NUVEEN Exchange-Traded Funds
FEBRUARY 29, 2000
SEMIANNUAL REPORT
DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN.
NPC
NCL
NCU
California
Photo of: People on dock
<PAGE>
Financial Information
As of February 29, 2000
Credit Quality
================================================================================
Nuveen Insured California Premium Income Municipal Fund, Inc. (NPC)
o Dividend per share of $.0715
o Market yield on share price of 6.36%
o Taxable-equivalent yield on share price of 10.18% *
Pie chart:
Insured & U.S. Guaranteed 2%
U.S. Guaranteed 18%
Insured 80%
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL)
o Dividend per share of $.0665
o Market yield on share price of 6.38%
o Taxable-equivalent yield on share price of 10.21% *
Pie chart:
Insured & U.S. Guaranteed 5%
U.S. Guaranteed 3%
Insured 92%
Nuveen California Premium Income Municipal Fund (NCU)
o Dividend per share of $.0670
o Market yield on share price of 6.43%
o Taxable-equivalent yield on share price of 10.29% *
Pie chart:
AAA/U.S. Guaranteed 63%
AA 7%
A 6%
BBB/NR 22%
Other 2%
Contents
1 Dear Shareholder
3 Portfolio Manager Roundtable
6 NPC Performance Overview
7 NCL Performance Overview
8 NCU Performance Overview
9 Shareholder Meeting Report
11 Portfolio of Investments
21 Statement of Net Assets
22 Statement of Operations
23 Statement of Changes in Net Assets
24 Notes to Financial Statements
30 Financial Highlights
32 Build Your Wealth Automatically
33 Fund Information
Past performance is not predictive of future results.
* For investors in the combined 37.5% federal and state income tax bracket.
<PAGE>
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sidebar text: Wealth takes a lifetime to build. Once achieved, it should be
preserved.
Dear Shareholder
The primary objective of Nuveen Exchange- Traded Funds is to provide dependable,
attractive tax-free dividends, and I am pleased to report that your Fund
continued to achieve this goal. The portfolio manager of your Fund and I
appreciate this opportunity to review with you the investment environment and
the performance of your Nuveen Exchange-Traded Fund.
A CHALLENGING INVESTMENT ENVIRONMENT
In March 2000, the U.S. economy entered its 108th consecutive month of
expansion, the longest continuous period of economic expansion in U.S. history.
While the economy continued to be characterized by strong growth and low
inflation, equity markets grew increasingly volatile, and record low
unemployment levels sparked concerns about their potentially inflationary impact
on wages and, ultimately, consumer prices. The accelerated pace of consumer
spending, which continued to serve as the main engine powering the country's
expansion, provided the Federal Reserve with another source of inflation worry.
The federal funds rate, which sets the standard for short-term market rates, was
increased again in March and now stands at 6.00%. This latest increase by the
Fed indicates its concern that an inflationary imbalance could be triggered if
consumer demand continues to exceed growth in supply. This leaves the door open
for additional tightenings during 2000.
MUNICIPAL BOND PERFORMANCE
The Federal Reserve's continued vigilance on the inflation front and the
cumulative effect of various economic events over the past 12 months continued
to impact the fixed-income markets, including municipal bonds, in a negative
manner. As the Fed's monetary tightening prompted a rise in market yields,
municipal bond prices continued to slump over this period.
On a more positive note, our exchange-traded municipal bond funds continued to
offer attractive, dependable income in a market that places a high premium on
yield. At the end of February 2000, long-term municipal yields, represented by
the Bond Buyer 25 Revenue Index, offered 102% of 30-year Treasury yields,
compared with the historical average of 86% for the period 1986-1999. For
investors, this meant that quality long-term municipal bonds offered higher
yields than long-term Treasury bonds, even before the tax advantages of
municipals were taken into account. Of course, Treasuries are backed by the full
faith and credit of the U.S. government. Even so, on an after-tax
<PAGE>
basis, municipal bonds continued to represent an exceptionally attractive
investment option relative to Treasuries.
During 1999, we saw the national supply of municipal bonds decline 21% from the
near-record levels of 1998. This was generally due to increasing interest rates,
which deterred municipalities from issuing new debt and removed much of the
incentive to refund existing bonds. To date in 2000, the supply of municipal
bonds has been running behind that of 1999. On the demand side, we anticipate
that individual investors interested in rebalancing their portfolios will
increasingly look to municipal bonds in the months ahead. With the outlook for
tighter supply and stronger demand, Nuveen's established market position as the
leading sponsor of exchange-traded municipal bond funds should give us excellent
access to bond offerings that have the potential to add value for our
shareholders.
A GOOD TIME TO EXAMINE PURCHASING ADDITIONAL SHARES
The flight to equities, year-end tax sell-offs, and Y2K concerns all contributed
to a decline in share price for our exchange-traded funds. Given the current
investment environment of higher interest rates, coupled with the expectation of
additional rate increases by the Fed, now could be a good opportunity to explore
purchasing additional shares of your exchange-traded fund. Your financial
adviser can serve as a valuable resource to do just that by helping you
establish a reinvestment plan that would allow you to buy more shares of your
particular fund. For more information on Nuveen's Exchange-Traded Fund
reinvestment plan, contact your financial adviser, or call Nuveen at (800)
257-8787.
Since 1898, Nuveen has been synonymous with investments that stand the test of
time. We remain committed to maintaining that reputation and finding the best
ways to serve your evolving investment needs. Thank you for your continued
confidence.
Sincerely,
/S/ TIMOTHY R. SCHWERTFEGER
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
April 17, 2000
Sidebar text:"With the outlook for tighter supply and stronger demand, Nuveen's
established market position as the leading sponsor of exchange-traded municipal
bond funds should give us excellent access to bond offerings that have the
potential to add value for our shareholders."
<PAGE>
Nuveen California Premium Income Exchange-Traded Funds
Portfolio Manager Roundtable
Portfolio managers Mike Davern and Bill Fitzgerald discuss the California
market, recent fund performance, and the key strategies used to manage the
Nuveen California Premium Income Exchange-Traded Funds. Mike, who has 17 years
of experience as an investment professional, including eight years at Nuveen,
has managed NPC and NCL since 1998. Bill is a 12-year veteran of Nuveen with
portfolio management responsibility for several California municipal funds. He
has managed NCU since 1998.
WHAT FACTORS AFFECTED CALIFORNIA'S ECONOMY OVER THE 12 MONTHS ENDED FEBRUARY 29,
2000?
Over the past 12 months, the California economy continued its steady expansion,
with healthy job growth, above-average income growth, and an improving export
environment. In 1999, jobs in the state grew by 2.8%, compared with 2.2%
nationally. Construction and services provided most of the new jobs, with growth
in the computer-related segment of the services sector, including software
design, reaching more than 17%. This resulted in extremely tight labor markets,
especially in California's major metropolitan areas. As of February 29, 2000,
unemployment in the state reached 4.6%, down from 5.5% at the end of February
1999 but still behind the national average of 4.1%. Between 1990 and 1999, job
growth in California outpaced the construction of new housing units, with five
jobs created for every three new housing units built statewide. In areas such as
San Francisco, San Diego, and Orange County, the ratio was even higher. The
resulting housing shortage spiked a dramatic increase in housing prices
throughout the state during the decade.
In 1999, high wages in the computer industry, combined with stock market and
real estate profits, boosted California's personal income growth to almost 8%,
ahead of the national average of 6%. This level of growth helped to attract
qualified workers to the state, which in turn helped to offset tight job
markets. Contributing to California's economic growth over the past year was the
improving situation in world markets. Mexico, Canada, and Japan served as the
state's largest trading partners, providing markets for about 40% of the state's
total exports.
From a revenue perspective, the state enjoyed its best year ever. Quarterly
estimated tax payments in December 1999 were almost 40% ahead of 1998 levels,
leading to expectations that final tax payments in April 2000 would also be far
above average. The state's economic prosperity helped to create a 1999/2000
budget surplus, or reserve fund balance, that was originally projected to be
$1.2 billion, but now is expected to exceed $5 billion. California's exceptional
economic performance over the past 12 months led Fitch IBCA to upgrade its
rating of California's general obligation bonds to AA from AA- in February 2000.
Ratings by the two other major agencies, Standard & Poor's and MoodyInvestor
Service, remained at AA- and Aa3, respectively.
HOW DID THESE EVENTS IMPACT THE MUNICIPAL MARKET IN CALIFORNIA?
In 1999, new municipal issuance in California dropped 21.6% from 1998 levels,
paralleling the 21.1% decline in national supply for the same period. Supply in
the state during the second half of 1999 was down slightly from that of the
first half of the year, as the rising interest rate environment deterred some
municipalities from issuing new bonds or refinancing old debt. Overall, the
decline in supply during 1999 helped to offset some of the negative impact that
higher interest rates and equity market activity had on the demand for municipal
bonds. In California, demand for municipal paper remained stronger than in other
states due in part to the state's high taxes. As a result, new California
offerings were met with steady interest by both institutional and individual
investors.
In February 2000, the state issued $500 million in general obligation bonds, and
plans call for the sale of an additional $500 million in April. California
voters recently approved $4.5 billion of new state general obligation bonds to
fund park, water, and library improvements and home loans for military veterans;
these bonds will be issued over several years, as projects near start dates.
Even with the new bonds, California's debt ratio remained about 4%, and the
state's strong revenue growth is expected to offset higher debt payments.
HOW WERE THE NUVEEN CALIFORNIA PREMIUM INCOME FUNDS' DIVIDENDS AFFECTED
BY THIS ENVIRONMENT?
During the past year, good call protection helped to support the dividends of
the Nuveen California Premium Income Funds and shield their income from erosion.
In addition, Nuveen's dividend management strategies and our prudent use of
leverage enabled us to increase the dividends of all three funds: NCL in August
1999, NPC in December 1999, and NCU in both May and December 1999. As of
February 2000, NPC and NCL had provided shareholders with steady or increasing
dividends for 55 consecutive months, while NCU's record of steady or increasing
dividends extended to 58 consecutive months. All three funds continued to
provide competitive market yields, as shown in the table on page four.
As leveraged funds, the Nuveen California Premium Income Funds issue
MuniPreferred shares that pay short-term interest rates to investors seeking
short-term liquidity. Short-term municipal rates are usually, but not always,
lower than long-term rates. The proceeds from the preferred shares are used to
buy additional long-term
<PAGE>
bonds for the Funds' portfolios. When short-term interest rates remain below
long-term rates, common shareholders can potentially earn extra net income from
the difference between the rate earned on a fund's long-term portfolio and the
short-term rate paid to preferred shareholders. While the use of leverage can
increase the volatility of a fund's net asset value (NAV), adding higher risk
than that associated with non-leveraged funds, the leveraged fund is usually
compensated for this additional risk in the form of higher yields.
OVERALL, HOW DID THE NUVEEN CALIFORNIA PREMIUM INCOME FUNDS PERFORM OVER THE
PAST YEAR?
For the 12 months ended February 29, 2000, the Nuveen California Premium Income
Funds produced total returns on NAV as shown in the accompanying table. For
comparison purposes, the annual returns for the Funds' benchmarks - the Lehman
Brothers California Tax-Exempt and the Lehman California Insured Tax-Exempt Bond
Indexes1 - and the Funds' Lipper Peer Groups2 are also presented.
<PAGE>
<TABLE>
<CAPTION>
Lehman
Total Return Total Lipper
Market Yield on NAV Return1 Average2
------------------------ ------------------------ ------- --------
1-Year 1-Year 1-Year
Taxable- Ended Taxable- Ended Ended
2/29/00 Equivalent3 2/29/00 Equivalent3 2/29/00 2/29/00
------- ----------- ------- ----------- ------ -------
<S> <C> <C> <C> <C> <C> <C>
NPC 6.36% 10.18% -9.19% -6.01% -2.93% -8.26%
------- --------- ------- --------- ------ -------
NCL 6.38% 10.21% -7.34% -4.08% -2.93% -8.26%
------- --------- ------- --------- ------ -------
NCU 6.43% 10.29% -7.85% -4.45% -2.44% -6.85%
------- --------- ------- --------- ------ -------
Past performance is not predictive of future results.
For additional information on your Fund, see its individual Performance Overview
in this report.
</TABLE>
The underperformance of the Funds' total returns on NAV relative to their Lehman
benchmarks can be attributed largely to the Funds' durations4. As of February
29, 2000, the durations of the insured NPC and NCL were 14.52 and 14.80,
respectively, compared with the Lehman Brothers California Insured Tax-Exempt
Bond Index's 9.23. NCU had a duration of 14.40, compared with 8.16 for the
Lehman Brothers California Tax-Exempt Bond Index. Duration measures a bond
fund's price volatility, or reaction to interest rate movements. The longer the
duration, the more sensitive the fund's NAV is to changes in interest rates.
During a period of falling interest rates, a long duration enables a fund's NAV
to participate more fully in market gains. However, when interest rates rise
(and bond values correspondingly fall), a long duration can make the fund's NAV
more vulnerable to price declines. Over the 12 months ended February 2000, the
yield on the Bond Buyer 25 Revenue Bond Index5 rose from 5.29% to 6.27%. This
meant that funds with longer durations, like the Nuveen California Premium
Income Funds, were more likely to underperform the market, as represented by the
unleveraged Lehman indexes.
Over the past 12 months, the durations of the Nuveen California Premium Income
Funds lengthened, due largely to market action. In addition, proceeds from sold
or called bonds were reinvested in issues with longer durations, which benefited
the Funds by providing attractive yields and better call protection. The longer
durations should help position the Nuveen California Premium Income Funds to
regain net asset value if the bond market recovers and interest rates decline.
WHAT ABOUT THE FUNDS' SHARE PRICE PERFORMANCE?
During the past 12 months, rising interest rates, inflation worries, and
constant speculation about the Federal Reserve's next move created a negative
environment in the fixed-income markets. In addition, concerns about the impact
of the transition to the year 2000 precipitated an early start to 1999's
tax-swap season, as investors attempted to offset profits in the equity markets
by selling fixed-income investments at a loss. The liquidity concerns engendered
by Y2K also prompted some investors with cash to opt for money market funds and
other short-term instruments rather than long-term fixed-income investments over
the year end.
All of these factors negatively impacted the market demand for exchange-traded
funds, including the Nuveen California Premium Income Funds. This resulted in
declines in the Funds' share prices from their positions as of February 28,
1999. The following chart illustrates the Funds' share price and NAV activity
over the past 12 months.
<TABLE>
<CAPTION>
2/28/99 5/31/99 8/31/99 11/30/99 2/29/00
------- ------- ------- -------- -------
<S> <C> <C> <C> <C> <C>
NPC Share Price $16 3/8 $15 1/2 $15 3/8 $13 13/16 $13 1/2
------- ------- ------- --------- -------
NAV $16.32 $15.86 $14.81 $14.19 $13.96
------- ------- ------- --------- -------
NCL Share Price $15 1/4 $14 1/4 $14 3/8 $12 7/16 $12 1/2
------- ------- ------- --------- -------
NAV $14.93 $14.57 $13.70 $13.23 $13.05
------- ------- ------- --------- -------
NCU Share Price $14 5/16 $14 1/2 $13 3/8 $12 7/16 $12 1/2
------- ------- ------- --------- -------
NAV $14.29 $13.97 $13.19 $12.71 $12.40
------- ------- ------- --------- -------
</TABLE>
Since the prevailing interest rate environment in February 2000 was higher than
that of a year earlier, the Funds' NAVs also declined, as bond prices fell while
interest rates rose. Consequently, the two insured Funds - NPC and NCL - saw
their premiums (share price above NAV) move to discounts (share price below
NAV). Because NCU's NAV declined marginally more than its share price, the
Fund's small premium widened slightly. One reason why the insured funds weren't
trading at bigger discounts and why NCU was trading at a slight premium is the
fact that demand for California municipal bonds was very high. With the market
prices of the two insured Funds lower than the actual value of the bonds in
their portfolios, shareholders may want to consider taking advantage of this
opportunity to add to their holdings of NPC and NCU.
<TABLE>
<CAPTION>
Total Return on Share Price Premium/Discount6
--------------------------- -----------------
1-Year Ended Taxable-
2/29/00 Equivalent3 2/28/99 2/29/00
------------ ----------- ------- -------
<S> <C> <C> <C> <C>
NPC -12.45% -9.28% 0.34% -3.30%
------- ------ ---- ------
NCL -13.08% -9.89% 2.14% -4.21%
------- ------ ---- ------
NCU -7.35% -3.95% 0.16% 0.81%
------- ------ ---- ------
</TABLE>
1 The performance of NPC and NCL is compared with that of the Lehman Brothers
California Insured Tax-Exempt Bond Index, an unleveraged index comprising a
broad range of insured California municipal bonds, while NCU's performance
is compared with that of the Lehman Brothers California Tax-Exempt Bond
Index, an unleveraged index comprising a broad range of investment-grade
California municipal bonds. Results for the indexes do not reflect any
expenses.
2 The total returns for NPC and NCL are compared with the average annualized
return of the 12 funds in the Lipper California Insured Municipal Debt
Funds category, while NCU's total return is compared with the average
annualized return of the 18 funds in the Lipper California Municipal Debt
Funds category. Fund and Lipper returns assume reinvestment of dividends.
3 The taxable-equivalent yield/total return represents the yield/total return
that must be earned on a taxable investment in order to equal the
yield/total return of the Nuveen fund on an after-tax basis. The
taxable-equivalent yield is based on the fund's current market yield and a
combined federal and state income tax rate of 37.5%, while the
taxable-equivalent total return is based on the annualized total return and
the 37.5% combined federal and state income tax rate.
4 Fund duration, also known as leverage-adjusted duration, takes into account
the leveraging process for the funds and therefore differs from the
duration of the actual portfolio of individual bonds that make up the
funds. References to duration in this commentary are intended to indicate
fund duration unless otherwise noted.
5 The Bond Buyer 25 Revenue Bond Index is an unmanaged index of long-term
municipal revenue bonds.
6 A fund's premium/discount represents the percentage difference between the
fund's share price and its NAV.
<PAGE>
WHAT KEY STRATEGIES WERE USED TO MANAGE THE NUVEEN CALIFORNIA PREMIUM INCOME
FUNDS DURING THE 12-MONTH PERIOD ENDED FEBRUARY 29, 2000?
The past 12 months represented a difficult period for fixed-income investments,
including leveraged, long-term funds such as the Nuveen California Premium
Income Funds. However, it also provided opportunities to improve the Funds'
structure by enhancing tax efficiency, extending call protection, and
strengthening the Funds' long-term dividend-paying capabilities. During the past
year, we focused on trying to take advantage of these opportunities while
continuing to manage the Funds toward their primary objective of providing
stable tax-free dividends. As the result of our implementation of these
strategies, we believe the Funds are well positioned to benefit from any
potential recovery of the bond market in the future.
As interest rates rose and bond prices declined over the past eight months,
enhanced tax efficiency became an increasing focus, and the interest rate
environment offered opportunities to benefit the Funds through active trading.
Our strategy has been to sell selected bonds that were trading at a loss,
recognize the capital losses, and then reinvest the proceeds in bonds with
similar structure and quality as well as attractive yields and better call
protection. Some of the bonds we sold were due to mature or scheduled to be
called within the next 12 months, while others were bonds that we had purchased
early in 1999 that were now producing a lower income stream than that recently
available in the market. This trading benefited the Funds by providing realized
capital losses with which to offset current and future realized capital gains,
thereby protecting shareholders from additional taxes, and also, in most cases,
increasing the net earnings of the Funds. If current market conditions persist,
we may continue to focus on implementing this strategy.
Among the bonds we selected for the reinvestment of sale proceeds were new
California general obligation bonds from the $500 million offering brought to
market in February 2000. Nuveen purchased $8 million of these bonds for NPC and
NCL, which represented the largest addition to the two insured funds over the
past 12 months. These purchases provided a unique opportunity to restructure the
portfolios with bonds offering 10 years of call protection. With improved credit
ratings and a high degree of liquidity, California state paper has been gaining
in market acceptance, and we anticipate that these bonds should trade well in
comparison to the rest of the California market.
These bonds, as well as others purchased during the past year, helped us further
reduce call exposure and protect portfolio income. NPC and NCL currently offer
excellent levels of call protection, with no scheduled calls in 2000 and only 2%
each in 2001. NCU also offers strong call protection over the next two years,
with only 7% of its portfolio subject to calls in 2000 and 2001. These levels of
call protection should provide additional stability for the Funds' dividends
over this period.
In NCU, we also invested in several different types of issues that we believed
represented the best value in the marketplace, including healthcare bonds and
multifamily housing bonds issued and backed by real estate investment trusts
(REITs). In the healthcare sector, which has been beset by concerns about
deregulation and profitability, we identified a few significant healthcare
providers that we believe should perform well. One of these is Cedars-Sinai
Medical Center, with a rating of A2, which was one of the top performing bonds
in the California market over the past 12 months. In the housing sector, we held
REIT-backed bonds issued for Irvine Apartment Communities. Because this REIT
owns properties that provide housing for low and moderate income families, it
can borrow money in the tax-exempt market. This benefits investors that want to
participate in the multifamily housing sector by providing bonds backed by the
income from a diversified portfolio of properties, rather than a single
property. Another feature of these REIT-backed bonds is what is known as a
mandatory put, which means that the REIT must repurchase the bonds within a
specified period of time (usually 8-13 years). That gives these bonds shorter
durations, which enabled them to outperform the market as interest rates rose
during recent months.
As of February 29, 2000, NCU offered excellent credit quality, with 70% of the
Fund's assets invested in bonds rated AAA/U.S. guaranteed and AA. This was
balanced by an allocation of 22% in BBB/non-rated bonds, which generally
provided higher yields as credit spreads (or the difference in yield between
higher credit quality securities and those of lower credit quality) widened in
recent months. As insured funds, NPC and NCL are 100% invested in insured and/or
U.S. guaranteed bonds, which means that credit quality is not an issue.
WHAT IS NUVEEN'S OUTLOOK FOR THE NUVEEN CALIFORNIA PREMIUM INCOME FUNDS?
In the months ahead, we plan to continue to focus on the same strategies that we
have emphasized over the past six months, including improving tax efficiency and
extending call protection while protecting and, as opportunities allow,
enhancing portfolio income. The tax loss carry-forwards that we have built in
each of these Funds over the past few months serve as an asset to the Funds,
enabling us to execute trades that can be advantageous to the Funds without
incurring taxable capital gain distributions for shareholders. As an experienced
investment manager knowledgeable about the unique aspects of the California
municipal market, Nuveen will continue to focus on implementing strategies such
as these that can add value for our shareholders.
<PAGE>
Nuveen Insured California Premium Income Municipal Fund, Inc.
Performance Overview
As of February 29, 2000
NPC
Portfolio Statistics
Inception Date 11/92
- --------------------------------------------------
Share Price $13 1/2
- --------------------------------------------------
Net Asset Value $13.96
- --------------------------------------------------
Market Yield 6.36%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.22%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.18%
- --------------------------------------------------
Fund Net Assets ($000) $134,656
- --------------------------------------------------
Average Effective Maturity (Years) 21.31
Leverage-Adjusted Duration 14.52
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -12.45% -9.19%
- --------------------------------------------------
5-Year 7.07% 5.53%
- --------------------------------------------------
Since Inception 4.30% 5.50%
- --------------------------------------------------
Taxable-Equivalent Total Return2
On Share Price On NAV
- --------------------------------------------------
1-Year -9.28% -6.01%
- --------------------------------------------------
5-Year 10.56% 8.81%
- --------------------------------------------------
Since Inception 7.72% 8.78%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
U.S. Guaranteed 20%
- --------------------------------------------------
Water and Sewer 16%
- --------------------------------------------------
Tax Obligation/Limited 15%
- --------------------------------------------------
Utilities 11%
- --------------------------------------------------
Tax Obligation/General 11%
- --------------------------------------------------
BAR CHART:
1999-2000 Monthly Tax-Free Dividends Per Share3
3/99 0.07
4/99 0.07
5/99 0.07
6/99 0.07
7/99 0.07
8/99 0.07
9/99 0.07
10/99 0.07
11/99 0.07
12/99 0.0715
1/00 0.0715
2/00 0.0715
LINE CHART:
Share Price Performance
3/5/99 16.56
16.5
16.5
16.38
16.4375
16.56
16.56
16.5
16.25
15.63
15.19
15.5
15.25
15.31
15.38
15.56
15.63
15.75
15.69
15.56
15.25
15.5
15.44
15.38
15.69
15.44
14.88
14.69
14.88
14.56
14.25
13.25
13.5
13.63
13.69
13.88
13.63
13.69
13.44
13.38
13.38
12.94
12.5
12.75
13.06
13.63
13.56
13.63
13.5
2/29/00 13.5
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 37.5%.
2 Taxable-equivalent total return is based on the annualized total return and
a combined federal and state income tax rate of 37.5%. It represents the
return on a taxable investment necessary to equal the return of the Nuveen
fund on an after-tax basis.
3 The Fund also paid shareholders a net ordinary income distribution in
December 1999 of $0.0373 per share.
<PAGE>
Nuveen Insured California Premium Income Municipal Fund 2, Inc.
Performance Overview
As of February 29, 2000
NCL
Portfolio Statistics
Inception Date 3/93
- --------------------------------------------------
Share Price $12 1/2
- --------------------------------------------------
Net Asset Value $13.05
- --------------------------------------------------
Market Yield 6.38%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.25%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.21%
- --------------------------------------------------
Fund Net Assets ($000) $259,765
- --------------------------------------------------
Average Effective Maturity (Years) 19.33
- --------------------------------------------------
Leverage-Adjusted Duration 14.80
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -13.08% -7.34%
- --------------------------------------------------
5-Year 6.75% 6.09%
- --------------------------------------------------
Since Inception 3.13% 4.53%
- --------------------------------------------------
Taxable-Equivalent Total Return2
On Share Price On NAV
- --------------------------------------------------
1-Year -9.89% -4.08%
- --------------------------------------------------
5-Year 10.25% 9.44%
- --------------------------------------------------
Since Inception 6.53% 7.83%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
Tax Obligation/Limited 37%
- --------------------------------------------------
Water and Sewer 10%
- --------------------------------------------------
Tax Obligation/General 9%
- --------------------------------------------------
Transportation 8%
- --------------------------------------------------
U.S. Guaranteed 8%
- --------------------------------------------------
BAR CHART:
1999-2000 Monthly Tax-Free Dividends Per Share3
3/99 0.065
4/99 0.065
5/99 0.065
6/99 0.065
7/99 0.065
8/99 0.0665
9/99 0.0665
10/99 0.0665
11/99 0.0665
12/99 0.0665
1/00 0.0665
2/00 0.0665
LINE CHART:
Share Price Performance
3/5/99 15.44
15.5
15.44
15.38
15.38
15.06
15.25
15.25
15
14.31
14.25
14.25
14.44
14.63
14.38
14.38
14.69
14.81
15
14.81
14.69
14.44
13.94
14.25
14.31
14.13
13.88
13.69
13.63
13.5
13.19
13.13
13.19
13.38
12.94
12.81
12.56
12.75
12.56
12.25
11.69
11.81
11.75
11.69
11.81
12.5
12.63
12.44
12.63
2/29/00 12.5
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 37.5%.
2 Taxable-equivalent total return is based on the annualized total return and
a combined federal and state income tax rate of 37.5%. It represents the
return on a taxable investment necessary to equal the return of the Nuveen
fund on an after-tax basis.
3 The Fund also paid shareholders a net ordinary income distribution in
December 1999 of $0.0081 per share.
<PAGE>
Nuveen California Premium Income Municipal Fund
Performance Overview
As of February 29, 2000
NCU
Portfolio Statistics
Inception Date 6/93
- --------------------------------------------------
Share Price $12 1/2
- --------------------------------------------------
Net Asset Value $12.40
- --------------------------------------------------
Market Yield 6.43%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.32%
- --------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.29%
- --------------------------------------------------
Fund Net Assets ($000) $114,425
- --------------------------------------------------
Average Weighted Maturity (Years) 17.92
- --------------------------------------------------
Leverage-Adjusted Duration 14.40
- --------------------------------------------------
Annualized Total Return
On Share Price On NAV
- --------------------------------------------------
1-Year -7.35% -7.85%
- --------------------------------------------------
5-Year 8.02% 6.40%
- --------------------------------------------------
Since Inception 3.22% 3.91%
- --------------------------------------------------
Taxable-Equivalent Total Return2
On Share Price On NAV
- --------------------------------------------------
1-Year -3.95% -4.45%
- --------------------------------------------------
5-Year 11.62% 9.88%
- --------------------------------------------------
Since Inception 6.70% 7.31%
- --------------------------------------------------
Top Five Sectors (as a % of total investments)
Tax Obligation/Limited 22%
- --------------------------------------------------
Healthcare 17%
- --------------------------------------------------
Housing/Multifamily 14%
- --------------------------------------------------
U.S. Guaranteed 11%
- --------------------------------------------------
Water and Sewer 10%
- --------------------------------------------------
BAR CHART:
1999-2000 Monthly Tax-Free Dividends Per Share
3/99 0.0635
4/99 0.0635
5/99 0.066
6/99 0.066
7/99 0.066
8/99 0.066
9/99 0.066
10/99 0.066
11/99 0.066
12/99 0.067
1/00 0.067
2/00 0.067
LINE CHART:
Share Price Performance
3/5/99 14.56
14.5
14.31
14.5
14.31
14.56
14.69
14.63
14.5
14.44
14.63
14.5
14.5
14.44
14.31
14.19
14.31
14.31
14.44
14.31
14
14.13
13.44
13.5
13.5
13.5
13.25
13.25
13.25
13.19
12.5
12.31
12.5
12.5
12.56
12.63
12.31
12.31
12.19
12.94
12.88
13
12.75
12.75
12.5
12.56
12.5
12.5
12.56
2/29/00 12.5
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen fund on an after-tax basis. The
federal only rate is based on the current market yield and a federal income
tax rate of 31%. The rate shown for federal and state highlights the added
value of owning shares that are also exempt from state income taxes. It is
based on a combined federal and state income tax rate of 37.5%.
2 Taxable-equivalent total return is based on the annualized total return and
a combined federal and state income tax rate of 37.5%. It represents the
return on a taxable investment necessary to equal the return of the Nuveen
fund on an after-tax basis.
<PAGE>
Shareholder Meeting Report
The annual shareholder meeting was held in Chicago, Illinois on October 13,
1999.
<TABLE>
<CAPTION>
NPC NCL
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Directors was reached as follows:
Preferred Preferred Preferred
Common Shares Common Shares Shares
Shares Series-T Shares Series-T Series-TH
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Robert P. Bremner
For 5,214,111 1,566 10,768,559 1,585 1,434
Withhold 42,550 -- 66,201 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,256,661 1,566 10,834,760 1,585 1,434
====================================================================================================================================
Lawrence H. Brown
For 5,215,433 1,566 10,772,187 1,585 1,434
Withhold 41,228 -- 62,573 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,256,661 1,566 10,834,760 1,585 1,434
====================================================================================================================================
Anne E. Impellizzeri
For 5,216,469 1,566 10,767,177 1,585 1,434
Withhold 40,192 -- 67,583 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,256,661 1,566 10,834,760 1,585 1,434
====================================================================================================================================
Peter R. Sawers
For 5,216,833 1,566 10,768,247 1,585 1,434
Withhold 39,828 -- 66,513 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,256,661 1,566 10,834,760 1,585 1,434
====================================================================================================================================
Judith M. Stockdale
For 5,216,833 1,566 10,765,397 1,585 1,434
Withhold 39,828 -- 69,363 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,256,661 1,566 10,834,760 1,585 1,434
====================================================================================================================================
William J. Schneider
For -- 1,566 -- 1,585 1,434
Withhold -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,566 -- 1,585 1,434
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,566 -- 1,585 1,434
Withhold -- -- -- -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,566 -- 1,585 1,434
====================================================================================================================================
Ratification of auditors was reached as follows:
For 5,171,737 1,566 10,712,396 1,584 1,434
Against 18,167 -- 36,336 1 --
Abstain 66,757 -- 86,028 -- --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,256,661 1,566 10,834,760 1,585 1,434
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
NCU
- ------------------------------------------------------------------------------------------------------------------------------------
Approval of the Trustees was reached as follows:
Preferred
Common Shares
Shares Series-M
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Robert P. Bremner
For 5,007,022 1,386
Withhold 38,632 28
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,045,654 1,414
====================================================================================================================================
Lawrence H. Brown
For 5,007,022 1,386
Withhold 38,632 28
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,045,654 1,414
====================================================================================================================================
Anne E. Impellizzeri
For 5,006,730 1,386
Withhold 38,924 28
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,045,654 1,414
====================================================================================================================================
Peter R. Sawers
For 5,007,022 1,386
Withhold 38,632 28
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,045,654 1,414
====================================================================================================================================
Judith M. Stockdale
For 5,004,747 1,386
Withhold 40,907 28
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,045,654 1,414
====================================================================================================================================
William J. Schneider
For -- 1,386
Withhold -- 28
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,414
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,386
Withhold -- 28
- ------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,414
====================================================================================================================================
Ratification of auditors was reached as follows:
For 4,977,185 1,414
Against 21,041 --
Abstain 47,428 --
- ------------------------------------------------------------------------------------------------------------------------------------
Total 5,045,654 1,414
====================================================================================================================================
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments (Unaudited)
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC. (NPC)
February 29, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education and Civic Organizations - 2.7%
$ 1,000 California Educational Facilities Authority, Revenue Bonds 11/08 at 101 Aaa $ 872,660
(University of the Pacific), Series 1998, 5.000%, 11/01/23
1,000 California Educational Facilities Authority, Revenue Bonds 10/09 at 101 Aaa 857,490
(University of San Diego), Series 1998, 5.000%, 10/01/28
2,000 California Educational Facilities Authority Revenue Bonds (Santa 9/06 at 102 AAA 1,961,340
Clara University), Series 1996, 5.750%, 9/01/26
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 9.4%
3,000 California Health Facilities Financing Authority, Insured Revenue 8/08 at 101 AAA 2,488,680
Bonds (Sutter Health), Series 1998A, 5.000%, 8/15/37
California Statewide Communities Development Authority, Sutter
Health Obligated Group, Certificates of Participation:
1,500 5.500%, 8/15/19 8/09 at 101 AAA 1,426,905
4,000 6.125%, 8/15/22 8/02 at 102 AAA 4,032,400
4,800 The Regents of the University of California, Hospital Revenue 7/06 at 101 AAA 4,673,952
Bonds (UC Davis Medical Center), Series 1996, 5.750%, 7/01/24
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 6.5%
1,000 ABAG Finance Authority for Nonprofit Corporations, Multifamily 9/09 at 100 AAA 959,520
Housing Revenue Bonds (Civic Center Drive Apartments Project),
1999 Series A, 5.800%, 9/01/20 (Alternative Minimum Tax)
3,650 California Housing Finance Agency, Multi-Unit Rental Housing Revenue 2/03 at 102 Aa2 3,702,378
Bonds, 1992 Series A, 6.625%, 2/01/24 (Alternative Minimum Tax)
4,000 The City of Los Angeles (California), Tax-Exempt Mortgage Revenue 7/02 at 102 AAA 4,063,160
Refunding Bonds, Series 1993A (FHA-Insured Mortgage Loans -
Section 8 Assisted Projects), 6.300%, 1/01/25
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 6.6%
2,065 California Housing Finance Agency, Single Family Mortgage Bonds II, 2/07 at 102 AAA 2,055,253
1997 Series A, 6.000%, 8/01/20 (Alternative Minimum Tax)
California Housing Finance Agency, Home Mortgage Revenue Bonds,
1998 Series E Remarketed:
3,190 5.150%, 8/01/19 2/09 at 101 1/2 AAA 2,834,411
1,500 5.250%, 2/01/33 (Alternative Minimum Tax) 2/09 at 101 1/2 AAA 1,292,670
3,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 8/08 at 101 AAA 2,724,630
1998 Series Q, 5.050%, 8/01/17
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 10.7%
State of California, Various Purpose General Obligation Bonds:
7,995 5.750%, 3/01/22 (WI) 3/10 at 101 AAA 7,891,865
2,000 5.750%, 3/01/27 (WI) 3/10 at 101 AAA 1,960,780
1,225 Fresno Unified School District (Fresno County, California), 1998 2/13 at 103 AAA 1,334,968
General Obligation Refunding Bonds, Series A, 6.550%, 8/01/20
3,000 Pomona Unified School District, General Obligation Refunding 8/11 at 103 AAA 3,235,200
Bonds, Series 1997-A, 6.500%, 8/01/19
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 15.2%
4,000 Anaheim Public Financing Authority, Lease Revenue Bonds (Anaheim No Opt. Call AAA 1,024,440
Public Improvements Project), Subordinate Lease Revenue Bonds,
1997 Series C, 0.000%, 9/01/22
2,000 State Public Works Board of California, Lease Revenue Bonds 11/09 at 101 AAA 1,954,720
(California Department of Health Services), 1999 Series A
(Richmond Laboratory Project), 5.750%, 11/01/24
4,000 Los Angeles County Metropolitan Transportation Authority (California), 7/03 at 100 AAA 3,510,920
Proposition A, Sales Tax Revenue Refunding Bonds, Series 1993-A,
5.000%, 7/01/21
<PAGE>
<CAPTION>
Portfolio of Investments (Unaudited)
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC. (NPC) (continued)
February 29, 2000
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Obligation/Limited (continued)
$ 4,000 Norco Redevelopment Agency, Norco Redevelopment Project Area 3/02 at 102 AAA $4,095,240
No. One, 1992 Refunding Tax Allocation Bonds, 6.250%, 3/01/19
2,135 City of San Buenaventura, California, 1993 Refunding Certificates 1/03 at 100 AAA 2,083,354
of Participation (Capital Improvements Project), 5.500%, 1/01/17
9,500 Redevelopment Agency of the City of San Jose, Merged Area 2/04 at 102 AAA 7,866,000
Redevelopment Project, Tax Allocation Bonds, Series 1993,
4.750%, 8/01/24
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - 1.2%
1,545 Airports Commission of San Francisco City and County, California, 5/03 at 102 AAA 1,563,401
San Francisco International Airport, Second Series Refunding
Revenue Bonds, Issue 4, 6.200%, 5/01/20 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 20.1%
6,000 Huntington Park Redevelopment Agency, Single Family Residential No Opt. Call AAA 7,518,900
Mortgage Revenue Refunding Bonds, 1986 Series A,
8.000%, 12/01/19
5,135 Community Redevelopment Agency of the City of Palmdale, No Opt. Call AAA 6,348,760
California, Single Family Mortgage Revenue Bonds, Series 1986A
Restructured, 8.000%, 3/01/16 (Alternative Minimum Tax)
6,220 County of Riverside, California, Single Family Mortgage Revenue No Opt. Call AAA 8,434,880
Bonds (GNMA Mortgage-Backed Securities Program), Issue A
of 1987, 9.000%, 5/01/21 (Alternative Minimum Tax)
2,455 Airports Commission of San Francisco City and County, California, 5/03 at 102 AAA 2,615,631
San Francisco International Airport, Second Series Refunding
Revenue Bonds, Issue 4, 6.200%, 5/01/20
(Alternative Minimum Tax) (Pre-refunded to 5/01/03)
1,485 City of San Jose, California, Single Family Mortgage Revenue No Opt. Call AAA 2,042,068
Bonds, 1985 Series A, 9.500%, 10/01/13
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 10.8%
4,000 California Pollution Control Financing Authority, Pollution Control 12/02 at 102 AAA 4,062,400
Revenue Bonds (Southern California Edison Company),
1992 Series B, 6.400%, 12/01/24 (Alternative Minimum Tax)
4,000 City of Chula Vista, Industrial Development Revenue Bonds 12/02 at 102 A-1+ 4,027,120
(San Diego Gas and Electric Company), 1992 Series A,
6.400%, 12/01/27 (Alternative Minimum Tax)
2,000 Sacramento Municipal Utility District (California), Electric 8/02 at 100 AAA 2,017,480
Revenue Refunding Bonds, 1992 Series A, 5.750%, 8/15/13
5,000 Sacramento Municipal Utility District (California), Electric Revenue 7/04 at 101 AAA 4,490,350
Refunding Bonds, 1999 Series M, 5.250%, 7/01/28
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 16.0%
2,000 Cucamonga County Water District (San Bernardino County, 9/01 at 102 AAA 2,078,380
California), Certificates of Participation (1992 Water Facilities
Refinancing), 6.300%, 9/01/12
1,000 East Bay Municipal Utility District (Alameda and Contra Costa 6/08 at 101 AAA 818,890
Counties, California), Water System Subordinated Revenue Bonds,
Series 1998, 4.750%, 6/01/28
8,000 The City of Los Angeles, California, Wastewater System Revenue 11/03 at 102 AAA 6,753,040
Bonds, Series 1993-D, 4.700%, 11/01/19
1,900 Public Facilities Financing Authority of the City of San Diego 5/09 at 101 AAA 1,626,741
(California), Sewer Revenue Bonds, Series 1999B, 5.000%, 5/15/29
2,190 City of Santa Monica, Wastewater Enterprise Revenue Bonds 1/04 at 102 AAA 1,890,430
(Hyperion Project), 1993 Refunding Series, 4.500%, 1/01/15
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Water and Sewer (continued)
$ 5,000 Wheeler Ridge-Maricopa Water Storage District (Kern County, 11/06 at 102 AAA $5,055,800
California), 1996 Water Refunding Bonds, 5.700%, 11/01/15
3,425 City of Woodland (Yolo County, California), Certificates of 3/03 at 100 AAA 3,320,400
Participation (1992 Wastewater System Refunding Project),
5.500%, 3/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
$ 136,915 Total Investments - (cost $130,871,398) - 99.2% 133,567,607
============------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.8% 1,088,707
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $134,656,314
====================================================================================================================
All of the bonds in the portfolio 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.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments (Unaudited)
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC. (NCL)
February 29, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education and Civic Organizations - 6.8%
$ 5,000 California Educational Facilities Authority, Revenue Bonds 10/06 at 102 AAA $5,017,950
(University of San Francisco), Series 1996, 6.000%, 10/01/26
California Educational Facilities Authority, Revenue Bonds (Santa
Clara University), Series 1996:
2,400 5.750%, 9/01/21 9/06 at 102 AAA 2,375,184
3,000 5.750%, 9/01/26 9/06 at 102 AAA 2,942,010
2,655 California State University, Housing System Revenue Bonds, 11/05 at 102 AAA 2,711,790
Series 1996, 5.700%, 11/01/13
4,900 The Regents of the University of California, University of California 11/03 at 102 AAA 4,746,826
Housing System Revenue Bonds, Series A, 5.500%, 11/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 4.1%
2,000 California Health Facilities Financing Authority, Kaiser Permanente 6/08 at 102 AAA 1,728,780
Revenue Bonds, Series 1998A, 5.000%, 6/01/24
1,450 California Health Facilities Financing Authority, Insured Health 7/06 at 102 AAA 1,466,443
Facility Refunding Revenue Bonds (Mark Twain/ St. Joseph's
Healthcare), 1996 Series A, 6.000%, 7/01/19
5,000 California Health Facilities Financing Authority, Insured Health 7/06 at 102 AAA 5,017,400
Facility Refunding Revenue Bonds (Catholic Healthcare West),
1996 Series A, 6.000%, 7/01/25
2,500 City of Oakland, California, Insured Revenue Bonds (1800 1/10 at 100 AAA 2,508,050
Harrison Foundation - Kaiser Permanente), Series 1999A,
6.000%, 1/01/29
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 6.1%
4,000 ABAG Finance Authority for Nonprofit Corporations, Multifamily 9/09 at 100 AAA 3,838,080
Housing Revenue Bonds (Civic Center Drive Apartments Project),
1999 Series A, 5.800%, 9/01/20 (Alternative Minimum Tax)
4,360 The Community Redevelopment Agency of the City of Los Angeles, 6/05 at 105 AAA 4,764,913
California, Multifamily Housing Revenue Refunding Bonds,
1995 Series A (Angelus Plaza Project), 7.400%, 6/15/10
7,400 Housing Authority of the County of Santa Cruz, Tax-Exempt 5/03 at 102 Aaa 7,335,324
Multifamily Housing Revenue Refunding Bonds, Series 1993A
(GNMA Collateralized-Meadowview Apartments), 6.125%, 5/20/28
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 4.1%
5,485 California Housing Finance Agency, Single Family Mortgage 8/07 at 101 1/2 AAA 5,188,920
Bonds II, 1997 Series C-2, 5.625%, 8/01/20
(Alternative Minimum Tax)
1,420 California Housing Finance Agency, Home Mortgage Revenue 2/06 at 102 AAA 1,416,294
Bonds, 1996 Series E, 6.150%, 8/01/25
(Alternative Minimum Tax)
2,000 California Housing Finance Agency, Home Mortgage Revenue 2/09 at 101 AAA 1,737,040
Bonds, 1998 Series N, 5.250%, 8/01/29
15,000 California Housing Finance Agency, Home Mortgage Revenue 2/09 at 32 1/8 AAA 2,218,800
Bonds 1999 Series B, 0.000%, 2/01/30 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 8.9%
485 State of California, Veterans General Obligation Bonds, Series BH, 12/03 at 102 AAA 450,647
5.500%, 12/01/24 (Alternative Minimum Tax)
State of California, Various Purpose General Obligation Bonds:
7,995 5.750%, 3/01/22 (WI) 3/10 at 101 AAA 7,891,865
2,500 5.500%, 9/01/24 9/09 at 101 AAA 2,366,625
2,000 5.750%, 3/01/27 (WI) 3/10 at 101 AAA 1,960,780
2,575 Calipatria Unified School District, Imperial County, California, 8/06 at 102 AAA 2,618,028
1996 Series A, General Obligation Bonds, 5.625%, 8/01/13
3,000 Escondido Union High School District, San Diego County, California, 11/06 at 102 AAA 3,071,010
General Obligation Bonds (1996 Election), 5.700%, 11/01/10
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Obligation/General (continued)
$ 1,750 Lake Tahoe Unified School District, El Dorado County, California, 8/09 at 100 AAA $1,577,205
General Obligation Bonds (1999 Election), Series A, 5.250%, 8/01/24
4,950 Murrieta Valley Unified School District (Riverside County, No Opt. Call AAA 1,352,489
California), 1998 Series A, General Obligation Bonds,
0.000%, 9/01/21
1,850 Sacramento City Unified School District (Sacramento County, 7/09 at 102 Aaa 1,855,180
California), General Obligation Bonds, Series 2000A,
5.750%, 7/01/18 (WI)
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/Limited - 36.5%
3,785 Certificates of Participation (1991 Financing Project), County of 9/06 at 102 AAA 3,818,724
Alameda, California, Alameda County Public Facilities Corporation,
6.000%, 9/01/21
7,985 County of Alameda, California, 1993 Refunding Certificates of 12/03 at 102 AAA 8,083,695
Participation (Santa Rita Jail Project), 5.700%, 12/01/14
Anaheim Public Financing Authority, Lease Revenue Bonds (Anaheim
Public Improvements Project), Subordinate Lease Revenue Bonds,
1997 Series C:
5,130 0.000%, 9/01/18 No Opt. Call AAA 1,707,110
8,000 0.000%, 9/01/21 No Opt. Call AAA 2,185,840
1,500 0.000%, 9/01/22 No Opt. Call AAA 384,165
1,800 California Public School District Financing Authority, Lease Revenue 9/06 at 102 AAA 1,810,188
Bonds (Richgrove Elementary School District Projects),
Series 1996B, 5.800%, 9/01/16
5,250 State Public Works Board of California, Lease Revenue Bonds 1/06 at 100 AAA 4,864,125
(Department of Corrections) 1996 Series A (California Substance
Abuse Treatment Facility and State Prison at Corcoran)
(Corcoran II), 5.250%, 1/01/21
1,000 State Public Works Board of California, Lease Revenue Bonds 11/09 at 101 AAA 977,360
(California Department of Health Services), 1999 Series A
(Richmond Laboratory Project), 5.750%, 11/01/24
5,000 Community Redevelopment Agency of the City of Compton, 8/05 at 102 AAA 5,318,300
California, Compton Redevelopment Project, Refunding Tax
Allocation Bonds, Series 1995A (Project Tax Revenues,
Subventions and Housing Tax Revenues) (Insured/ Tax-Exempt),
6.500%, 8/01/13
4,000 County of Contra Costa, California, Certificates of Participation 11/07 at 102 AAA 3,765,320
(Merrithew Memorial Hospital Replacement Project), Refunding
Series of 1997, 5.500%, 11/01/22
3,000 Galt Schools Joint Powers Authority (Sacramento County, 11/07 at 102 AAA 2,999,700
California), 1997 Refunding Revenue Bonds, Series A (High
School and Elementary School Facilities), 5.875%, 11/01/24
2,500 Lancaster Housing Authority (California), Lease Refunding Revenue 4/08 at 102 AAA 2,116,125
Bonds (Brierwood Mobilehome Park Project), Issue of 1999,
5.000%, 4/01/24 (Optional put 4/01/10)
5,585 Los Angeles County Transportation Commission (California), 7/01 at 102 AAA 5,813,650
Sales Tax Revenue Refunding Bonds, Series 1991-B,
6.500%, 7/01/13
2,100 Menifee Union School District (Riverside County, California), 9/06 at 102 AAA 2,127,741
Certificates of Participation (1996 School Project), 6.125%, 9/01/24
2,690 Norwalk Community Facilities Financing Authority (Los Angeles 9/05 at 102 AAA 2,779,469
County, California), Tax Allocation Refunding Revenue Bonds,
1995 Series A, 6.000%, 9/01/15
4,000 Oakland State Building Authority, Lease Revenue Bonds 4/08 at 101 AAA 3,496,600
(Elihu M. Harris State Office Building), 1998 Series A,
5.000%, 4/01/23
9,000 City of Redlands, California, Certificates of Participation 9/03 at 102 AAA 9,039,870
(1993 Refunding of 1986 and 1987 Projects), 5.800%, 9/01/17
5,000 City of San Bernardino, California, Refunding Certificates of 9/09 at 102 AAA 4,795,400
Participation (Police Station, South Valle Refundings and
201 Building Projects), San Bernardino Joint Powers Financing
Authority, 5.500%, 9/01/20
3,500 San Francisco Bay Area Rapid Transit District (California), Sales 7/09 at 101 AAA 3,265,990
Tax Revenue Bonds, Series 1999, 5.500%, 7/01/34
1,930 Santa Margarita/Dana Point Authority, Orange County, California, No Opt. Call AAA 2,163,067
Revenue Bonds, Series A (1994 Improvement Districts Nos. 1, 2, 2A
and 8 General Obligation Bond Refinancing), 7.250%, 8/01/05
South Orange County Public Financing Authority (California),
Special Tax Revenue Bonds, 1994 Series C (Foothill Area):
4,000 8.000%, 8/15/08 No Opt. Call AAA 4,808,840
7,330 8.000%, 8/15/09 No Opt. Call AAA 8,894,149
<PAGE>
Portfolio of Investments (Unaudited)
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC. (NCL) (continued)
February 29, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Obligation/Limited (continued)
$ 3,935 Redevelopment Agency of the City of Suisun City, Suisun City 10/03 at 102 AAA $3,937,518
Redevelopment Project, 1993 Tax Allocation Refunding Bonds
(County of Solano, California), 5.900%, 10/01/23
5,450 City of Visalia, California (Motor Vehicle License Fee 12/06 at 102 AAA 5,001,847
Enhancement), Visalia Public Finance Authority, Refunding
Certificates of Participation, 1996A, 5.375%, 12/01/26
2,400 Yorba Linda Redevelopment Agency (Orange County, California), No Opt. Call AAA 418,368
Yorba Linda Redevelopment Project, 1998 Tax Allocation Parity
Refunding Bonds, Series A, 0.000%, 9/01/28
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - 7.8%
6,500 Foothill/Eastern Transportation Corridor Agency (California), 1/10 at 65 5/16 AAA 2,176,265
Toll Road Refunding Revenue Bonds, Series 1999,
0.000%, 1/15/18
10,000 Airport Commission of the City and County of San Francisco, 5/09 at 101 AAA 8,717,100
California, San Francisco International Airport, Second Series
Revenue Bonds, Issue 23B Bonds, 5.125%, 5/01/30
6,500 San Joaquin Hills Transportation Corridor Agency, Toll Road 1/07 at 102 AAA 5,821,790
Refunding Revenue Bonds, Series 1997A, 5.250%, 1/15/30
3,750 City of San Jose, California, Airport Revenue Bonds, Series 3/03 at 102 AAA 3,653,288
of 1993, 5.700%, 3/01/18 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 7.7%
3,000 Central Unified School District (Fresno County, California), 3/03 at 102 AAA 3,145,950
General Obligation Bonds, Election 1992, 5.625%, 3/01/18
(Pre-refunded to 3/01/03)
4,320 County of Riverside, California, Single Family Mortgage Revenue No Opt. Call AAA 5,599,109
Bonds (GNMA Mortgage-Backed Securities Program), Issue B of
1987, 8.625%, 5/01/16 (Alternative Minimum Tax)
9,000 Airports Commission of the City and County of San Francisco, 5/04 at 101 AAA 9,582,750
California, San Francisco International Airport, Second Series
Revenue Bonds, Issue 8B, 6.100%, 5/01/20 (Pre-refunded
to 5/01/04)
1,625 City of Torrance, Floating Rate Demand Hospital Revenue Bonds 12/05 at 100 AAA 1,754,090
(Little Company of Mary Hospital), 1985 Series A,
7.100%, 12/01/15 (Pre-refunded to 12/01/05)
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 7.4%
2,500 California Pollution Control Financing Authority, Pollution 9/09 at 101 AAA 2,325,525
Control Refunding Revenue Bonds (Southern California Edison
Company), 1999 Series C, 5.450%, 9/01/29
3,215 Modesto Irrigation District Financing Authority, Refunding Revenue 10/06 at 102 AAA 3,328,168
Bonds, Series A, 6.000%, 10/01/15
1,790 Sacramento City Financing Authority (California), 1999 Capital 12/09 at 102 AAA 1,756,205
Improvement Revenue Bonds (Solid Waste and Redevelopment
Projects), 5.800%, 12/01/19
3,500 Sacramento Municipal Utility District (California), Electric Revenue 8/06 at 102 AAA 3,372,285
Bonds, 1996 Series J, 5.600%, 8/15/24
6,650 Turlock Irrigation District (California), Revenue Refunding Bonds, 7/02 at 100 AAA 6,650,133
Series 1992-A, 5.750%, 1/01/18
2,000 Turlock Irrigation District (California), Revenue Refunding Bonds, 1/08 at 102 AAA 1,728,300
1998 Series A, 5.000%, 1/01/26
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 9.6%
1,250 City of Barstow, California, Certificates of Participation 10/04 at 102 AAA 1,170,325
(1994 Wastewater Reclamation Improvement Project),
5.250%, 10/01/18
3,530 Castaic Lake Water Agency (California), Refunding Revenue No Opt. Call AAA 3,998,360
Certificates of Participation (Water System Improvement Projects),
Series 1994A, 8.000%, 8/01/04
2,975 Chino Basin Regional Financing Authority, Revenue Bonds, 8/04 at 102 AAA 3,040,718
Series 1994 (Chino Basin Municipal Water District Sewer
System Project), 6.000%, 8/01/16
1,000 The City of Los Angeles, California, Wastewater System Revenue 6/08 at 101 AAA 857,130
Bonds, Series 1998-A, 5.000%, 6/01/28
2,875 Pomona Public Financing Authority (California), 1999 Revenue 5/09 at 101 AAA 2,698,504
Bonds, Series AC (Water Facilities Project), 5.500%, 5/01/29
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Water and Sewer (continued)
$ 1,000 Public Facilities Financing Authority of the City of San Diego 5/09 at 101 AAA $ 856,180
(California), Sewer Revenue Bonds, Series 1999B, 5.000%, 5/15/29
2,900 City and County of San Francisco, Sewer Revenue Refunding Bonds, 10/02 at 102 AAA 2,847,800
Series 1992, 5.500%, 10/01/15
4,000 South San Joaquin Irrigation District (San Joaquin County, 1/03 at 102 AAA 3,969,640
California), 1993 Refunding Revenue Certificates of Participation
(1987 Project and 1992 Project), 5.500%, 1/01/15
5,410 City of Tulare, California, 1996 Sewer Revenue Bonds, 5.750%, 11/15/21 11/06 at 102 AAA 5,353,248
- ------------------------------------------------------------------------------------------------------------------------------------
$ 290,835 Total Investments - (cost $259,553,415) - 99.0% 257,133,657
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.0% 2,631,358
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $259,765,015
====================================================================================================================
All of the bonds in the portfolio 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.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Portfolio of Investments (Unaudited)
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND (NCU)
February 29, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Education and Civic Organizations - 1.9%
$ 2,225 The Regents of the University of California, University of 11/03 at 102 AAA $2,155,447
California Housing System Revenue Bonds, Series A,
5.500%, 11/01/18
- ------------------------------------------------------------------------------------------------------------------------------------
Health Care - 16.8%
5,150 California Health Facilities Financing Authority, Hospital Revenue 5/03 at 102 BBB+ 4,726,207
Bonds (Downey Community Hospital), Series 1993, 5.750%, 5/15/15
4,000 California Statewide Communities Development Authority, 8/02 at 102 A2 4,221,560
Certificates of Participation (Cedars-Sinai Medical Center),
6.500%, 8/01/15
8,100 California Statewide Community Development Authority, Revenue No Opt. Call AAA 7,094,709
Refunding Bonds (Sherman Oaks Project), Series 1998A,
5.000%, 8/01/22
2,000 City of Loma Linda California, Hospital Revenue Bonds (Loma 12/03 at 102 N/R 1,874,120
Linda University Medical Center Project), Series 1993-A,
6.000%, 12/01/06
1,355 Palomar Pomerado Health System, Insured Revenue Bonds, 11/03 at 102 AAA 1,293,510
Series 1993, 5.000%, 11/01/13
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Multifamily - 14.1%
2,000 California Statewide Communities Development Authority, 7/08 at 101 BBB 1,852,240
Apartment Development Revenue Refunding Bonds (Irvine
Apartment Communities, L.P.), Series 1998A, 5.250%, 5/15/25
(Mandatory put 5/15/13)
7,825 The Community Redevelopment Agency of the City of Los Angeles, 6/05 at 105 AAA 8,551,708
California, Multifamily Housing Revenue Refunding Bonds,
1995 Series A (Angelus Plaza Project), 7.400%, 6/15/10
3,980 City of Stanton Multifamily Housing Revenue Bonds (Continental 8/07 at 102 AAA 3,987,005
Gardens Apartments), Series 1997, 5.625%, 8/01/29
(Alternative Minimum Tax) (Mandatory put 8/01/09)
2,000 City of Vista, California, Mobile Home Park Subordinate Revenue 3/09 at 102 N/R 1,753,560
Bonds (Vista Manor Mobile Home Park Project), Series 1999B,
5.750%, 3/15/29
- ------------------------------------------------------------------------------------------------------------------------------------
Housing/Single Family - 8.5%
3,860 California Housing Finance Agency, Single Family Mortgage 2/07 at 102 AAA 3,841,781
Bonds II, 1997 Series A, 6.000%, 8/01/20 (Alternative Minimum Tax)
1,000 California Housing Finance Agency, Home Mortgage Revenue 8/04 at 102 Aa 1,020,370
Bonds, 1994 Series A, 6.550%, 8/01/26
1,000 California Housing Finance Agency, Home Mortgage Revenue 8/05 at 102 AAA 1,000,530
Bonds, 1994 Series F-3, 6.100%, 8/01/15 (Alternative Minimum Tax)
2,000 California Housing Finance Agency, Home Mortgage Revenue 2/07 at 102 AAA 2,013,600
Bonds, 1997 Series B, 6.000%, 8/01/16 (Alternative Minimum Tax)
1,685 California Rural Home Mortgage Finance Authority, Single Family No Opt. Call AAA 1,837,290
Mortgage Revenue Bonds (Mortgage-Backed Securities Program),
1996 Series C, 7.500%, 8/01/27 (Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
Tax Obligation/General - 7.8%
6,500 State of California, Veterans General Obligation Bonds, 6/04 at 101 AA- 5,695,690
Series BR, 5.300%, 12/01/29 (Alternative Minimum Tax)
3,000 Pomona Unified School District, General Obligation Refunding 8/11 at 103 AAA 3,195,030
Bonds, Series 1997-A, 6.150%, 8/01/15
<PAGE>
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Tax Obligation/Limited - 21.6%
$ 4,500 Bonita Canyon Public Facilities Financing Authority (California), 3/00 at 103 N/R $3,588,390
Community Facilities District No. 98-1 Special Tax Bonds,
Series 1998, 5.375%, 9/01/28
5,920 State Public Works Board of California, Lease Revenue Bonds 11/09 at 101 AAA 5,797,219
(Department of Veterans Affairs, Southern California Veterans
Home - Chula Vista Facility) 1999 Series A, 5.600%, 11/01/19
2,500 City of Carlsbad (California), Assessment District No. 96-1 3/00 at 102 1/2 N/R 2,064,750
(Rancho Carillo), Limited Obligation Improvement Bonds,
5.500%, 9/02/28
2,000 Carson Redevelopment Agency (California), Redevelopment 10/03 at 102 BBB 2,001,280
Project Area No. 2, Refunding Tax Allocation Bonds,
Series 1993, 5.875%, 10/01/09
1,760 Carson Redevelopment Agency (California), Redevelopment 10/03 at 102 BBB+ 1,778,374
Project Area No. 1, Tax Allocation Bonds, Series 1993,
5.625%, 10/01/08
2,160 Community Redevelopment Financing Authority of the Community 6/03 at 102 BB 2,017,634
Redevelopment Agency of the City of Los Angeles, California,
Grand Central Square Multifamily Housing Bonds, 1993 Series A,
5.750%, 12/01/13 (Alternative Minimum Tax)
1,000 Community Facilities District No. 88-1 of the City of Poway, 8/08 at 102 N/R 1,034,570
California (Parkway Business Center), Special Tax Refunding
Bonds, Series 1998, 6.500%, 8/15/09
1,500 City of Richmond, Limited Obligation Refunding Improvement 3/00 at 103 N/R 1,506,705
Bonds, Reassessment District No. 855 (Atlas Road West
and Interchange), 6.600%, 9/02/19
2,100 Sacramento City Finance Authority, Lease Revenue Refunding No Opt. Call A+ 1,983,240
Bonds, Series 1993B, 5.400%, 11/01/20
San Marcos Public Facilities Authority (California), Refunding
Revenue Bonds, Series 1998:
1,500 5.800%, 9/01/18 9/08 at 101 N/R 1,307,400
2,000 5.800%, 9/01/27 9/08 at 101 N/R 1,670,200
- ------------------------------------------------------------------------------------------------------------------------------------
Transportation - 4.1%
2,750 Airport Commission of the City and County of San Francisco, 5/04 at 102 AAA 2,829,888
California, San Francisco International Airport, Second Series
Revenue Bonds, Issue 5, 6.500%, 5/01/24 (Alternative Minimum Tax)
2,000 Airports Commission of the City and County of San Francisco, 5/06 at 102 AAA 1,902,140
California, San Francisco International Airport, Second Series
Revenue Bonds, Issue 10, 5.700%, 5/01/26
(Alternative Minimum Tax)
- ------------------------------------------------------------------------------------------------------------------------------------
U.S. Guaranteed - 10.6%
1,500 ABAG Finance Authority for Nonprofit Corporations, 11/03 at 102 AAA 1,385,130
Certificates of Participation (Stanford University Hospital),
California, Series 1993, 5.250%, 11/01/20
3,200 State Public Works Board of the State of California, Lease 10/04 at 102 A+*** 3,478,112
Revenue Bonds (The Trustees of the California State University),
1994 Series A (Various California State University Projects),
6.375%, 10/01/14 (Pre-refunded to 10/01/04)
4,100 Imperial Irrigation District, California, Certificates of 11/04 at 102 AAA 4,396,266
Participation (1994 Electric System Project), 6.000%, 11/01/15
(Pre-refunded to 11/01/04)
2,655 City of Torrance, Floating Rate Demand Hospital Revenue 12/05 at 100 AAA 2,865,913
Bonds (Little Company of Mary Hospital), 1985 Series A,
7.100%, 12/01/15 (Pre-refunded to 12/01/05)
- ------------------------------------------------------------------------------------------------------------------------------------
Utilities - 2.5%
1,000 California Pollution Control Financing Authority, Pollution 12/02 at 102 AAA 1,015,600
Control Revenue Bonds (Southern California Edison Company),
1992 Series B, 6.400%, 12/01/24 (Alternative Minimum Tax)
2,000 Department of Water and Power of The City of Los Angeles 9/03 at 102 AAA 1,854,240
(California), Electric Plant Refunding Revenue Bonds,
Issue of 1993, 5.375%, 9/01/23
- ------------------------------------------------------------------------------------------------------------------------------------
Water and Sewer - 10.1%
5,000 City of Culver, California, Wastewater Facilities Refunding 9/09 at 102 AAA 4,857,550
Revenue Bonds, 1999 Series A, 5.700%, 9/01/29
1,000 Eastern Municipal Water District (Riverside County, California), 7/01 at 101 AAA 1,014,790
Water and Sewer Revenue Refunding Certificates of Participation,
Series 1991A, 6.300%, 7/01/20
<PAGE>
Portfolio of Investments (Unaudited)
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND (NCU) (continued)
February 29, 2000
<CAPTION>
Principal Optional Call Market
Amount (000) Description Provisions* Ratings** Value
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Water and Sewer (continued)
$ 1,000 City of Riverside, California, Water Revenue Bonds, Issue of 1991, No Opt. Call AA $1,071,770
9.000%, 10/01/01
1,965 Public Facilities Financing Authority of the City of San Diego 5/09 at 101 AAA 1,682,394
(California), Sewer Revenue Bonds, Series 1999B, 5.000%, 5/15/29
3,100 City and County of San Francisco, Sewer Revenue Refunding 10/02 at 102 AAA 2,971,814
Bonds, Series 1994, 5.375%, 10/01/16
- ------------------------------------------------------------------------------------------------------------------------------------
$ 115,890 Total Investments - (cost $115,005,213) - 98.0% 112,189,726
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.0% 2,235,268
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $114,424,994
====================================================================================================================
* Optional Call Provisions: Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices at
later dates.
** Ratings: Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Net Assets (Unaudited)
February 29, 2000
<CAPTION>
Insured Insured California
California California California
Premium Income Premium Income 2 Premium Income
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Assets
Investments in municipal securities, at market value $133,567,607 $257,133,657 $112,189,726
Cash 1,152,237 9,000,039 983,638
Receivables:
Interest 1,845,458 3,864,117 1,817,334
Investments sold 11,295,464 2,548,040 --
Other assets 14,324 34,744 10,148
- ------------------------------------------------------------------------------------------------------------------------------------
Total assets 147,875,090 272,580,597 115,000,846
- ------------------------------------------------------------------------------------------------------------------------------------
Liabilities
Payable for investments purchased 12,566,552 11,670,274 --
Accrued expenses:
Management fees 68,790 131,568 58,565
Other 102,864 132,640 126,562
Preferred share dividends payable 20,966 41,384 4,829
Common share dividends payable 459,604 839,716 385,896
- ------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 13,218,776 12,815,582 575,852
- ------------------------------------------------------------------------------------------------------------------------------------
Net assets $134,656,314 $259,765,015 $114,424,994
====================================================================================================================================
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 6,422,707 12,627,409 5,759,864
====================================================================================================================================
Netasset value per Common share outstanding (net assets less
Preferred shares at liquidation value,
divided by Common shares outstanding) $ 13.96 $ 13.05 $ 12.40
====================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Operations (Unaudited)
Six Months Ended February 29, 2000
<CAPTION>
Insured Insured California
California California California
Premium Income Premium Income 2 Premium Income
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income $ 3,969,318 $ 7,451,372 $ 3,398,357
- -----------------------------------------------------------------------------------------------------------------------------------
Expenses
Management fees 437,718 834,675 374,193
Preferred shares - auction fees 56,096 118,424 53,603
Preferred shares - dividend disbursing agent fees 4,987 9,972 4,987
Shareholders' servicing agent fees and expenses 3,920 5,449 2,230
Custodian's fees and expenses 18,621 33,965 26,749
Directors'/Trustees' fees and expenses 2,642 3,564 2,555
Professional fees 8,293 7,697 6,840
Shareholders' reports - printing and mailing expenses 14,191 25,308 13,939
Stock exchange listing fees 8,063 12,098 2,675
Investor relations expense 6,286 11,504 5,207
Portfolio insurance expense 6,061 3,243 --
Other expenses 10,550 12,906 5,854
- -----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 577,428 1,078,805 498,832
Custodian fee credit (5,730) (15,804) (7,138)
- -----------------------------------------------------------------------------------------------------------------------------------
Net expenses 571,698 1,063,001 491,694
- -----------------------------------------------------------------------------------------------------------------------------------
Net investment income 3,397,620 6,388,371 2,906,663
- -----------------------------------------------------------------------------------------------------------------------------------
Realized and Unrealized Gain (Loss) from Investments
Net realized gain (loss) from investment transactions (2,148,060) (843,282) (456,339)
Change in net unrealized appreciation (depreciation) of investments (2,968,910) (7,060,503) (4,085,971)
- -----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (5,116,970) (7,903,785) (4,542,310)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets from operations $(1,719,350) $(1,515,414) $(1,635,647)
===================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
<TABLE>
Statement of Changes in Net Assets (Unaudited)
<CAPTION>
Insured California Premium Income Insured California Premium Income 2 California Premium Income
- --------------------------------------------------------------- ----------------------------------- -------------------------------
Six Months Ended Year Ended Six Months Ended Year Ended Six Months Ended Year Ended
2/29/00 8/31/99 2/29/00 8/31/99 2/29/00 8/31/99
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Operations
Net investment income $ 3,397,620 $ 7,013,184 $ 6,388,371 $ 12,704,555 $ 2,906,663 $ 5,736,493
Net realized gain (loss) from
investment transactions (2,148,060) 2,811,060 (843,282) 1,092,203 (456,339) 953,072
Change in net unrealized appreciation
(depreciation) of investments (2,968,910) (12,837,818) (7,060,503) (15,444,517) (4,085,971) (7,444,796)
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
from operations (1,719,350) (3,013,574) (1,515,414) (1,647,759) (1,635,647) (755,231)
- -----------------------------------------------------------------------------------------------------------------------------------
Distributions to Shareholders
From undistributed net investment income:
Common shareholders (3,021,429) (5,336,428) (5,166,604) (9,879,332) (2,297,152) (4,435,082)
Preferred shareholders (739,599) (1,268,146) (1,510,462) (2,643,521) (601,533) (1,186,689)
- -----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (3,761,028) (6,604,574) (6,677,066) (12,522,853) (2,898,685) (5,621,771)
- -----------------------------------------------------------------------------------------------------------------------------------
Capital Share Transactions
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions 45,617 231,305 124,697 604,259 82,118 188,040
- -----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets (5,434,761) (9,386,843) (8,067,783) (13,566,353) (4,452,214) (6,188,962)
Net assets at the beginning
of period 140,091,075 149,477,918 267,832,798 281,399,151 118,877,208 125,066,170
- -----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end of period $134,656,314 $140,091,075 $259,765,015 $267,832,798 $114,424,994 $118,877,208
===================================================================================================================================
Balance of undistributed net
investment income at the end
of period $ 362,616 $ 726,024 $ 449,264 $ 737,959 $ 367,290 $ 359,312
===================================================================================================================================
See accompanying notes to financial statements.
</TABLE>
<PAGE>
Notes to Financial Statements (Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
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). Insured California Premium Income and Insured California Premium Income 2
are traded on the New York Stock Exchange while California Premium Income 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 the state of California.
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
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers and general
market conditions. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term securities are valued at
amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At
February 29, 2000, Insured California Premium Income and Insured California
Premium Income 2 had outstanding when-issued purchase commitments of $9,828,876
and $11,670,274, respectively. There were no such purchase commitments in
California Premium Income.
Investment Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
when required for federal income tax purposes.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its tax-exempt net
investment income, in addition to any significant amounts of net realized
capital gains and/or market discount realized from investment transactions. The
Funds currently consider significant net realized capital gains and/or market
discount as amounts in excess of $.01 per Common share. Furthermore, each Fund
intends to satisfy conditions which will enable interest from municipal
securities, which is exempt from regular federal and California state income
taxes, to retain such tax-exempt status when distributed to shareholders of the
Funds. Net realized capital gain and market discount distributions are subject
to federal taxation.
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month end. Net realized capital gains and/or market discount
from investment transactions 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, if any, 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
may change every seven days, as set by the Auction Agent. The number of shares
outstanding, by Series and in total, for each Fund is as follows:
<TABLE>
<CAPTION>
Insured Insured
California California California
Premium Premium Premium
Income Income 2 Income
- ---------------------------------------------------------------------------------------------------------
<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
Insured California Premium Income and Insured California Premium Income 2 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
The Funds may invest in transactions in certain derivative financial instruments
including futures, forward, swap, and option contracts, and other financial
instruments with similar characteristics. Although the Funds are authorized to
invest in such financial instruments, and may do so in the future, they did not
make any such investments during the six months ended February 29, 2000.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby the custodian fees
and expenses are reduced by credits earned on each Fund's cash on deposit with
the bank. Such deposit arrangements are an alternative to overnight investments.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
2. FUND SHARES
Transactions in Common shares were as follows:
<TABLE>
<CAPTION>
Insured California Insured California
Premium Income Premium Income 2
- ---------------------------------------------------------------------------------------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
2/29/00 8/31/99 2/29/00 8/31/99
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Shares issued to shareholders
due to reinvestment
of distributions 2,967 14,390 13,469 36,233
=========================================================================================================
<CAPTION>
California
Premium Income
- ---------------------------------------------------------------------------------------------------------
Six Months Ended Year Ended
2/29/00 8/31/99
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C>
Shares issued to shareholders
due to reinvestment
of distributions 6,329 13,023
=========================================================================================================
</TABLE>
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid April 3, 2000, to shareholders of record on
March 15, 2000, as follows:
<TABLE>
<CAPTION>
Insured Insured
California California California
Premium Premium Premium
Income Income 2 Income
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Dividend per share $.0715 $.0665 $.0670
=========================================================================================================
</TABLE>
<PAGE>
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities during the six months ended
February 29, 2000, were as follows:
<TABLE>
<CAPTION>
Insured Insured
California California California
Premium Premium Premium
Income Income 2 Income
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Purchases:
Long-term municipal securities $29,369,920 $49,288,135 $10,730,168
Short-term municipal securities 7,600,000 21,300,000 --
Sales and maturities:
Long-term municipal securities 29,320,210 49,879,269 11,046,060
Short-term municipal securities 7,600,000 21,300,000 --
=========================================================================================================
</TABLE>
At February 29, 2000, the identified cost of investments owned for federal
income tax purposes were as follows:
<TABLE>
<CAPTION>
Insured Insured
California California California
Premium Premium Premium
Income Income 2 Income
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$130,871,398 $259,553,415 $115,005,213
=========================================================================================================
</TABLE>
At August 31, 1999, the Funds' last fiscal year end, 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>
Insured Insured
California California California
Premium Premium Premium
Income Income 2 Income
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Expiration year:
2002 $ -- $ -- $ 29,822
2003 -- 2,032,923 1,893,938
2004 -- 4,345,091 2,742,449
2005 165,897 1,283,948 1,049,994
- ---------------------------------------------------------------------------------------------------------
Total $ 165,897 $7,661,962 $5,716,203
=========================================================================================================
</TABLE>
<PAGE>
Notes to Financial Statements (Unaudited) (continued)
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
for federal income tax purposes at February 29, 2000, were as follows:
<TABLE>
<CAPTION>
Insured Insured
California California California
Premium Premium Premium
Income Income 2 Income
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Gross unrealized:
appreciation $ 5,109,000 $ 4,015,240 $ 2,196,617
depreciation (2,412,791) (6,434,998) (5,012,104)
- ---------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation) $ 2,696,209 $(2,419,758) $(2,815,487)
=========================================================================================================
</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 assets of each Fund as
follows:
Average Daily Net Assets Management Fee
- --------------------------------------------------------------------------------
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For net assets over $2 billion .5875 of 1
================================================================================
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates.
<PAGE>
7. COMPOSITION OF NET ASSETS
At February 29, 2000, net assets consisted of:
<TABLE>
<CAPTION>
Insured Insured
California California California
Premium Premium Premium
Income Income 2 Income
- ---------------------------------------------------------------------------------------------------------
<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 64,227 126,274 57,599
Paid-in surplus 88,847,219 175,114,479 79,988,134
Balance of undistributed net investment income 362,616 449,264 367,290
Accumulated net realized gain (loss) from investment transactions (2,313,957) (8,505,244) (6,172,542)
Net unrealized appreciation (depreciation) of investments 2,696,209 (2,419,758) (2,815,487)
- ---------------------------------------------------------------------------------------------------------
Net assets $134,656,314 $259,765,015 $114,424,994
- ---------------------------------------------------------------------------------------------------------
Authorized shares:
Common 200,000,000 200,000,000 Unlimited
Preferred 1,000,000 1,000,000 Unlimited
=========================================================================================================
</TABLE>
<PAGE>
<TABLE>
Financial Highlights (Unaudited)
Selected data for a Common share outstanding throughout each
period:
<CAPTION>
Investment Operations Less Distributions
-------------------------------- ----------------------------------------------------------------
Net Net Net
Realized/ Investment Investment Capital Capital
Beginning Net Unrealized Income Income Gains Gains
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>
Insured California
Premium Income
Year Ended 8/31:
2000 (a) $14.81 $ .53 $ (.80) $ (.27) $(.46) $(.12) $-- $-- $ (.58)
1999 16.31 1.09 (1.56) (.47) (.83) (.20) -- -- (1.03)
1998 15.39 1.03 .92 1.95 (.81) (.22) -- -- (1.03)
1997 14.46 1.04 .93 1.97 (.81) (.23) -- -- (1.04)
1996 14.41 1.05 .02 1.07 (.79) (.23) -- -- ( .02)
1995 13.72 1.05 .73 1.78 (.83) (.26) -- -- (1.09)
<CAPTION>
Insured California
Premium Income 2
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended 8/31:
2000 (a) 13.70 .50 (.62) (.12) (.41) (.12) -- -- (.53)
1999 14.82 1.01 (1.14) (.13) (.78) (.21) -- -- (.99)
1998 14.06 .98 .77 1.75 (.75) (.24) -- -- (.99)
1997 13.27 .99 .77 1.76 (.74) (.23) -- -- (.97)
1996 13.01 1.00 .24 1.24 (.74) (.24) -- -- (.98)
1995 12.75 1.02 .30 1.32 (.79) (.27) -- -- (1.06)
<CAPTION>
California Premium Income
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Year Ended 8/31:
2000 (a) 13.19 .50 (.79) (.29) (.40) (.10) -- -- (.50)
1999 14.30 1.00 (1.13) (.13) (.77) (.21) -- -- (.98)
1998 13.60 .98 .70 1.68 (.74) (.24) -- -- (.98)
1997 12.70 .99 .89 1.88 (.74) (.24) -- -- (.98)
1996 12.43 .98 .27 1.25 (.74) (.24) -- -- (.98)
1995 12.01 1.00 .47 1.47 (.77) (.28) -- -- (1.05)
<PAGE>
<CAPTION>
Total Returns
----------------------
Based
Ending Based on
Net Ending on Net
Asset Market Market Asset
Value Value Value** Value**
<S> <C> <C> <C> <C>
Insured California
Premium Income
Year Ended 8/31:
2000 (a) $13.96 $13.5000 (9.20)% (2.59)%
1999 14.81 15.3750 1.62 (4.35)
1998 16.31 15.9375 15.85 11.51
1997 15.39 14.5000 10.69 12.30
1996 14.46 13.8750 15.39 5.83
1995 14.41 12.7500 4.67 11.68
<CAPTION>
Insured California
Premium Income 2
<S> <C> <C> <C> <C>
Year Ended 8/31:
2000 (a) 13.05 12.5000 (10.20) (1.74)
1999 13.70 14.3750 2.27 (2.50)
1998 14.82 14.8125 15.70 10.95
1997 14.06 13.5000 14.36 11.82
1996 13.27 12.5000 15.36 7.76
1995 13.01 11.5000 3.55 8.80
<CAPTION>
California Premium Income
<S> <C> <C> <C> <C>
Year Ended 8/31:
2000 (a) 12.40 12.5000 (3.54) (2.96)
1999 13.19 13.3750 .81 (2.57)
1998 14.30 14.0000 12.54 10.83
1997 13.60 13.1250 17.16 13.20
1996 12.70 11.8750 17.51 8.15
1995 12.43 10.7500 3.65 10.53
<PAGE>
<CAPTION>
Ratios/Supplemental Data
--------------------------------------------------------------------
Before Credit
------------------------------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Expenses Income to Expenses Income to
to Average Average to Average Average
Ending Net Assets Net Assets Total Total
Net Applicable Applicable Net Assets Net Assets
Assets to Common to Common Including Including
(000) Shares++ Shares++ Preferred++ Preferred++
Insured California
Premium Income
<S> <C> <C> <C> <C> <C>
Year Ended 8/31:
2000 (a) $134,656 1.28%* 7.51%* .85%* 5.02%*
1999 140,091 1.22 6.82 .85 4.74
1998 149,478 1.22 6.49 .85 4.50
1997 143,571 1.25 6.96 .85 4.74
1996 137,610 1.26 7.08 .85 4.81
1995 137,323 1.35 7.74 .89 5.10
<CAPTION>
Insured California
Premium Income 2
<S> <C> <C> <C> <C> <C>
Year Ended 8/31:
2000 (a) 259,765 1.30* 7.70* .83* 4.90*
1999 267,833 1.24 6.86 .82 4.53
1998 281,399 1.25 6.79 .82 4.46
1997 271,883 1.28 7.24 .83 4.67
1996 261,851 1.29 7.39 .83 4.73
1995 258,628 1.36 8.23 .84 5.11
<CAPTION>
California Premium Income
<S> <C> <C> <C> <C> <C>
Year Ended 8/31:
2000 (a) 114,425 1.37* 7.99* .86* 5.02*
1999 118,877 1.30 7.08 .85 4.63
1998 125,066 1.32 7.02 .86 4.57
1997 120,995 1.34 7.47 .86 4.76
1996 115,869 1.39 7.63 .88 4.83
1995 114,304 1.73 8.34 1.05 5.08
<PAGE>
<CAPTION>
Ratios/Supplemental Data
-----------------------------------------------------------------
After Credit***
-------------------------------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Expenses Income to Expenses Income to
to Average Average to Average Average
Net Assets Net Assets Total Total
Applicable Applicable Net Assets Net Assets Portfolio
to Common to Common Including Including Turnover
Shares++ Shares++ Preferred++ Preferred++ Rate
<S> <C> <C> <C> <C> <C>
Insured California
Premium Income
Year Ended 8/31:
2000 (a) 1.27%* 7.52%* .85%* 5.02%* 22%
1999 1.22 6.82 .85 4.74 50
1998 1.22 6.49 .85 4.50 2
1997 1.25 6.96 .85 4.74 9
1996 1.26 7.08 .85 4.81 9
1995 1.35 7.74 .89 5.10 24
<CAPTION>
Insured California
Premium Income 2
<S> <C> <C> <C> <C> <C>
Year Ended 8/31:
2000 (a) 1.28* 7.72* .82* 4.91* 19
1999 1.24 6.86 .82 4.53 35
1998 1.25 6.79 .82 4.46 13
1997 1.28 7.24 .83 4.67 24
1996 1.29 7.39 .83 4.73 27
1995 1.36 8.23 .84 5.11 24
<CAPTION>
California Premium Income
<S> <C> <C> <C> <C> <C>
Year Ended 8/31:
2000 (a) 1.36* 8.01* .85* 5.04* 9
1999 1.30 7.08 .85 4.63 36
1998 1.32 7.02 .86 4.57 21
1997 1.34 7.47 .86 4.76 44
1996 1.39 7.63 .88 4.83 25
1995 1.73 8.34 1.05 5.08 26
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Net Asset Value is the
combination of reinvested dividend income, reinvested capital gains
distributions, if any, and changes in net asset value per share. Total
returns are not annualized.
*** After custodian fee credit, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the six months ended February 29, 2000.
</TABLE>
<PAGE>
Build Your Wealth Automatically
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Exchange-Traded Fund allows you to conveniently reinvest dividends
and/or capital gains distributions in additional fund shares. If you do not
elect to reinvest distributions, all distributions are paid by check or can be
deposited directly into your bank or brokerage account.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. You'll also potentially benefit from dollar-cost averaging, a
technique of investing at regular intervals, which allows you to build a
high-quality, tax-free portfolio conveniently and cost effectively over time.
Dollar-cost averaging does not ensure a profit, nor does it protect you against
loss in a declining market. Because such a plan involves continuous investment
regardless of fluctuating prices, investors should consider their financial
ability to continue purchases through periods of low price levels.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
Income or capital gains taxes may be payable on dividends or distributions that
are reinvested.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBILITY
You may, of course, change your distribution option or withdraw from the Plan at
any time, should your needs or situation change. Should you withdraw, you can
receive a certificate for all whole shares credited to your reinvestment account
and cash payment for fractional shares, or cash payment for all reinvestment
account shares, less brokerage commissions and a $2.50 service fee.
You can also reinvest if your shares are registered in the name of a brokerage
firm, bank, or other nominee. Just ask your investment adviser if the firm will
participate on your behalf. If not, it's easy to have the shares registered in
your name and to apply for a reinvestment account directly. Participants whose
shares are registered in the name of one firm may not be able to transfer the
shares to another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial adviser or call us at (800)
257-8787.
Sidebar text: Nuveen offers a number of convenient ways to add to your portfolio
and earn the tax-free income you need to achieve your financial goals.
Sidebar text: Nuveen makes reinvesting easy. A phone call is all it takes to set
up your reinvestment account.
<PAGE>
Fund Information
BOARD OF DIRECTORS/TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN, TRANSFER AGENT AND SHAREHOLDER SERVICES
The Chase Manhattan Bank
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
LEGAL COUNSEL
Morgan, Lewis &
Bockius LLP
Washington, D.C.
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
FUND POLICIES
The Board of Trustees of your Fund recently modified certain investment policies
of the Fund. The Fund was formerly not permitted to invest more than 5% of its
total assets in Municipal Leases that contain "non-appropriation" clauses. In
addition, your Fund was not permitted to invest more than 10% of its total
assets in Municipal Leases and securities that are unmarketable, illiquid or not
readily marketable. The Municipal Lease market has matured since the Fund's
inception, and non-appropriation leases have become more liquid and widely
accepted. The Nuveen Exchange-Traded Fund Board has eliminated the restrictions
noted above, replacing them with requirements that the Funds limit investments
in non-appropriation Municipal Leases to those that meet one or more of six
criteria that indicate that the issuer will be motivated to continue to
appropriate monies to make the payments under the Municipal Lease.
The Board also eliminated the Fund's policy not to invest more than 5% of its
total assets in unsecured obligations of issuers which, together with their
predecessors, have been in operation for less than three years.
Each fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the 6-month period ended February 29, 2000. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
<PAGE>
Serving Investors for Generations
Photo of: John Nuveen, Sr.
For over a century, generations of Americans have relied on Nuveen to help them
grow and keep the money they've earned. Financial advisers, investors and their
families have associated Nuveen investments with quality, expertise and
dependability since 1898. That is why financial advisers have entrusted the
assets of more than 1.3 million investors to Nuveen.
With the know-how that comes from a century of experience, Nuveen continues to
build upon its reputation for quality. Now, financial advisers and investors can
count on Nuveen Investments to help them design customized solutions that meet
the far-reaching financial goals unique to family wealth strategies - solutions
that can translate into legacies.
Invest well. Look ahead. Leave your mark.
To find out more about how Nuveen investment products and services can help you
preserve your financial security, talk with your financial adviser, or call us
at (800) 257-8787 for more information, including a prospectus where applicable.
Please read that information carefully before you invest.
LOGO:
NUVEEN Investments
John Nuveen & Co. Incorporated
333 West Wacker Drive
Chicago, IL 60606-1286
www.nuveen.com
FSA-2-2-00
