortgage Loan-Wilson Pines Apartments Section 8
Assisted Project), 6.125%, 1/01/23 1/01 at 100 Aaa 2,398,827
- ------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.8%
1,000,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 1992 Series B, Subseries B-3,
6.750%, 7/01/21 (Alternative Minimum Tax) 1/02 at 102 Aa1 1,053,590
3,240,000 Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 1992 Series B, Subseries B-5,
6.300%, 1/01/27 (Alternative Minimum Tax) 1/02 at 102 Aa1 3,370,961
Virginia Housing Development Authority, Commonwealth Mortgage Bonds, 1992 Series B, Subseries B-6:
4,000,000 6.200%, 7/01/21 (Alternative Minimum Tax) 1/02 at 102 Aa1 4,152,360
2,945,000 6.250%, 1/01/27 (Alternative Minimum Tax) 1/02 at 102 Aa1 3,055,585
5,000,000 Virginia Housing Development Authority, Commonwealth Mortgage Revenue Bonds, 1992 Series B
Subseries B-4, 6.550%, 1/01/27 (Alternative Minimum Tax) 1/02 at 102 Aa1 5,246,900
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
LONG TERM CARE - 1.7%
Industrial Development Authority of the City of Winchester,
Residential Care Facility First Mortgage Revenue Bonds
(Westminster-Canterbury of Winchester, Inc.), Series 1998:
$ 1,350,000 5.750%, 1/01/18 1/03 at 102 N/R $ 1,351,391
2,000,000 5.750%, 1/01/27 1/03 at 102 N/R 1,991,540
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 6.3%
2,500,000 City of Portsmouth, Virginia, General Obligation Bonds, Public Utility Refunding Bonds, Series 1993,
5.500%, 8/01/19 8/03 at 102 AA- 2,550,225
5,700,000 Commonwealth of Puerto Rico, Public Improvement Bonds 1996 (General Obligation Bonds),
5.400%, 7/01/25 7/06 at 101 1/2 A 5,783,847
1,700,000 City of Richmond, Virginia, General Obligation Public Improvement Bonds, Series 1993B,
5.500%, 7/15/23 7/03 at 102 AA 1,731,960
2,000,000 City of Winchester, Virginia, General Obligation Public Improvement and Refunding Bonds,
Series of 1994, 5.500%, 1/15/14 1/04 at 102 AA 2,083,240
- ------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 6.1%
County of Cumberland, Virginia, Certificates of Participation, Series 1997:
1,075,000 6.200%, 7/15/12 No Opt. Call N/R 1,147,068
1,350,000 6.375%, 7/15/17 No Opt. Call N/R 1,455,192
500,000 Industrial Development Authority of Dinwiddie County, Virginia, Lease Revenue Bonds (Dinwiddie
County School Facilities Project), Series 1997A, 6.000%, 2/01/18 2/07 at 102 N/R 530,720
5,000,000 Hampton Roads Regional Jail Authority, Regional Jail Facility Revenue Bonds, Series 1996A,
5.500%, 7/01/24 7/06 at 102 Aaa 5,163,950
3,000,000 Prince William County Park Authority (Virginia), Revenue Bonds, Series 1994,
6.875%, 10/15/16 10/04 at 102 A- 3,382,650
- ------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.3%
6,315,000 Virginia Port Authority, Port Facilities Revenue Bonds, Series 1997, 5.600%, 7/01/27
(Alternative Minimum Tax) 7/07 at 101 Aaa 6,520,111
1,000,000 Capital Region Airport Commission, Richmond (Virginia), International Airport Projects,
Airport Revenue Bonds, Series 1995A, 5.625%, 7/01/25 7/05 at 102 Aaa 1,041,450
Metropolitan Washington Airports Authority, Airport System Revenue Bonds, Series 1992A:
1,900,000 6.625%, 10/01/19 (Alternative Minimum Tax) 10/02 at 102 Aaa 2,077,669
2,400,000 5.375%, 10/01/23 10/07 at 101 AA- 2,435,472
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 13.0%
7,035,000 Commonwealth Transportation Board, Commonwealth of Virginia, Transportation Revenue Bonds,
Series 1995A (Northern Virginia Transportation District Program), 6.250%, 5/15/17
(Pre-refunded to 5/15/04) 5/04 at 101 AA*** 7,837,412
2,750,000 Virginia College Building Authority, Educational Facilities Revenue Bonds (The Washington and Lee
University Project), Series of 1994, 5.800%, 1/01/24
(Pre-refunded to 1/01/04) 1/04 at 102 AA*** 3,008,473
5,250,000 Chesapeake Bay Bridge and Tunnel District, General Resolution Revenue Bonds, Refunding Series 1991,
6.375%, 7/01/22 (Pre-refunded to 7/01/01) 7/01 at 102 Aaa 5,700,818
4,085,000 Fairfax County Water Authority, Water Refunding Revenue Bonds, Series 1992, 5.750%, 4/01/29
(Pre-refunded to 4/01/02) 4/02 at 100 Aaa 4,324,136
3,500,000 Puerto Rico Highway and Transportation Authority, Highway
Revenue Bonds (Series T), 6.500%, 7/01/22 (Pre-refunded to
7/01/02) 7/02 at 101 1/2 AAA 3,865,260
125,000 Richmond Metropolitan Authority (Virginia), Expressway Revenue and Refunding Bonds, Series 1992-A,
5.750%, 7/15/22 (Pre-refunded to 7/15/02) 7/02 at 100 Aaa 132,825
- ------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 17.5%
750,000 Fairfax County Economic Development Authority (Virginia), Resource Recovery Revenue Bonds,
Series 1988-A (Ogden Martin Systems of Fairfax, Inc. Project), 7.750%, 2/01/11
(Alternative Minimum Tax) 2/99 at 103 A1 788,873
5,060,000 Halifax County Industrial Development Authority (Old Dominion Electric Cooperative), Alternative
Minimum Tax, 6.350%, 12/01/07 (Alternative Minimum Tax) 12/02 at 102 A+ 5,487,874
<PAGE>
<CAPTION>
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
UTILITIES (continued)
$ 2,250,000 Industrial Development Authority of the Town of Louisa, Virginia, Pollution Control Revenue Bonds
(Virginia Electric and Power Company Project), Series 1994,
5.450%, 1/01/24 1/04 at 102 A $ 2,286,900
5,000,000 Richmond Public Utility Revenue and Refunding, Series 1998A,
5.125%, 1/15/28 1/08 at 101 A1 4,928,450
10,300,000 Valley Resource Authority of the City of Roanoke, Virginia, Solid Waste System Revenue Bonds,
Series 1992, 5.750%, 9/01/12 9/02 at 102 A+ 10,720,961
6,150,000 Southeastern Public Service Authority of Virginia, Senior Revenue Bonds, Series 1993 (Regional Solid
Waste System), 6.000%, 7/01/17 (Alternative Minimum Tax) 7/03 at 102 A- 6,353,627
3,000,000 Southeastern Public Service Authority, Senior Revenue Refunding Bonds,
Series 1998, 5.000%, 7/01/15 No Opt. Call Aaa 3,034,320
- ------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 15.7%
1,920,000 Virginia Resources Authority, Revenue Refunding Bonds, Harrisonburg - Rockingham County,
5.000%, 5/01/18 5/08 at 101 AA 1,889,011
3,955,000 Virginia Resources Authority, Water and Sewer System Revenue Bonds, 1995 Series A
(Sussex County Project), 5.600%, 10/01/25 10/05 at 102 AA 4,079,424
1,500,000 Albemarle County Service Authority (Virginia), Water and Sewer System Revenue Refunding Bonds,
Series of 1993, 5.750%, 8/01/11 8/02 at 102 Aa 1,586,580
5,880,000 Fairfax County (Virginia), Water Authority, Water Refunding Revenue Bonds, Series 1992,
5.750%, 4/01/29 4/02 at 100 AA 6,050,461
1,000,000 Henrico County, Virginia, Water and Sewer System Refunding Revenue Bonds, Series 1992,
6.250%, 5/01/13 5/02 at 100 Aa2 1,060,140
1,500,000 Henry County Public Service Authority, Water and Sewer Refunding Revenue Bonds, Series 1991,
6.250%, 11/15/19 11/01 at 101 Aaa 1,606,050
2,090,000 City of Norfolk, Virginia, Water Revenue Bonds, Series 1993,
5.375%, 11/01/23 11/03 at 102 Aaa 2,117,316
City of Norfolk, Virginia, Water Revenue Bonds, Series 1995:
6,200,000 5.875%, 11/01/20 11/05 at 102 Aaa 6,627,427
2,365,000 5.900%, 11/01/25 11/05 at 102 Aaa 2,532,441
2,595,000 Upper Occoquan Sewage Authority (Virginia), Regional Sewerage System Revenue Refunding Bonds,
Series of 1993, 5.000%, 7/01/21 1/04 at 102 Aaa 2,535,807
- ------------------------------------------------------------------------------------------------------------------------------------
$ 180,000,000 Total Investments - (cost $176,949,022) - 98.3% 188,663,840
=============
TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.5%
$ 1,000,000 Roanoke Industrial Development Authority, Hospital Revenue Bonds (Carilion Health System Obligated Group),
============= Variable Rate Demand Bonds, Series 1997B, 4.000%, 7/01/27+ VMIG-1 1,000,000
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.2% 2,258,519
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 191,922,359
====================================================================================================================
* 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.
+ The security has a maturity of more than one year, but has variable
rate and demand features which qualify it as a short-term security. The rate
disclosed is that currently in effect. This rate changes periodically based on
market conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF NET ASSETS
May 31, 1998
<CAPTION>
GEORGIA MARYLAND NORTH CAROLINA VIRGINIA
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
ASSETS
Investments in municipal securities, at market value
(note 1) $81,263,714 $225,463,968 $135,098,053 $188,663,840
Temporary investments in short-term municipal securities,
at amortized cost, which approximates market value (note 1) 500,000 400,000 100,000 1,000,000
Cash -- -- 26,852 69,397
Receivables:
Interest 1,547,071 4,428,761 2,603,226 2,990,438
Investments sold 2,209,624 874,322 -- --
Other assets 6,039 19,617 14,209 15,835
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 85,526,448 231,186,668 137,842,340 192,739,510
- ------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 59,041 90,605 -- --
Payable for investments purchased 2,963,927 -- -- --
Accrued expenses:
Management fees (note 6) 45,017 125,201 75,187 104,601
Other 52,147 101,041 73,101 100,570
Preferred share dividends payable 8,454 16,737 11,344 25,468
Common share dividends payable 245,954 665,205 412,363 586,512
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 3,374,540 998,789 571,995 817,151
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets (note 7) $82,151,908 $230,187,879 $137,270,345 $191,922,359
====================================================================================================================================
Preferred shares, at liquidation value $27,800,000 $ 79,100,000 $ 46,800,000 $ 63,800,000
====================================================================================================================================
Preferred shares outstanding 1,112 3,164 1,872 2,552
====================================================================================================================================
Common shares outstanding 3,726,573 10,393,836 6,247,920 8,562,221
====================================================================================================================================
Netasset value per Common share outstanding (net assets less Preferred shares
at liquidation value, divided by Common shares
outstanding) $ 14.58 $ 14.54 $ 14.48 $ 14.96
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Year Ended May 31, 1998
GEORGIA MARYLAND NORTH CAROLINA VIRGINIA
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
INVESTMENT INCOME (NOTE 1) $4,489,154 $12,216,789 $7,512,202 $10,617,688
- ------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees (note 6) 527,151 1,466,862 879,142 1,221,253
Preferred shares - auction fees 69,499 197,750 117,001 159,501
Preferred shares - dividend disbursing agent fees 9,629 19,093 9,629 19,169
Shareholders' servicing agent fees and expenses 8,226 34,461 15,597 31,644
Custodian's fees and expenses 35,163 52,797 42,365 47,333
Trustees' fees and expenses (note 6) 1,697 3,108 2,216 2,735
Professional fees 16,697 17,032 16,954 16,844
Shareholders' reports - printing and mailing expenses 12,071 59,584 24,985 39,492
Stock exchange listing fees 3,433 27,557 16,091 16,213
Investor relations expense 6,734 20,173 11,461 16,925
Other expenses 16,456 23,641 17,567 22,078
- ------------------------------------------------------------------------------------------------------------------------------------
Total expenses 706,756 1,922,058 1,153,008 1,593,187
- ------------------------------------------------------------------------------------------------------------------------------------
Net investment income 3,782,398 10,294,731 6,359,194 9,024,501
- ------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN FROM INVESTMENTS
Net realized gain from investment transactions
(notes 1 and 4) 262,947 209,020 105,277 815,729
Net change in unrealized appreciation or depreciation
of investments 3,091,525 7,993,591 6,157,216 7,074,942
- ------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 3,354,472 8,202,611 6,262,493 7,890,671
- ------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $7,136,870 $18,497,342 $12,621,687 $16,915,172
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
<CAPTION>
GEORGIA MARYLAND
- ----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/98 5/31/97 5/31/98 5/31/97
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 3,782,398 $ 3,748,068 $ 10,294,731 $ 10,375,856
Net realized gain (loss) from investment
transactions (notes 1 and 4) 262,947 (252,801) 209,020 (222,999)
Net change in unrealized appreciation or
depreciation of investments 3,091,525 2,814,265 7,993,591 5,782,311
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 7,136,870 6,309,532 18,497,342 15,935,168
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (2,940,684) (2,849,902) (7,965,280) (7,813,819)
Preferred shareholders (910,706) (863,423) (2,466,134) (2,462,066)
- ----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (3,851,390) (3,713,325) (10,431,414) (10,275,885)
- ----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued to shareholders due to
reinvestment of distributions 169,532 74,474 643,736 128,815
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 3,455,012 2,670,681 8,709,664 5,788,098
Net assets at beginning of year 78,696,896 76,026,215 221,478,215 215,690,117
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $82,151,908 $78,696,896 $230,187,879 $221,478,215
==================================================================================================================================
Balance of undistributed net investment income at
end of year $ 181,047 $ 250,039 $ 363,405 $ 500,088
==================================================================================================================================
<CAPTION>
NORTH CAROLINA VIRGINIA
- ----------------------------------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/98 5/31/97 5/31/98 5/31/97
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 6,359,194 $ 6,360,344 $ 9,024,501 $ 8,943,630
Net realized gain (loss) from investment
transactions (notes 1 and 4) 105,277 400,003 815,729 (125,901)
Net change in unrealized appreciation or
depreciation of investments 6,157,216 4,073,182 7,074,942 5,962,001
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations 12,621,687 10,833,529 16,915,172 14,779,730
- ----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1)
From undistributed net investment income:
Common shareholders (4,942,333) (4,798,983) (7,014,079) (6,884,682)
Preferred shareholders (1,588,477) (1,461,339) (2,065,746) (2,048,258)
- ----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from distributions to shareholders (6,530,810) (6,260,322) (9,079,825) (8,932,940)
- ----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS (NOTE 2)
Net proceeds from Common shares issued to shareholders due to
reinvestment of distributions 250,831 159,211 990,319 600,991
- ----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 6,341,708 4,732,418 8,825,666 6,447,781
Net assets at beginning of year 130,928,637 126,196,219 183,096,693 176,648,912
- ----------------------------------------------------------------------------------------------------------------------------------
Net assets at end of year $137,270,345 $130,928,637 $191,922,359 $183,096,693
==================================================================================================================================
Balance of undistributed net investment income at
end of year $ 218,179 $ 389,795 $ 396,862 $ 452,186
==================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The state Funds (the "Funds") covered in this report and their corresponding
stock exchange symbols are Nuveen Georgia Premium Income Municipal Fund (NPG),
Nuveen Maryland Premium Income Municipal Fund (NMY), Nuveen North Carolina
Premium Income Municipal Fund (NNC) and Nuveen Virginia Premium Income Municipal
Fund (NPV). Maryland, North Carolina and Virginia are traded on the New York
Stock Exchange while Georgia is traded on the American Stock Exchange.
Each Fund invests primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities within a single state. The
Funds are registered under the Investment Company Act of 1940 as closed-end,
diversified management investment companies.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
generally accepted accounting principles.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When price quotes
are not readily available (which is usually the case for municipal securities),
the pricing service establishes fair market value based on yields or prices of
municipal bonds of comparable quality, type of issue, coupon, maturity and
rating, indications of value from securities dealers and general market
conditions. Temporary investments in securities that have variable rate and
demand features qualifying them as short-term securities are valued at amortized
cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At May
31, 1998, Georgia had a delayed delivery purchase commitment of $2,963,927.
There were no such outstanding purchase commitments in any of the other Funds.
Investment Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
when required for federal income tax purposes.
Income Taxes
Each Fund is a separate tax payer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its tax-exempt net
investment income, in addition to any significant amounts of net realized
capital gains and/or market discount realized from investment transactions. The
Funds currently consider significant net realized capital gains and/or market
discount as amounts in excess of $.01 per Common share. Furthermore, each Fund
intends to satisfy conditions which will enable interest from municipal
securities, which is exempt from regular federal and designated state income
taxes, to retain such tax-exempt status when distributed to shareholders of the
Funds. All monthly tax-exempt income dividends paid during the fiscal year ended
May 31, 1998, 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 as a dividend monthly 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.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount are recorded on the ex-dividend date. The
amount and timing of distributions are determined in accordance with federal
income tax regulations, which may differ from generally accepted accounting
principles. Accordingly, temporary over-distributions as a result of these
differences may occur and will be classified as either distributions in excess
of net investment income, distributions in excess of net realized gains and/or
distributions in excess of net ordinary taxable income from investment
transactions, where applicable.
<PAGE>
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in one or more Series. The dividend rate
on each Series may change every seven days, as set by the auction agent. The
number of shares outstanding, by Series and in total, for each of the Funds is
as follows:
<TABLE>
<CAPTION>
GEORGIA MARYLAND NORTH CAROLINA VIRGINIA
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Number of shares:
Series T -- -- -- 832
Series W -- 1,404 -- --
Series TH 1,112 1,760 1,872 1,720
- -----------------------------------------------------------------------------------------------------------
Total 1,112 3,164 1,872 2,552
===========================================================================================================
</TABLE>
Derivative Financial Instruments
The Funds may invest in transactions in certain derivative financial instruments
including futures, forward, swap, 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 May 31, 1998.
Use of Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities at the date of the
financial statements and the reported amounts of increases and decreases in net
assets from operations during the reporting period.
2. FUND SHARES
Transactions in Common shares were as follows:
<TABLE>
<CAPTION>
GEORGIA MARYLAND
- ----------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/98 5/31/97 5/31/98 5/31/97
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions 11,603 5,440 44,290 9,331
==========================================================================================================
<CAPTION>
NORTH CAROLINA VIRGINIA
- ----------------------------------------------------------------------------------------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/98 5/31/97 5/31/98 5/31/97
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment of
distributions 16,963 11,613 64,943 42,523
==========================================================================================================
</TABLE>
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on July 1, 1998, to shareholders of record on
June 15, 1998, as follows:
<TABLE>
<CAPTION>
GEORGIA MARYLAND NORTH CAROLINA VIRGINIA
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Dividend per share $.0660 $.0640 $.0660 $.0685
==========================================================================================================
</TABLE>
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments for the fiscal year ended May 31,
1998, were as follows:
<TABLE>
<CAPTION>
NORTH
GEORGIA MARYLAND CAROLINA VIRGINIA
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Purchases:
Investments in municipal securities $13,879,900 $14,015,446 $13,287,769 $35,426,929
Temporary municipal investments 7,500,000 15,400,000 7,000,000 13,750,000
Sales and Maturities:
Investments in municipal securities 13,074,568 12,792,735 12,167,065 34,919,016
Temporary municipal investments 7,200,000 15,500,000 7,300,000 13,150,000
=========================================================================================================
</TABLE>
At May 31, 1998, the identified cost of investments owned for federal income tax
purposes was the same as the cost for financial reporting purposes for each
Fund.
<PAGE>
At May 31, 1998, the 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>
NORTH
GEORGIA MARYLAND CAROLINA VIRGINIA
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Expiration year:
2002 $ -- $ 2,996,315 $ -- $ 1,211,877
2003 1,111,467 1,019,929 2,383,842 1,577,464
2004 1,842,885 2,660,424 1,137,399 1,579,895
2005 340,685 454,351 131,993 140,749
- ---------------------------------------------------------------------------------------------------------
Total $ 3,295,037 $ 7,131,019 $ 3,653,234 $ 4,509,985
=========================================================================================================
</TABLE>
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at May 31, 1998, were as follows:
<TABLE>
<CAPTION>
NORTH
GEORGIA MARYLAND CAROLINA VIRGINIA
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Gross unrealized:
appreciation $ 5,956,560 $12,928,126 $ 7,379,799 $ 11,714,818
depreciation (7,253) (23,072) (5,261) --
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation $ 5,949,307 $12,905,054 $ 7,374,538 $ 11,714,818
=========================================================================================================
</TABLE>
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund
pays an annual management fee, payable monthly, at the rates set forth below,
which are based upon the average daily net asset value of each Fund:
<TABLE>
<CAPTION>
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE
- -----------------------------------------------------------------------------------------------------------
<S> <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 Trustees who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
<PAGE>
<TABLE>
7. COMPOSITION OF NET ASSETS
At May 31, 1998, net assets consisted of:
<CAPTION>
GEORGIA MARYLAND NORTH CAROLINA VIRGINIA
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $27,800,000 $ 79,100,000 $ 46,800,000 $ 63,800,000
Common shares, $.01 par value per share 37,266 103,938 62,479 85,622
Paid-in surplus 51,479,324 144,967,817 86,468,383 120,440,151
Balance of undistributed net investment income 181,047 363,405 218,179 396,862
Accumulated net realized gain (loss) from
investment transactions (3,295,036) (7,252,335) (3,653,234) (4,515,094)
Net unrealized appreciation of investments 5,949,307 12,905,054 7,374,538 11,714,818
- ---------------------------------------------------------------------------------------------------------
Net assets $82,151,908 $230,187,879 $137,270,345 $191,922,359
=========================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
=========================================================================================================
</TABLE>
<PAGE>
<TABLE>
Financial Highlights
Selected data for a Common share outstanding throughout each period is
as follows:
<CAPTION>
Investment Operations Less Distributions
-------------------------------- ---------------------------------------------------------------
Net Net Net
Realized/ Investment Investment Capital Capital
Beginning Net Unrealized Income Income Gain Gain
Net Asset Investment Investment To Common To Preferred To Common To Preferred
Value Income Gain (Loss) Total Shareholders Shareholders+ Shareholders Shareholders+ Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Georgia
Year Ended 5/31:
1998 $13.70 $1.01 $ .90 $1.91 $(.79) $(.24) $-- $-- $(1.03)
1997 13.00 1.01 .69 1.70 (.77) (.23) -- -- (1.00)
1996 13.35 1.00 (.38) .62 (.73) (.24) -- -- (.97)
1995 12.26 .98 1.09 2.07 (.73) (.25) -- -- (.98)
1994 13.96 .78 (1.57) (.79) (.62) (.14) -- -- (.76)
<CAPTION>
Maryland
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended 5/31:
1998 13.76 .99 .80 1.79 (.77) (.24) -- -- (1.01)
1997 13.21 1.00 .55 1.55 (.76) (.24) -- -- (1.00)
1996 13.36 .99 (.14) .85 (.74) (.26) -- -- (1.00)
1995 12.67 .99 .70 1.69 (.74) (.26) -- -- (1.00)
1994 14.13 .89 (1.30) (.41) (.75) (.16) -- -- (.91)
<CAPTION>
North Carolina
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended 5/31:
1998 13.50 1.02 1.01 2.03 (.79) (.25) -- -- (1.05)
1997 12.77 1.02 .72 1.74 (.77) (.24) -- -- (1.01)
1996 13.19 .98 (.44) .54 (.70) (.26) -- -- (.96)
1995 12.34 .97 .85 1.82 (.73) (.24) -- -- (.97)
1994 14.00 .75 (1.53) (.78) (.60) (.14) -- -- (.74)
<CAPTION>
Virginia
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year ended 5/31:
1998 14.04 1.06 .92 1.98 (.82) (.24) -- -- (1.06)
1997 13.35 1.06 .68 1.74 (.81) (.24) -- -- (1.05)
1996 13.61 1.04 (.26) .78 (.79) (.25) -- -- (1.04)
1995 12.79 1.04 .84 1.88 (.80) (.26) -- -- (1.06)
1994 14.18 .94 (1.25) (.31) (.79) (.15) -- -- (.94)
<PAGE>
<CAPTION>
Financial Highlights
Selected data for a Common share outstanding throughout each period is
as follows:
Total Returns
-----------------------------
Organization and
Offering Costs and
Preferred Share Ending
Underwriting Net Asset Ending Based on Based on Net
Discounts Value Market Value Market Value* Asset Value*
<S> <C> <C> <C> <C> <C>
Georgia
Year Ended 5/31:
1998 $-- $14.58 $15.0625 14.56% 12.43%
1997 -- 13.70 13.8750 19.95 11.53
1996 -- 13.00 12.2500 12.88 2.81
1995 -- 13.35 11.5000 (3.00) 15.78
1994 (.15) 12.26 12.6250 (12.09) (8.05)
<CAPTION>
Maryland
<S> <C> <C> <C> <C> <C>
Year Ended 5/31:
1998 -- 14.54 15.0625 16.54 11.47
1997 -- 13.76 13.6250 13.07 10.08
1996 -- 13.21 12.7500 10.22 4.41
1995 -- 13.36 12.2500 4.36 12.07
1994 (.14) 12.67 12.5000 (13.62) (5.39)
<CAPTION>
North Carolina
<S> <C> <C> <C> <C> <C>
Year ended 5/31:
1998 -- 14.48 15.0000 8.17 13.38
1997 -- 13.50 14.6250 22.60 12.01
1996 -- 12.77 12.6250 10.13 2.11
1995 -- 13.19 12.1250 3.04 13.64
1994 (.14) 12.34 12.5000 (13.81) (7.79)
<CAPTION>
Virginia
<S> <C> <C> <C> <C> <C>
Year ended 5/31:
1998 -- 14.96 16.1250 17.30 12.66
1997 -- 14.04 14.5000 13.81 11.49
1996 -- 13.35 13.5000 11.04 3.86
1995 -- 13.61 12.8750 4.66 13.58
1994 (.14) 12.79 13.1250 (8.35) (4.58)
<PAGE>
<CAPTION>
Financial Highlights
Selected data for a Common share outstanding throughout each period is
as follows:
Ratios/Supplemental Data
---------------------------------------------------
Ratio of Net
Ratio of Investment
Ending Expenses to Income to Portfolio
Net Assets Average Average Turnover
(000) Net Assets++ Net Assets++ Rate
Georgia
<S> <C> <C> <C> <C>
Year Ended 5/31:
1998 $ 82,152 .87% 4.66% 17%
1997 78,697 .90 4.83 30
1996 76,026 .91 4.82 14
1995 77,334 .95 5.01 35
1994 73,042 .97 3.97 31
<CAPTION>
Maryland
<S> <C> <C> <C> <C>
Year Ended 5/31:
1998 230,188 .84 4.52 6
1997 221,478 .85 4.72 6
1996 215,690 .87 4.68 18
1995 217,162 .97 4.92 25
1994 117,506 .92 4.30 19
<CAPTION>
North Carolina
<S> <C> <C> <C> <C>
Year ended 5/31:
1998 137,270 .85 4.70 9
1997 130,929 .87 4.92 19
1996 126,196 .88 4.75 39
1995 128,815 .89 4.96 32
1994 123,181 .93 3.85 19
<CAPTION>
Virginia
<S> <C> <C> <C> <C>
Year ended 5/31:
1998 191,922 .84 4.77 19
1997 183,097 .86 4.95 16
1996 176,649 .87 4.92 27
1995 178,394 .98 5.13 45
1994 116,904 .93 4.56 28
* Total Return on Market Value is the combination of reinvested
dividend income, reinvested capital gain 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 gain distributions, if any, and
changes in net asset value per share. Total returns are not annualized.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders.
</TABLE>
<PAGE>
Building a Better Portfolio Can Make You a Successful Investor
NUVEEN FAMILY
OF MUTUAL FUNDS
Nuveen offers a variety of funds designed to help you reach your financial
goals.
GROWTH
Nuveen Rittenhouse
Growth Fund
GROWTH AND INCOME
European Value Fund
Growth and
Income Stock Fund
Balanced Stock
and Bond Fund
Balanced Municipal
and Stock Fund
TAX-FREE INCOME
NATIONAL FUNDS
Long-Term
Insured
Intermediate-Term
Limited-Term
STATE FUNDS
Alabama
Arizona
California
Colorado
Connecticut
Florida
Georgia
Kansas
Kentucky
Louisiana
Maryland
Massachusetts
Michigan
Missouri
New Jersey
New Mexico
New York
North Carolina
Ohio
Pennsylvania
South Carolina
Tennessee
Virginia
Wisconsin
Successful investors know that a well-diversified portfolio - one that balances
different types of investments, levels of risk and tax management - can be the
foundation for building and sustaining wealth. That's why Nuveen offers you and
your financial adviser a wide range of quality investments that can help you
build a better portfolio in the pursuit of your financial goals.
Exchange-Traded Funds
Nuveen Exchange-Traded Funds offer investors actively managed portfolios of
investment-grade quality municipal bonds. The fund shares are listed and traded
on the New York and American stock exchanges. Exchange-traded funds provide the
investment convenience, price visibility and liquidity of common stocks.
MuniPreferred(R)
Nuveen MuniPreferred offers investors a AAA rated investment with an attractive
tax-free yield for the cash reserves portion of an investment portfolio.
MuniPreferred shares are backed 2-to-1 by the long-term portfolios of Nuveen
dual-class exchange-traded funds and are available for national as well as a
wide variety of state-specific portfolios.
Mutual Funds
Nuveen offers a family of equity, balanced and municipal bond funds featuring
Premier AdvisersSM including Institutional Capital Corporation, Rittenhouse
Financial Services, and Nuveen Advisory Corp. Each brings a specialized
expertise in a particular investment style or asset class, time-tested
investment strategies and a focus on consistent, long-term performance. With
Nuveen's Premier Adviser funds, you have all the advantages of a family of funds
plus the benefits of specialized investment expertise.
Private Asset Management
Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive,
customized investment management solutions to investors with assets of $250,000
or more to invest. A range of actively managed growth, balanced and municipal
income-oriented portfolios are available, all based upon a disciplined
investment philosophy.
Defined Portfolios
Nuveen Defined Portfolios are fixed portfolios of quality securities that are a
convenient, attractive alternative to purchasing individual securities. They
provide low-cost diversification to reduce risk, experienced, professional
security selection and surveillance and daily liquidity at that day's net asset
value for quick access to your assets.
<PAGE>
Fund Information
BOARD OF TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Anthony T. Dean
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN, 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, our trading, fund management and pricing systems at
Nuveen - the systems that directly affect our investors and their financial
advisers - have been updated or replaced to address the Year 2000 concerns. We
continue to work closely with our transfer agent, custodian and other service
partners to monitor readiness and address other remaining systems issues. Our
initial testing indicates we are on schedule, and we have targeted year-end 1998
to complete verification of vendor compliance and service partner readiness.
However, we can give no complete assurance at this time that the steps we have
taken will be sufficient to prevent any problems that would impact the Nuveen
Exchange-Traded Funds.
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 May 31, 1998. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
Serving Investors for Generations
Photo of: JOHN NUVEEN, SR.
Since our founding in 1898, John Nuveen & Co. has been synonymous with
investments that withstand the test of time. Today we offer a broad range of
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:
1898 - 1998
NUVEEN
OUR SECOND CENTURY
helping investors sustain the wealth of a lifetime.(tm)
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
FAN-2-5-98
