Nuveen Exchange-Traded Funds
Providing tax-free income to help you live your dreams.
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC.
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC.
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND
SEMIANNUAL REPORT/FEBRUARY 29, 1996
Photographic image of man seated at breakfast table with wife standing behind
him.
<PAGE>
CONTENTS
3 Dear shareholder
5 Answering your questions
10 Fund performance
12 Commonly used terms
14 Shareholder meeting report
15 Portfolio of investments
26 Statement of net assets
27 Statement of operations
28 Statement of changes in net assets
30 Notes to financial statements
38 Financial highlights
<PAGE>
Dear shareholder
Photographic image of Richard Franke, Chairman of Nuveen.
"Over time, municipal bonds have proven to be a valuable and dependable
component of successful invest ment programs."
Since the beginning of the recovery in early 1995, we've enjoyed a welcome
rebound in the bond markets--a sharp contrast to 1994, which was one of the
most volatile periods in bond market history. In fact, 1995 unfolded as one of
the best years for bonds in a decade, as the bond market responded to a
climate of slowing economic growth and diminished inflationary pressure.
The changing profile of the bond markets over the past two years serves to
remind us that weathering the ups and downs of the markets is a normal part of
the investment process. By maintaining a long-term perspective on your
investments, you can minimize the impact of short-term fluctuations and keep
the focus on achieving your goals. Municipal bond funds continue to be an
attractive way to invest for the long term, offering a solid source of current
tax-free income and the diversification across municipal market sectors that
our investors seek.
Over the past year, we have kept our sights focused on successfully meeting
the funds' objectives. As of February 29, 1996, the current annual yield on
share price for the exchange-traded funds covered in this report ranged from
5.72% to 5.96%. To match these yields, an investor in the combined 42% federal
and California state income tax bracket would have had to earn at least 9.86%
on taxable alternatives. Without question, taxable yields at this level on
investments of comparable quality are difficult to achieve in today's markets.
Reflecting the rebound in the bond markets, each of these funds reported
gains in net asset value over February 28, 1995, as well as increases in share
price. The 12-month total returns on net asset value, reflecting per share
gains plus reinvested dividend income, ranged from 14.45% to 16.37%, which
translate to 18.87% to 20.97% on a taxable-equivalent basis.
<PAGE>
As some of you may know, on June 30, 1996, I will be retiring as the
Chairman and Chief Executive Officer of John Nuveen & Co. Incorporated and as
Chairman of the Board of the Nuveen Funds. As I look back over the 41 years I
have spent at Nuveen, I am proud to have been associated with a firm that
holds integrity, honesty, and value as the cornerstones of its business. I'm
confident that these traditions will continue to be the hallmarks of Nuveen.
Over the past few years, I have been working closely with other Nuveen
managers to ensure that the company and the funds continue to be guided by
strong and talented management following my retirement. Timothy Schwertfeger,
who has been with Nuveen since 1977, will succeed me as Chief Executive Officer
and Chairman of Nuveen. He currently serves as Executive Vice President of
Nuveen and President of the Nuveen Funds. I am very confident in his abilities
and the abilities of the entire Nuveen management team.
The management transition has been well planned so that it will have no
effect on portfolio management or the way dividends are set. Our management
team is committed to continuing Nuveen's successful tradition of value
investing and prudent management, helping our shareholders meet their need for
tax-free investment income with a full range of investment choices.
Our focus will continue to be on building shareholder value, providing
research-oriented management, and maintaining our leadership role in the
municipal bond market. With this focus, we anticipate many more years of
accomplishment for our shareholders and our firm.
I'd like to take this occasion to thank you for selecting Nuveen tax-free
investments.
Sincerely,
Richard J. Franke
Chairman of the Board
April 15, 1996
<PAGE>
Answering your questions
Tom Spalding, head of Nuveen's portfolio management team, offers insights into
the bond market recovery and the outlook for 1996.
How did the investment climate over the past year affect municipal bonds?
In 1995, the combination of slow economic growth and low inflation created the
ideal environment for the bond markets, which responded with a sustained
rally. Citing the lack of significant inflation, the Federal Reserve Board
moved to cut interest rates in July and December 1995, and again at the end of
January 1996. This succession of rate cuts acted to bring down long-term
municipal bond yields by almost 130 basis points from their position at the
beginning of 1995. The rebound of the municipal bond market was not as great
as that of the taxable market due to the much-publicized discussion of major
tax reform legislation and concern about its potential impact on tax-free
investments. Yet, in 1995, most Nuveen exchange-traded funds enjoyed
taxable-equivalent totals returns of 20% or better.
<PAGE>
Photographic image of Tom Spalding, Portfolio Manager of Nuveen.
Tom Spalding, head of Nuveen's portfolio management team, answers investors'
questions on developments in the municipal market.
Why do some funds continue to trade at a discount despite the recovery?
It may be helpful to remember that each share has two prices: the net asset
value (NAV), which represents the underlying value of the bonds, and the share
price, which is the fund's price on the stock exchange. As the market turned
around in 1995, net asset values appreciated more quickly than share prices.
This is typical of a market that may take time to recognize underlying value
balanced against the various factors that affect share price, such as interest
rates, inflation forecasts, the relative strength of the stock market, and
legislative and tax outlooks. Most of the discounts have narrowed considerably
in recent months and, in fact, some funds are now trading at premiums to NAV.
The net asset values for the funds covered in this report remain quite
strong. For long-term investors, the current period may represent a buying
opportunity, as some shares can be purchased at discount prices.
What does Nuveen see as the impact of the flat tax proposals on the municipal
market?
Because of the implications for tax-free investments such as municipal bonds
and bond funds, we have been closely monitoring the various flat tax proposals
currently being debated in Congress. While the presidential primaries
spotlighted the debate, it is important to note that none of the proposals
currently under discussion has gained a strong consensus. In addition,
implementation of any measure that manages to pass both houses is at least two
years away. As the election year progresses, focus seems to be shifting from
tax reform to other economic matters. However, the high-profile
discussion--and the attendant concern about the potential impact of tax reform
on tax-free investments--did affect the market for municipal bonds in 1995,
causing these bonds to underperform their taxable counterparts for the year.
Given the low likelihood that the tax preference on municipal bonds will be
eliminated or dramatically reduced in the near future, Nuveen believes that it
is inadvisable to manage our funds toward one specific outcome. Instead, we
will continue to follow our value investing philosophy as the optimal way to
pursue our investors' objectives. In our view, this approach offers investors
greater price stability in the event of volatile markets. Once the tax issue
is resolved, we're confident that municipal bonds--because of their high
credit quality and attractive yields--will continue to hold a strategic place
in the prudent investor's portfolio. We will continue to monitor developments
in the tax debate as well as changes in other economic and political
conditions while keeping our focus on achieving the objectives of your fund.
<PAGE>
What is Nuveen's market outlook for 1996? Although inflation currently
remains low and economic growth remains moderate, we continue to watch these
factors for potential changes and impact on the bond market. During this
election year, we are also closely monitoring any changes in economic and tax
policy that may affect the municipal market. The fundamentals in the long term
are sound, with the supply of municipal bonds down from past years, and with a
growing number of individual investors seeking to diversify their portfolios
and to increase their tax-free income.
What does Nuveen mean by "value investing"? Where are Nuveen analysts finding
value today?
At Nuveen, we define value investing as a disciplined approach to security
selection and portfolio construction designed to deliver above-market
performance by emphasizing securities that offer good intrinsic value but that
are underpriced or undervalued by the market. This approach has been rewarded
over the past year, as we saw many of our portfolio holdings upgraded by the
rating agencies, confirming that our Research Department's judgments about
credit quality were on target.
As we search for value in the market today, we are constantly on the lookout
for attractive issues. Our analysts continuously assess investment potential
across the entire spectrum of geographical and sector opportunities
nationwide. Currently, we favor revenue bonds for essential services (such as
those issued by water and sewer facilities and utilities, especially public
power authorities providing electricity at competitive rates) over general
obligation bonds issued by counties and cities, which have suffered financial
strain as the result of spending cuts at the state and federal levels. We also
moved to protect current income by investing more of our portfolio in
non-callable bonds when possible. These bonds cannot be redeemed before
maturity so that their yield is assured for the long term in the event of
falling interest rates. As is our policy, we continue to invest only in
investment-grade quality securities.
<PAGE>
<TABLE>
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC.
NPC
While the dividend income remained attractive compared with other fixed income
alternatives, the Fund adjusted its monthly dividend in August 1995, seeking a
level in line with its earnings.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
3/09/95 $0.0675
4/07/95 $0.0675
5/09/95 $0.0675
6/13/95 $0.0675
7/12/95 $0.0675
8/11/95 $0.0655
9/13/95 $0.0655
10/11/95 $0.0655
11/13/95 $0.0655
12/13/95 $0.0655
1/10/96 $0.0655
2/13/96 $0.0655
<CAPTION>
FUND HIGHLIGHTS 2/29/96
<S> <C>
Yield 5.72%
Taxable-equivalent yield 9.86%
Annual total return on NAV 15.78%
Taxable-equivalent total return 20.01%
Share price $13.75
NAV $15.34
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC.
NCL
While the dividend income remained attractive compared with other fixed income
alternatives, the Fund adjusted its monthly dividend in August 1995, seeking a
level in line with its earnings.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
3/09/95 $0.0650
4/07/95 $0.0650
5/09/95 $0.0650
6/13/95 $0.0650
7/12/95 $0.0650
8/11/95 $0.0620
9/13/95 $0.0620
10/11/95 $0.0620
11/13/95 $0.0620
12/13/95 $0.0620
1/10/96 $0.0620
2/13/96 $0.0620
<CAPTION>
FUND HIGHLIGHTS 2/29/96
<S> <C>
Yield 5.89%
Taxable-equivalent yield 10.16%
Annual total return on NAV 14.45%
Taxable-equivalent total return 18.87%
Share price $12.625
NAV $13.81
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
<TABLE>
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND
NCU
While the dividend income remained attractive compared with other fixed income
alternatives, the Fund adjusted its monthly dividend in May 1995, seeking a
level in line with its earnings.
12 MONTH DIVIDEND HISTORY
<CAPTION>
Date Monthly Dividends Supplemental Dividends Capital Gains
<S> <C> <C> <C>
3/09/95 $0.0650
4/07/95 $0.0650
5/09/95 $0.0615
6/13/95 $0.0615
7/12/95 $0.0615
8/11/95 $0.0615
9/13/95 $0.0615
10/11/95 $0.0615
11/13/95 $0.0615
12/13/95 $0.0615
1/10/96 $0.0615
2/13/96 $0.0615
<CAPTION>
FUND HIGHLIGHTS 2/29/96
<S> <C>
Yield 5.96%
Taxable-equivalent yield 10.28%
Annual total return on NAV 16.37%
Taxable-equivalent total return 20.97%
Share price $12.375
NAV $13.23
The dividend history used in this chart constitutes past performance and does
not necessarily predict the future dividends of the Fund.
</TABLE>
<PAGE>
Commonly used terms
Yield
An exchange-traded fund's annualized monthly dividend on a given date (in the
case of this report, February 29, 1996) divided by its closing price per share
on that date.
Taxable equivalent yield
The return an investor subject to a given federal and state income tax rate
would need to obtain from a fully taxable investment to equal the fund's
stated annualized yield on share price. In this report, the combined tax rate
is assumed to be 42% for California shareholders, based on incomes of
$121,300-$263,750 for investors filing singly, and $147,700-$263,750 for those
filing jointly.
Net Asset Value (NAV)
The market value of all securities and other assets held by an exchange-traded
fund, minus any liabili -ties. The NAV per share is the fund's net assets,
less the value of its preferred shares, divided by the total number of shares
outstanding.
Total return on NAV
The percentage change in a fund's NAV per common share for a given period,
assuming reinvestment of all dividends and capital gains distributions, if
any.
Taxable equivalent total return
The total return that would be generated by a taxable income fund that
produced the same amount of after-tax income as the portfolio, assuming a
specified tax rate.
Leverage
A technique used to enhance the income produced for common shareholders by a
long-term municipal bond fund through the issuance of short-term preferred
shares. The proceeds from the sale of the preferred shares can be used to
purchase additional long-term bonds, thus increasing the portfolio's income
stream. Changes in net asset value, both up and down, are also magnified by
leverage.
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the six-month period ended February 29, 1996. Any
future repur chases will be reported to shareholders in the next annual or
semiannual report.
<PAGE>
<TABLE>
SHAREHOLDER MEETING REPORT
On November 16, 1995, the following Nuveen Exchange-Traded Funds held an Annual
Meeting of Shareholders. At the meeting, shareholders voted to elect directors
of the Funds and to ratify selection of Ernst & Young L.L.P. as the auditors
for the Funds. The directors elected at the meeting include: Lawrence H. Brown,
Richard J. Franke, Anne E. Impellizzeri, and Peter R. Sawers.
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
APPROVAL OF THE DIRECTORS
WAS REACHED AS FOLLOWS:
Lawrence H. Brown
For 11,522,238 5,673,999 5,284,289
Abstain 206,730 103,113 84,242
---------- --------- ---------
Total 11,728,968 5,777,112 5,368,531
========== ========= =========
Richard J. Franke
For 11,540,433 5,674,349 5,287,075
Abstain 188,535 102,763 81,456
---------- --------- ---------
Total 11,728,968 5,777,112 5,368,531
========== ========= =========
Anne E. Impellizzeri
For 11,540,697 5,673,999 5,285,971
Abstain 188,271 103,113 82,560
---------- --------- ---------
Total 11,728,968 5,777,112 5,368,531
========== ========= =========
Peter R. Sawers
For 11,542,366 5,674,349 5,284,494
Abstain 186,602 102,763 84,037
---------- --------- ---------
Total 11,728,968 5,777,112 5,368,531
========== ========= =========
RATIFICATION OF AUDITORS
WAS REACHED AS FOLLOWS:
For 11,441,126 5,642,166 5,272,721
Against 98,520 38,468 23,992
Abstain 189,322 96,478 71,818
---------- --------- ---------
Total 11,728,968 5,777,112 5,368,531
========== ========= =========
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC. (NPC)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 3,725,000 California Housing Finance Agency, Multi-Unit
Rental, Alternative Minimum Tax, 6.625%, 2/01/24 2/03 at 102 A1 $ 3,829,449
4,000,000 California Pollution Control Finance Authority
(Southern California Edison Company), Alternative
Minimum Tax, 6.400%, 12/01/24 12/02 at 102 Aaa 4,254,240
4,000,000 California Statewide Community Development
Authority (Sutter Health), 6.125%, 8/15/22 8/02 at 102 Aaa 4,187,880
4,000,000 Chula Vista (San Diego Gas and Electric Company),
Alternative Minimum Tax, 6.400%, 12/01/27 12/02 at 102 A1 4,155,560
2,000,000 Cucamonga County Water District, Certificates of
Participation, 6.300%, 9/01/12 9/01 at 102 Aaa 2,129,520
3,000,000 Culver City Redevelopment Finance Authority, Tax
Allocation, 4.600%, 11/01/20 11/03 at 102 Aaa 2,613,870
6,000,000 Huntington Park Redevelopment Agency, Single
Family Mortgage, 8.000%, 12/01/19 No Opt. Call Aaa 8,123,280
2,300,000 Los Angeles Department of Water and Power, Electric
Plant, 6.000%, 2/01/28 2/02 at 102 Aa 2,380,638
3,000,000 Los Angeles Department of Water and Power,
Waterworks, 6.000%, 7/15/32 7/02 at 102 Aa 3,084,180
4,000,000 Los Angeles FHA-Insured (Section 8),
6.300%, 1/01/25 7/02 at 102 Aaa 4,086,640
Los Angeles Wastewater System:
3,250,000 4.700%, 11/01/17 11/03 at 102 Aaa 2,898,350
11,000,000 4.700%, 11/01/19 11/03 at 102 Aaa 9,755,680
4,000,000 7.100%, 2/01/21 (Pre-refunded to 2/01/99) 2/99 at 102 Aaa 4,419,840
3,750,000 6.700%, 12/01/21 (Pre-refunded to 12/01/00) 12/00 at 102 Aaa 4,227,188
4,000,000 Los Angeles County Metropolitan Transportation
Authority, 5.000%, 7/01/21 7/03 at 100 Aaa 3,669,280
5,000,000 Los Angeles County Metropolitan Transit Authority,
Sales Tax, 4.750%, 7/01/13 7/03 at 102 Aaa 4,623,450
4,000,000 Norco Redevelopment Agency, Tax Allocation,
6.250%, 3/01/19 3/02 at 102 Aaa 4,242,160
5,135,000 Palmdale Community Redevelopment Agency,
8.000%, 3/01/16 No Opt. Call Aaa 6,725,669
4,450,000 Riverside County Asset Leasing Corporation,
7.200%, 6/01/10 (Pre-refunded to 6/01/99) 6/99 at 102 Aaa 4,964,287
2,500,000 Riverside Redevelopment Agency, Tax Allocation,
5.625%, 8/01/23 8/02 at 102 Aaa 2,465,500
6,220,000 Riverside County, Single Family Mortgage (GNMA),
Alternative Minimum Tax, 9.000%, 5/01/21 No Opt. Call Aaa 9,316,067
Sacramento Municipal Utility District:
2,000,000 5.750%, 8/15/13 8/02 at 100 Aaa 2,031,720
5,000,000 4.750%, 9/01/21 9/03 at 100 Aaa 4,448,300
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 2,135,000 San Buenaventura Certificates of Participation,
5.500%, 1/01/17 1/03 at 100 Aaa $ 2,084,401
4,000,000 San Francisco Airports Commission, Alternative
Minimum Tax, 6.200%, 5/01/20 5/03 at 102 Aaa 4,168,480
1,000,000 San Francisco City and County General Purpose Sewer,
6.500%, 10/01/21 (Pre-refunded to 10/01/99) 10/99 at 102 Aaa 1,101,530
4,375,000 San Francisco Bay Area Rapid Transit District,
5.500%, 7/01/15 7/05 at 101 Aaa 4,330,988
9,500,000 San Jose Redevelopment Agency, Tax Allocation,
4.750%, 8/01/24 2/04 at 102 Aaa 8,400,660
1,485,000 San Jose Single Family Mortgage, 9.500%, 10/01/13 No Opt. Call Aaa 2,190,509
3,400,000 Santa Maria Certificates of Participation,
5.500%, 8/01/21 8/02 at 102 Aaa 3,315,782
5,440,000 Santa Monica Wastewater (Hyperion Project),
4.500%, 1/01/15 1/04 at 102 Aaa 4,803,520
2,000,000 Suisun City Redevelopment Agency, Tax Allocation,
5.500%, 10/01/23 10/03 at 102 Aaa 1,965,060
2,670,000 University of California, 4.750%, 9/01/21 9/03 at 102 Aaa 2,375,391
3,425,000 Woodland Wastewater System, Certificates of
Participation, 5.500%, 3/01/18 3/03 at 100 Aaa 3,341,806
$135,760,000 Total Investments - (cost $128,708,210) - 98.2% 140,710,875
============
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.6%
$ 400,000 California Pollution Control Finance Authority (Shell
Oil Company), Variable Rate Demand Bonds,
3.150%, 10/01/11+ VMIG-1 400,000
500,000 California Statewide Communities Development
Authority (St. Joseph Health System), Variable Rate
Demand Bonds, 3.100%, 7/01/24+ VMIG-1 500,000
$ 900,000 Total Temporary Investments - 0.6% 900,000
============
Other Assets Less Liabilities - 1.2% 1,648,765
Net Assets - 100% $143,259,640
============
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 30 $127,261,048 90%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 2 5,464,818 4
PORTFOLIO OF A+ A1 2 7,985,009 6
INVESTMENTS
(EXCLUDING
TEMPORARY
INVESTMENTS):
TOTAL 34 $140,710,875 100%
<FN>
All of the bonds in the portfolio, excluding temporary investments in short-term
municipal securities, are either covered by Original Issue Insurance, Secondary
Market Insurance or Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government agency securities,
any of which ensure the timely payment of principal and interest.
* Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC. (NCL)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
California General Obligation:
$ 2,100,000 7.000%, 8/01/02 No Opt. Call Aaa $ 2,406,915
5,500,000 5.750%, 11/01/17 11/02 at 102 Aaa 5,542,405
3,110,000 California Health Facilities Financing Authority
(Sutter Health), 6.700%, 1/01/13 1/99 at 101 Aaa 3,322,320
California Public Works Board, Department of
Corrections (State Prisons):
3,000,000 7.000%, 9/01/09 (Pre-refunded to 9/01/00) 9/00 at 102 Aaa 3,403,230
3,000,000 5.000%, 12/01/19 No Opt. Call Aaa 2,819,190
7,985,000 Alameda County (Santa Rita Jail Project), Certificates
of Participation, 5.700%, 12/01/14 12/03 at 102 Aaa 8,044,808
2,000,000 Barstow Wastewater Reclamation, Certificates of
Participation, 5.250%, 10/01/18 10/04 at 102 Aaa 1,890,000
3,530,000 Castaic Lake Water Agency, Certificates of
Participation, 8.000%, 8/01/04 No Opt. Call Aaa 4,342,006
3,000,000 Central Unified School District, General Obligation,
5.625%, 3/01/18 3/03 at 102 Aaa 2,966,400
5,000,000 Compton Community Redevelopment Agency,
Tax Allocation, 6.500%, 8/01/13 8/05 at 102 Aaa 5,542,750
6,000,000 Contra Costa Water Authority, 5.750%, 10/01/20 10/02 at 102 Aaa 6,033,960
8,000,000 Galt Community Facility District, 7.700%, 9/01/19
(Pre-refunded to 9/01/98) 9/98 at 102 Aaa 8,892,720
1,000,000 Industry General Obligation, 5.500%, 7/01/15 7/03 at 101 1/2 Aaa 982,980
1,000,000 Kern High School District, General Obligation,
5.600%, 8/01/15 (Pre-refunded to 8/01/03) 8/03 at 102 Aaa 1,087,070
2,000,000 Liberty Union High School District (Contra Costa
County), General Obligation, 5.500%, 8/01/20 8/05 at 102 Aaa 1,974,760
5,020,000 Los Angeles Community Redevelopment Agency,
Multi-Family Housing (Angelus Plaza),
7.400%, 6/15/10 6/05 at 105 AAA 5,609,197
5,250,000 Los Angeles Wastewater System, 5.800%, 6/01/21 6/03 at 102 Aaa 5,322,608
2,550,000 Los Angeles County (Correctional Facilities),
Certificates of Participation, 6.000%, 9/01/15 9/00 at 102 Aaa 2,628,056
4,400,000 Los Angeles County Metropolitan Transportation
Authority, 5.000%, 7/01/21 7/03 at 100 Aaa 4,036,208
5,585,000 Los Angeles County Transportation Commission,
Sales Tax, 6.500%, 7/01/17 7/01 at 102 Aaa 6,129,035
6,745,000 Marysville (Fremont-Reideout Health System),
5.650%, 1/01/19 1/04 at 102 Aaa 6,680,383
14,150,000 Metro Water District, 5.750%, 7/01/21 7/05 at 102 Aaa 14,260,229
4,000,000 Northern California Power Agency, Hydroelectric
Project No. 1, 5.500%, 7/01/16 7/03 at 102 Aaa 3,953,840
Northern California Transmission Agency:
2,200,000 5.500%, 5/01/14 5/03 at 102 Aaa 2,178,638
2,000,000 7.000%, 5/01/24 (Pre-refunded to 5/01/00) 5/00 at 101 1/2 Aaa 2,244,700
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 2,690,000 Norwalk Community Facilities Financing Authority,
Tax Allocation, 6.000%, 9/01/15 9/05 at 102 Aaa $ 2,820,949
Orange County (John Wayne Airport), Alternative
Minimum Tax:
4,900,000 6.625%, 7/01/18 7/97 at 100 A 4,949,931
3,575,000 5.500%, 7/01/18 7/03 at 102 Aaa 3,404,830
2,500,000 Oxnard Financing Authority, Wastewater System,
5.500%, 6/01/14 6/03 at 100 Aaa 2,458,800
9,000,000 Redlands Certificates of Participation,
5.800%, 9/01/17 9/03 at 102 Aaa 9,055,440
Redlands Unified School District, General Obligation:
4,280,000 5.500%, 7/01/14 7/03 at 101 Aaa 4,209,294
4,430,000 5.500%, 7/01/18 7/03 at 101 Aaa 4,359,696
4,320,000 Riverside County Single Family (GNMA),
Alternative Minimum Tax, 8.625%, 5/01/16 No Opt. Call AAA 5,978,837
5,000,000 Riverside County Transportation Commission, Sales
Tax, 6.500%, 6/01/09 (Pre-refunded to 6/01/01) 6/01 at 102 Aaa 5,599,600
5,500,000 Sacramento Municipal Utility District,
5.750%, 5/15/22 5/03 at 102 Aaa 5,532,670
6,290,000 San Francisco General Obligation, 5.500%, 6/15/11 6/01 at 102 Aaa 6,355,290
1,000,000 San Francisco Airports Commission, Alternative
Minimum Tax, 6.200%, 5/01/20 5/03 at 102 Aaa 1,042,120
9,000,000 San Francisco Airports Commission, 6.100%, 5/01/20 5/04 at 101 Aaa 9,413,730
San Francisco City and County Sewer System:
2,900,000 5.500%, 10/01/15 10/02 at 102 AAA 2,850,381
2,500,000 6.500%, 10/01/21 (Pre-refunded to 10/01/99) 10/99 at 102 Aaa 2,753,825
1,000,000 San Jose Airport, 5.750%, 3/01/16 3/03 at 100 Aaa 1,004,850
3,750,000 San Jose Airport, Alternative Minimum Tax,
5.700%, 3/01/18 3/03 at 102 Aaa 3,715,200
7,400,000 Santa Cruz County Housing Authority, GNMA
(Meadowview Apartments), 6.125%, 5/20/28 5/03 at 102 Aaa 7,495,312
1,930,000 Santa Margarita/Dana Point Authority,
7.250%, 8/01/05 No Opt. Call Aaa 2,314,128
4,000,000 Santa Monica Community College District, General
Obligation, 5.750%, 7/01/20 7/05 at 102 Aaa 4,031,160
South Orange County Public Finance Authority
(Foothill Area):
4,000,000 8.000%, 8/15/08 No Opt. Call Aaa 5,143,960
3,680,000 8.000%, 8/15/09 No Opt. Call Aaa 4,754,229
4,000,000 South San Joaquin Irrigation District,
5.500%, 1/01/15 1/03 at 102 Aaa 3,901,240
6,500,000 Stockton Wastewater System, Certificates of
Participation, 5.750%, 9/01/23 9/03 at 101 Aaa 6,486,610
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 5,000,000 Stockton Housing, GNMA (O'Connor Woods),
5.600%, 3/20/28 3/03 at 102 AAA $ 4,814,150
7,500,000 Suisun City Redevelopment Agency, Tax Allocation,
5.900%, 10/01/23 10/03 at 102 Aaa 7,674,450
1,805,000 Torrance (Little Company of Mary Hospital),
7.100%, 12/01/15 (Pre-refunded to 12/01/05) 12/05 at 100 AAA 2,084,071
1,500,000 Tulare Sewer System, 5.700%, 11/15/18 11/03 at 102 Aaa 1,504,844
11,750,000 Turlock Irrigation District, 5.750%, 1/01/18 7/02 at 100 Aaa 11,789,127
University of California:
3,000,000 10.000%, 9/01/02 No Opt. Call Aaa 3,916,710
6,350,000 5.000%, 9/01/12 9/03 at 102 Aaa 6,038,215
4,900,000 University of California Housing System,
5.500%, 11/01/18 11/03 at 102 Aaa 4,803,225
$254,075,000 Total Investments - (cost $257,552,571) - 98.5% 264,551,282
============
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.2%
$ 400,000 California Health Facilities Financing Authority
(St. Joseph Health System), Series A, Variable Rate
Demand Bonds, 3.150%, 7/01/13+ VMIG-1 400,000
200,000 California Pollution Control Finance Authority
(Shell Oil Company), Variable Rate Demand
Bonds, 3.150%, 10/01/07+ VMIG-1 200,000
$ 600,000 Total Temporary Investments - 0.2% 600,000
============
Other Assets Less Liabilities - 1.3% 3,556,192
Net Assets - 100% $268,707,474
============
<PAGE>
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 56 $259,601,351 98%
RATINGS** A, A- A, A2, A3 1 4,949,931 2
PORTFOLIO OF
INVESTMENTS
(EXCLUDING
TEMPORARY
INVESTMENTS):
TOTAL 57 $264,551,282 100%
<FN>
All of the bonds in the portfolio, excluding temporary investments in
short-term municipal securities, are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance, or are backed by
an escrow or trust containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of principal and
interest.
* Optional Call Provisions: Dates (month and year) and prices of the
earliest optional call or redemption. There may be other call provisions at
varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
+ The security has a maturity of more than one year, but has variable rate and
demand features which qualify it as a short-term security. The rate disclosed
is that currently in effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
PORTFOLIO OF INVESTMENTS
(Unaudited)
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND (NCU)
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 3,500,000 California Educational Facilities Authority,
6.750%, 10/01/15 10/99 at 102 Aa $ 3,757,985
California General Obligation:
2,000,000 6.250%, 9/01/12 No Opt. Call A1 2,183,000
2,000,000 5.150%, 10/01/19 10/03 at 102 A1 1,866,760
1,750,000 California Health Facilities Authority (Kaiser
Permanente), 5.450%, 10/01/13 10/01 at 101 Aa3 1,691,340
3,500,000 California Health Facilities Financing Authority
(Downey Community Hospital), 5.750%, 5/15/15 5/03 at 102 A- 3,383,240
2,455,000 California Housing Finance Agency, Home Mortgage,
5.650%, 8/01/14 2/04 at 102 Aa 2,402,659
California Housing Finance Agency, Alternative
Minimum Tax:
1,000,000 6.100%, 8/01/15 8/05 at 102 Aaa 1,008,950
1,000,000 6.550%, 8/01/26 8/04 at 102 Aa 1,033,490
2,000,000 California Pollution Control Finance Authority
(Pacific Gas and Electric), Alternative Minimum
Tax, 5.875%, 6/01/23 6/03 at 102 A2 2,002,620
1,000,000 California Pollution Control Finance Authority
(Pacific Gas and Electric Company),
5.850%, 12/01/23 12/03 at 102 A2 999,210
2,000,000 California Pollution Control Finance Authority
(San Diego Gas and Electric Company), Alternative
Minimum Tax, 5.850%, 6/02/21 6/03 at 102 A1 2,003,320
3,200,000 California State Public Works Board (California State
University), 6.375%, 10/01/14 10/04 at 102 A 3,397,216
4,000,000 California State Public Works Board (Regents of the
University of California), 6.600%, 12/01/22
(Pre-refunded to 12/01/02) 12/02 at 102 Aaa 4,591,560
4,000,000 California Statewide Communities Development
Authority (Cedars-Sinai Medical Center),
6.500%, 8/01/15 8/02 at 102 A1 4,204,640
1,500,000 ABAG Finance Authority for Nonprofit Corporations
(Stanford University Hospital), Certificates of
Participation, 5.250%, 11/01/20 11/03 at 102 A1 1,396,980
Carson Redevelopment Agency, Tax Allocation:
1,760,000 5.625%, 10/01/08 10/03 at 102 Baa1 1,709,717
2,000,000 5.875%, 10/01/09 10/03 at 102 Baa 2,008,600
1,000,000 Eastern Municipal Water District, Certificates of
Participation, 6.300%, 7/01/20 7/01 at 101 Aaa 1,051,310
1,175,000 Elsinore Valley Municipal Water District,
5.750%, 7/01/19 7/02 at 102 Aaa 1,174,142
2,000,000 Garden Grove Agency for Community Development,
Tax Allocation, 5.875%, 10/01/23 10/03 at 102 A 1,973,000
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 3,000,000 Imperial Irrigation District, Certificates of
Participation, 6.000%, 11/01/15 11/04 at 102 Aaa $ 3,123,300
2,000,000 Loma Linda University Medical Center,
6.000%, 12/01/06 12/03 at 102 BBB 2,063,100
2,160,000 Los Angeles Community Redevelopment Agency,
Multi-Family Housing, Alternative Minimum Tax,
5.750%, 12/01/13 6/03 at 102 Baa1 2,060,467
9,000,000 Los Angeles Community Redevelopment Agency,
Multi-Family Housing (Angelus Plaza),
7.400%, 6/15/10 6/05 at 105 AAA 10,056,330
2,000,000 Los Angeles Convention and Exhibition Center
Authority, 5.375%, 8/15/18 8/03 at 102 Aaa 1,929,220
2,000,000 Los Angeles Department of Water and Power,
Electric Plant, 5.375%, 9/01/23 9/03 at 102 Aaa 1,916,940
1,000,000 Los Angeles Wastewater System, 6.250%, 6/01/12 6/02 at 102 Aaa 1,067,920
2,000,000 Los Angeles County Metropolitan Transportation
Authority, Sales Tax Revenue, 5.625%, 7/01/18 7/03 at 102 Aaa 1,984,760
2,000,000 Metropolitan Water District of Southern California,
5.500%, 7/01/19 7/02 at 102 Aa 1,949,820
3,560,000 Northern California Power Agency, 10.000%, 7/01/03 No Opt. Call Aaa 4,738,930
500,000 Northern California Power Agency, Hydroelectric
Project No. 1, 5.500%, 7/01/23 7/02 at 100 Aaa 489,920
2,000,000 Orange County Water District, Certificates of
Participation, 5.000%, 8/15/18 8/03 at 100 Aa 1,797,000
1,355,000 Palomar Pomerado Health System, 5.000%, 11/01/13 11/03 at 102 Aaa 1,289,960
1,500,000 Pasadena Electric Works, 7.000%, 8/01/09 8/00 at 102 AA- 1,665,435
1,000,000 Riverside Water System, 9.000%, 10/01/01 No Opt. Call Aa 1,230,400
2,100,000 Sacramento City Finance Authority, 5.400%, 11/01/20 No Opt. Call Aa 2,078,643
Sacramento Municipal Utility District:
1,095,000 5.700%, 5/15/12 5/03 at 102 A 1,104,647
1,370,000 5.250%, 11/15/20 11/03 at 102 Aaa 1,294,760
900,000 San Diego Industrial Development (San Diego Gas
and Electric Company), 7.625%, 7/01/21 7/96 at 102 Aa3 926,955
2,750,000 San Francisco Airports Commission, Alternative
Minimum Tax, 6.500%, 5/01/24 5/04 at 102 Aaa 2,945,195
3,100,000 San Francisco City and County Sewer System,
5.375%, 10/01/16 10/02 at 102 Aaa 2,998,692
3,500,000 San Joaquin County, Certificates of Participation,
4.750%, 11/15/19 11/03 at 102 Aaa 3,126,620
1,400,000 Santa Clara Electric System, 6.250%, 7/01/13 7/01 at 102 Aaa 1,482,054
1,005,000 Santa Monica Wastewater Enterprise,
12.000%, 1/01/04 No Opt. Call Aaa 1,484,214
1,150,000 Santa Monica-Malibu Unified School District,
General Obligation, 5.500%, 8/01/18 8/03 at 102 Aa 1,111,855
<PAGE>
<CAPTION>
PRINCIPAL OPT. CALL MARKET
AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE
<S> <C> <C> <C> <C>
$ 1,975,000 Southern California Public Power Authority,
5.500%, 7/01/20 7/02 at 100 Aa $ 1,921,912
2,940,000 Torrance-Little Company of Mary Hospital,
7.100%, 12/01/15 (Pre-refunded to 12/01/05) 12/05 at 100 AAA 3,394,553
1,500,000 University of California (UCLA Center Chiller
Cogeneration), Certificates of Participation,
5.600%, 11/01/20 11/03 at 102 Aa 1,448,370
University of California Research Facilities:
2,000,000 5.750%, 9/01/18 9/01 at 102 A- 1,923,180
2,000,000 5.800%, 9/01/23 9/01 at 102 A- 1,976,960
2,225,000 University of California Housing System,
5.500%, 11/01/18 11/03 at 102 Aaa 2,181,056
2,000,000 Walnut Creek (John Muir Medical Center),
Certificates of Participation, 5.000%, 2/15/16 2/04 at 102 Aaa 1,857,960
2,000,000 Washington Township Hospital District,
5.250%, 7/01/23 7/03 at 102 A 1,800,720
$112,925,000 Total Investments - (cost $113,996,228) - 97.8% 116,261,587
============
TEMPORARY INVESTMENTS IN SHORT-TERM
MUNICIPAL SECURITIES - 0.9%
$ 410,000 California Health Facilities Financing Authority
(St. Joseph Health System), Series B, Variable Rate
Demand Bonds, 3.100%, 7/01/13+ VMIG-1 410,000
400,000 California Health Facilities Financing Authority
(St. Francis Memorial Hospital), Series 1993B,
Variable Rate Demand Bonds, 3.200%, 11/01/19+ VMIG-1 400,000
300,000 Santa Ana Health Facilities Authority (Town and
Country), Variable Rate Demand Bonds,
3.250%, 10/01/20+ A-1 300,000
$ 1,110,000 Total Temporary Investments - 0.9% 1,110,000
============
Other Assets Less Liabilities - 1.3% 1,537,157
Net Assets - 100% $118,908,744
============
<CAPTION>
NUMBER MARKET MARKET
STANDARD & POOR'S MOODY'S OF ISSUES VALUE PERCENT
<S> <C> <C> <C> <C> <C>
SUMMARY OF AAA Aaa 22 $ 55,188,346 47%
RATINGS** AA+, AA, AA- Aa1, Aa, Aa2, Aa3 13 23,015,864 20
PORTFOLIO OF A+ A1 5 11,654,700 10
INVESTMENTS A, A- A, A2, A3 9 18,560,793 16
(EXCLUDING BBB+, BBB, BBB- Baa1, Baa, Baa2, Baa3 4 7,841,884 7
TEMPORARY
INVESTMENTS):
TOTAL 53 $116,261,587 100%
<FN>
* Optional Call Provisions: Dates (month and year) and prices of the earliest
optional call or redemption. There may be other call provisions at varying
prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's rating.
+ 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
(Unaudited)
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
ASSETS
Investments in municipal securities, at market
value (note 1) $140,710,875 $264,551,282 $116,261,587
Temporary investments in short-term municipal
securities, at amortized cost (note 1) 900,000 600,000 1,110,000
Cash 98,133 73,369 119,035
Receivables:
Interest 2,108,084 4,485,945 1,935,493
Investments sold -- 1,983,680 --
Other assets 25,899 42,260 21,074
------------ ------------ ------------
Total assets 143,842,991 271,736,536 119,447,189
------------ ------------ ------------
LIABILITIES
Payable for investments purchased -- 1,977,387 --
Accrued expenses:
Management fees (note 6) 74,735 138,460 62,007
Other 81,568 93,709 111,808
Preferred share dividends payable 7,498 39,688 11,867
Common share dividends payable 419,550 779,818 352,763
------------ ------------ ------------
Total liabilities 583,351 3,029,062 538,445
------------ ------------ ------------
Net assets (note 7) $143,259,640 $268,707,474 $118,908,744
============ ============ ============
Preferred shares, at liquidation value $ 45,000,000 $ 95,000,000 $ 43,000,000
============ ============ ============
Preferred shares outstanding 1,800 3,800 1,720
============ ============ ============
Common shares outstanding 6,405,350 12,577,707 5,735,977
============ ============ ============
Net asset value per Common share outstanding
(net assets less Preferred shares
at liquidation value, divided by Common
shares outstanding) $ 15.34 $ 13.81 $ 13.23
============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF OPERATIONS
Six months ended February 29, 1996
(Unaudited)
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
INVESTMENT INCOME
Tax-exempt interest income (note 1) $3,978,962 $ 7,352,489 $3,334,779
----------- ------------ -----------
Expenses:
Management fees (note 6) 458,981 853,622 382,001
Preferred shares--auction fees 56,096 118,425 53,602
Preferred shares--dividend disbursing agent fees 7,479 14,959 7,479
Shareholders' servicing agent fees and expenses 7,329 3,761 2,521
Custodian's fees and expenses 21,921 28,296 23,085
Directors'/Trustees' fees and expenses (note 6) 1,188 1,106 583
Professional fees 6,579 10,317 9,280
Shareholders' reports--printing and mailing expenses 5,976 13,314 5,421
Stock exchange listing fees 8,096 14,917 2,465
Investor relations expense 1,775 7,319 3,290
Portfolio insurance expense 9,574 5,549 --
Other expenses 9,958 15,413 23,907
----------- ------------ -----------
Total expenses 594,952 1,086,998 513,634
----------- ------------ -----------
Net investment income 3,384,010 6,265,491 2,821,145
----------- ------------ -----------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions
(note 3) 3,764 (391,481) (589,893)
Net change in unrealized appreciation or depreciation
of investments 5,822,202 10,383,337 5,223,446
----------- ------------ -----------
Net gain from investments 5,825,966 9,991,856 4,633,553
----------- ------------ -----------
Net increase in net assets from operations $9,209,976 $16,257,347 $7,454,698
=========== ============ ===========
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<CAPTION>
NPC NCL
Six months ended Year ended Six months ended Year ended
2/29/96 8/31/95 2/29/96 8/31/95
<S> <C> <C> <C> <C>
OPERATIONS
Net investment income $ 3,384,010 $ 6,740,617 $ 6,265,491 $ 12,793,319
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) 3,764 (269,095) (391,481) (3,934,343)
Net change in unrealized appreciation or depreciation
of investments 5,822,202 4,914,208 10,383,337 7,676,617
------------ ------------ ------------ ------------
Net increase in net assets from operations 9,209,976 11,385,730 16,257,347 16,535,593
------------ ------------ ------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Common shareholders (2,517,303) (5,302,260) (4,678,907) (9,896,794)
Preferred shareholders (756,516) (1,644,081) (1,498,739) (3,358,809)
------------ ------------ ------------ ------------
Decrease in net assets from distributions to
shareholders (3,273,819) (6,946,341) (6,177,645) (13,255,603)
------------ ------------ ------------ ------------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from shares issued in acquisition of
NCV, as applicable (note 1) -- -- -- --
Net proceeds from Common shares issued to
shareholders due to reinvestment of distributions
from net investment income and from net
realized gains from investment transactions -- 78,498 -- 103,296
------------ ------------ ----------- ------------
Net increase in net assets derived from capital
share transactions -- 78,498 -- 103,296
------------ ------------ ----------- ------------
Net increase in net assets 5,936,157 4,517,887 10,079,702 3,383,286
Net assets at beginning of period 137,323,483 132,805,596 258,627,772 255,244,486
------------ ------------ ------------ ------------
Net assets at end of period $143,259,640 $137,323,483 $268,707,474 $258,627,772
============ ============ ============ ============
Balance of undistributed net investment income at
end of period $ 231,703 $ 121,512 $ 418,922 $ 331,076
============ ============ ============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
STATEMENT OF CHANGES IN NET ASSETS
(Unaudited)
<CAPTION>
NCU
Six months ended Year ended
2/29/96 8/31/95
<S> <C> <C>
OPERATIONS
Net investment income $ 2,821,145 $ 5,208,244
Net realized gain (loss) from investment transactions,
net of taxes, if applicable (notes 1 and 3) (589,893) (2,548,807)
Net change in unrealized appreciation or depreciation
of investments 5,223,446 9,505,079
------------ ------------
Net increase in net assets from operations 7,454,698 12,164,516
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS (note 1)
From undistributed net investment income:
Common shareholders (2,116,577) (3,968,924)
Preferred shareholders (733,182) (1,443,761)
------------ ------------
Decrease in net assets from distributions to
shareholders (2,849,759) (5,412,685)
------------ ------------
CAPITAL SHARE TRANSACTIONS (note 2)
Net proceeds from shares issued in acquisition of
NCV, as applicable (note 1) -- 37,803,999
Net proceeds from Common shares issued to
shareholders due to reinvestment of distributions
from net investment income and from net
realized gains from investment transactions -- 37,810
------------ ------------
Net increase in net assets derived from capital
share transactions -- 37,841,809
------------ ------------
Net increase in net assets 4,604,939 44,593,640
Net assets at beginning of period 114,303,805 69,710,165
------------ ------------
Net assets at end of period $118,908,744 $114,303,805
============ ============
Balance of undistributed net investment income at
end of period $ 137,921 $ 166,535
============ ============
See accompanying notes to financial statements.
</TABLE>
<PAGE>
NOTES TO FINANCIAL STATEMENTS
(Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
At February 29, 1996, the California Funds (the "Funds") covered in this
report and their corresponding stock exchange symbols are Nuveen Insured
California Premium Income Municipal Fund, Inc. (NPC), Nuveen Insured
California Premium Income Municipal Fund 2, Inc. (NCL) and Nuveen California
Premium Income Municipal Fund (NCU). NPC and NCL are traded on the New York
Stock Exchange while NCU is traded on the American Stock Exchange.
The Funds are registered under the Investment Company Act of 1940 as
closed-end, diversified management investment companies.
On November 7, 1994, NCU acquired all of the net assets of Nuveen California
Premium Income Municipal Fund 2 (NCV) pursuant to a plan of reorganization
approved by the shareholders of the Funds on October 21, 1994. The acquisition
was accomplished by a tax-free exchange of 2,175,061shares of NCU for the
2,233,987 shares of NCV outstanding on November 7, 1994. NCV's net assets at
that date of $37,803,999 included $7,676,463 of unrealized depreciation and
$16,000,000 of preferred shares at liquidation value which was combined with
that of NCU. The combined net assets of NCU immediately after the acquisition
were $100,464,481.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
generally accepted accounting principles.
Securities Valuation
Portfolio securities for which market quotations are readily available are
valued at the mean between the quoted bid and asked prices or the yield
equivalent. Portfolio securities for which market quotations are not readily
available are valued at fair value by consistent application of methods
determined in good faith by the Board of Directors/Trustees. Temporary
investments in securities that have variable rate and demand features
qualifying them as short-term securities are traded and valued at amortized
cost.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery
basis may be settled a month or more after the transaction date. The
securities so purchased are subject to market fluctuation during this period.
The Funds have instructed the custodian to segregate assets in a separate
account with a current value at least equal to the amount of their purchase
commitments. At February 29, 1996, there were no such purchase commitments in
any of the Funds.
<PAGE>
Interest Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt
securities when required for federal income tax purposes.
Income Taxes
The Funds intend to comply with the requirements of the Internal Revenue Code
applicable to regulated investment companies by distributing all of their net
investment income, in addition to any significant amounts of net realized
gains from investments, to shareholders. The Funds currently consider
significant net realized gains 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
California state income taxes, to retain such tax-exempt status when
distributed to shareholders of the Funds.
Dividends and Distributions to Shareholders
Net investment income is declared as a dividend monthly and payment is made or
reinvestment is credited to shareholder accounts after month-end. Net realized
gains from securities transactions are distributed to shareholders not less
frequently than annually only to the extent they exceed available capital loss
carryovers.
Distributions to shareholders of net investment income and net realized gains
are recorded on the ex-dividend date. The amount and timing of such
distributions are determined in accordance with federal income tax
regulations, which may differ from generally accepted accounting principles.
Accordingly, temporary over-distributions as a result of these differences may
result and will be classified as either distributions in excess of net
investment income or distributions in excess of net realized gains, if
applicable.
<PAGE>
<TABLE>
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, at February 29,
1996, for each Fund is as follows:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Number of shares:
Series M -- -- 1,720
Series T 1,800 1,900 --
Series Th -- 1,900 --
----- ----- -----
Total 1,800 3,800 1,720
===== ===== =====
</TABLE>
Insurance
NPC and NCL invest in municipal securities which are either covered by
insurance or are backed by an escrow or trust account containing sufficient
U.S. Government or U.S. Government agency securities, both of which ensure the
timely payment of principal and interest. Each insured municipal security is
covered by Original Issue Insurance, Secondary Market Insurance or Portfolio
Insurance. Such insurance does not guarantee the market value of the municipal
securities or the value of the Funds' shares. Original Issue Insurance and
Secondary Market Insurance remain in effect as long as the municipal
securities covered thereby remain outstanding and the insurer remains in
business, regardless of whether the Funds ultimately dispose of such municipal
securities. Consequently, the market value of the municipal securities covered
by Original Issue Insurance or Secondary Market Insurance may reflect value
attributable to the Insurance. Portfolio Insurance is effective only while the
municipal securities are held by the Funds. Accordingly, neither the prices
used in determining the market value of the underlying municipal securities
nor the net asset value of the Funds' shares include value, if any,
attributable to the Portfolio Insurance. Each policy of the Portfolio
Insurance does, however, give the Funds the right to obtain permanent
insurance with respect to the municipal security covered by the Portfolio
Insurance policy at the time of its sale.
Derivative Financial Instruments
In October 1994, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 119 Disclosure about
Derivative Financial Instruments and Fair Value of Financial Instruments which
prescribes disclosure requirements for transactions in certain derivative
financial instruments including future, forward, swap and option contracts,
and other financial instruments with similar characteristics. Although the
Funds are authorized to invest in such financial instruments, and may do so in
the future, they did not make any such investments during the six months ended
February 29, 1996, other than occasional purchases of high quality synthetic
money market securities which were held temporarily pending the re-investment
in long-term portfolio securities.
<PAGE>
<TABLE>
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
<CAPTION>
NPC NCL
6 months ended Year ended 6 months ended Year ended
2/29/96 8/31/95 2/29/96 8/31/95
<S> <C> <C> <C> <C>
Common shares:
Shares issued in acquisition of NCV, as applicable
(note 1) -- -- -- --
Shares issued to shareholders due to reinvestment
of distributions from net investment income and
from net realized gains from investment
transactions -- 6,408 -- 9,285
----- ----- ----- -----
Net increase -- 6,408 -- 9,285
===== ===== ===== =====
Preferred shares acquired from NCV, as applicable
(note 1) -- -- -- --
===== ===== ===== =====
<CAPTION>
NCU
6 months ended Year ended
2/29/96 8/31/95
<S> <C> <C>
Common shares:
Shares issued in acquisition of NCV, as applicable
(note 1) -- 2,175,061
Shares issued to shareholders due to reinvestment
of distributions from net investment income and
from net realized gains from investment
transactions -- 3,601
----- ---------
Net increase -- 2,178,662
===== =========
Preferred shares acquired from NCV, as applicable
(note 1) -- 640
===== =========
</TABLE>
<PAGE>
<TABLE>
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in municipal
securities and temporary municipal investments during the six months ended
February 29, 1996, were as follows:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
PURCHASES
Investments in municipal securities $6,072,202 $40,502,539 $18,091,704
Temporary municipal investments 4,500,000 28,555,000 20,710,000
SALES AND MATURITIES
Investments in municipal securities 2,099,690 37,529,525 17,852,389
Temporary municipal investments 8,400,000 30,955,000 21,600,000
========== =========== ===========
At February 29, 1996, the identified cost of investments owned for federal
income tax purposes was the same as the cost for financial reporting purposes
for each Fund.
At August 31, 1995, the Funds' last fiscal year end, the Funds had unused
capital loss carryovers available for federal income tax purposes to be
applied against future security gains, if any. If not applied, the carryovers
will expire as follows:
<CAPTION>
NPC NCL NCU*
<S> <C> <C> <C>
Expiration year:
2001 $ 10,001 $ -- $ --
2002 -- -- 1,175,783
2003 2,373,250 3,896,131 1,893,938
---------- ---------- ----------
Total $2,383,251 $3,896,131 $3,069,721
========== ========== ==========
<FN>
* Due to the acquisition of NCV by NCU (note 1), NCV had net realized losses
from investment transactions of $1,175,783 which were carried forward by NCU,
as permitted under applicable tax regulation.
</TABLE>
<PAGE>
<TABLE>
4. DISTRIBUTIONS TO COMMON SHAREHOLDERS
On March 1, 1996, the Funds declared Common share dividend distributions from
their ordinary income which were paid April 1, 1996, to shareholders of record
on March 15, 1996, as follows:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Dividend per share $.0655 $.0620 $.0615
====== ====== ======
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
at February 29, 1996, were as follows:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Gross unrealized:
Appreciation $12,105,188 $7,324,862 $3,224,369
Depreciation (102,523) (326,151) (959,010)
----------- ---------- ----------
Net unrealized appreciation $12,002,665 $6,998,711 $2,265,359
=========== ========== ==========
</TABLE>
<PAGE>
<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 to the Adviser an annual management fee, payable monthly, at the
rates set forth below, which are based upon the average daily net asset value
of each Fund:
<CAPTION>
Average daily net asset value Management fee
<S> <C>
For the first $125,000,000 .65 of 1%
For the next $125,000,000 .6375 of 1
For the next $250,000,000 .625 of 1
For the next $500,000,000 .6125 of 1
For the next $1,000,000,000 .6 of 1
For net assets over $2,000,000,000 .5875 of 1
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those directors/trustees who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
</TABLE>
<PAGE>
<TABLE>
7. COMPOSITION OF NET ASSETS
At February 29, 1996, net assets consisted of:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Preferred shares, $25,000 stated value per share,
at liquidation value $ 45,000,000 $ 95,000,000 $ 43,000,000
Common shares, $.01 par value per share 64,054 125,777 57,360
Paid-in surplus 88,572,853 174,386,019 79,656,267
Balance of undistributed net investment income 231,703 418,922 137,921
Accumulated net realized gain (loss) from
investment transactions (2,611,635) (8,221,955) (6,208,163)
Net unrealized appreciation or depreciation
of investments 12,002,665 6,998,711 2,265,359
------------ ------------ -----------
Net assets $143,259,640 $268,707,474 $118,908,744
============ ============ ============
Authorized shares:
Common 200,000,000 200,000,000 Unlimited
Preferred 1,000,000 1,000,000 Unlimited
============ ============ ============
</TABLE>
<PAGE>
<TABLE>
8. INVESTMENT COMPOSITION
Each Fund invests in municipal securities which include general obligation,
escrowed and revenue bonds. At February 29, 1996, the revenue sources by
municipal purpose for these investments, expressed as a percent of total
investments, were as follows:
<CAPTION>
NPC NCL NCU
<S> <C> <C> <C>
Revenue Bonds:
Water / Sewer Facilities 21% 18% 11%
Health Care Facilities 3 4 15
Electric Utilities 6 9 14
Housing Facilities 5 13 12
Educational Facilities 2 6 13
Lease Rental Facilities 2 9 6
Transportation 3 9 3
Pollution Control Facilities 6 -- 5
Other 23 8 10
General Obligation Bonds -- 12 4
Escrowed Bonds 29 12 7
----- ----- -----
100% 100% 100%
===== ===== =====
Certain long-term and intermediate-term investments owned by the Funds are
either covered by insurance issued by several private insurers or are backed
by an escrow or trust containing U.S. Government or U.S. Government agency
securities, both of which ensure the timely payment of principal and interest
in the event of default (100% for NPC, 100% for NCL and 39% for NCU). Such
insurance or escrow, however, does not guarantee the market value of the
municipal securities or the value of any of the Funds' shares.
All of the temporary investments in short-term municipal securities have
credit enhancements (letters of credit, guarantees or insurance) issued by
third party domestic or foreign banks or other institutions.
For additional information regarding each investment security, refer to the
Portfolio of Investments of each Fund.
</TABLE>
<PAGE>
<TABLE>
FINANCIAL HIGHLIGHTS
(Unaudited)
SELECTED DATA FOR A COMMON SHARE OUTSTANDING THROUGHOUT EACH PERIOD IS AS FOLLOWS:
<CAPTION>
Operating performance Dividends from net investment income
Net
realized &
Net asset Net unrealized
value invest- gain (loss) To To
beginning ment from invest- Common Preferred
of period income ments** shareholders shareholders+
<S> <C> <C> <C> <C> <C>
NPC
6 mos. ended
2/29/96 $14.410 $ .528 $ .913 $(.393) $(.118)
Year ended 8/31,
1995 13.720 1.053 .722 (.828) (.257)
1994 15.310 1.066 (1.609) (.847) (.200)
11/19/92 to
8/31/93 14.050 .640 1.445 (.500) (.108)
<CAPTION>
NCL
<S> <C> <C> <C> <C> <C>
6 mos. ended
2/29/96 13.010 .498 .793 (.372) (.119)
Year ended 8/31,
1995 12.750 1.017 .297 (.787) (.267)
1994 14.570 1.020 (1.851) (.817) (.172)
3/18/93 to
8/31/93 14.050 .247 .655 (.192) (.023)
<CAPTION>
NCU
<S> <C> <C> <C> <C> <C>
6 mos. ended
2/29/96 12.430 .492 .805 (.369) (.128)
Year ended 8/31,
1995 12.010 1.002 .460 (.766) (.276)
1994 14.470 .973 (2.259) (.815) (.168)
6/18/93 to
8/31/93 14.050 .080 .438 -- --
<PAGE>
<CAPTION>
Distributions from capital gains Per
Organization Common
and offering share
costs and market
To To Preferred share Net asset value
Common Preferred underwriting value end end of
shareholders shareholders+ discounts of period period
NPC
<S> <C> <C> <C> <C> <C>
6 mos. ended
2/29/96 $ -- $ -- $ -- $15.340 $13.750
Year ended 8/31,
1995 -- -- -- 14.410 12.750
1994 -- -- -- 13.720 13.000
11/19/92 to
8/31/93 -- -- (.217) 15.310 15.500
<CAPTION>
NCL
<S> <C> <C> <C> <C> <C>
6 mos. ended
2/29/96 -- -- -- 13.810 12.625
Year ended 8/31,
1995 -- -- -- 13.010 11.500
1994 -- -- -- 12.750 11.875
3/18/93 to
8/31/93 -- -- (.167) 14.570 14.875
<CAPTION>
NCU
<S> <C> <C> <C> <C> <C>
6 mos. ended
2/29/96 -- -- -- 13.230 12.375
Year ended 8/31,
1995 -- -- -- 12.430 10.750
1994 (.023) (.004) (.164) 12.010 11.125
6/18/93 to
8/31/93 -- -- (.098) 14.470 14.875
<PAGE>
<CAPTION>
Ratio/Supplemental data
Total
invest- Ratio of
ment net
return Total Net assets Ratio of investment
on return on end of expenses income Portfolio
market net asset period (in to average to average turnover
value++ value++ thousands) net assets@ net assets@ rate
NPC
<S> <C> <C> <C> <C> <C> <C>
6 mos. ended
2/29/96 11.05% 9.22% $143,260 .84%* 4.77%* 2%
Year ended 8/31,
1995 4.67 11.68 137,323 .89 5.10 24
1994 (10.88) (4.99) 132,806 .85 4.94 29
11/19/92 to
8/31/93 6.80 12.73 142,812 .88* 4.45* 20
<CAPTION>
NCL
<S> <C> <C> <C> <C> <C> <C>
6 mos. ended
2/29/96 13.11 9.05 268,707 .82* 4.70* 14
Year ended 8/31,
1995 3.55 8.80 258,628 .84 5.11 24
1994 (15.01) (7.07) 255,244 .84 4.80 24
3/18/93 to
8/31/93 .49 5.11 277,948 .86* 3.46* --
<CAPTION>
NCU
<S> <C> <C> <C> <C> <C> <C>
6 mos. ended
2/29/96 18.75 9.45 118,909 .87* 4.79* 16
Year ended 8/31,
1995 3.65 10.53 114,304 1.05 5.08 26
1994 (20.07) (11.51) 69,710 .95 4.79 40
6/18/93 to
8/31/93 (.83) 2.99 51,487 1.19* 3.33* --
<FN>
* Annualized.
** Net of taxes, if applicable (note 1).
+ The amounts shown are based on Common share equivalents.
++ Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distribution, if any, and changes in
stock price per share. Total Return on Net Asset Value is the combination of
reinvested dividend income, reinvested capital gains distributions, if any,
and changes in net asset value per share.
@ Ratios do not reflect the effect of dividend payments to Preferred
shareholders.
</TABLE>
<PAGE>
Your investment partner
Photograpic image of John Nuveen, Sr. founder of Nuveen.
For nearly 100 years, Nuveen has earned its reputation as a tax-free income
specialist by focusing on municipal bonds
Since 1898, John Nuveen & Co. Incorporated has worked to bring together the
various participants in the municipal bond industry and build strong
partnerships that benefit all concerned. Investors, financial advisers,
municipal officials, investment bankers--Nuveen believes that forging
relationships with these groups based on trust and value is the key to
successful investing.
As the oldest and largest municipal bond specialist in the United States,
Nuveen's investment bankers work with issuers to understand and meet their
needs in structuring and selling their bond issues.
Nuveen also works closely with financial advisers around the country,
including brokerage firms, banks, insurance companies, and independent
financial planners, to bring the benefits of tax-free investing to you. These
advisers are experts at identifying your needs and recommending the best
solutions for your situation. Together we make a powerful team, helping you
create a successful investment plan that meets your needs today and in the
future.
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, Illinois 60606-1286
ETF2-APR 96
