-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Jf0bX9+cDKXyf3O0zZ3fkxNxuovyC08gQ1ryOgsfVvzJTanD8bZ/xJbhKeRl7u6E pk8ZCUPkWuPsChiax+C3mg== 0000891804-03-001716.txt : 20030807 0000891804-03-001716.hdr.sgml : 20030807 20030807160205 ACCESSION NUMBER: 0000891804-03-001716 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030531 FILED AS OF DATE: 20030807 EFFECTIVENESS DATE: 20030807 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND CENTRAL INDEX KEY: 0001090119 IRS NUMBER: 364327214 STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-09471 FILM NUMBER: 03828634 BUSINESS ADDRESS: STREET 1: JOHN NUVEEN & CO INC STREET 2: 333 WEST WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129177794 MAIL ADDRESS: STREET 1: JOHN NUVEEN & CO INC STREET 2: 333 WEST WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 N-CSR 1 file001.txt NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM N-CSR CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES Investment Company Act file number 811-09471 --------------------- Nuveen Maryland Dividend Advantage Municipal ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Jessica R. Droeger Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------ (Name and address of agent for service) Registrant's telephone number, including area code: (312) 917-7700 ------------------- Date of fiscal year end: May 31st ------------------ Date of reporting period: May 31st ----------------- Form N-CSR is to be used by management investment companies to file reports with the Commission not later than 10 days after the transmission to stockholders of any report that is required to be transmitted to stockholders under Rule 30e-1 under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may use the information provided on Form N-CSR in its regulatory, disclosure review, inspection, and policymaking roles. A registrant is required to disclose the information specified by Form N-CSR, and the Commission will make this information public. A registrant is not required to respond to the collection of information contained in Form N-CSR unless the Form displays a currently valid Office of Management and Budget ("OMB") control number. Please direct comments concerning the accuracy of the information collection burden estimate and any suggestions for reducing the burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW, Washington, DC 20549-0609. The OMB has reviewed this collection of information under the clearance requirements of 44 U.S.C. ss. 3507. ITEM 1. REPORTS TO STOCKHOLDERS. Nuveen Municipal Closed-End Exchange-Traded Funds ANNUAL REPORT May 31, 2003 MARYLAND NMY NFM NZR NWI VIRGINIA NPV NGB NNB Photo of: man and child working on laptop computer. Photo of: man hugging child. DEPENDABLE, TAX-FREE INCOME BECAUSE IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) Logo: NUVEEN Investments FASTER INFORMATION RECEIVE YOUR NUVEEN FUND REPORT ELECTRONICALLY By registering for electronic delivery, you will receive an e-mail as soon as your Nuveen Fund information is available. Click on the link and you will be taken directly to the report. Your Fund report can be viewed and saved on your computer. Your report will arrive faster via e-mail than by traditional mail. Registering is easy and only takes a few minutes (see instructions at right). - -------------------------------------------------------------------------------- SOME COMMON CONCERNS: WILL MY E-MAIL ADDRESS BE DISTRIBUTED TO OTHER COMPANIES? No, your e-mail address is strictly confidential and will not be used for anything other than notification of shareholder information. WHAT IF I CHANGE MY MIND AND WANT TO RECEIVE INVESTOR MATERIALS THROUGH REGULAR MAIL DELIVERY AGAIN? If you decide you do not like receiving your reports electronically, it's a simple process to go back to regular mail delivery. - -------------------------------------------------------------------------------- IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS COME FROM YOUR FINANCIAL ADVISOR OR BROKERAGE ACCOUNT, FOLLOW THE STEPS OUTLINED BELOW: 1 Go to WWW.INVESTORDELIVERY.COM 2 Refer to the address sheet that accompanied this report. Enter the personal 13-CHARACTER ENROLLMENT NUMBER imprinted near your name. 3 You'll be taken to a page with several options. Select the NEW ENROLLMENT-CREATE screen. Once there, enter your e-mail address (e.g. yourID@providerID.com), and a personal, 4-digit PIN number of your choice. (Pick a number that's easy to remember.) 4 Click Submit. Confirm the information you just entered is correct, then click Submit again. 5 You should get a confirmation e-mail within 24 hours. If you do not, go back through these steps to make sure all the information is correct. 6 Use this same process if you need to change your registration information or cancel internet viewing. IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS COME DIRECTLY TO YOU FROM NUVEEN, FOLLOW THE STEPS OUTLINED BELOW: 1 Go to WWW.NUVEEN.COM 2 Select ACCESS YOUR ACCOUNT. Select the E-REPORT ENROLLMENT section. Click on Enrollment Today. 3 You'll be taken to a screen that asks for your Social Security number and e-mail address. Fill in this information, then click Enroll. 4 You should get a confirmation e-mail within 24 hours. If you do not, go back through these steps to make sure all the information is correct. 5 Use this same process if you need to change your registration information or cancel internet viewing. Logo: NUVEEN Investments PHOTO OF: Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board SIDEBAR TEXT:"NO ONE KNOWS WHAT THE FUTURE WILL BRING, WHICH IS WHY WE THINK A WELL-BALANCED PORTFOLIO ..... IS AN IMPORTANT COMPONENT IN ACHIEVING YOUR LONG-TERM FINANCIAL GOALS." Dear SHAREHOLDER Once again, I am pleased to report that over the most recent reporting period your Fund continued to provide you with monthly tax-free income and an attractive total return. For more specific information about the performance of your Fund, please see the Portfolio Manager's Comments and Performance Overview sections of this report. With interest rates at historically low levels, many have begun to wonder whether interest rates will rise, and whether that possibility should cause them to adjust their holdings of fixed-income investments. No one knows what the future will bring, which is why we think a well-balanced portfolio that is structured and carefully monitored with the help of an investment professional is an important component in achieving your long-term financial goals. A well-diversified portfolio may actually help to reduce your overall investment risk, and we believe that municipal bond investments like your Nuveen Fund can be important building blocks in a portfolio crafted to perform well through a variety of market conditions. I'd also like to direct your attention to the inside front cover of this report, which explains the quick and easy process to begin receiving Fund reports like this via e-mail and the internet. Thousands of Nuveen Fund shareholders already have signed-up, and they are getting their Fund information faster and more conveniently than ever. I urge you to consider joining them. Since 1898, Nuveen Investments has offered financial products and solutions that incorporate careful research, diversification, and the application of conservative risk-management principles. We are grateful that you have chosen us as a partner as you pursue your financial goals. We look forward to continuing to earn your trust in the months and years ahead. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board July 15, 2003 1 Nuveen Maryland and Virginia Municipal Closed-End Exchange-Traded Funds (NMY, NFM, NZR, NWI, NPV, NGB, NNB) Portfolio Manager's COMMENTS Portfolio manager Paul Brennan reviews economic and market conditions, key investment strategies and the recent performance of the Funds. With 12 years of investment experience, Paul has managed NMY and NPV since 1999, NFM, NZR, NGB and NNB since 2001, and NWI since its inception in September 2002. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE TWELVE-MONTH PERIOD ENDED MAY 31, 2003? The underlying economic and market conditions remained similar to those we discussed in our last shareholder report dated November 30, 2002. We believe the most influential factors affecting the performance of the U.S. economy and the municipal market continued to be the sluggish pace of economic growth and interest rates that remained at 40-year lows. At the same time, continued geopolitical concerns, centering on the threat of terrorism and the Iraqi situation, also had an impact during this reporting period. In the municipal market, the slow economic recovery and the continued lack of inflationary pressures during the reporting period created conditions that helped many bonds, and especially higher-rated bonds, perform well. Following a record $357 billion of new supply in calendar year 2002, municipal issuance nationwide remained strong during the first five months of 2003, with $145.6 billion in new municipal securities, up 14% over the same period in 2002. Much of this increase in supply reflects issuance intended to address fiscal problems facing states and localities as the result of slow economic growth, rising costs (especially for healthcare and pensions) and sharp declines in tax collections. Given the relatively low interest rate environment, many states and local governments have turned to borrowing in order to close budget gaps, fund needed capital projects and free up cash for operating purposes. The heavy supply of municipal bonds was met with evidence of continued strong demand over most of this reporting period, as the record issuance was absorbed without a significant decline in prices. Both individual and institutional investors were active buyers. HOW WERE ECONOMIC AND MARKET CONDITIONS IN MARYLAND AND VIRGINIA? Stimulated by a brisk economy in the Washington, D.C. metropolitan area and by increased federal defense and security spending, Maryland's economy began to show signs of recovery during the twelve-month period. Promising trends included renewed growth in bioscience firms and research facilities, above-average appreciation in housing prices and accelerating population growth. These trends generally helped to offset disappointing employment news from the retail, manufacturing and telecommunications sectors. Local economies continued to benefit from strong property tax growth and revenue-raising flexibility. While Maryland has recently relied on pay-as-you-go capital spending, current budget pressures are expected to lead to increased debt issuance over the next few years, with the majority of the state's general obligation bonds earmarked for public schools and research facilities at four-year universities. Municipal issuance in the state for the first five months of 2003 topped $5.2 billion, up 16% over the same 2 period last year. Maryland's credit rating from both Moody's and Standard & Poor's remained intact at Aaa/AAA, respectively, with stable outlooks. Virginia's economy also began to emerge slowly from recession during the reporting period. We expect the commonwealth's economy to continue to benefit from increased federal spending for defense, particularly in northern Virginia and the Norfolk area. While local governments and the services sector were leaders in job growth during the twelve-month period, Virginia's manufacturing and telecommunications sectors continued to post job losses. However, Virginia's long track record of strong financial management and economic diversity should help it maintain budgetary structural balance, and the state's positive demographic trends, relatively low business costs and generous tax incentives should contribute to strong growth over the long term. During the first five months of 2003, Virginia issued $3.1 billion in new municipal bonds, up 43% over the first five months of 2002. Currently the commonwealth's general obligation debt is rated AAA/stable outlook by Standard & Poor's and Aaa/negative outlook by Moody's, with the latter agency reaffirming its credit rating in October 2002. HOW DID THE FUNDS PERFORM OVER THE TWELVE MONTHS ENDED MAY 31, 2003? Individual results for these Funds, as well as for selected benchmarks, are presented in the accompanying table. TOTAL RETURN LEHMAN LIPPER MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2 - ---------------------------------------------------------------------------- 1 YEAR 1 YEAR 1 YEAR TAXABLE- ENDED ENDED ENDED 5/31/03 EQUIVALENT3 5/31/03 5/31/03 5/31/03 - ---------------------------------------------------------------------------- NMY 5.32% 7.77% 14.33% 10.36% 15.88% - ---------------------------------------------------------------------------- NFM 5.52% 8.06% 15.55% 10.36% 15.88% - ---------------------------------------------------------------------------- NZR 5.46% 7.97% 18.39% 10.36% 15.88% - ---------------------------------------------------------------------------- NWI 5.28% 7.71% NA -- -- - ---------------------------------------------------------------------------- NPV 5.16% 7.59% 14.99% 10.36% 15.88% - ---------------------------------------------------------------------------- NGB 5.15% 7.57% 14.92% 10.36% 15.88% - ---------------------------------------------------------------------------- NNB 5.35% 7.87% 18.51% 10.36% 15.88% - ---------------------------------------------------------------------------- Past performance is not predictive of future results. For additional information, see the individual Performance Overview for your Fund in this report. For the twelve months ended May 31, 2003, all of the Funds in this report with at least one year of performance history outperformed the national, unleveraged Lehman Brothers Municipal Bond Index. Their performances were mixed when compared with the Lipper Other States Municipal Debt Funds category. While these Lipper comparisons carry some value, we believe they have limited usefulness because the Lipper average includes the results of funds from ten different states, each with its own unique conditions and circumstances. The Funds' favorable performances for the year shown in the accompanying table when compared with the Lehman Index are attributable in large part to their durations.4 During periods of declining interest rates, such as we experienced over most of the twelve-month reporting period, longer duration investments generally would be expected to outperform shorter duration investments, assuming all other factors were equal. As of May 31, 2003, the durations of the six Funds with a full year of performance history ranged from 7.93 to 10.70, compared with 7.80 for the Lehman index. (Please see each Fund's Performance Overview page for its duration.) The performance of these Funds also benefited from their use of leverage, a strategy that can provide the opportunity for additional income for common shareholders, especially in periods of low short-term interest rates. Income is an important component of total return for any bond investment, and additional income can lead to enhanced total return. In addition to duration and leverage, the relative performances of these Funds were influenced by factors including call exposure, portfolio trading activity and the price movement of specific sectors and holdings. For example, NMY held approximately 1% (par value) of its 1 The total annual returns on common share net asset value (NAV) for these Nuveen Funds are compared with the total annual return of the Lehman Brothers Municipal Bond Index, an unleveraged, unmanaged national index comprising a broad range of investment-grade municipal bonds. Results for the Lehman index do not reflect any expenses. 2 The total returns of these Funds are compared with the average annualized return of the 36 funds in the Lipper Other States Municipal Debt Funds category. Fund and Lipper returns assume reinvestment of dividends. It should be noted that the performance of the Lipper Other States category represents the overall average of annual returns for funds from 10 different states with a wide variety of economic and municipal market conditions and investment guidelines, making direct comparisons less applicable. 3 The taxable-equivalent yield represents the yield that must be earned on a taxable investment in order to equal the yield of the Nuveen Fund on an after-tax basis. The taxable-equivalent yield is based on the Fund's market yield on the indicated date and a federal income tax rate of 28% plus the applicable state income tax rate. The combined federal and state tax rates used in this report are as follows: Maryland 31.5% and Virginia 32%. 4 Duration is a measure of a Fund's NAV volatility in reaction to interest rate movements. Fund duration, also known as leverage-adjusted duration, takes into account the leveraging process for a Fund and therefore is generally longer than the duration of the actual portfolio of individual bonds that make up the Fund. References to duration in this commentary are intended to indicate Fund duration unless otherwise noted. 3 portfolio in bonds backed by American Airlines as of May 31, 2003. Over the past year, the market value of most airline-backed bonds fell, due in part to a decline in passenger volume and in part to the well-documented financial struggles of many carriers. The depreciation of these bonds over the twelve-month period had a negative impact on NMY's total return. As another example, both NPV and NGB held bonds issued for Nekoosa Packaging Corporation and now backed by Georgia-Pacific Corp. that, despite some recent positive developments with asbestos-related litigation, were poor performers for the twelve-month period ended May 31, 2003. HOW DID THE MARKET ENVIRONMENT AND THE FUNDS' RETURNS AFFECT DIVIDENDS AND SHARE PRICES? As noted earlier, with short-term interest rates at historically low levels, the dividend-payment capabilities of these Funds benefited from their use of leverage. The amount of this benefit is tied in part to the short-term rates the Funds pay their MuniPreferred(R) shareholders. Low short-term rates can enable the Funds to reduce the amount of income paid to MuniPreferred shareholders, which potentially can leave more earnings to support common share dividends. During the twelve months ended May 31, 2003, the continued low level of short-term interest rates enabled us to implement three dividend increases in NMY and NZR, two in NFM, NPV and NGB, and one in NNB. NWI, which was introduced in September 2002, declared its first monthly distribution in November 2002. Over the course of this twelve-month reporting period, strong demand and favorable market conditions helped to boost the share prices and net asset values of these Funds. As of May 31, 2003, NMY, NFM, NPV, NGB and NNB continued to trade at premiums to their common share NAVs, while NWI was trading at virtually the same level as its NAV. Over the reporting period, NZR's NAV appreciated more rapidly than its share price, and this Fund moved from trading at a premium to a slight discount (see charts on individual Performance Overview pages). WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE PERIOD ENDED MAY 31, 2003? Over this twelve-month reporting period, we continued to place strong emphasis on diversifying the portfolios, enhancing call protection and improving dividend-paying capabilities. Strategically, our main focus centered on systematically shortening the Funds' durations, which we believed would enhance our ability to control the Funds' interest rate risk and produce more consistent returns over time. Interest rate risk is the risk that the value of a Fund's portfolio will decline when market interest rates rise (since bond prices move in the opposite direction of interest rates). The longer the duration of a Fund's portfolio, the greater its interest rate risk. In line with our duration strategy as well as the recent steepness of the municipal yield curve, we concentrated on finding value in the intermediate part of the yield curve (i.e., bonds that mature in 15 to 20 years), particularly in the newer Funds with longer durations. In many cases, bonds in this part of the curve were offering yields similar to those of longer-term bonds but, in our opinion, had less inherent interest rate risk. In NMY and NPV, two older Funds, large holdings of bonds priced to near-term call dates, rather than to their maturities, also served to shorten the Funds' durations. In general, the relatively heavy municipal bond issuance in these states created increased purchase opportunities. We looked for individual issues that we believed would perform well regardless of the future direction of interest rates. 4 In Maryland, much of the new issue supply was either state- or local-issued debt or hospital bonds, and we took advantage of attractive offerings in both sectors. We also participated in several Virginia hospital offerings over the reporting period. All of these Maryland and Virginia Funds remained heavily weighted in healthcare bonds. The Maryland Funds also had a large exposure to education bonds, while the Virginia Funds held a number of water and sewer issues. Each of the Maryland Funds also has invested between 2% and 4% of its portfolio in bonds backed by the 1998 master tobacco settlement agreement. Each of the Virginia Funds held less than 2% of their portfolios in these tobacco-backed bonds. In recent months, the prices of these bonds weakened as the result of lawsuits involving the major tobacco companies as well as the increased issuance of such bonds by states planning to use the proceeds to help close budget gaps. Although the sector as a whole produced negative returns over the twelve months ended May 31, 2003, tobacco bonds rebounded somewhat following the April payment by the Altria Group of $2.6 billion to the 46 states covered by the agreement, as well as by a number of recent legal developments favorable to the tobacco companies. As of the end of the reporting period, our strategy was to maintain our tobacco holdings while we continued to regularly evaluate the situation. NWI, the new Maryland Fund introduced in September 2002, was fully invested as of the end of the reporting period and, as mentioned earlier, began paying regular monthly dividends in November 2002. Over the Fund's first eight months, we have added Maryland bonds to replace U.S. territorial bonds (e.g., Puerto Rico) that were purchased during the initial investment phase last fall, a step necessitated by relatively tight supply in Maryland at that time. As of May 31, 2003, approximately 75% of NWI's assets were invested in Maryland-issued securities. We expect to continue to incrementally increase the percentage of Maryland bonds as attractive opportunities arise in the marketplace. Given the current geopolitical and economic climate, we believed that maintaining strong credit quality was a vital requirement. Both Maryland and Virginia remain very high quality issuers, and as of May 31, 2003, each of the Funds in this report offered excellent credit quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from 67% to 86%. In general, our weightings in insured and AAA bonds benefited the performance of these Funds during the past year. WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET IN GENERAL AND THESE FUNDS IN PARTICULAR? We continue to believe the U.S. economy is slowly headed for a recovery, but one that may take longer and be less robust than some originally anticipated. As a result, we think that inflation and interest rates will remain relatively low over the near term. However, the threat of an eventual rise in interest rates remains, and we intend to keep a careful watch on the Funds' durations and holdings to be as well-positioned as possible if and when rates do reverse course. Given the budget situations in both Maryland and Virginia, as well as their continued need for spending on infrastructure, education, and healthcare, we expect to see continued good levels of issuance in these two states. Recently, anticipation of changes to the national tax code led to some wonder about the new law's 5 potential impact on tax-exempt investments. The final version of the 2003 tax relief law reduced, but did not eliminate, taxes on corporate dividends and, as a result, we do not expect to see any significant impact on the demand or pricing for tax-exempt municipal bonds. Looking at bond call exposure, the five newer Funds currently offer good levels of protection, with call exposure ranging from zero to 3% during the remainder of 2003 and through 2004. The two older Funds, NMY and NPV, which marked their 10-year anniversaries in March 2003, have entered the part of their life cycles that typically are associated with an increase in bond calls. Over the past reporting period, we worked to mitigate this call risk and improve the positions of these two Funds. As of May 31, 2003, the percentage of bonds eligible for calls during 2003 and 2004 was 23% in NMY and 15% in NPV, down from 29% and 20%, respectively, as of November 30, 2002. The number of actual calls over the coming months will depend largely on market interest rates during this time. We believe that these Nuveen Funds can continue to serve as attractive sources of tax-free income, as well as offer considerable portfolio diversification potential. We remain convinced that these Funds are quality investments that can continue to benefit shareholders as part of a well-balanced core investment portfolio. 6 Nuveen Maryland Premium Income Municipal Fund Performance OVERVIEW As of May 31, 2003 NMY Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 50% AA 20% A 16% BBB 9% NR 2% BB OR LOWER 3% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $17.15 - -------------------------------------------------- Common Share Net Asset Value $15.10 - -------------------------------------------------- Market Yield 5.32% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 7.39% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 7.77% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $159,415 - -------------------------------------------------- Average Effective Maturity (Years) 18.83 - -------------------------------------------------- Leverage-Adjusted Duration 7.93 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 15.22% 14.33% - -------------------------------------------------- 5-Year 8.32% 6.76% - -------------------------------------------------- 10-Year 6.91% 6.53% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Housing/Multifamily 17% - -------------------------------------------------- Healthcare 17% - -------------------------------------------------- Tax Obligation/Limited 15% - -------------------------------------------------- Education and Civic Organizations 12% - -------------------------------------------------- Tax Obligation/General 10% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jun 0.0725 Jul 0.0725 Aug 0.0725 Sep 0.0735 Oct 0.0735 Nov 0.0735 Dec 0.0745 Jan 0.0745 Feb 0.0745 Mar 0.076 Apr 0.076 May 0.076 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/1/02 15.68 15.6 15.65 16.05 16.15 16.9 16.4 16.8 16.46 16.2 15.85 15.97 16 16.14 16.14 16.15 16.42 16.68 16.8 15.85 15.29 15.25 15.36 15.58 15.6 15.62 15.6 15.63 15.88 16 16.3 15.88 16.05 15.85 15.66 15.67 15.81 15.95 16.01 16.29 16.5 16.4 16.3 16.29 16.35 16.35 16.2 16.19 16.25 5/31/03 17.15 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. It is calculated using the current market yield and a federal income tax rate of 28%. 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 31.5%. 2 The Fund also paid shareholders a net ordinary income distribution in December 2002 of $0.0032 per share. 7 Nuveen Maryland Dividend Advantage Municipal Fund Performance OVERVIEW As of May 31, 2003 NFM Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 43% AA 24% A 17% BBB 11% NR 5% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $16.08 - -------------------------------------------------- Common Share Net Asset Value $15.47 - -------------------------------------------------- Market Yield 5.52% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 7.67% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 8.06% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $64,338 - -------------------------------------------------- Average Effective Maturity (Years) 22.14 - -------------------------------------------------- Leverage-Adjusted Duration 9.28 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 1/25/01) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 9.98% 15.55% - -------------------------------------------------- Since Inception 8.53% 9.28% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 16% - -------------------------------------------------- Healthcare 16% - -------------------------------------------------- Housing/Single Family 14% - -------------------------------------------------- Tax Obligation/Limited 13% - -------------------------------------------------- U.S. Guaranteed 11% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE Jun 0.07 Jul 0.07 Aug 0.07 Sep 0.07 Oct 0.07 Nov 0.07 Dec 0.071 Jan 0.071 Feb 0.071 Mar 0.074 Apr 0.074 May 0.074 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/1/02 14.95 15.16 15.25 15.2 15.4 15.52 15.55 16.05 16.1 16 15.44 15.62 15.97 15.8 15.51 14.9 15.2 15.2 15.31 15.5 15.95 16.25 5/31/03 16.08 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. It is calculated using the current market yield and a federal income tax rate of 28%. 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 31.5%. 8 Nuveen Maryland Dividend Advantage Municipal Fund 2 Performance OVERVIEW As of May 31, 2003 NZR Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 45% AA 31% A 14% BBB 8% NR 2% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $15.60 - -------------------------------------------------- Common Share Net Asset Value $15.71 - -------------------------------------------------- Market Yield 5.46% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 7.58% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 7.97% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $65,490 - -------------------------------------------------- Average Effective Maturity (Years) 21.43 - -------------------------------------------------- Leverage-Adjusted Duration 10.21 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/01) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 12.71% 18.39% - -------------------------------------------------- Since Inception 7.76% 11.30% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 29% - -------------------------------------------------- Healthcare 15% - -------------------------------------------------- Tax Obligation/Limited 13% - -------------------------------------------------- Education and Civic Organizations 11% - -------------------------------------------------- Housing/Multifamily 10% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE Jun 0.065 Jul 0.065 Aug 0.065 Sep 0.066 Oct 0.066 Nov 0.066 Dec 0.068 Jan 0.068 Feb 0.068 Mar 0.071 Apr 0.071 May 0.071 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/1/02 14.81 14.94 14.91 15.15 14.85 14.9 14.94 14.85 14.94 14.95 14.79 14.75 14.83 15.1 14.6 14.86 15.56 15.08 15.35 14.8 14.6 14.95 14.72 14.91 14.44 14.68 14.79 14.74 14.65 14.98 14.95 14.8 14.54 14.68 14.5 14.6 14.41 14.6 14.66 14.74 14.85 14.96 15 14.97 14.95 15.17 15.18 15.31 15.35 5/31/03 15.6 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. It is calculated using the current market yield and a federal income tax rate of 28%. 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 31.5%. 9 Nuveen Maryland Dividend Advantage Municipal Fund 3 Performance OVERVIEW As of May 31, 2003 NWI Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 44% AA 38% A 11% BBB 6% NR 1% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $14.90 - -------------------------------------------------- Common Share Net Asset Value $14.89 - -------------------------------------------------- Market Yield 5.28% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 7.33% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 7.71% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $79,700 - -------------------------------------------------- Average Effective Maturity (Years) 23.46 - -------------------------------------------------- Leverage-Adjusted Duration 11.16 - -------------------------------------------------- CUMULATIVE TOTAL RETURN (Inception 9/25/02) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- Since Inception 2.53% 7.31% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/Limited 27% - -------------------------------------------------- Tax Obligation/General 21% - -------------------------------------------------- Housing/Multifamily 14% - -------------------------------------------------- Education and Civic Organizations 11% - -------------------------------------------------- Healthcare 10% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.0655 Dec 0.0655 Jan 0.0655 Feb 0.0655 Mar 0.0655 Apr 0.0655 May 0.0655 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 9/25/02 15 15.07 15 14.3 13.75 14.66 14.4 14.17 14.6 5/31/03 14.9 1 Taxable-equivalent yield represents the yield on a taxable investment necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 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 31.5%. 10 Nuveen Virginia Premium Income Municipal Fund Performance OVERVIEW As of May 31, 2003 NPV Pie Chartt: CREDIT QUALITY AAA/U.S. Guaranteed 51% AA 24% A 15% BBB 4% NR 4% BB or Lower 2% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $17.67 - -------------------------------------------------- Common Share Net Asset Value $15.93 - -------------------------------------------------- Market Yield 5.16% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 7.17% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 7.59% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $140,223 - -------------------------------------------------- Average Effective Maturity (Years) 18.16 - -------------------------------------------------- Leverage-Adjusted Duration 7.93 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 15.27% 14.99% - -------------------------------------------------- 5-Year 7.47% 7.27% - -------------------------------------------------- 10-Year 7.36% 7.22% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/Limited 17% - -------------------------------------------------- Healthcare 16% - -------------------------------------------------- Water and Sewer 13% - -------------------------------------------------- Education and Civic Organizations 11% - -------------------------------------------------- Tax Obligation/General 9% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE Jun 0.0735 Jul 0.0735 Aug 0.0735 Sep 0.0745 Oct 0.0745 Nov 0.0745 Dec 0.0745 Jan 0.0745 Feb 0.0745 Mar 0.076 Apr 0.076 May 0.076 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/1/02 16.47 16.55 17.1 16.8 17.1 17.1 17.2 17 17.17 17.32 17.4 17.4 16.98 17.2 16.99 17.33 17.4 17.25 17 16.14 16.38 16.65 16.33 16.3 16.48 16.17 16.5 16.28 16.85 16.9 17.5 17.5 17.27 17.32 17.36 17.18 16.92 16.95 17.36 17.24 16.65 16.44 16.32 16.35 16.63 16.5 16.3 16.57 16.68 5/31/03 17.67 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. It is calculated using the current market yield and a federal income tax rate of 28%. 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 32%. 11 Nuveen Virginia Dividend Advantage Municipal Fund Performance OVERVIEW As of May 31, 2003 NGB Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 48% AA 25% A 12% BBB 8% NR 5% BB OR LOWER 2% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $17.35 - -------------------------------------------------- Common Share Net Asset Value $15.43 - -------------------------------------------------- Market Yield 5.15% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 7.15% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 7.57% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $48,102 - -------------------------------------------------- Average Effective Maturity (Years) 20.44 - -------------------------------------------------- Leverage-Adjusted Duration 9.94 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 1/26/01) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 21.45% 14.92% - -------------------------------------------------- Since Inception 12.21% 9.22% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 18% - -------------------------------------------------- Transportation 17% - -------------------------------------------------- Healthcare 15% - -------------------------------------------------- Water and Sewer 10% - -------------------------------------------------- Tax Obligation/Limited 8% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE Jun 0.0705 Jul 0.0705 Aug 0.0705 Sep 0.0705 Oct 0.0705 Nov 0.0705 Dec 0.0715 Jan 0.0715 Feb 0.0715 Mar 0.0745 Apr 0.0745 May 0.0745 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/1/02 15.1 15.25 15.15 14.71 15 15.14 15.29 15.04 15.82 15.92 15.75 15.63 15.6 15.6 15.8 15.65 15.55 16.68 16.53 15.52 15.15 15.22 15.1 15.21 15.1 15.61 15.71 15.6 15.72 16.07 16 15.85 15.79 15.55 15.26 15.53 15.23 15.38 15.5 15.47 15.51 15.39 15.57 15.59 15.96 15.92 15.98 16.26 16.33 5/31/03 17.35 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. It is calculated using the current market yield and a federal income tax rate of 28%. 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 32%. 12 Nuveen Virginia Dividend Advantage Municipal Fund 2 Performance OVERVIEW As of May 31, 2003 NNB Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 51% AA 35% A 7% BBB 6% NR 1% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $16.14 - -------------------------------------------------- Common Share Net Asset Value $16.02 - -------------------------------------------------- Market Yield 5.35% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 7.43% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 7.87% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $91,065 - -------------------------------------------------- Average Effective Maturity (Years) 21.73 - -------------------------------------------------- Leverage-Adjusted Duration 10.70 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 11/15/01) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 14.58% 18.51% - -------------------------------------------------- Since Inception 10.46% 13.33% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 21% - -------------------------------------------------- Tax Obligation/Limited 19% - -------------------------------------------------- Water and Sewer 18% - -------------------------------------------------- Healthcare 12% - -------------------------------------------------- Utilities 8% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jun 0.069 Jul 0.069 Aug 0.069 Sep 0.069 Oct 0.069 Nov 0.069 Dec 0.069 Jan 0.069 Feb 0.069 Mar 0.072 Apr 0.072 May 0.072 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 6/1/02 14.9 14.9 14.76 15.19 15.75 14.91 15.23 15.75 15.03 15.22 15.24 15.9 5/31/03 16.14 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. It is calculated using the current market yield and a federal income tax rate of 28%. 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 32%. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2002 of $0.0257 per share. 13 Report of INDEPENDENT AUDITORS THE BOARD OF TRUSTEES AND SHAREHOLDERS NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3 NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Maryland Premium Income Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund 2, Nuveen Maryland Dividend Advantage Municipal Fund 3, Nuveen Virginia Premium Income Municipal Fund, Nuveen Virginia Dividend Advantage Municipal Fund and Nuveen Virginia Dividend Advantage Municipal Fund 2 as of May 31, 2003, and the related statements of operations, changes in net assets and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of securities owned as of May 31, 2003, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Nuveen Maryland Premium Income Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund 2, Nuveen Maryland Dividend Advantage Municipal Fund 3, Nuveen Virginia Premium Income Municipal Fund, Nuveen Virginia Dividend Advantage Municipal Fund and Nuveen Virginia Dividend Advantage Municipal Fund 2 at May 31, 2003, and the results of their operations, changes in their net assets and their financial highlights for the periods indicated therein in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP CHICAGO, ILLINOIS JULY 11, 2003 14 Nuveen Maryland Premium Income Municipal Fund (NMY) Portfolio of INVESTMENTS May 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 1.8% $ 3,340 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 A- $ 2,932,052 Asset-Backed Bonds, Series 2002 Refunding, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 17.3% 1,000 Maryland Economic Development Corporation, Student 6/09 at 102.00 Baa3 1,039,970 Housing Revenue Bonds, Collegiate Housing Foundation - Salisbury Project, Series 1999A, 6.000%, 6/01/19 2,250 Maryland Economic Development Corporation, Student 6/09 at 102.00 Baa2 2,307,240 Housing Revenue Bonds, Collegiate Housing Foundation - University Courtyard Project, Series 1999A, 5.750%, 6/01/24 1,000 Maryland Economic Development Corporation, Student Housing 10/13 at 100.00 Baa3 1,047,430 Revenue Bonds, University of Maryland at Baltimore, Series 2003A, 5.625%, 10/01/23 910 Maryland Economic Development Corporation, Utility 7/11 at 100.00 AAA 1,044,908 Infrastructure Revenue Bonds, University of Maryland, College Park Project, 2001 Series, 5.375%, 7/01/16 - AMBAC Insured Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Bullis School Issue, Series 2000: 750 5.250%, 7/01/25 - FSA Insured 1/11 at 101.00 AAA 810,465 500 5.250%, 7/01/30 - FSA Insured 1/11 at 101.00 AAA 537,600 Maryland Health and Higher Educational Facilities Authority, Refunding Revenue Bonds, Johns Hopkins University Issue, Series 1997: 1,000 5.625%, 7/01/17 7/07 at 102.00 AA 1,146,310 1,500 5.625%, 7/01/27 7/07 at 102.00 AA 1,707,000 1,400 Maryland Health and Higher Educational 6/11 at 100.00 Baa1 1,467,942 Facilities Authority, Revenue Bonds, Maryland Institute College of Art, Series 2001, 5.625%, 6/01/36 9,445 Morgan State University, Maryland, Academic No Opt. Call AAA 12,080,438 Fees and Auxiliary Facilities Fees, Revenue Refunding Bonds, 1993 Series, 6.100%, 7/01/20 - MBIA Insured 4,000 University of Puerto Rico, University System 6/05 at 101.00 AAA 4,313,680 Revenue Bonds, Series O, 5.375%, 6/01/30 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 24.3% City of Gaithersburg, Maryland, Hospital Facilities Refunding and Improvement Revenue Bonds, Shady Grove Adventist Hospital, Series 1995: 2,550 6.500%, 9/01/12 - FSA Insured No Opt. Call AAA 3,221,976 3,015 5.500%, 9/01/15 - FSA Insured 9/05 at 102.00 AAA 3,315,173 2,000 Maryland Health and Higher Educational 6/09 at 101.00 A 2,171,820 Facilities Authority, Revenue Bonds, Kaiser Permanente, Series 1998A, 5.375%, 7/01/15 750 Maryland Health and Higher Educational 7/10 at 101.00 Baa1 845,423 Facilities Authority, Revenue Bonds, University of Maryland Medical System Issue, Series 2000, 6.750%, 7/01/30 Maryland Health and Higher Educational Facilities Authority, Revenue Bonds, Johns Hopkins Medicine, Howard County General Hospital Acquisition Issue, Series 1998: 1,000 5.000%, 7/01/19 - MBIA Insured 7/08 at 101.00 AAA 1,065,970 1,250 5.000%, 7/01/29 - MBIA Insured 7/08 at 101.00 AAA 1,297,725 1,500 Maryland Health and Higher Educational 1/08 at 101.00 Aaa 1,556,145 Facilities Authority, Revenue Bonds, Upper Chesapeake Hospitals Issue, Series 1998A, 5.125%, 1/01/38 - FSA Insured 1,500 Maryland Health and Higher Educational 7/11 at 100.00 A+ 1,528,815 Facilities Authority, Revenue Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34 1,500 Maryland Health and Higher Educational 7/12 at 100.00 A 1,672,740 Facilities Authority, Revenue Bonds, University of Maryland Medical System, Series 2002, 6.000%, 7/01/22 4,500 Maryland Health and Higher Educational 7/12 at 100.00 Baa1 4,803,075 Facilities Authority, Revenue Bonds, Carroll County General Hospital, Series 2002, 5.800%, 7/01/32 15 Nuveen Maryland Premium Income Municipal Fund (NMY) (continued) Portfolio of INVESTMENTS May 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) $ 3,000 Maryland Health and Higher Educational 7/12 at 100.00 A3 $ 3,083,460 Facilities Authority, Revenue Bonds, Frederick Memorial Hospital, Series 2002, 5.125%, 7/01/35 3,250 Maryland Health and Higher Educational 7/12 at 100.00 A3 3,427,060 Facilities Authority, Revenue Bonds, Union Hospital of Cecil County, Series 2002, 5.625%, 7/01/32 3,800 Maryland Health and Higher Educational 7/13 at 100.00 Baa2 3,904,918 Facilities Authority, Revenue Bonds, Kennedy Krieger Issue, Series 2003, 5.500%, 7/01/33 Prince George's County, Maryland, Project and Refunding Revenue Bonds, Dimensions Health Corporation Issue, Series 1994: 825 5.000%, 7/01/05 7/04 at 102.00 B3 628,361 3,080 5.375%, 7/01/14 7/04 at 102.00 B3 2,099,728 6,000 5.300%, 7/01/24 7/04 at 102.00 B3 4,054,680 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 25.0% 4,000 Anne Arundel County, Maryland, Multifamily No Opt. Call BBB- 4,054,240 Housing Revenue Bonds, Woodside Apartments Project, Series 1994, 7.450%, 12/01/24 (Alternative Minimum Tax) (Mandatory put 12/01/03) 1,795 County Commissioners of Charles County, 5/05 at 102.00 AAA 1,887,101 Maryland, Mortgage Revenue Refunding Bonds, Series 1995A, Holly Station IV Townhouses Project - FHA-Insured Mortgage Loan, 6.450%, 5/01/26 Howard County, Maryland, Mortgage Revenue Refunding Bonds, Series 1996A, FHA-Insured Mortgage Loan - Normandy Woods III Apartments Project: 700 6.000%, 7/01/17 7/06 at 102.00 AAA 748,930 2,000 6.100%, 7/01/25 7/06 at 102.00 AAA 2,116,200 1,130 Community Development Administration, Maryland Department 11/03 at 102.00 Aa2 1,154,295 of Housing and Community Development, Multifamily Housing Revenue Bonds, Insured Mortgage Loans, 1993 Series B, 6.625%, 5/15/23 2,500 Community Development Administration, Maryland 1/09 at 101.00 Aa2 2,591,850 Department of Housing and Community Development, Housing Revenue Bonds, 1999 Series A, 5.350%, 7/01/41 (Alternative Minimum Tax) 880 Community Development Administration, Maryland 1/10 at 100.00 Aa2 952,310 Department of Housing and Community Development, Housing Revenue Bonds, Series 1999B, 6.250%, 7/01/32 (Alternative Minimum Tax) 1,450 Community Development Administration, Maryland 2/11 at 101.00 Aaa 1,594,594 Department of Housing and Community Development, Multifamily Development Revenue Bonds, Edgewater Village Apartments Project, Series 2000B, 5.800%, 8/01/20 (Alternative Minimum Tax) 2,605 Community Development Administration, 11/03 at 102.00 Aa2 2,659,757 Maryland Department of Housing and Community Development, Multifamily Housing Revenue Bonds, Insured Mortgage Loans, 1993 Series D, 6.050%, 5/15/24 2,000 Housing Opportunities Commission of 7/05 at 102.00 Aa2 2,115,680 Montgomery County, Maryland, Multifamily Housing Revenue Bonds, 1995 Series A, 5.900%, 7/01/15 1,500 Housing Opportunities Commission of Montgomery 7/06 at 102.00 Aaa 1,584,315 County, Maryland, Multifamily Housing Revenue Bonds, 1996 Series B, 5.900%, 7/01/26 3,830 Housing Opportunities Commission of 7/08 at 101.00 Aaa 3,970,255 Montgomery County, Maryland, Multifamily Housing Development Bonds, 1998 Series A, 5.200%, 7/01/30 2,000 Housing Opportunities Commission of Montgomery 7/10 at 100.00 Aaa 2,178,680 County, Maryland, Multifamily Housing Development Bonds, Series 2000A, 6.100%, 7/01/30 1,000 Housing Authority of Prince George's County, 7/03 at 102.00 AAA 1,021,450 Maryland, Mortgage Revenue Refunding Bonds, Series 1993A, GNMA Collateralized - Stevenson Apartments Project, 6.350%, 7/20/20 Housing Authority of Prince George's County, Maryland, Mortgage Revenue Refunding Bonds, Series 1993A, Cherry Hill Apartments Project: 1,090 5.900%, 9/20/10 - FSA Insured 9/03 at 102.00 AAA 1,118,536 1,930 6.000%, 9/20/15 - FSA Insured 9/03 at 102.00 AAA 1,979,910 1,500 Housing Authority of Prince George's County, 12/04 at 102.00 AAA 1,576,410 Maryland, Mortgage Revenue Refunding Bonds, Series 1995A, GNMA Collateralized - Riverview Terrace Apartments Project, 6.700%, 6/20/20 Housing Authority of Prince George's County, Maryland, Mortgage Revenue Refunding Bonds, Series 1995A, GNMA Collateralized - Overlook Apartments Project: 2,000 5.700%, 12/20/15 12/05 at 102.00 AAA 2,123,900 1,670 5.750%, 12/20/19 12/05 at 102.00 AAA 1,760,213 16 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY (continued) $ 1,000 Housing Authority of Prince George's County, 11/03 at 100.00 AAA $ 1,001,010 Maryland, Mortgage Revenue Refunding Bonds, GNMA Collateralized, Foxglenn Apartments Project, Series 1998A, 5.450%, 11/20/14 (Alternative Minimum Tax) 540 Housing Authority of Prince George's County, 9/09 at 102.00 AAA 584,539 Maryland, Mortgage Revenue Bonds, Series 1999, GNMA Collateralized - University Landing at Langley Apartments Project, 6.100%, 3/20/41 (Alternative Minimum Tax) 1,000 City of Salisbury, Maryland, Mortgage Revenue 12/04 at 102.00 AAA 1,039,680 Refunding Bonds, Series 1995A, FHA-Insured Mortgage Loan - College Lane Apartments Project, 6.600%, 12/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 6.4% 1,000 Community Development Administration, Maryland 4/04 at 102.00 Aa2 1,037,160 Department of Housing and Community Development, Single Family Program Bonds, 1994 Fourth Series, 6.450%, 4/01/14 1,730 Community Development Administration, Maryland 4/04 at 102.00 Aa2 1,789,408 Department of Housing and Community Development, Single Family Program Bonds, 1994 Fifth Series, 6.750%, 4/01/26 (Alternative Minimum Tax) 225 Community Development Administration, Maryland 9/09 at 100.00 Aa2 228,047 Department of Housing and Community Development, Residential Revenue Bonds, 1999 Series H, 6.250%, 3/01/31 (Alternative Minimum Tax) 1,420 Community Development Administration, Maryland 9/09 at 100.00 Aa2 1,503,510 Department of Housing and Community Development, Residential Revenue Bonds, 2000 Series B, 6.150%, 9/01/32 (Alternative Minimum Tax) 1,455 Community Development Administration, Maryland 3/10 at 100.00 Aa2 1,577,075 Department of Housing and Community Development, Residential Revenue Bonds, 2000 Series D, 6.250%, 9/01/32 (Alternative Minimum Tax) 995 Community Development Administration, Maryland 4/06 at 102.00 Aa2 1,054,899 Department of Housing and Community Development, Single Family Program Bonds, 1996 Sixth Series, 6.200%, 4/01/22 (Alternative Minimum Tax) 1,570 Housing Authority of Prince George's County, 8/07 at 102.00 AAA 1,679,194 Maryland, FHLMC/FNMA/GNMA Collateralized, Single Family Mortgage Revenue Bonds, Series 1997, 5.625%, 8/01/17 (Alternative Minimum Tax) 315 Housing Authority of Prince George's County, 8/10 at 100.00 AAA 339,998 Maryland, FHLMC/FNMA/GNMA Collateralized, Single Family Mortgage Revenue Bonds, Series 2000A, 6.150%, 8/01/19 (Alternative Minimum Tax) 1,000 Puerto Rico Housing Finance Authority, Home 6/13 at 100.00 AAA 1,020,240 Mortgage Revenue Bonds, Mortgage-Backed Securities Program, Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 1.8% 1,000 Carroll County, Maryland, Revenue Bonds, EMA 1/09 at 101.00 AA 1,074,830 Obligated Group Issue, Fairhaven and Copper Ridge, Refunding Revenue Bonds, Series 1999A, 5.625%, 1/01/25 - RAAI Insured 1,790 Maryland Economic Development Corporation, 4/11 at 102.00 N/R 1,842,698 Health and Mental Hygiene Providers Facilities Acquisition Program, Revenue Bonds, Series 1996A, 7.625%, 4/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 14.8% Baltimore County Metropolitan District, Maryland, General Obligation Bonds, 67th Issue: 2,500 5.000%, 6/01/25 6/11 at 101.00 AAA 2,658,800 2,000 5.000%, 6/01/26 6/11 at 101.00 AAA 2,122,840 2,500 Baltimore County, Maryland, General Obligation 8/12 at 100.00 AAA 2,782,525 Consolidated Public Improvement Bonds, Series 2002, 5.000%, 8/01/18 1,000 City of Baltimore, Maryland, General Obligation No Opt. Call A+ 1,237,130 Bonds, Consolidated Public Improvement, Series 1989B, 7.150%, 10/15/08 Frederick County, Maryland, General Obligation Public Facilities Bonds, Series 2002: 1,000 5.000%, 11/01/21 11/12 at 101.00 AA 1,090,050 1,000 5.000%, 11/01/22 11/12 at 101.00 AA 1,083,470 3,000 Frederick County, Maryland, General Obligation 7/09 at 101.00 AA 3,406,860 Public Facilities Bonds, Series 1999, 5.250%, 7/01/18 500 Frederick County, Maryland, Special Obligation 7/10 at 102.00 AA 543,875 Bonds, Villages of Lake Linganore Community Development Authority, Series 2001A, 5.700%, 7/01/29 - RAAI Insured 575 Howard County, Maryland, General Obligation 2/12 at 100.00 AAA 648,330 Public Improvement Project and Refunding Bonds, 2002 Series A, 5.250%, 8/15/18 2,000 Montgomery County, Maryland, General Obligation 10/11 at 101.00 AAA 2,262,160 Bonds, Consolidated Public Improvement, Series 2001 Refunding, 5.250%, 10/01/18 925 Northern Mariana Islands Commonwealth, General 6/10 at 100.00 A 1,006,104 Obligation Bonds, Series 2000A, 6.000%, 6/01/20 - ACA Insured 17 Nuveen Maryland Premium Income Municipal Fund (NMY) (continued) Portfolio of INVESTMENTS May 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 1,000 Prince George's County, Maryland, General 12/11 at 101.00 AAA $ 1,115,250 Obligation Consolidated Public Improvement Bonds, Series 2001, 5.250%, 12/01/20 - FGIC Insured 3,000 Prince George's County, Maryland, General 9/12 at 101.00 AA 3,044,640 Obligation Consolidated Public Improvement Bonds, Series 2002, 4.100%, 9/15/19 460 Wicomico County, Maryland, General Obligation 12/09 at 101.00 AAA 543,403 Public Improvement Bonds, Series 1999, 5.750%, 12/01/19 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 22.0% Baltimore Board of School Commissioners, Maryland, City Public School System Revenue Bonds, Series 2003A: 1,500 5.000%, 5/01/16 (WI, settling 6/05/03) 5/13 at 100.00 AA+ 1,686,090 1,000 5.000%, 5/01/18 (WI, settling 6/05/03) 5/13 at 100.00 AA+ 1,105,510 1,870 Howard County, Maryland, Metropolitan District 2/12 at 100.00 AAA 2,108,481 General Obligation Project and Refunding Bonds, 2002 Series A, 5.250%, 8/15/18 1,465 Maryland Department of Housing and Community 6/08 at 101.00 Aaa 1,541,502 Development, Community Development Administration, Infrastructure Financing Bonds, 1998 Series B, 5.200%, 6/01/28 - MBIA Insured 4,250 Maryland Department of Transportation, County No Opt. Call AA 5,145,220 Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16 1,875 Maryland Economic Development Corporation, 6/12 at 100.50 AA+ 2,118,056 Lease Revenue Bonds, Maryland Department of Transportation Headquarters Building, Series 2002, 5.375%, 6/01/19 Maryland Department of Transportation, Project Certificates of Participation, Mass Transit Administration Project, Series 2000: 880 5.500%, 10/15/19 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 959,218 930 5.500%, 10/15/20 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 1,010,017 1,700 Maryland Stadium Authority, Montgomery 6/13 at 100.00 AA+ 1,822,706 County, Conference Center Facilities Lease Revenue Bonds, Series 2003, 5.000%, 6/15/24 4,455 Maryland Stadium Authority, Sports Facilities 3/06 at 101.00 AAA 4,941,041 Lease Revenue Bonds, Series 1996, 5.750%, 3/01/18 - AMBAC Insured 1,000 Montgomery County, Maryland, Lease Revenue 6/12 at 100.00 AA 1,076,150 Bonds, Metrorail Garage Projects, Series 2002, 5.000%, 6/01/21 675 Montgomery County, Maryland, Special Obligation 7/12 at 101.00 AA 729,871 Bonds, West Germantown Development District, Senior Series 2002A, 5.500%, 7/01/27 - RAAI Insured 635 New Baltimore City Board of School 11/10 at 100.00 AA+ 717,207 Commissioners, Maryland, School System Revenue Bonds, Series 2000, 5.125%, 11/01/15 1,000 Puerto Rico Highway and Transportation Authority, Highway 7/16 at 100.00 A 1,092,040 Revenue Bonds, Series 1996Y, 5.500%, 7/01/36 1,500 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,815,885 Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured 2,100 Puerto Rico Municipal Finance Agency, General Obligation 8/12 at 100.00 AAA 2,331,210 Bonds, 2002 Series A, 5.250%, 8/01/21 - FSA Insured 2,000 Virgin Islands Public Finance Authority, Revenue Bonds, 10/10 at 101.00 BBB- 2,305,880 Virgin Islands Gross Receipts Tax Loan Note, Series 1999A, 6.500%, 10/01/24 Washington Suburban Sanitary District, Montgomery and Prince George's Counties, Maryland, General Construction Bonds, Series 2000: 1,085 5.250%, 6/01/20 6/10 at 100.00 AAA 1,218,271 1,205 5.250%, 6/01/21 6/10 at 100.00 AAA 1,344,226 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 6.4% 1,060 City of Baltimore, Maryland, Refunding Revenue Bonds, No Opt. Call AAA 1,260,308 Parking System Facilities, Series 1998A, 5.250%, 7/01/17 - FGIC Insured 5,500 Maryland Transportation Authority, Special Obligation Revenue 7/04 at 102.00 AAA 5,862,395 Bonds, Qualified Airport Bonds, Baltimore/Washington International Airport Projects, Series 1994A, 6.250%, 7/01/14 (Alternative Minimum Tax) - FGIC Insured 18 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION (continued) $ 2,075 Puerto Rico Port Authority, Special Facilities Revenue Bonds, 6/06 at 102.00 Caa2 $ 809,312 1996 Series A, American Airlines, Inc. Project, 6.250%, 6/01/26 (Alternative Minimum Tax) 2,000 Washington Metropolitan Area Transit Authority, District of No Opt. Call AAA 2,329,020 Columbia, Gross Revenue Transit Refunding Bonds, Series 1993, 6.000%, 7/01/07 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 10.3% 2,000 City of Baltimore, Maryland, Water Projects and Refunding 7/08 at 101.00 AAA 2,228,320 Revenue Bonds, Series 1998A, 5.000%, 7/01/28 - FGIC Insured 2,000 City of Baltimore, Maryland, Water Projects and Refunding No Opt. Call AAA 2,247,840 Revenue Bonds, Series 1994A, 5.000%, 7/01/24 - FGIC Insured 1,500 City of Baltimore, Maryland, Project and Refunding Revenue 7/10 at 100.00 AAA 1,791,345 Bonds, Wastewater Projects, Series 2000A, 5.625%, 7/01/30 (Pre-refunded to 7/01/10) - FSA Insured 940 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,056,005 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded to 7/01/10) 1,875 Maryland Health and Higher Educational Facilities Authority, 7/03 at 102.00 AAA 1,920,469 Revenue Bonds, Good Samaritan Hospital Issue, Series 1993, 5.750%, 7/01/19 - AMBAC Insured 3,125 Maryland Health and Higher Educational Facilities Authority, 7/03 at 102.00 Aaa 3,190,625 Revenue Bonds, Howard County General Hospital Issue, Series 1993, 5.500%, 7/01/25 2,560 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 2,866,253 Revenue Bonds, Helix Health Issue, Series 1997, 5.000%, 7/01/27 - AMBAC Insured 1,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 1,150,900 Obligation Bonds, 2000 Series A, 5.500%, 10/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 13.3% 6,000 Anne Arundel County, Maryland, Pollution Control Revenue 4/04 at 102.00 A2 6,204,060 Refunding Bonds, Baltimore Gas and Electric Company Project, Series 1994, 6.000%, 4/01/24 6,500 Calvert County, Maryland, Pollution Control Revenue Refunding 7/04 at 102.00 A2 6,760,260 Bonds, Baltimore Gas and Electric Company Project, Series 1993, 5.550%, 7/15/14 3,000 Maryland Energy Financing Administration, Limited Obligation 9/05 at 102.00 N/R 3,079,710 Cogeneration Revenue Bonds, AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) 5,000 Prince George's County, Maryland, Pollution Control Revenue 7/03 at 102.00 A1 5,114,950 Refunding Bonds, Potomac Electric Project, 1993 Series, 6.375%, 1/15/23 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 0.7% 1,000 City of Baltimore, Maryland, Water Projects and Refunding No Opt. Call AAA 1,117,889 Revenue Bonds, Series 1994A, 5.000%, 7/01/24 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 216,955 Total Long-Term Investments (cost $216,322,814) - 144.1% 229,676,697 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 5.5% 8,838,377 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (49.6)% (79,100,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $159,415,074 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. N/R Investment is not rated. (WI) Security purchased on a when-issued basis. See accompanying notes to financial statements. 19
Nuveen Maryland Dividend Advantage Municipal Fund (NFM) Portfolio of INVESTMENTS May 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 2.3% $ 1,670 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 A- $ 1,466,026 Asset-Backed Bonds, Series 2002 Refunding, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 12.4% Frederick County, Maryland, Educational Facilities Revenue Bonds, Mount Saint Mary's College, Series 2001A: 465 5.700%, 9/01/20 3/10 at 101.00 BBB 496,978 1,000 5.750%, 9/01/25 3/10 at 101.00 BBB 1,053,210 500 5.800%, 9/01/30 3/10 at 101.00 BBB 525,045 1,800 Maryland Economic Development Corporation, Student Housing 7/11 at 101.00 A 1,956,150 Revenue Bonds, University Village at Sheppard Pratt, Series 2001, 6.000%, 7/01/33 - ACA Insured 1,000 Maryland Economic Development Corporation, Utility 7/11 at 100.00 AAA 1,095,520 Infrastructure Revenue Bonds, University of Maryland, College Park Project, 2001 Series, 5.000%, 7/01/19 - AMBAC Insured 1,500 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 1,551,885 Educational Facilities Leasehold Mortgage Revenue Bonds, McLean School Issue, 6.000%, 7/01/31 625 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 651,469 Revenue Bonds, Maryland Institute College of Art, Series 2001, 5.500%, 6/01/32 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, Series 1999, Ana G. Mendez University System Project: 215 5.375%, 2/01/19 2/09 at 101.00 BBB 226,917 410 5.375%, 2/01/29 2/09 at 101.00 BBB 422,956 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 23.2% 2,725 Maryland Health and Higher Educational Facilities Authority, 6/09 at 101.00 A 2,959,105 Revenue Bonds, Kaiser Permanente, Series 1998A, 5.375%, 7/01/15 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 A2 1,019,980 Revenue Bonds, Calvert Memorial Hospital Issue, Series 1998, 5.000%, 7/01/28 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,045,350 Revenue Bonds, Anne Arundel Medical Center Issue, Series 1998, 5.125%, 7/01/28 - FSA Insured 570 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 A3 587,243 Revenue Bonds, Union Hospital of Cecil County, Series 1998 Refunding, 5.100%, 7/01/22 1,250 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 AA- 1,310,563 Revenue Bonds, The Johns Hopkins Hospital Issue, Series 2001, 5.000%, 5/15/21 1,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 1,036,730 Revenue Bonds, Mercy Medical Center, Series 2001, 5.625%, 7/01/31 1,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 1,019,210 Revenue Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34 2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A 2,072,520 Revenue Bonds, University of Maryland Medical System, Series 2001, 5.250%, 7/01/28 1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,089,400 Revenue Bonds, Carroll County General Hospital, Series 2002, 6.000%, 7/01/26 1,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,284,775 Revenue Bonds, Frederick Memorial Hospital, Series 2002, 5.125%, 7/01/35 1,425 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,464,344 Revenue Bonds, Kennedy Krieger Issue, Series 2003, 5.500%, 7/01/33 85 Prince George's County, Maryland, Project and Refunding 7/04 at 102.00 B3 57,441 Revenue Bonds, Dimensions Health Corporation Issue, Series 1994, 5.300%, 7/01/24 20 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 15.3% $ 750 Baltimore County, Maryland, Mortgage Revenue Refunding 10/08 at 102.00 AAA $ 778,065 Bonds, GNMA Collateralized - Cross Creek Apartments Project, Series 1998A, 5.250%, 10/20/33 2,000 Community Development Administration, Maryland Department 7/08 at 101.00 Aa2 2,091,140 of Housing and Community Development, Housing Revenue Bonds, Series 1998A, 5.625%, 1/01/40 (Alternative Minimum Tax) 850 Community Development Administration, Maryland Department 5/11 at 100.00 Aa2 885,972 of Housing and Community Development, Multifamily Housing Revenue Bonds, Insured Mortgage Loan, 2001 Series B, 5.350%, 5/15/32 (Alternative Minimum Tax) 1,000 Community Development Administration, Maryland Department 12/11 at 100.00 Aaa 1,054,260 of Housing and Community Development, Multifamily Housing Revenue Bonds, Princess Anne Apartments Project, Series 2001D, 5.450%, 12/15/33 (Alternative Minimum Tax) 750 Housing Opportunities Commission of Montgomery County, 7/08 at 101.00 Aaa 777,112 Maryland, Multifamily Housing Development Bonds, Series 1998A, 5.250%, 7/01/29 (Alternative Minimum Tax) 2,000 Housing Opportunities Commission of Montgomery County, 7/10 at 100.00 Aaa 2,170,660 Maryland, Multifamily Housing Development Bonds, Series 2000B, 6.200%, 7/01/30 (Alternative Minimum Tax) 2,000 Housing Opportunities Commission of Montgomery County, 7/11 at 100.00 Aaa 2,110,480 Maryland, Multifamily Housing Development Bonds, Series 2001A, 5.600%, 7/01/42 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 21.0% 195 Community Development Administration, Maryland Department 9/09 at 100.00 Aa2 211,583 of Housing and Community Development, Residential Housing Revenue Bonds, 1997 Series E, 5.700%, 9/01/17 3,000 Community Development Administration, Maryland 9/09 at 100.00 Aa2 3,200,880 Department of Housing and Community Development, Residential Revenue Bonds, 2000 Series G, 5.950%, 9/01/29 (Alternative Minimum Tax) 1,365 Community Development Administration, Maryland Department 9/10 at 100.00 Aa2 1,454,544 of Housing and Community Development, Residential Revenue Bonds, Series H, 5.800%, 9/01/32 (Alternative Minimum Tax) 1,905 Community Development Administration, Maryland Department 10/10 at 100.00 Aa2 2,021,872 of Housing and Community Development, Single Family Program Bonds, First Series 2001, 5.000%, 4/01/17 1,000 Community Development Administration, Maryland 9/10 at 100.00 Aa2 1,038,590 Department of Housing and Community Development, Residential Revenue Bonds, Series 2001B, 5.450%, 9/01/32 (Alternative Minimum Tax) 1,000 Community Development Administration, Maryland 3/11 at 100.00 Aa2 1,059,300 Department of Housing and Community Development, Residential Revenue Bonds, Series 2001F, 5.600%, 9/01/28 (Alternative Minimum Tax) 2,775 Housing Opportunities Commission of Montgomery County, 7/07 at 102.00 Aa2 3,013,928 Maryland, Single Family Mortgage Revenue Bonds, 1997 Series A, 5.750%, 7/01/13 1,420 Housing Authority of Prince George's County, Maryland, 8/07 at 102.00 AAA 1,499,705 FHLMC/FNMA/GNMA Collateralized, Single Family Mortgage Revenue Bonds, Series 1997, 5.750%, 8/01/30 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 1.5% 1,000 Northeast Maryland Waste Disposal Authority, Resource 1/09 at 101.00 BBB 997,170 Recovery Revenue Bonds, Baltimore RESCO Retrofit Project, Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 1.5% 1,000 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R 996,630 Revenue Bonds, Collington Episcopal Life, Series 2001A, 6.750%, 4/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 23.8% Anne Arundel County, Maryland, General Obligation Bonds, Various Purpose, Series 2001: 580 4.800%, 2/15/18 2/11 at 101.00 AA+ 623,517 900 5.000%, 2/15/28 2/11 at 101.00 AA+ 951,219 Baltimore County Metropolitan District, Maryland, General Obligation Bonds, 67th Issue: 1,500 5.000%, 6/01/26 6/11 at 101.00 AAA 1,592,130 3,500 5.000%, 6/01/27 6/11 at 101.00 AAA 3,713,010 1,500 Baltimore County, Maryland, General Obligation Consolidated 8/12 at 100.00 AAA 1,669,515 Public Improvement Bonds, Series 2002, 5.000%, 8/01/18 21 Nuveen Maryland Dividend Advantage Municipal Fund (NFM) (continued) Portfolio of INVESTMENTS May 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 1,000 Frederick County, Maryland, General Obligation Public Facilities 11/12 at 101.00 AA $ 1,083,470 Bonds, Series 2002, 5.000%, 11/01/22 Howard County, Maryland, Consolidated Public Improvement Bonds, Series 2001A: 1,220 4.750%, 2/15/20 2/09 at 101.00 AAA 1,279,524 1,360 4.750%, 2/15/21 2/09 at 101.00 AAA 1,418,194 430 Northern Mariana Islands Commonwealth, General Obligation 6/10 at 100.00 A 467,702 Bonds, Series 2000A, 6.000%, 6/01/20 - ACA Insured 740 Mayor and City Council of Ocean City, Maryland, General 3/11 at 101.00 AAA 793,569 Obligation Municipal Purpose Bonds, Series 2001, 4.875%, 3/01/19 - FGIC Insured 1,500 Prince George's County, Maryland, General Obligation 12/11 at 101.00 AAA 1,672,875 Consolidated Public Improvement Bonds, Series 2001, 5.250%, 12/01/20 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 19.7% 885 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 902,771 Revenue Bonds, Parole Town Center Project, Series 2002, 5.000%, 7/01/12 500 Baltimore Board of School Commissioners, Maryland, City 5/13 at 100.00 AA+ 552,755 Public School System Revenue Bonds, Series 2003A, 5.000%, 5/01/18 (WI, settling 6/05/03) 1,500 Maryland Department of Transportation, County Transportation No Opt. Call AA 1,815,960 Revenue Bonds, Series 2002, 5.500%, 2/01/16 1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,587,130 Bonds, Maryland Department of Transportation Headquarters Building, Series 2002, 5.375%, 6/01/19 700 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 847,413 Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured 1,290 Virgin Islands Public Finance Authority, Revenue Bonds, 10/10 at 101.00 BBB- 1,499,393 Virgin Islands Gross Receipts Tax Loan Note, Series 1999A, 6.375%, 10/01/19 Washington Suburban Sanitary District, Montgomery and Prince George's Counties, Maryland, General Construction Bonds, Series 2001: 895 5.000%, 6/01/22 6/11 at 100.00 AAA 957,990 935 5.000%, 6/01/23 6/11 at 100.00 AAA 996,186 985 5.000%, 6/01/24 6/11 at 100.00 AAA 1,043,923 1,035 5.000%, 6/01/25 6/11 at 100.00 AAA 1,093,302 1,290 Washington Suburban Sanitary District, Montgomery and 6/11 at 100.00 AAA 1,367,026 Prince George's Counties, Maryland, Water Supply Bonds, Series 2001, 4.750%, 6/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 2.3% Maryland Health and Higher Educational Facilities Authority, Parking Revenue Bonds, The Johns Hopkins Medical Institutions, Issue of 2001: 650 5.000%, 7/01/27 - AMBAC Insured 7/11 at 100.00 AAA 683,631 750 5.000%, 7/01/34 - AMBAC Insured 7/11 at 100.00 AAA 783,788 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 16.0% 1,015 City of Baltimore, Maryland, Water Projects and Refunding 7/08 at 101.00 AAA 1,130,872 Revenue Bonds, Series 1998A, 5.000%, 7/01/28 - FGIC Insured 670 City of Baltimore, Maryland, Water Projects and Refunding No Opt. Call AAA 753,026 Revenue Bonds, Series 1994A, 5.000%, 7/01/24 - FGIC Insured 2,350 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 2,640,013 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded to 7/01/10) 1,000 Maryland Transportation Authority, Transportation Facilities No Opt. Call AAA 1,248,850 Project Revenue Bonds, First Series Refunding, 6.800%, 7/01/16 Puerto Rico Infrastructure Financing Authority, Special Obligation Bonds, 2000 Series A: 2,300 5.500%, 10/01/32 10/10 at 101.00 AAA 2,606,199 1,700 5.500%, 10/01/40 10/10 at 101.00 AAA 1,927,392 22 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 6.9% $ 2,500 Maryland Energy Financing Administration, Limited Obligation 9/05 at 102.00 N/R $ 2,566,425 Cogeneration Revenue Bonds, AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) 1,800 Puerto Rico Electric Power Authority, Power Revenue Refunding 7/05 at 100.00 A- 1,884,492 Bonds, Series Z, 5.250%, 7/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 0.6% 330 City of Baltimore, Maryland, Water Projects and Refunding No Opt. Call AAA 368,903 Revenue Bonds, Series 1994A, 5.000%, 7/01/24 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 88,215 Total Long-Term Investments (cost $88,907,152) - 146.5% 94,276,873 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.2% 2,061,085 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (49.7)% (32,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $64,337,958 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. N/R Investment is not rated. (WI) Security purchased on a when-issued basis. See accompanying notes to financial statements. 23
Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR) Portfolio of INVESTMENTS May 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 2.1% $ 835 Puerto Rico, The Children's Trust Fund, Tobacco 5/12 at 100.00 A- $ 733,013 Settlement Asset-Backed Bonds, Series 2002 Refunding, 5.375%, 5/15/33 800 Tobacco Settlement Financing Corporation of the 5/11 at 100.00 Baa2 643,192 Virgin Islands, Asset-Backed Bonds, Series 2001, 5.000%, 5/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 16.5% 1,100 Anne Arundel County, Maryland, Economic 9/12 at 102.00 A3 1,170,609 Development Revenue Bonds, Community College Project, Series 2002, 5.125%, 9/01/22 1,000 Maryland Economic Development Corporation, 10/13 at 100.00 Baa3 1,047,430 Student Housing Revenue Bonds, University of Maryland at Baltimore, Series 2003A, 5.625%, 10/01/23 250 Maryland Health and Higher Educational 7/08 at 102.00 BBB- 258,648 Facilities Authority, Educational Facilities Leasehold Mortgage Revenue Bonds, McLean School Issue, 6.000%, 7/01/31 415 Maryland Health and Higher Educational 1/11 at 101.00 AAA 446,208 Facilities Authority, Revenue Bonds, Bullis School Issue, Series 2000, 5.250%, 7/01/30 - FSA Insured 1,000 Maryland Health and Higher Educational 7/08 at 102.00 AA 1,140,180 Facilities Authority, Refunding Revenue Bonds, Johns Hopkins University Issue, Series 1998, 5.125%, 7/01/12 1,000 Maryland Health and Higher Educational 10/08 at 101.00 AAA 1,020,680 Facilities Authority, Revenue Bonds, College of Notre Dame of Maryland Issue, Series 1998, 4.650%, 10/01/23 - MBIA Insured 1,000 Maryland Health and Higher Educational 7/11 at 100.00 AA 1,038,690 Facilities Authority, Revenue Bonds, Johns Hopkins University, Series 2001B, 5.000%, 7/01/41 1,250 Maryland Health and Higher Educational Facilities 6/11 at 100.00 Baa1 1,302,938 Authority, Revenue Bonds, Maryland Institute College of Art, Series 2001, 5.500%, 6/01/32 500 Morgan State University, Maryland, Academic and Auxiliary 7/12 at 100.00 AAA 538,445 Fees Revenue Bonds, Series 2001, 4.900%, 7/01/21 - FGIC Insured University of Maryland, System Auxiliary Facility and Tuition Revenue Bonds, 2001 Series B: 1,580 4.375%, 4/01/17 4/11 at 100.00 AA+ 1,643,721 1,140 4.500%, 4/01/19 4/11 at 100.00 AA+ 1,181,462 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 22.7% 2,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 2,085,760 Revenue Bonds, Anne Arundel Medical Center Issue, Series 1998, 5.125%, 7/01/33 - FSA Insured 1,000 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 AA- 1,028,470 Revenue Bonds, The Johns Hopkins Hospital Issue, Series 2001, 5.000%, 5/15/34 2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 2,073,460 Revenue Bonds, Mercy Medical Center, Series 2001, 5.625%, 7/01/31 1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 1,528,815 Revenue Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34 2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A 2,072,520 Revenue Bonds, University of Maryland Medical System, Series 2001, 5.250%, 7/01/28 1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,089,400 Revenue Bonds, Carroll County General Hospital, Series 2002, 6.000%, 7/01/26 1,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,284,775 Revenue Bonds, Frederick Memorial Hospital, Series 2002, 5.125%, 7/01/35 24 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) $ 1,425 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 $ 1,464,344 Revenue Bonds, Kennedy Krieger Issue, Series 2003, 5.500%, 7/01/33 2,160 Montgomery County, Maryland, Economic Development Revenue 12/11 at 100.00 AA- 2,270,873 Bonds, Trinity Health Care Group, Series 2001, 5.125%, 12/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 15.3% 55 Community Development Administration, Maryland Department 5/11 at 100.00 Aa2 57,063 of Housing and Community Development, Multifamily Housing Insured Mortgage Loans, Series 2001A, 5.100%, 5/15/28 4,255 Community Development Administration, Maryland Department 5/11 at 100.00 Aa2 4,435,072 of Housing and Community Development, Multifamily Housing Revenue Bonds, Insured Mortgage Loan, 2001 Series B, 5.350%, 5/15/32 (Alternative Minimum Tax) 1,110 Community Development Administration, Maryland Department 12/11 at 100.00 Aaa 1,170,229 of Housing and Community Development, Multifamily Housing Revenue Bonds, Princess Anne Apartments Project, Series 2001D, 5.450%, 12/15/33 (Alternative Minimum Tax) 3,145 Community Development Administration, Maryland Department 12/11 at 100.00 Aaa 3,315,648 of Housing and Community Development, Multifamily Development Revenue Bonds, Waters Towers Senior Apartments, Series 2001F, 5.450%, 12/15/33 (Alternative Minimum Tax) 1,000 Community Development Administration, Maryland Department 5/12 at 100.00 Aa2 1,066,100 of Housing and Community Development, Multifamily Housing Insured Mortgage Revenue Bonds, 2002 Series A, 5.300%, 5/15/22 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 2.4% 500 Community Development Administration, Maryland Department 3/07 at 101.50 Aa2 527,495 of Housing and Community Development, Residential Revenue Bonds, Series 1997B, 5.875%, 9/01/25 (Alternative Minimum Tax) 1,000 Community Development Administration, Maryland Department 9/10 at 100.00 Aa2 1,040,980 of Housing and Community Development, Residential Revenue Bonds, Series 2001H, 5.350%, 9/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 3.4% 2,250 Northeast Maryland Waste Disposal Authority, Resource 1/09 at 101.00 BBB 2,243,633 Recovery Revenue Bonds, Baltimore RESCO Retrofit Project, Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 43.3% 755 Anne Arundel County, Maryland, General Obligation Bonds, 3/12 at 100.00 AA+ 792,878 Series 2002, 5.000%, 3/01/31 1,500 Baltimore County, Maryland, General Obligation Consolidated 8/12 at 100.00 AAA 1,669,515 Public Improvement Bonds, Series 2002, 5.000%, 8/01/18 Cecil County, Maryland, General Obligation Bonds, Consolidated Public Improvement Series 2001B: 975 4.600%, 8/01/18 8/11 at 101.00 A+ 1,032,866 1,020 4.600%, 8/01/19 8/11 at 101.00 A+ 1,072,907 300 4.625%, 8/01/20 8/11 at 101.00 A+ 314,151 335 4.750%, 8/01/21 8/11 at 101.00 A+ 351,301 1,000 Frederick County, Maryland, General Obligation Public Facilities 11/12 at 101.00 AA 1,098,340 Bonds, Series 2002, 5.000%, 11/01/20 3,000 Frederick County, Maryland, General Obligation Public 12/10 at 101.00 AA 3,375,720 Facilities Bonds, Series 2000, 5.200%, 12/01/19 510 City of Frederick, Maryland, General Obligation Bonds, General 12/11 at 101.00 AA- 544,598 Improvements Refunding, Series 2001, 4.750%, 12/01/19 State of Maryland, General Obligation Bonds, State and Local Facilities Loan of 2001, First Series: 2,445 5.500%, 3/01/11 No Opt. Call AAA 2,904,342 1,500 5.500%, 3/01/12 No Opt. Call AAA 1,797,195 4,730 Montgomery County, Maryland, General Obligation Bonds, 10/11 at 101.00 AAA 5,350,008 Consolidated Public Improvement, Series 2001 Refunding, 5.250%, 10/01/18 25 Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR) (continued) Portfolio of INVESTMENTS May 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) Prince George's County, Maryland, General Obligation Consolidated Public Improvement Bonds, Series 2001: $ 1,000 5.250%, 12/01/20 - FGIC Insured 12/11 at 101.00 AAA $ 1,115,250 2,820 5.250%, 12/01/21 - FGIC Insured 12/11 at 101.00 AAA 3,123,291 2,000 Commonwealth of Puerto Rico, Public Improvement Refunding 7/11 at 100.00 AAA 2,120,640 General Obligation Bonds, Series of 2001, 5.000%, 7/01/24 - FSA Insured 1,500 Commonwealth of Puerto Rico, Public Improvement General No Opt. Call A- 1,687,785 Obligation Bonds, 2002 Series A, 5.500%, 7/01/29 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 19.2% 750 Anne Arundel County, Maryland, General Obligation Bonds, 8/09 at 101.00 AA+ 780,547 Consolidated Water and Sewer, Series 1999, 4.500%, 8/01/19 885 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 902,771 Revenue Bonds, Parole Town Center Project, Series 2002, 5.000%, 7/01/12 County of Baltimore, Maryland, Certificates of Participation, Health and Social Services Building Project, Series 2001: 1,580 5.000%, 8/01/20 8/11 at 101.00 AA+ 1,719,561 1,660 5.000%, 8/01/21 8/11 at 101.00 AA+ 1,794,477 530 Baltimore Board of School Commissioners, Maryland, City 5/13 at 100.00 AA+ 601,121 Public School System Revenue Bonds, Series 2003A, 5.000%, 5/01/15 (WI, settling 6/05/03) 1,000 Maryland Department of Transportation, County Transportation No Opt. Call AA 1,210,640 Revenue Bonds, Series 2002, 5.500%, 2/01/16 1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,587,130 Bonds, Maryland Department of Transportation Headquarters Building, Series 2002, 5.375%, 6/01/19 1,000 Montgomery County, Maryland, Special Obligation Bonds, 7/12 at 101.00 AA 1,081,290 West Germantown Development District, Senior Series 2002A, 5.500%, 7/01/27 - RAAI Insured 700 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 847,413 Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured 1,100 Puerto Rico Infrastructure Financing Authority, Special Tax 1/08 at 101.00 AAA 1,159,774 Revenue Bonds, Series 1997A, 5.000%, 7/01/21 - AMBAC Insured 800 Puerto Rico Public Finance Corporation, Series 2001A, 8/11 at 100.00 AAA 868,064 Commonwealth Appropriation Bonds, 5.000%, 8/01/21 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 5.5% Maryland Health and Higher Educational Facilities Authority, Parking Revenue Bonds, Johns Hopkins Medical Institutions, Issue of 2001: 650 5.000%, 7/01/27 - AMBAC Insured 7/11 at 100.00 AAA 683,631 2,775 5.000%, 7/01/34 - AMBAC Insured 7/11 at 100.00 AAA 2,900,014 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 13.6% 1,000 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,223,430 Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26 (Pre-refunded to 7/01/10) 1,250 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 1,445,750 Revenue Bonds, Helix Health Issue, Series 1997, 5.000%, 7/01/17 - AMBAC Insured 1,365 Maryland Transportation Authority, Transportation Facilities No Opt. Call AAA 1,704,680 Project Revenue Bonds, First Series Refunding, 6.800%, 7/01/16 4,000 Puerto Rico Infrastructure Financing Authority, Special Obligation 10/10 at 101.00 AAA 4,535,040 Bonds, 2000 Series A, 5.500%, 10/01/40 26 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 3.2% $ 1,000 Guam Power Authority, Revenue Bonds, 1999 Series A, 10/09 at 101.00 AAA $ 1,091,040 5.250%, 10/01/34 - MBIA Insured 1,000 Maryland Energy Financing Administration, Limited Obligation 9/05 at 102.00 N/R 1,026,570 Cogeneration Revenue Bonds, AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ $ 89,360 Total Long-Term Investments (cost $90,556,946) - 147.2% 96,433,583 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.7% 1,056,261 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.9)% (32,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $65,489,844 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. N/R Investment is not rated. (WI) Security purchased on a when-issued basis. See accompanying notes to financial statements. 27
Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI) Portfolio of INVESTMENTS May 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 3.2% $ 2,910 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 A- $ 2,554,573 Asset-Backed Bonds, Series 2002 Refunding, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 16.6% 225 Anne Arundel County, Maryland, Economic Development 9/12 at 102.00 A3 239,443 Revenue Bonds, Community College Project, Series 2002, 5.125%, 9/01/22 1,250 Maryland Economic Development Corporation, Student 10/13 at 100.00 Baa3 1,309,287 Housing Revenue Bonds, University of Maryland at Baltimore, Series 2003A, 5.625%, 10/01/23 2,540 Maryland Health and Higher Educational Facilities Authority, 10/09 at 101.00 A 2,633,726 Revenue Bonds, Loyola College Issue, Series 1999, 5.000%, 10/01/39 2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 AA 2,077,380 Revenue Bonds, Johns Hopkins University, Series 2001B, 5.000%, 7/01/41 1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 AA 1,051,000 Revenue Bonds, Johns Hopkins University, Series 2002A, 5.000%, 7/01/32 1,500 Morgan State University, Maryland, Academic and Auxiliary 7/13 at 100.00 AAA 1,590,810 Fees Revenue Bonds, Series 2003A, 5.000%, 7/01/32 - FGIC Insured 985 University of Maryland, System Auxiliary Facility and Tuition 4/11 at 100.00 AA+ 1,015,643 Revenue Bonds, 2001 Series B, 4.625%, 4/01/21 University of Maryland, System Auxiliary Facilities and Tuition Revenue Bonds, 2002 Series A: 1,000 5.000%, 4/01/09 No Opt. Call AA+ 1,143,120 2,000 5.125%, 4/01/22 4/12 at 100.00 AA+ 2,160,880 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 15.4% 3,000 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 3,398,340 Revenue Bonds, Medlantic/Helix Issue, Series 1998B, 5.250%, 8/15/38 - AMBAC Insured 1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,042,880 Revenue Bonds, Anne Arundel Medical Center Issue, Series 1998, 5.125%, 7/01/33 - FSA Insured 1,000 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 AA- 1,048,450 Revenue Bonds, The Johns Hopkins Hospital Issue, Series 2001, 5.000%, 5/15/21 1,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 1,019,210 Revenue Bonds, Greater Baltimore Medical Center, Series 2001, 5.000%, 7/01/34 1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,027,820 Revenue Bonds, Frederick Memorial Hospital, Series 2002, 5.125%, 7/01/35 1,845 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,945,516 Revenue Bonds, Union Hospital of Cecil County, Series 2002, 5.625%, 7/01/32 775 Maryland Health and Higher Educational Facilities Authority, 1/13 at 101.00 Baa1 803,892 Revenue Bonds, Adventist Healthcare, Series 2003A Refunding, 5.750%, 1/01/25 1,930 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,983,287 Revenue Bonds, Kennedy Krieger Issue, Series 2003, 5.500%, 7/01/33 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 21.2% 5,000 Community Development Administration, Department of 7/12 at 100.00 Aa2 5,122,600 Housing and Community Development, Maryland, Housing Revenue Bonds, 2002 Series B, 4.950%, 7/01/32 (Alternative Minimum Tax) Housing Opportunities Commission of Montgomery County, Maryland, Multifamily Housing Development Bonds, Series B: 515 5.100%, 7/01/33 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 532,845 3,000 5.200%, 7/01/44 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 3,103,260 28 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY (continued) $ 3,000 Housing Authority of Prince George's County, Maryland, 2/13 at 102.00 AAA $ 3,111,630 Mortgage Revenue Bonds, Series 2002A, GNMA Collateralized Windsor Crossing Apartments Project, 5.150%, 8/20/33 4,860 Housing Authority of Prince George's County, Maryland, 11/12 at 100.00 AAA 5,009,494 Mortgage Revenue Bonds, Fairfield and Hillside Projects, GNMA Collateralized, Series 2002A, 4.700%, 11/20/22 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 2.4% 1,900 Northeast Maryland Waste Disposal Authority, Resource 1/09 at 101.00 BBB 1,894,623 Recovery Revenue Bonds, Baltimore RESCO Retrofit Project, Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 31.4% 1,000 Annapolis, Maryland, General Obligation Bonds, Public 4/12 at 101.00 AA 1,055,730 Improvement Refunding, Series 2002, 4.375%, 4/01/17 2,115 Baltimore County, Maryland, General Obligation Consolidated 8/12 at 100.00 AAA 2,420,025 Public Improvement Bonds, Series 2002, 5.250%, 8/01/17 Frederick County, Maryland, General Obligation Public Facilities Bonds, Series 2002: 1,830 5.000%, 11/01/20 11/12 at 101.00 AA 2,009,962 2,035 5.000%, 11/01/21 11/12 at 101.00 AA 2,218,252 2,500 5.000%, 11/01/22 11/12 at 101.00 AA 2,708,675 1,210 Howard County, Maryland, Consolidated Public Improvement 2/09 at 101.00 AAA 1,290,066 Bonds, Series 2001A, 4.750%, 2/15/19 2,000 State of Maryland, General Obligation Bonds, State and No Opt. Call AAA 2,326,800 Local Facilities Loan, 2002 Series B, 5.250%, 2/01/10 2,000 Montgomery County, Maryland, General Obligation 2/12 at 101.00 AAA 2,192,520 Consolidated Public Improvement Bonds, Series 2002A, 5.000%, 2/01/20 5,000 Prince George's County, Maryland, General Obligation 9/12 at 101.00 AA 5,082,600 Consolidated Public Improvement Bonds, Series 2002, 4.300%, 9/15/21 2,430 Commonwealth of Puerto Rico, General Obligation Public 7/11 at 100.00 AAA 2,585,763 Improvement Refunding Bonds, Series 2001, 5.125%, 7/01/30 - FSA Insured 1,000 St. Mary's County, Maryland, General Obligation Hospital No Opt. Call AA- 1,159,110 Bonds, Series 2002, 5.000%, 10/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 39.3% 500 Mayor and City Council of Baltimore, Maryland, Convention 9/08 at 102.00 AAA 547,860 Center Refunding Revenue Bonds, Series 1998, 5.000%, 9/01/19 - MBIA Insured 1,000 Baltimore Board of School Commissioners, Maryland, City 5/13 at 100.00 AA+ 1,134,190 Public School System Revenue Bonds, Series 2003A, 5.000%, 5/01/15 (WI, settling 6/05/03) 5,000 Department of Transportation, Maryland, County No Opt. Call AA 6,053,200 Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16 2,200 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 2,293,302 Bonds, Maryland Department of Transportation Headquarters Building, Series 2002, 4.750%, 6/01/22 2,935 Maryland Economic Development Corporation, Montgomery 9/12 at 100.00 AA+ 3,340,500 County, Lease Revenue Bonds, Wayne Avenue Parking Project, Series 2002A, 5.250%, 9/15/16 Maryland Stadium Authority, Montgomery County Conference Center, Facilities Lease Revenue Bonds, Series 2003: 1,465 5.000%, 6/15/21 6/13 at 100.00 AA+ 1,587,049 1,620 5.000%, 6/15/23 6/13 at 100.00 AA+ 1,738,309 700 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 847,413 Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured 3,500 Puerto Rico Infrastructure Financing Authority, Special Tax 1/08 at 101.00 AAA 3,643,745 Revenue Bonds, Series 1997A, 5.000%, 7/01/28 - AMBAC Insured 29 Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI) (continued) Portfolio of INVESTMENTS May 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Bonds, Series 2002G: $ 1,000 5.250%, 7/01/17 7/12 at 100.00 A- $ 1,098,000 1,205 5.250%, 7/01/20 7/12 at 100.00 A- 1,297,351 1,275 5.250%, 7/01/21 7/12 at 100.00 A- 1,363,778 2,000 Puerto Rico Municipal Finance Agency, 2002 Series A, 8/12 at 100.00 AAA 2,122,640 5.000%, 8/01/27 - FSA Insured 1,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 1,147,230 Appropriation Bonds, 1998 Series A, 5.125%, 6/01/24 - AMBAC Insured 2,000 Puerto Rico Public Finance Corporation, Series 2001A, 8/11 at 100.00 AAA 2,106,040 Commonwealth Appropriation Bonds, 5.000%, 8/01/31 - MBIA Insured 935 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB+ 996,953 Appropriation Bonds, 2002 Series E, 5.500%, 8/01/29 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 7.1% 5,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 5,668,800 Obligation Bonds, 2000 Series A, 5.500%, 10/01/40 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 7.1% 1,250 Maryland Energy Financing Administration, Limited Obligation 9/05 at 102.00 N/R 1,283,213 Cogeneration Revenue Bonds, AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) 4,025 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 4,392,724 Series HH, 5.250%, 7/01/29 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 3.4% 2,570 Baltimore, Maryland, Wastewater Project Revenue Bonds, 7/12 at 100.00 AAA 2,707,622 Series 2002A Refunding, 5.125%, 7/01/42 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 109,535 Total Long-Term Investments (cost $112,857,534) - 147.1% 117,239,131 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.8% 1,460,953 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.9)% (39,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $79,700,084 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. N/R Investment is not rated. (WI) Security purchased on a when-issued basis. See accompanying notes to financial statements. 30
Nuveen Virginia Premium Income Municipal Fund (NPV) Portfolio of INVESTMENTS May 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 1.0% $ 1,670 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 A- $ 1,466,026 Asset-Backed Bonds, Series 2002 Refunding, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 14.5% 3,500 Industrial Development Authority of the City of Alexandria, 10/10 at 101.00 AAA 4,100,495 Virginia, Fixed-Rate Revenue Bonds, Institute for Defense Analyses, Series 2000A, 5.900%, 10/01/30 - AMBAC Insured Industrial Development Authority of Danville, Virginia, Student Housing Revenue Bonds, Collegiate Housing Foundation - Averett College Project, Series 1999A: 500 6.875%, 6/01/20 6/09 at 102.00 N/R 492,625 1,500 7.000%, 6/01/30 6/09 at 102.00 N/R 1,477,650 2,940 Industrial Development Authority of the City of Lynchburg, 9/03 at 102.00 A- 3,034,492 Virginia, Educational Facilities Revenue Bonds, Randolph- Macon Women's College, Series 1993, 5.875%, 9/01/13 (Pre-refunded to 9/01/03) 2,500 Industrial Development Authority of the City of Lynchburg, 9/03 at 102.00 A- 2,580,350 Virginia, Educational Facilities Revenue Bonds, Randolph- Macon Woman's College, Series 1993, 5.875%, 9/01/23 (Pre-refunded to 9/01/03) 500 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 537,850 Revenue Refunding and Improvement Bonds, Series 1999, 6.000%, 10/15/28 500 Industrial Development Authority of Rockbridge County, 7/11 at 100.00 Ba1 489,050 Virginia, Virginia Horse Center, Revenue and Refunding Bonds, Series 2001C, 6.850%, 7/15/21 2,000 Virginia College Building Authority, Educational Facilities 9/11 at 100.00 AA+ 2,111,200 Revenue Bonds, Public Higher Education Financing Program, Series 2001A, 5.000%, 9/01/26 3,000 Virginia College Building Authority, Educational Facilities 11/04 at 100.00 Aa1 3,175,920 Revenue Bonds, University of Richmond Project, Series 1994, 5.550%, 11/01/19 (Optional put 11/01/04) 1,000 Virginia College Building Authority, Educational Facilities No Opt. Call AAA 1,164,200 Revenue Bonds, Washington and Lee University Project, Series 1998, 5.250%, 1/01/31 - MBIA Insured 1,000 Virginia College Building Authority, Educational Facilities 4/10 at 101.00 A+ 1,137,410 Revenue Bonds, Hampton University Project, Series 2000, 6.000%, 4/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 22.7% 2,000 Albemarle County Industrial Development Authority, 10/12 at 100.00 A2 2,046,240 Virginia, Hospital Revenue Bonds, Martha Jefferson Hospital, Series 2002, 5.250%, 10/01/35 4,850 Industrial Development Authority of Fairfax County, Virginia, No Opt. Call AA 5,322,342 Hospital Revenue Refunding Bonds, Inova Health System Hospitals Project, Series 1993A, 5.000%, 8/15/23 1,200 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 1,224,336 Revenue Bonds, Medicorp Health System, Series 2002B, 5.125%, 6/15/33 4,650 Hanover County Industrial Development Authority, Virginia, 8/05 at 102.00 AAA 5,066,594 Hospital Revenue Bonds, Bon Secours Health System Obligated Group, Series 1995, 5.500%, 8/15/25 - MBIA Insured 1,500 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 1,590,930 Revenue Bonds, Bon Secours Health System, Inc., Series 2002A, 5.600%, 11/15/30 1,500 Henrico County Industrial Development Authority, Virginia, No Opt. Call AAA 1,915,755 Healthcare Revenue Bonds, Bon Secours Health, Series 1996, 6.250%, 8/15/20 - MBIA Insured Loudoun County Industrial Development Authority, Virginia, Loudoun Hospital Center Revenue Bonds, Series 2002A: 375 6.000%, 6/01/22 6/12 at 101.00 BBB- 395,325 800 6.100%, 6/01/32 6/12 at 101.00 BBB- 839,376 2,260 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 2,318,331 Revenue Bonds, Prince William Hospital, Series 2002, 5.250%, 4/01/33 31 Nuveen Virginia Premium Income Municipal Fund (NPV) (continued) Portfolio of INVESTMENTS May 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) $ 4,750 Medical College of Virginia Hospitals Authority, General 7/08 at 102.00 AAA $ 5,009,873 Revenue Bonds, Series 1998, 5.125%, 7/01/23 - MBIA Insured 2,500 Industrial Development Authority of the City of Norfolk, 11/04 at 102.00 AA 2,723,450 Virginia, Hospital Revenue and Refunding Bonds, Sentara Hospitals - Norfolk, Series 1994A, 6.500%, 11/01/13 3,000 Industrial Development Authority of the County of Roanoke, 7/12 at 100.00 AAA 3,380,070 Virginia, Hospital Revenue Bonds, Carilion Health System, Series 2002A, 5.500%, 7/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 8.5% 515 Industrial Development Authority of Arlington County, 7/05 at 102.00 A 546,147 Virginia, Multifamily Housing Mortgage Revenue Bonds, Arlington Housing Corporation, 1995 Series, 5.700%, 7/01/07 1,505 Industrial Development Authority of Arlington County, 5/10 at 100.00 Aaa 1,640,917 Virginia, Multifamily Housing Revenue Bonds, Patrick Henry Apartments Project, Series 2000, 6.050%, 11/01/32 (Alternative Minimum Tax) (Mandatory put 11/01/20) 4,445 Hampton Redevelopment and Housing Authority, Virginia, 7/03 at 102.00 A-1+ 4,597,197 Multifamily Housing Revenue Refunding Bonds, Series 1994, Chase Hampton II Apartments, 7.000%, 7/01/24 (Mandatory put 7/01/04) 1,495 Economic Development Authority of Henrico County, Virginia, 7/09 at 102.00 AAA 1,687,451 Beth Sholom Assisted Living Revenue Bonds, GNMA Mortgage-Backed Securities, Financing Series 1999A, 5.900%, 7/20/29 1,000 Lynchburg Redevelopment and Housing Authority, Virginia, 4/10 at 102.00 AAA 1,064,530 Vistas Revenue Bonds - GNMA Mortgage-Backed Securities Financing, Series 2000A, 6.200%, 1/20/40 (Alternative Minimum Tax) 2,355 Suffolk Redevelopment and Housing Authority, Virginia, 7/03 at 100.00 AAA 2,357,355 Mortgage Revenue Refunding Bonds, Series 1993, FHA-Insured Mortgage Loan - Wilson Pines Apartments, Section 8 Assisted Project, 6.125%, 1/01/23 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 1.5% 1,000 Puerto Rico Housing Finance Authority, Home Mortgage 6/13 at 100.00 AAA 1,020,240 Revenue Bonds, Mortgage-Backed Securities Program, Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax) 1,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 1,049,920 Mortgage Bonds, 2001 Series H, Subseries H-1, 5.350%, 7/01/31 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 1.5% 2,000 Industrial Development Authority of the County of Charles No Opt. Call BBB 2,078,620 City, Virginia, Solid Waste Disposal Facility Revenue Refunding Bonds, USA Waste of Virginia, Inc. Project, Series 1999, 4.875%, 2/01/09 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 1.6% Industrial Development Authority of the City of Winchester, Virginia, Residential Care Facility First Mortgage Revenue Bonds, Westminster-Canterbury of Winchester, Inc., Series 1998: 1,350 5.750%, 1/01/18 7/03 at 102.00 N/R 1,317,411 1,000 5.750%, 1/01/27 7/03 at 102.00 N/R 943,370 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 2.0% 500 Industrial Development Authority of the County of Bedford, 2/08 at 102.00 Ba3 377,350 Virginia, Industrial Development Refunding Revenue Bonds, Nekoosa Packaging Corporation, Series 1998, 5.600%, 12/01/25 (Alternative Minimum Tax) 1,900 Industrial Development Authority of the County of Bedford, 12/09 at 101.00 Ba3 1,639,187 Virginia, Industrial Development Refunding Revenue Bonds, Nekoosa Packaging Corporation, Series 1999A, 6.550%, 12/01/25 (Alternative Minimum Tax) 1,000 Industrial Development Authority of Goochland County, 12/08 at 101.00 Ba3 759,900 Virginia, Industrial Development Refunding Revenue Bonds, Nekoosa Packaging Corporation Project, Series 1998, 5.650%, 12/01/25 (Alternative Minimum Tax) 32 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 13.3% $ 2,060 City of Chesapeake, Virginia, General Obligation Water 6/13 at 100.00 AA $ 2,213,511 and Sewer Bonds, Series 2003B, 5.000%, 6/01/23 (WI, settling 6/19/03) Hampton, Virginia, Public Improvement General Obligation Bonds, Series 2000: 890 5.750%, 2/01/17 2/10 at 102.00 AA 1,047,699 2,000 6.000%, 2/01/20 2/10 at 102.00 AA 2,383,000 1,355 Harrisonburg, Virginia, General Obligation Bonds, 7/12 at 101.00 AAA 1,489,497 Series 2002A, Public Safety and Steam Plant, 5.000%, 7/15/19 - FGIC Insured 585 Loudoun County, Virginia, General Obligation Public 5/12 at 100.00 AA+ 641,915 Improvement Bonds, Series 2002A, 5.250%, 5/01/22 Newport News, Virginia, General Obligation Bonds, Series 2002A, General Improvement and Water Projects: 2,770 5.000%, 7/01/19 7/13 at 100.00 AA 3,062,152 1,000 5.000%, 7/01/20 7/13 at 100.00 AA 1,095,780 1,830 Newport News, Virginia, General Obligation Bonds, 11/13 at 100.00 AA 2,087,627 Series 2003B, 5.000%, 11/01/15 (WI, settling 6/3/03) 1,400 Northern Mariana Islands Commonwealth, General Obligation 6/10 at 100.00 A 1,522,752 Bonds, Series 2000A, 6.000%, 6/01/20 - ACA Insured 1,430 Roanoke, Virginia, General Obligation Public Improvement 10/12 at 101.00 AA 1,604,388 Bonds, Series 2002A, 5.000%, 10/01/17 1,425 Virginia Beach, Virginia, General Obligation Public 6/11 at 101.00 AA+ 1,547,963 Improvement Bonds, Series 2001, 5.000%, 6/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 24.8% 750 Bristol, Virginia, General Obligation Utility System 11/12 at 102.00 AAA 808,553 Revenue Bonds, Series 2002, 5.000%, 11/01/24 - FSA Insured Cumberland County, Virginia, Certificates of Participation, Series 1997: 1,075 6.200%, 7/15/12 No Opt. Call N/R 1,195,239 1,350 6.375%, 7/15/17 No Opt. Call N/R 1,531,926 500 Industrial Development Authority of Dinwiddie County, 2/07 at 102.00 N/R 527,380 Virginia, Lease Revenue Bonds, Dinwiddie County School Facilities Project, Series 1997A, 6.000%, 2/01/18 1,000 Fairfax County Economic Development Authority, 9/09 at 102.00 AA 1,194,680 Virginia, Parking Revenue Bonds, Vienna II Metrorail Station Project, 1999 First Series, 6.000%, 9/01/18 Greater Richmond Convention Center Authority, Virginia, Hotel Tax Revenue Bonds, Convention Center Expansion Project, Series 2000: 600 6.125%, 6/15/25 6/10 at 101.00 A- 680,322 2,000 6.125%, 6/15/29 6/10 at 101.00 A- 2,258,560 3,000 Hampton Roads Regional Jail Authority, Virginia, Regional 7/06 at 102.00 AAA 3,346,380 Jail Facility Revenue Bonds, Series 1996A, 5.500%, 7/01/24 - MBIA Insured 1,230 Middlesex County, Virginia, Industrial Development 8/09 at 102.00 AAA 1,457,292 Authority, Lease Revenue Bonds, School Facilities Project, Series 1999, 6.000%, 8/01/24 - MBIA Insured 1,200 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,452,708 Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured 2,000 Puerto Rico Highway and Transportation Authority, 7/12 at 100.00 AAA 2,115,880 Transportation Revenue Bonds, Series D, 5.000%, 7/01/32 - FSA Insured Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Bonds, Series 2002D Refunding: 1,000 5.250%, 7/01/27 7/12 at 100.00 A- 1,049,530 1,200 5.250%, 7/01/36 7/12 at 100.00 A- 1,251,192 2,000 Virgin Islands Public Finance Authority, Revenue Bonds, 10/10 at 101.00 BBB- 2,305,880 Virgin Islands Gross Receipts Tax Loan Note, Series 1999A, 6.500%, 10/01/24 2,250 Virginia College Building Authority, Educational Facilities 2/09 at 101.00 AA+ 2,622,240 Revenue Bonds, 21st Century College Program, Series 2000, 6.000%, 2/01/20 33 Nuveen Virginia Premium Income Municipal Fund (NPV) (continued) Portfolio of INVESTMENTS May 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 2,000 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ $ 2,135,380 Revenue Bonds, 21st Century College and Equipment Program, Series 2002A, 5.000%, 2/01/22 2,000 Virginia Public School Authority, School Financing Bonds, 8/10 at 101.00 AA+ 2,185,360 1997 Resolution, Series 2000B, 5.000%, 8/01/18 Virginia Resources Authority, Infrastructure Revenue Bonds, Pooled Loan Bond Program, Series 2000B: 1,120 5.500%, 5/01/20 - FSA Insured 5/10 at 101.00 AAA 1,268,770 3,060 5.500%, 5/01/30 - FSA Insured 5/10 at 101.00 AAA 3,400,547 1,740 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/11 at 101.00 AA 1,895,121 Pooled Loan Bond Program, Series 2002A, 5.000%, 5/01/19 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 11.8% 1,400 Metropolitan Washington Airports Authority, Virginia, Airport 10/07 at 101.00 Aa3 1,462,314 System Revenue Bonds, Series 1997A, 5.375%, 10/01/23 4,000 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 4,225,200 Series 2001A, 5.125%, 7/01/31 - FGIC Insured 530 Pocahontas Parkway Association, Virginia, Route 895 8/08 at 102.00 Baa3 358,953 Connector Toll Road Senior Lien Revenue Bonds, Series 1998A, 5.500%, 8/15/28 1,500 Richmond Metropolitan Authority, Virginia, Expressway No Opt. Call AAA 1,745,595 Revenue Bonds, Series 2002 Refunding, 5.250%, 7/15/22 - FGIC Insured 6,065 Virginia Port Authority, Port Facilities Revenue Bonds, 7/07 at 101.00 AAA 6,666,102 Series 1997, 5.600%, 7/01/27 (Alternative Minimum Tax) - MBIA Insured 2,000 Virginia Resources Authority, Airport Revolving Fund 2/11 at 100.00 Aa2 2,157,440 Revenue Bonds, Series 2001A, 5.250%, 8/01/23 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 11.4% 1,530 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,718,817 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded to 7/01/10) 4,200 Commonwealth of Puerto Rico, General Obligation Public 7/06 at 101.50 A-*** 4,769,436 Improvement Bonds of 1996, 5.400%, 7/01/25 (Pre-refunded to 7/01/06) 2,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 2,834,400 Obligation Bonds, 2000 Series A, 5.500%, 10/01/40 3,955 Virginia Resources Authority, Water and Sewer System 10/07 at 100.00 AA*** 4,563,872 Revenue Bonds, 1995 Series A, Sussex County Project, 5.600%, 10/01/25 (Pre-refunded to 10/01/07) 2,000 City of Winchester, Virginia, General Obligation Public 1/04 at 102.00 AA*** 2,095,720 Improvement and Refunding Bonds, Series 1994 5.500%, 1/15/14 (Pre-refunded to 1/15/04) - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 10.7% 2,500 Mecklenburg County Industrial Development Authority, 10/12 at 100.00 BBB- 2,586,600 Virginia, Exempt Facility Revenue Bonds, UAE LP Project, Series 2002 Refunding, 6.500%, 10/15/17 3,500 City of Richmond, Virginia, Public Utility Revenue Bonds, 1/08 at 101.00 AAA 3,651,655 Series 1998A Refunding, 5.125%, 1/15/28 - FGIC Insured City of Richmond, Virginia, Public Utility Revenue Bonds, Series 2002 Refunding: 750 5.000%, 1/15/27 - FSA Insured 1/12 at 100.00 AAA 790,448 1,600 5.000%, 1/15/33 - FSA Insured 1/12 at 100.00 AAA 1,679,328 6,150 Southeastern Public Service Authority of Virginia, Senior 7/03 at 102.00 A- 6,299,199 Revenue Bonds, Series 1993, Regional Solid Waste System, 6.000%, 7/01/17 (Alternative Minimum Tax) (Pre-refunded to 7/03/03) 34 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 18.4% $ 2,000 Fairfax County, Virginia, Sewer Revenue Bonds, Series 1996, 7/06 at 102.00 AAA $ 2,257,440 5.875%, 7/15/28 - MBIA Insured 2,000 Fairfax County Water Authority, Virginia, Water Revenue 4/10 at 101.00 AAA 2,286,120 Bonds, Series 2000, 5.625%, 4/01/25 Fairfax County Water Authority, Virginia, Water Revenue Bonds, Series 2002 Refunding: 2,030 5.375%, 4/01/19 4/12 at 100.00 AAA 2,294,814 1,000 5.000%, 4/01/27 4/12 at 100.00 AAA 1,055,470 1,650 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ 1,734,909 and Refunding Bonds, Series 1999, 5.000%, 5/01/28 6,200 City of Norfolk, Virginia, Water Revenue Bonds, Series 1995, 11/05 at 102.00 AAA 6,911,016 5.875%, 11/01/20 - MBIA Insured City of Norfolk, Virginia, Water Revenue and Refunding Bonds, Series 2001: 1,310 5.000%, 11/01/21 - FGIC Insured 11/11 at 100.00 AAA 1,401,857 1,380 5.000%, 11/01/22 - FGIC Insured 11/11 at 100.00 AAA 1,467,023 1,955 Rivanna Water and Sewer Authority, Virginia, Regional Water 10/09 at 101.00 Aa3 2,134,313 and Sewer System Revenue Bonds, Series 1999, 5.625%, 10/01/29 1,000 Upper Occoquan Sewage Authority, Virginia, Regional 1/04 at 102.00 AAA 1,037,630 Sewerage System Revenue Refunding Bonds, Series 1993, 5.000%, 7/01/21 - FGIC Insured 2,250 City of Virginia Beach, Virginia, Storm Water Utility Revenue 9/10 at 101.00 Aa3 2,667,015 Bonds, Series 2000, 6.000%, 9/01/24 500 Virginia Resources Authority, Clean Water State Revolving 10/10 at 100.00 AAA 576,332 Fund Revenue Bonds, Series 1999, 5.625%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ $ 186,335 Total Long-Term Investments (cost $184,634,591) - 143.7% 201,487,727 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 1.4% 2,000 Loudoun County Industrial Development Authority, Virginia, A-1+ 2,000,000 Variable Rate Demand Revenue Bonds, Howard Hughes Medical Institute, Series 2003E, 1.300%, 2/15/38+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 2,000 Total Short-Term Investments (cost $2,000,000) 2,000,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $186,634,591) - 145.1% 203,487,727 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 0.4% 535,455 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (45.5)% (63,800,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $140,223,182 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. (WI) Security purchased on a when-issued basis. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 35
Nuveen Virginia Dividend Advantage Municipal Fund (NGB) Portfolio of INVESTMENTS May 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 4.4% Guam Economic Development Authority, Asset-Backed Bonds, Series 2001A: $ 155 5.000%, 5/15/22 5/11 at 100.00 Baa2 $ 152,664 850 5.400%, 5/15/31 5/11 at 100.00 Baa2 751,502 1,400 Guam Economic Development Authority, Asset-Backed Bonds, 5/11 at 100.00 Baa2 1,197,532 2001 Series B, 5.500%, 5/15/41 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 11.1% 500 Industrial Development Authority of the City of Danville, 3/11 at 102.00 N/R 507,900 Virginia, Educational Facilities Revenue Bonds, Averett University Project, Series 2001, 6.000%, 3/15/22 850 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 914,345 Revenue Refunding and Improvement Bonds, Series 1999, 6.000%, 10/15/28 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, Series 1999, Ana G. Mendez University System Project: 160 5.375%, 2/01/19 2/09 at 101.00 BBB 168,869 320 5.375%, 2/01/29 2/09 at 101.00 BBB 330,112 465 Industrial Development Authority of Rockbridge County, No Opt. Call Ba1 438,281 Virginia, Virginia Horse Center Revenue and Refunding Bonds, Series 2001B, 6.125%, 7/15/11 1,000 Industrial Development Authority of Rockbridge County, 7/11 at 100.00 Ba1 978,100 Virginia, Virginia Horse Center Revenue and Refunding Bonds, Series 2001C, 6.850%, 7/15/21 1,325 Virginia College Building Authority, Educational Facilities 9/10 at 100.00 AA+ 1,458,931 Revenue Bonds, Public Higher Education Financing Program, Series 2000A, 5.000%, 9/01/17 500 Virginia College Building Authority, Educational Facilities 7/08 at 101.00 AA 531,340 Revenue and Refunding Bonds, Marymount University Project, Series 1998, 5.100%, 7/01/18 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 21.8% Industrial Development Authority of Albemarle County, Virginia, Hospital Refunding Revenue Bonds, Martha Jefferson Hospital, Series 1993: 1,000 5.500%, 10/01/15 10/03 at 102.00 A2 1,024,710 1,000 5.500%, 10/01/20 10/03 at 102.00 A2 1,022,650 1,000 Industrial Development Authority of Fauquier County, 10/12 at 102.00 AA 1,050,990 Virginia, Hospital Revenue Bonds, Fauquier Hospital, Series 2002, 5.250%, 10/01/25 - RAAI Insured 2,000 Industrial Development Authority of the City of 6/07 at 102.00 AAA 2,227,860 Fredericksburg, Virginia, Hospital Facilities Revenue Refunding Bonds, MediCorp Health System Obligated Group, Series 1996, 5.250%, 6/15/16 - AMBAC Insured 500 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 510,140 Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%, 6/15/33 500 Henrico County, Virginia, Economic Development Authority 11/12 at 100.00 A- 530,310 Revenue Bonds, Bon Secours Health System, Inc., Series 2002A, 5.600%, 11/15/30 425 Loudoun County Industrial Development Authority, Virginia, 6/12 at 101.00 BBB- 448,035 Loudoun Hospital Center Revenue Bonds, Series 2002A, 6.000%, 6/01/22 1,000 Industrial Development Authority of the City of Lynchburg, 1/08 at 101.00 A+ 1,029,420 Virginia, Healthcare Facilities Revenue and Refunding Bonds, Centra Health, Series 1998, 5.200%, 1/01/23 675 Manassas Industrial Development Authority, Virginia, 4/13 at 100.00 A2 692,422 Hospital Revenue Bonds, Prince William Hospital, Series 2002, 5.250%, 4/01/33 1,000 Industrial Development Authority of the City of Norfolk, 8/07 at 102.00 AAA 1,049,830 Virginia, Healthcare Revenue Bonds, Series 1997, Bon Secours Health System, 5.250%, 8/15/26 - MBIA Insured 800 Industrial Development Authority of the City of Norton, 12/11 at 101.00 A 876,120 Virginia, Hospital Revenue Bonds, Norton Community Hospital Refunding and Improvement, Series 2001, 6.000%, 12/01/22 - ACA Insured 36 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 4.4% $ 1,000 Industrial Development Authority of Arlington County, 11/11 at 102.00 AAA $ 1,062,970 Virginia, Multifamily Housing Mortgage Revenue Bonds, Arlington View Terrace Apartments, Series 2001, 5.150%, 11/01/31 (Alternative Minimum Tax) (Mandatory put 11/01/19) 1,000 Virginia Housing Development Authority, Rental Housing 10/10 at 100.00 AA+ 1,074,090 Bonds, 2000 Series G, 5.625%, 10/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 2.2% 1,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 1,049,920 Mortgage Bonds, 2001 Series H, Subseries H-1, 5.350%, 7/01/31 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 4.2% 2,000 Industrial Development Authority of Albemarle County, 1/12 at 100.00 N/R 2,034,040 Virginia, Residential Care Facility Revenue Bonds, Westminster Canterbury of the Blue Ridge First Mortgage, Series 2001, 6.200%, 1/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 0.4% 25 Industrial Development Authority of Bedford County, Virginia, 2/08 at 102.00 Ba3 18,868 Industrial Development Refunding Revenue Bonds, Nekoosa Packaging Corporation, Series 1998, 5.600%, 12/01/25 (Alternative Minimum Tax) 20 Industrial Development Authority of the County of Bedford, 12/09 at 101.00 Ba3 17,255 Virginia, Industrial Development Refunding Revenue Bonds, Nekoosa Packaging Corporation, Series 1999A, 6.550%, 12/01/25 (Alternative Minimum Tax) 220 Industrial Development Authority of Goochland County, 12/08 at 101.00 Ba3 167,178 Virginia, Industrial Development Refunding Revenue Bonds, Nekoosa Packaging Corporation Project, Series 1998, 5.650%, 12/01/25 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 26.9% 2,000 County of Chesterfield, Virginia, General Obligation Public 1/11 at 100.00 AAA 2,164,100 Improvement Bonds, Series 2001, 5.000%, 1/15/21 3,310 Town of Leesburg, Virginia, General Obligation Public 1/11 at 101.00 AAA 3,599,261 Improvement Bonds, Series 2000, 5.125%, 1/15/21 - FGIC Insured 1,540 Loudoun County, Virginia, General Obligation Public Improvement 1/11 at 101.00 AA+ 1,701,253 Bonds, Series 2001B, 5.250%, 1/01/20 1,000 Newport News, Virginia, General Obligation Bonds, 5/10 at 102.00 AA 1,169,570 Series 2000A, 5.625%, 5/01/16 320 Northern Mariana Islands Commonwealth, General Obligation 6/10 at 100.00 A 348,058 Bonds, Series 2000A, 6.000%, 6/01/20 - ACA Insured 1,300 City of Richmond, Virginia, General Obligation Public 1/10 at 101.00 AAA 1,383,642 Improvement and Refunding Bonds, Series 1999A, 5.125%, 1/15/24 - FSA Insured 2,425 Virginia Beach, Virginia, General Obligation Public 6/11 at 101.00 AA+ 2,616,842 Improvement Bonds, Series 2001, 5.000%, 6/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 12.0% 350 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R 355,971 Assessment Bonds, Series 2003A, 6.750%, 3/01/22 500 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 497,635 Revenue Bond, Series 2003, 7.500%, 6/01/33 500 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 605,295 Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured 960 Virgin Islands Public Finance Authority, Revenue Bonds, 10/10 at 101.00 BBB- 1,115,827 Virgin Islands Gross Receipts Tax Loan Note, Series 1999A, 6.375%, 10/01/19 500 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 533,845 Revenue Bonds, 21st Century College and Equipment Program, Series 2002A, 5.000%, 2/01/22 430 Virginia Commonwealth Transportation Board, Transportation 5/07 at 101.00 AA+ 471,517 Revenue Bonds, Northern Virginia Transportation District Program, Series 1997B Refunding, 5.125%, 5/15/19 2,000 Virginia Public School Authority, School Financing Bonds, 8/11 at 101.00 AA+ 2,182,540 1997 Resolution, Series 2001A, 5.000%, 8/01/19 37 Nuveen Virginia Dividend Advantage Municipal Fund (NGB) (continued) Portfolio of INVESTMENTS May 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 24.3% $ 1,750 Capital Region Airport Commission, Richmond, Virginia, 7/05 at 102.00 AAA $ 1,915,568 International Airport Projects, Airport Revenue Bonds, Series 1995A, 5.625%, 7/01/20 - AMBAC Insured 1,000 Chesapeake Bay and Bridge Tunnel Commission, Virginia, No Opt. Call AAA 1,185,080 District Revenue Bonds, General Resolution Refunding, Series 1998, 5.500%, 7/01/25 - MBIA Insured 3,000 Metropolitan Washington D.C. Airports Authority, Airport 10/11 at 101.00 AAA 3,195,360 System Revenue Bonds, Series 2001A, 5.500%, 10/01/27 (Alternative Minimum Tax) - MBIA Insured 250 Metropolitan Washington Airports Authority, Airport System 10/11 at 101.00 AAA 266,595 Revenue Bonds, Series 2001B, 5.000%, 10/01/21 - MBIA Insured 1,500 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 1,584,450 Series 2001A, 5.125%, 7/01/31 - FGIC Insured Pocahontas Parkway Association, Virginia, Route 895 Connector Toll Road Senior Lien Revenue Bonds, Series 1998A: 25 5.000%, 8/15/05 No Opt. Call Baa3 23,401 200 5.250%, 8/15/07 No Opt. Call Baa3 178,218 200 5.500%, 8/15/28 8/08 at 102.00 Baa3 135,454 500 Richmond Metropolitan Authority, Virginia, Expressway No Opt. Call AAA 581,865 Revenue Bonds, Series 2002 Refunding, 5.250%, 7/15/22 - FGIC Insured 1,225 Virginia Resources Authority, Airport Revolving Fund Revenue 2/11 at 100.00 Aa2 1,321,432 Bonds, Series 2001A, 5.250%, 8/01/23 1,250 Virginia Resources Authority, Airport Revolving Fund Revenue 2/11 at 100.00 Aa2 1,283,963 Bonds, Series 2001B, 5.125%, 8/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 8.5% 610 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 685,280 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded to 7/01/10) Puerto Rico Infrastructure Financing Authority, Special Obligation Bonds, 2000 Series A: 1,500 5.500%, 10/01/32 10/10 at 101.00 AAA 1,699,695 1,500 5.500%, 10/01/40 10/10 at 101.00 AAA 1,700,640 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 11.9% 1,000 City of Bristol, Virginia, Utility System Revenue and Refunding 7/11 at 102.00 AAA 1,079,510 Bonds, Series 2001, 5.000%, 7/15/21 - FSA Insured 1,000 Mecklenburg County Industrial Development Authority, 10/12 at 100.00 BBB- 1,034,640 Virginia, Exempt Facility Revenue Bonds, UAE LP Project, Series 2002 Refunding, 6.500%, 10/15/17 1,725 Puerto Rico Electric Power Authority, Power Revenue 7/05 at 100.00 A- 1,805,972 Refunding Bonds, Series Z, 5.250%, 7/01/21 City of Richmond, Virginia, Public Utility Revenue Bonds, Series 2002 Refunding: 500 5.000%, 1/15/27 - FSA Insured 1/12 at 100.00 AAA 526,965 1,200 5.000%, 1/15/33 - FSA Insured 1/12 at 100.00 AAA 1,259,496 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 14.3% 2,000 Fairfax County Water Authority, Virginia, Water Refunding No Opt. Call AAA 2,276,580 Revenue Bonds, Series 1997, 5.000%, 4/01/21 2,000 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ 2,125,480 and Refunding Revenue Bonds, Series 1999, 5.000%, 5/01/22 38 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER (continued) $ 520 Prince William County Service Authority, Virginia, Water 7/09 at 101.00 AAA $ 593,159 and Sewer System Revenue Bonds, Series 1999, 5.500%, 7/01/19 - FGIC Insured 1,680 Virginia Resources Authority, Clean Water State Revolving 10/10 at 100.00 AAA 1,886,603 Fund Revenue Bonds, Series 2000, 5.400%, 10/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ $ 65,960 Total Long-Term Investments (cost $66,139,784) - 146.4% 70,407,146 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.5% 1,694,364 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (49.9)% (24,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $48,101,510 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. N/R Investment is not rated. See accompanying notes to financial statements. 39
Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB) Portfolio of INVESTMENTS May 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 1.2% $ 1,250 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 A- $ 1,097,325 Asset-Backed Bonds, Series 2002 Refunding, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 7.0% 1,000 Fairfax County Economic Development Authority, Virginia, 9/09 at 101.00 Aaa 1,094,300 Revenue Bonds, National Wildlife Federation Project, Series 1999, 5.375%, 9/01/29 - MBIA Insured 3,000 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB 3,200,970 Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, Series 2002, Ana G. Mendez University System Project Refunding, 5.375%, 12/01/21 2,000 Virginia College Building Authority, Educational Facilities 9/11 at 100.00 AA+ 2,111,200 Revenue Bonds, Public Higher Education Financing Program, Series 2001A, 5.000%, 9/01/26 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 17.2% 1,500 Albemarle County Industrial Development Authority, Virginia, 10/12 at 100.00 A2 1,534,680 Hospital Revenue Bonds, Martha Jefferson Hospital, Series 2002, 5.250%, 10/01/35 3,000 Industrial Development Authority of Fauquier County, Virginia, 10/12 at 102.00 AA 3,152,970 Hospital Revenue Bonds, Fauquier Hospital, Series 2002, 5.250%, 10/01/25 - RAAI Insured 800 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 816,224 Revenue Bonds, MediCorp Health System, Series 2002B, 5.125%, 6/15/33 1,000 Henrico County, Virginia, Economic Development Authority, 11/12 at 100.00 A- 1,060,620 Revenue Bonds, Bon Secours Health System, Inc., Series 2002A, 5.600%, 11/15/30 Loudoun County Industrial Development Authority, Virginia, Loudoun Hospital Center Revenue Bonds, Series 2002A: 250 6.000%, 6/01/22 6/12 at 101.00 BBB- 263,550 600 6.100%, 6/01/32 6/12 at 101.00 BBB- 629,532 1,355 Manassas Industrial Development Authority, Virginia, Hospital 4/13 at 100.00 A2 1,389,973 Revenue Bonds, Prince William Hospital, Series 2002, 5.250%, 4/01/33 1,200 Industrial Development Authority of the City of Norton, 12/11 at 101.00 A 1,314,180 Virginia, Hospital Revenue Bonds, Norton Community Hospital Refunding and Improvement, Series 2001, 6.000%, 12/01/22 - ACA Insured 1,000 Industrial Development Authority of the County of Prince 10/08 at 102.00 Aaa 1,074,280 William, Virginia, Hospital Facility Refunding Revenue Bonds, Potomac Hospital Corporation of Prince William, Series 1998, 5.000%, 10/01/18 - FSA Insured 3,915 Industrial Development Authority of the County of Roanoke, 7/12 at 100.00 AAA 4,382,294 Virginia, Hospital Revenue Bonds, Carilion Health System, Series 2002A, 5.500%, 7/01/20 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 8.6% 7,485 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 7,858,651 Mortgage Bonds, 2001 Series H, Subseries H-1, 5.350%, 7/01/31 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 0.4% 40 Industrial Development Authority of the County of Bedford, 2/08 at 102.00 Ba3 30,188 Virginia, Industrial Development Refunding Revenue Bonds, Nekoosa Packaging Corporation, Series 1998, 5.600%, 12/01/25 (Alternative Minimum Tax) 460 Industrial Development Authority of Goochland County, 12/08 at 101.00 Ba3 349,554 Virginia, Industrial Development Refunding Revenue Bonds, Nekoosa Packaging Corporation Project, Series 1998, 5.650%, 12/01/25 (Alternative Minimum Tax) 40 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 30.0% $ 1,750 City of Chesapeake, Virginia, General Obligation Public 12/11 at 100.00 AA $ 2,038,645 Improvement Bonds, Series 2001 Refunding, 5.500%, 12/01/16 1,880 City of Chesapeake, Virginia, General Obligation Water 6/13 at 100.00 AA 2,042,620 and Sewer Bonds, Series 2003B, 5.000%, 6/01/21 (WI, settling 6/19/03) 1,730 Loudoun County, Virginia, General Obligation Public 11/11 at 101.00 AA+ 1,835,651 Improvement Bonds, Series 2001C, 4.500%, 11/01/17 540 Loudoun County, Virginia, General Obligation Public 5/12 at 100.00 AA+ 592,537 Improvement Bonds, Series 2002A, 5.250%, 5/01/22 1,840 Newport News, Virginia, General Obligation Bonds, 7/13 at 100.00 AA 2,016,235 Series 2002A, General Improvement and Water Projects, 5.000%, 7/01/20 525 City of Portsmouth, Virginia, General Obligation Public Utility 6/08 at 100.00 AAA 561,005 Bonds, Series 2001B Refunding, 5.000%, 6/01/21 - FGIC Insured Powhatan County, Virginia, General Obligation Bonds, Series 2001: 660 5.000%, 1/15/23 - AMBAC Insured 1/11 at 101.00 AAA 702,016 2,000 5.000%, 1/15/27 - AMBAC Insured 1/11 at 101.00 AAA 2,115,260 City of Roanoke, Virginia, General Obligation Public Improvement Bonds, Series 2002A: 2,400 5.000%, 10/01/18 10/12 at 101.00 AA 2,674,416 2,435 5.000%, 10/01/19 10/12 at 101.00 AA 2,693,037 1,280 City of Roanoke, Virginia, General Obligation Public Improvement 10/12 at 101.00 AAA 1,423,130 Bonds, Series 2002B, 5.000%, 10/01/15 (Alternative Minimum Tax) - FGIC Insured City of Salem, Virginia, General Obligation Public Improvement Bonds, Series 2002: 1,145 5.375%, 1/01/21 1/12 at 100.00 Aa3 1,271,156 1,200 5.375%, 1/01/22 1/12 at 100.00 Aa3 1,326,672 1,260 5.375%, 1/01/23 1/12 at 100.00 Aa3 1,388,180 1,325 5.375%, 1/01/24 1/12 at 100.00 Aa3 1,455,738 1,500 City of Virginia Beach, Virginia, General Obligation Public 6/11 at 101.00 AA+ 1,641,375 Improvement Bonds, Series 2001, 5.000%, 6/01/19 1,420 City of Virginia Beach, Virginia, General Obligation Public 3/12 at 100.00 AA+ 1,529,894 Improvement Bonds, Series 2002 Refunding, 5.000%, 3/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 27.8% 650 Bell Creek Community Development Authority, Virginia, 3/13 at 101.00 N/R 661,089 Special Assessment Bonds, Series 2003A, 6.750%, 3/01/22 1,000 City of Bristol, Virginia, General Obligation Utility System 11/12 at 102.00 AAA 1,078,070 Revenue Bonds, Series 2002, 5.000%, 11/01/24 - FSA Insured 1,000 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 995,270 Revenue Bonds, Series 2003, 7.500%, 6/01/33 700 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 847,413 Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Bonds, Series 2002D Refunding: 1,500 5.250%, 7/01/27 7/12 at 100.00 A- 1,574,295 500 5.250%, 7/01/36 7/12 at 100.00 A- 521,330 1,800 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB+ 1,919,268 Appropriation Bonds, 2002 Series E, 5.500%, 8/01/29 1,790 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 1,911,165 Revenue Bonds, 21st Century College and Equipment Program, Series 2002A, 5.000%, 2/01/22 1,710 Virginia Commonwealth Transportation Board, Transportation 5/11 at 100.00 AA+ 1,802,289 Revenue Bonds, Northern Virginia Transportation District Program, Series 2001A, 5.000%, 5/15/26 41 Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB) (continued) Portfolio of INVESTMENTS May 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) Virginia Commonwealth Transportation Board, Transportation Revenue Bonds, U.S. Route 58 Corridor Development Program, Series 2001B: $ 1,705 5.000%, 5/15/22 5/11 at 100.00 AA+ $ 1,812,432 1,665 5.000%, 5/15/23 5/11 at 100.00 AA+ 1,764,117 1,710 Virginia Public Building Authority, Public Facilities Revenue 8/08 at 100.00 AAA 1,852,118 Bonds, Series 1999A, 5.000%, 8/01/19 - MBIA Insured 2,540 Virginia Public School Authority, School Financing Bonds, 8/11 at 101.00 AA+ 2,771,826 1997 Resolution, Series 2001B, 5.000%, 8/01/19 Virginia Resources Authority, Infrastructure Revenue Bonds, Pooled Loan Bond Program, Series 2001D: 1,265 5.000%, 5/01/26 5/10 at 101.00 AA 1,324,291 4,330 5.000%, 5/01/31 5/10 at 101.00 AA 4,512,293 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 7.4% 2,500 Chesapeake Bay Bridge and Tunnel Commission, Virginia, No Opt. Call AAA 2,862,175 District Revenue Bonds, General Resolution Junior Lien, Series 2001B Refunding, 5.000%, 7/01/09 - FGIC Insured 1,000 Metropolitan Washington D.C. Airports Authority, Airport 10/12 at 100.00 AAA 1,029,850 System Revenue Bonds, 2002 Series A, 5.125%, 10/01/26 (Alternative Minimum Tax) - FGIC Insured Pocahontas Parkway Association, Virginia, Route 895 Connector Toll Road Senior Lien Revenue Bonds, Series 1998A: 25 5.000%, 8/15/05 No Opt. Call Baa3 23,401 300 5.250%, 8/15/07 No Opt. Call Baa3 267,327 325 5.500%, 8/15/28 8/08 at 102.00 Baa3 220,113 1,980 Richmond Metropolitan Authority, Virginia, Expressway No Opt. Call AAA 2,304,185 Revenue and Refunding Bonds, Series 1998, 5.250%, 7/15/22 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 7.8% 6,250 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 7,086,000 Obligation Bonds, 2000 Series A, 5.500%, 10/01/40 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 11.2% 2,000 Mecklenburg County Industrial Development Authority, 10/12 at 100.00 BBB- 2,069,280 Virginia, Exempt Facility Revenue Bonds, UAE LP Project, Series 2002 Refunding, 6.500%, 10/15/17 3,125 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 3,410,500 Series HH, 5.250%, 7/01/29 - FSA Insured City of Richmond, Virginia, Public Utility Revenue Bonds, Series 2002 Refunding: 1,000 5.000%, 1/15/27 - FSA Insured 1/12 at 100.00 AAA 1,053,930 2,400 5.000%, 1/15/33 - FSA Insured 1/12 at 100.00 AAA 2,518,992 1,110 Industrial Development Authority of Russell County, 11/08 at 101.00 AAA 1,187,312 Virginia, Pollution Control Revenue Bonds, Appalachian Power Company Project, Series 1998H, 5.000%, 11/01/21 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 26.2% 3,800 Fairfax County Water Authority, Virginia, Water Refunding No Opt. Call AAA 4,325,502 Revenue Bonds, Series 1997, 5.000%, 4/01/21 1,500 Fairfax County Water Authority, Virginia, Water Revenue 4/12 at 100.00 AAA 1,583,205 Bonds, Series 2002 Refunding, 5.000%, 4/01/27 Henry County Public Service Authority, Virginia, Water and Sewer Revenue Bonds, Series 2001 Refunding: 1,000 5.500%, 11/15/17 - FSA Insured No Opt. Call AAA 1,209,530 3,000 5.500%, 11/15/19 - FSA Insured No Opt. Call AAA 3,617,700 City of Norfolk, Virginia, Water Revenue and Refunding Bonds, Series 2001: 1,130 5.000%, 11/01/18 - FGIC Insured 11/11 at 100.00 AAA 1,236,175 1,190 5.000%, 11/01/19 - FGIC Insured 11/11 at 100.00 AAA 1,290,603 1,450 5.000%, 11/01/23 - FGIC Insured 11/11 at 100.00 AAA 1,538,262 1,525 5.000%, 11/01/24 - FGIC Insured 11/11 at 100.00 AAA 1,611,269 1,000 5.000%, 11/01/31 - FGIC Insured 11/11 at 100.00 AAA 1,046,460 42 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER (continued) $ 1,610 County of Spotsylvania, Virginia, Water and Sewer System 6/11 at 100.00 AAA $ 1,682,853 Revenue Bonds, Series 2001, 5.000%, 6/01/30 - FSA Insured 2,000 Upper Occoquan Sewage Authority, Virginia, Regional No Opt. Call AAA 2,310,980 Sewerage System Revenue Bonds, Series 1995, 5.150%, 7/01/20 - MBIA Insured 2,250 Virginia Resources Authority, Water and Sewer System Revenue 5/11 at 101.00 AA 2,376,176 Bonds, Caroline County Public Improvements Project, Series 2001, 5.000%, 5/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ $ 122,080 Total Long-Term Investments (cost $122,267,561) - 144.8% 131,877,104 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 1.1% 1,000 Loudoun County Industrial Development Authority, Virginia, A-1+ 1,000,000 Variable Rate Demand Revenue Bonds, Howard Hughes Medical Institute, Series 2003E, 1.300%, 2/15/38+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,000 Total Short-Term Investments (cost $1,000,000) 1,000,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $123,267,561) - 145.9% 132,877,104 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 0.2% 188,229 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (46.1)% (42,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $91,065,333 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. N/R Investment is not rated. (WI) Security purchased on a when-issued basis. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 43
Statement of ASSETS AND LIABILITIES May 31, 2003
MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at market value (cost $216,322,814, $88,907,152, $90,556,946 and $112,857,534, respectively) $229,676,697 $94,276,873 $96,433,583 $117,239,131 Cash -- 532,875 220,693 1,037,433 Receivables: Interest 4,495,386 1,654,879 1,496,845 1,644,286 Investments sold 7,566,576 480,073 -- -- Other assets 20,470 9,670 4,346 6,142 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 241,759,129 96,954,370 98,155,467 119,926,992 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft 243,324 -- -- -- Payable for investments purchased 2,803,001 555,836 602,341 1,136,492 Accrued expenses: Management fees 129,748 28,456 28,740 35,624 Other 63,932 28,609 29,592 50,308 Preferred share dividends payable 4,050 3,511 4,950 4,484 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 3,244,055 616,412 665,623 1,226,908 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 79,100,000 32,000,000 32,000,000 39,000,000 ==================================================================================================================================== Net assets applicable to Common shares $159,415,074 $64,337,958 $65,489,844 $ 79,700,084 ==================================================================================================================================== Common shares outstanding 10,557,585 4,158,671 4,167,884 5,354,283 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.10 $ 15.47 $ 15.71 $ 14.89 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 105,576 $ 41,587 $ 41,679 $ 53,543 Paid-in surplus 146,500,862 58,975,707 59,096,531 75,581,691 Undistributed net investment income 1,942,571 510,849 502,516 83,340 Accumulated net realized gain (loss) from investments (2,487,818) (559,906) (27,519) (400,087) Net unrealized appreciation of investments 13,353,883 5,369,721 5,876,637 4,381,597 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $159,415,074 $64,337,958 $65,489,844 $ 79,700,084 ==================================================================================================================================== Authorized shares: Common Unlimited Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited Unlimited ==================================================================================================================================== See accompanying notes to financial statements. 44
VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at market value (cost $186,634,591, $66,139,784 and $123,267,561, respectively) $203,487,727 $70,407,146 $132,877,104 Cash 1,553,716 687,752 561,082 Receivables: Interest 3,055,460 1,028,223 1,637,134 Investments sold 365,000 120,000 286,067 Other assets 9,724 7,435 6,530 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 208,471,627 72,250,556 135,367,917 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft -- -- -- Payable for investments purchased 4,275,894 103,080 2,235,595 Accrued expenses: Management fees 110,979 21,235 39,123 Other 58,787 23,546 24,986 Preferred share dividends payable 2,785 1,185 2,880 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 4,448,445 149,046 2,302,584 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 63,800,000 24,000,000 42,000,000 ==================================================================================================================================== Net assets applicable to Common shares $140,223,182 $48,101,510 $ 91,065,333 ==================================================================================================================================== Common shares outstanding 8,800,359 3,118,062 5,684,412 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.93 $ 15.43 $ 16.02 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 88,004 $ 31,181 $ 56,844 Paid-in surplus 123,747,396 44,189,032 80,640,173 Undistributed net investment income 1,506,057 354,056 465,866 Accumulated net realized gain (loss) from investments (1,971,411) (740,121) 292,907 Net unrealized appreciation of investments 16,853,136 4,267,362 9,609,543 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $140,223,182 $48,101,510 $ 91,065,333 ==================================================================================================================================== Authorized shares: Common Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited ==================================================================================================================================== See accompanying notes to financial statements. 45
Statement of OPERATIONS Year Ended May 31, 2003 MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI)* - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $12,640,995 $4,793,587 $ 4,524,936 $3,135,390 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 1,495,130 607,225 608,942 466,473 Preferred shares - auction fees 200,027 83,356 79,335 51,631 Preferred shares - dividend disbursing agent fees 20,000 10,000 10,000 5,425 Shareholders' servicing agent fees and expenses 36,243 3,383 1,848 2,438 Custodian's fees and expenses 63,101 34,079 32,510 25,534 Trustees' fees and expenses 2,800 1,271 2,926 1,225 Professional fees 14,510 13,495 11,168 13,346 Shareholders' reports - printing and mailing expenses 40,908 5,784 14,720 23,163 Stock exchange listing fees 16,385 348 436 202 Investor relations expense 31,267 6,153 8,190 8,670 Other expenses 12,514 8,022 8,479 1,422 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 1,932,885 773,116 778,554 599,529 Custodian fee credit (15,291) (5,838) (5,336) (16,205) Expense reimbursement -- (280,258) (281,050) (229,648) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 1,917,594 487,020 492,168 353,676 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 10,723,401 4,306,567 4,032,768 2,781,714 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS Net realized gain (loss) from investments 2,417,190 (444,217) 176,840 (400,087) Change in net unrealized appreciation (depreciation) of investments 8,129,891 5,349,299 6,557,094 4,381,597 - ------------------------------------------------------------------------------------------------------------------------------------ Net gain from investments 10,547,081 4,905,082 6,733,934 3,981,510 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (733,384) (321,178) (356,207) (245,067) From accumulated net realized gains from investments -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (733,384) (321,178) (356,207) (245,067) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $20,537,098 $8,890,471 $10,410,495 $6,518,157 ==================================================================================================================================== * For the period September 25, 2002 (commencement of operations) through May 31, 2003. See accompanying notes to financial statements. 46
VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $10,467,033 $3,546,945 $ 6,176,957 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 1,270,536 454,302 827,928 Preferred shares - auction fees 160,334 62,515 104,014 Preferred shares - dividend disbursing agent fees 20,000 10,000 10,000 Shareholders' servicing agent fees and expenses 35,360 2,212 2,982 Custodian's fees and expenses 57,927 26,671 34,777 Trustees' fees and expenses 2,099 804 1,973 Professional fees 39,274 9,681 11,206 Shareholders' reports - printing and mailing expenses 31,959 7,574 20,485 Stock exchange listing fees 11,727 456 832 Investor relations expense 26,027 3,721 13,343 Other expenses 14,860 9,211 10,436 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 1,670,103 587,147 1,037,976 Custodian fee credit (13,993) (7,467) (11,271) Expense reimbursement -- (209,678) (382,267) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 1,656,110 370,002 644,438 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 8,810,923 3,176,943 5,532,519 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS Net realized gain (loss) from investments 1,078,214 (429,332) 562,801 Change in net unrealized appreciation (depreciation) of investments 9,438,098 3,871,254 8,983,926 - ------------------------------------------------------------------------------------------------------------------------------------ Net gain from investments 10,516,312 3,441,922 9,546,727 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (582,520) (223,605) (456,477) From accumulated net realized gains from investments -- -- (21,076) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (582,520) (223,605) (477,553) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $18,744,715 $6,395,260 $14,601,693 ==================================================================================================================================== See accompanying notes to financial statements. 47
Statement of CHANGES IN NET ASSETS MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR) ----------------------------- ---------------------------- ----------------------------- FOR THE PERIOD 9/25/01 (COMMENCEMENT YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED OF OPERATIONS) 5/31/03 5/31/02 5/31/03 5/31/02 5/31/03 THROUGH 5/31/02 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 10,723,401 $ 10,807,188 $ 4,306,567 $ 4,321,839 $ 4,032,768 $ 2,351,555 Net realized gain (loss) from investments 2,417,190 1,246,503 (444,217) (51,148) 176,840 (204,367) Change in net unrealized appreciation (depreciation) of investments 8,129,891 145,991 5,349,299 941,869 6,557,094 (678,321) Distributions to Preferred Shareholders: From net investment income (733,384) (1,325,949) (321,178) (577,614) (356,207) (257,677) From accumulated net realized gains from investments -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 20,537,098 10,873,733 8,890,471 4,634,946 10,410,495 1,211,190 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (9,412,274) (8,760,619) (3,554,454) (3,489,426) (3,375,174) (1,894,877) From accumulated net realized gains from investments -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (9,412,274) -- (3,554,454) -- (3,375,174) -- - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- -- -- -- -- 59,424,315 Net proceeds from shares issued to shareholders due to reinvestment of distributions 494,984 481,491 45,521 39,474 34,422 18,843 Preferred shares offering costs -- -- 31,543 -- 50,355 (490,000) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 494,984 481,491 77,064 39,474 84,777 58,953,158 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares 11,619,808 2,594,605 5,413,081 1,184,994 7,120,098 58,269,471 Net assets applicable to Common shares at the beginning of period 147,795,266 145,200,661 58,924,877 57,739,883 58,369,746 100,275 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of period $159,415,074 $147,795,266 $64,337,958 $58,924,877 $65,489,844 $58,369,746 ==================================================================================================================================== Undistributed net investment income at the end of period $ 1,942,571 $ 1,467,113 $ 510,849 $ 78,110 $ 502,516 $ 199,001 ==================================================================================================================================== See accompanying notes to financial statements. 48
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB) ----------------- ---------------------------- ---------------------------- FOR THE PERIOD 9/25/02 (COMMENCEMENT OF OPERATIONS) YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED THROUGH 5/31/03 5/31/03 5/31/02 5/31/03 5/31/02 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 2,781,714 $ 8,810,923 $ 9,051,106 $ 3,176,943 $ 3,172,126 Net realized gain (loss) from investments (400,087) 1,078,214 727,999 (429,332) (124,637) Change in net unrealized appreciation (depreciation) of investments 4,381,597 9,438,098 (499,466) 3,871,254 1,095,723 Distributions to Preferred Shareholders: From net investment income (245,067) (582,520) (952,624) (223,605) (394,239) From accumulated net realized gains from investments -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 6,518,157 18,744,715 8,327,015 6,395,260 3,748,973 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (2,453,307) (7,864,088) (7,522,358) (2,683,388) (2,633,474) From accumulated net realized gains from investments -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (2,453,307) (7,864,088) -- (2,683,388) -- - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares 76,335,300 -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 105,659 687,975 704,912 52,795 37,832 Preferred shares offering costs (906,000) -- -- 28,686 -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 75,534,959 687,975 704,912 81,481 37,832 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares 79,599,809 11,568,602 1,509,569 3,793,353 1,153,331 Net assets applicable to Common shares at the beginning of period 100,275 128,654,580 127,145,011 44,308,157 43,154,826 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of period $79,700,084 $140,223,182 $128,654,580 $48,101,510 $44,308,157 ==================================================================================================================================== Undistributed net investment income at the end of period $ 83,340 $ 1,506,057 $ 1,119,659 $ 354,056 $ 83,355 ==================================================================================================================================== See accompanying notes to financial statements. 49
Statement of CHANGES IN NET ASSETS (continued) VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) ----------------------------- FOR THE PERIOD 11/15/01 (COMMENCEMENT YEAR ENDED OF OPERATIONS) 5/31/03 THROUGH 5/31/02 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 5,532,519 $ 2,341,899 Net realized gain (loss) from investments 562,801 (103,377) Change in net unrealized appreciation (depreciation) of investments 8,983,926 625,853 Distributions to Preferred Shareholders: From net investment income (456,477) (234,802) From accumulated net realized gains from investments (21,076) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 14,601,693 2,629,573 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (4,757,183) (1,960,304) From accumulated net realized gains from investments (145,463) -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (4,902,646) -- - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- 81,124,125 Net proceeds from shares issued to shareholders due to reinvestment of distributions 33,189 1,614 Preferred shares offering costs 8,152 (570,338) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 41,341 80,555,401 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares 9,740,388 81,224,670 Net assets applicable to Common shares at the beginning of period 81,324,945 100,275 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of period $91,065,333 $81,324,945 ==================================================================================================================================== Undistributed net investment income at the end of period $ 465,866 $ 146,793 ==================================================================================================================================== See accompanying notes to financial statements. 50
Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The state Funds (the "Funds") covered in this report and their corresponding Common share stock exchange symbols are Nuveen Maryland Premium Income Municipal Fund (NMY), Nuveen Maryland Dividend Advantage Municipal Fund (NFM), Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR), Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI), Nuveen Virginia Premium Income Municipal Fund (NPV), Nuveen Virginia Dividend Advantage Municipal Fund (NGB) and Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB). Maryland Premium Income (NMY) and Virginia Premium Income (NPV) are traded on the New York Stock Exchange while Maryland Dividend Advantage (NFM), Maryland Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI), Virginia Dividend Advantage (NGB) and Virginia Dividend Advantage 2 (NNB) are traded on the American Stock Exchange. The Funds are registered under the Investment Company Act of 1940, as amended, as closed-end management investment companies. Prior to the commencement of operations of Maryland Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI) and Virginia Dividend Advantage 2 (NNB), each Fund had no operations other than those related to organizational matters, the initial capital contribution of $100,275 per Fund by Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc. (formerly, The John Nuveen Company), and the recording of the organizational expenses ($11,500 per Fund) and their reimbursement by Nuveen Investments, LLC (formerly, Nuveen Investments), also a wholly owned subsidiary of Nuveen Investments, Inc. Each Fund seeks to provide current income exempt from both regular federal and designated state income taxes by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities within a single state. 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 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. If it is determined that market prices for a security are unavailable or inappropriate, the Board of Trustees of the Funds, or its designee, may establish a fair value for the security. 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 with a current value at least equal to the amount of the when-issued and delayed delivery purchase commitments. At May 31, 2003, Maryland Premium Income (NMY), Maryland Dividend Advantage (NFM), Maryland Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI), Virginia Premium Income (NPV) and Virginia Dividend Advantage 2 (NNB), had outstanding when-issued purchase commitments of $2,803,001, $555,836, $602,341, $1,136,492, $4,275,894 and $2,044,162, respectively. There were no such outstanding purchase commitments in Virginia Dividend Advantage (NGB). Investment Income Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. 51 Notes to FINANCIAL STATEMENTS (continued) 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 net investment income to its shareholders. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal and designated state income taxes, to retain such tax-exempt status when distributed to shareholders of the Funds. All monthly tax-exempt income dividends paid during the fiscal year ended May 31, 2003, have been designated Exempt Interest Dividends. Dividends and Distributions to Common Shareholders Dividends from tax-exempt net investment income are declared and paid monthly. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to Common 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 accounting principles generally accepted in the United States. Preferred Shares The Funds have issued and outstanding $25,000 stated value Preferred shares. Each Fund's Preferred shares are issued in one or more Series. The dividend rate on each Series may change every seven days, as set pursuant to a dutch auction process by the auction agent, and is payable at or near the end of each rate period. The number of Preferred shares outstanding, by Series and in total, for each of the Funds is as follows:
MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - --------------------------------------------------------------------------------------------------------- Number of shares: Series M -- 1,280 -- -- Series T -- -- -- 1,560 Series W 1,404 -- -- -- Series TH 1,760 -- -- -- Series F -- -- 1,280 -- - --------------------------------------------------------------------------------------------------------- Total 3,164 1,280 1,280 1,560 ========================================================================================================= VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - --------------------------------------------------------------------------------------------------------- Number of shares: Series M -- -- 1,680 Series T 832 -- -- Series W -- 960 -- Series TH 1,720 -- -- Series F -- -- -- - --------------------------------------------------------------------------------------------------------- Total 2,552 960 1,680 =========================================================================================================
Effective November 15, 2002, Maryland Dividend Advantage 3 (NWI) issued 1,560 Series T, $25,000 stated value Preferred shares. 52 Derivative Financial Instruments The Funds may invest in certain derivative financial instruments including futures, forward, swap and option contracts, and other financial instruments with similar characteristics. Although the Funds are authorized to invest in such financial instruments, and may do so in the future, they did not make any such investments during the fiscal year ended May 31, 2003. Custodian Fee Credit Each Fund has an arrangement with the custodian bank whereby certain 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. Offering Costs Nuveen Investments, LLC has agreed to pay all Common share offering costs (other than the sales load) that exceed $.03 per Common share for Maryland Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI) and Virginia Dividend Advantage 2 (NNB). Maryland Dividend Advantage 2's (NZR), Maryland Dividend Advantage 3's (NWI) and Virginia Dividend Advantage 2's (NNB) share of Common share offering costs ($124,710, $160,200 and $170,250, respectively) were recorded as a reduction of the proceeds from the sale of common shares. Costs incurred by Maryland Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI) and Virginia Dividend Advantage 2 (NNB) in connection with their offering of Preferred shares ($439,645, $906,000 and $562,186, respectively) were recorded as a reduction to paid-in surplus. 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 applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES Transactions in Common and Preferred shares were as follows:
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR) ----------------------- ----------------------- --------------------------- FOR THE PERIOD 9/25/01 (COMMENCEMENT YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED OF OPERATIONS) 5/31/03 5/31/02 5/31/03 5/31/02 5/31/03 THROUGH 5/31/02 - ------------------------------------------------------------------------------------------------------------- Common shares: Shares sold -- -- -- -- -- 4,157,000 Shares issued to shareholders due to reinvestment of distributions 30,973 31,382 3,029 2,584 2,564 1,320 - ------------------------------------------------------------------------------------------------------------- 30,973 31,382 3,029 2,584 2,564 4,158,320 ============================================================================================================= Preferred shares sold -- -- -- -- -- 1,280 ============================================================================================================= MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB) ----------------- ----------------------- ----------------------- FOR THE PERIOD 9/25/02 (COMMENCEMENT OF OPERATIONS) YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED THROUGH 5/31/03 5/31/03 5/31/02 5/31/03 5/31/02 - --------------------------------------------------------------------------------------------------------- Common shares: Shares sold 5,340,000 -- -- -- -- Shares issued to shareholders due to reinvestment of distributions 7,283 40,954 44,124 3,523 2,529 - --------------------------------------------------------------------------------------------------------- 5,347,283 40,954 44,124 3,523 2,529 ========================================================================================================= Preferred shares sold 1,560 -- -- -- -- =========================================================================================================
53 Notes to FINANCIAL STATEMENTS (continued)
VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) ---------------------------- FOR THE PERIOD 11/15/01 (COMMENCEMENT YEAR ENDED OF OPERATIONS) 5/31/03 THROUGH 5/31/02 - ------------------------------------------------------------------------------------------------------- Common shares: Shares sold -- 5,675,000 Shares issued to shareholders due to reinvestment of distributions 2,299 113 - ------------------------------------------------------------------------------------------------------- 2,299 5,675,113 ======================================================================================================= Preferred shares sold -- 1,680 =======================================================================================================
3. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in long-term municipal securities for the fiscal year ended May 31, 2003, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI)* - --------------------------------------------------------------------------------------------------------- Purchases $37,583,153 $10,620,604 $10,782,477 $126,661,698 Sales and maturities 43,770,698 10,850,205 10,900,599 13,245,980 ========================================================================================================= VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - --------------------------------------------------------------------------------------------------------- Purchases $33,959,513 $7,167,604 $19,727,902 Sales and maturities 32,934,745 6,673,670 19,438,469 ========================================================================================================= * For the period September 25, 2002 (commencement of operations) through May 31, 2003.
54 4. INCOME TAX INFORMATION The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to timing differences in recognizing income on taxable market discount securities and timing differences in recognizing certain gains and losses on security transactions. At May 31, 2003, the cost of investments were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - ---------------------------------------------------------------------------------------------------------- Cost of investments $216,158,237 $88,897,108 $90,545,076 $112,854,506 ========================================================================================================== VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - ---------------------------------------------------------------------------------------------------------- Cost of investments $186,438,073 $66,136,550 $123,255,947 ==========================================================================================================
Gross unrealized appreciation and gross unrealized depreciation on investments at May 31, 2003, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - ----------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $16,992,137 $5,540,984 $6,123,585 $4,671,968 Depreciation (3,473,677) (161,219) (235,078) (287,343) - ----------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments $13,518,460 $5,379,765 $5,888,507 $4,384,625 =========================================================================================================== VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - ---------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $17,848,204 $4,616,985 $9,741,291 Depreciation (798,550) (346,389) (120,134) - ---------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments $17,049,654 $4,270,596 $9,621,157 ==========================================================================================================
The tax components of undistributed net investment income and net realized gains at May 31, 2003, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - ---------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income $2,459,589 $812,057 $791,515 $435,499 Undistributed net ordinary income * 3,514 -- -- -- Undistributed net long-term capital gains -- -- -- -- ========================================================================================================== VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - ---------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income $1,964,684 $584,303 $866,410 Undistributed net ordinary income * 16,467 -- 83,460 Undistributed net long-term capital gains -- -- 209,448 ========================================================================================================== * Net ordinary income consists of taxable market discount income and net short-term capital gains, if any.
55 Notes to FINANCIAL STATEMENTS (continued) The tax character of distributions paid during the fiscal years ended May 31, 2003 and May 31, 2002, was designated for purposes of the dividends paid deduction as follows:
MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 2003 (NMY) (NFM) (NZR) (NWI) - --------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $10,056,404 $3,859,655 $3,704,764 $2,343,187 Distributions from net ordinary income * 38,307 -- -- -- Distributions from net long-term capital gains -- -- -- -- ========================================================================================================= VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 2003 (NPV) (NGB) (NNB) - --------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $8,413,226 $2,895,125 $5,200,254 Distributions from net ordinary income * -- -- 167,216 Distributions from net long-term capital gains -- -- -- =========================================================================================================
MARYLAND MARYLAND MARYLAND VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 INCOME ADVANTAGE ADVANTAGE 2 2002 (NMY) (NFM) (NZR) (NPV) (NGB) (NNB) - --------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $10,022,067 $4,070,762 $1,878,301 $8,429,395 $3,027,568 $1,795,677 Distributions from net ordinary income * 33,073 -- -- 32,064 -- -- Distributions from net long-term capital gains -- -- -- -- -- -- ========================================================================================================= * Net ordinary income consists of taxable market discount income and net short-term capital gains, if any.
At May 31, 2003, the following Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows:
MARYLAND MARYLAND MARYLAND MARYLAND VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND DIVIDEND PREMIUM DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 INCOME ADVANTAGE (NMY) (NFM) (NZR) (NWI) (NPV) (NGB) - --------------------------------------------------------------------------------------------------------- Expiration year: 2004 $1,263,034 $ -- $ -- $ -- $1,579,895 $ -- 2005 454,351 -- -- -- 140,749 -- 2006 -- -- -- -- -- -- 2007 -- -- -- -- -- -- 2008 332,070 -- -- -- 250,767 -- 2009 317,048 9,874 -- -- -- 186,152 2010 -- 37,159 -- -- -- 104,197 2011 -- -- 27,519 240,898 -- 32,604 - --------------------------------------------------------------------------------------------------------- Total $2,366,503 $47,033 $27,519 $240,898 $1,971,411 $322,953 =========================================================================================================
56 The following Funds have elected to defer net realized losses from investments incurred from November 1, 2002 through May 31, 2003 ("post-October losses") in accordance with Federal income tax regulations. The following post-October losses are treated as having arisen in the following fiscal year: MARYLAND MARYLAND VIRGINIA DIVIDEND DIVIDEND DIVIDEND ADVANTAGE ADVANTAGE 3 ADVANTAGE (NFM) (NWI) (NGB) - -------------------------------------------------------------------------------- $512,871 $159,189 $417,167 ================================================================================ 5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Under Maryland Premium Income's (NMY) and Virginia Premium Income's (NPV) investment management agreements with the Adviser, each Fund pays an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE - -------------------------------------------------------------------------------- For the first $125 million .6500% For the next $125 million .6375 For the next $250 million .6250 For the next $500 million .6125 For the next $1 billion .6000 For the next $3 billion .5875 For net assets over $5 billion .5750 ================================================================================ Under Maryland Dividend Advantage's (NFM), Maryland Dividend Advantage 2's (NZR), Maryland Dividend Advantage 3's (NWI), Virginia Dividend Advantage's (NGB) and Virginia Dividend Advantage 2's (NNB) investment management agreements with the Adviser, each Fund pays an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE - -------------------------------------------------------------------------------- For the first $125 million .6500% For the next $125 million .6375 For the next $250 million .6250 For the next $500 million .6125 For the next $1 billion .6000 For net assets over $2 billion .5750 ================================================================================ For the first ten years of Maryland Dividend Advantage's (NFM) and Virginia Dividend Advantage's (NGB) operations, the Adviser has agreed to reimburse the Funds, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts, and for the time periods set forth below: YEAR ENDING YEAR ENDING JANUARY 31, JANUARY 31, - -------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Maryland Dividend Advantage (NFM) and Virginia Dividend Advantage (NGB) for any portion of its fees and expenses beyond January 31, 2011. 57 Notes to FINANCIAL STATEMENTS (continued) For the first ten years of Maryland Dividend Advantage 2's (NZR) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts, and for the time periods set forth below: YEAR ENDING YEAR ENDING SEPTEMBER 30, SEPTEMBER 30, - -------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Maryland Dividend Advantage 2 (NZR) for any portion of its fees and expenses beyond September 30, 2011. For the first eight years of Maryland Dividend Advantage 3's (NWI) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts, and for the time periods set forth below: YEAR ENDING YEAR ENDING SEPTEMBER 30, SEPTEMBER 30, - -------------------------------------------------------------------------------- 2002* .32% 2007 .32% 2003 .32 2008 .24 2004 .32 2009 .16 2005 .32 2010 .08 2006 .32 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Maryland Dividend Advantage 3 (NWI) for any portion of its fees and expenses beyond September 30, 2010. For the first ten years of Virginia Dividend Advantage 2's (NNB) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts, and for the time periods set forth below: YEAR ENDING YEAR ENDING NOVEMBER 30, NOVEMBER 30, - -------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Virginia Dividend Advantage 2 (NNB) for any portion of its fees and expenses beyond November 30, 2011. 58 The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Trustees who are affiliated with the Adviser or to their officers, all of whom receive remuneration for their services to the Funds from the Adviser. 6. SUBSEQUENT EVENT -- DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on July 1, 2003, to shareholders of record on June 15, 2003, as follows:
MARYLAND MARYLAND MARYLAND MARYLAND PREMIUM DIVIDEND DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMY) (NFM) (NZR) (NWI) - --------------------------------------------------------------------------------------------------------- Dividend per share $.0760 $.0755 $.0720 $.0655 ========================================================================================================= VIRGINIA VIRGINIA VIRGINIA PREMIUM DIVIDEND DIVIDEND INCOME ADVANTAGE ADVANTAGE 2 (NPV) (NGB) (NNB) - --------------------------------------------------------------------------------------------------------- Dividend per share $.0760 $.0755 $.0730 =========================================================================================================
59
Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each period: Investment Operations Less Distributions --------------------------------------------------------------- ------------------------------- Distributions Distributions from Net from Net Beginning Net Investment Capital Investment Capital Common Realized/ Income to Gains to Income to Gains to Share Net Unrealized Preferred Preferred Common Common Net Asset Investment Investment Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ==================================================================================================================================== MARYLAND PREMIUM INCOME (NMY) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2003 $14.04 $1.02 $ 1.00 $(.07) $-- $1.95 $(.89) $-- $(.89) 2002 13.83 1.03 .14 (.13) -- 1.04 (.83) -- (.83) 2001 12.83 1.03 1.01 (.25) -- 1.79 (.79) -- (.79) 2000 14.41 1.02 (1.58) (.24) -- (.80) (.78) -- (.78) 1999 14.54 1.00 (.14) (.22) -- .64 (.77) -- (.77) MARYLAND DIVIDEND ADVANTAGE (NFM) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2003 14.18 1.04 1.18 (.08) -- 2.14 (.86) -- (.86) 2002 13.90 1.04 .22 (.14) -- 1.12 (.84) -- (.84) 2001(a) 14.33 .22 (.25) (.05) -- (.08) (.21) -- (.21) MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2003 14.01 .97 1.62 (.09) -- 2.50 (.81) -- (.81) 2002(b) 14.33 .57 (.22) (.06) -- .29 (.46) -- (.46) MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2003(c) 14.33 .52 .75 (.05) -- 1.22 (.46) -- (.46) ==================================================================================================================================== Total Returns ---------------- Based Offering on Costs and Ending Common Preferred Common Based Share Share Share Ending on Net Underwriting Net Asset Market Market Asset Discounts Value Value Value** Value** ================================================================================== MARYLAND PREMIUM INCOME (NMY) - ---------------------------------------------------------------------------------- Year Ended 5/31: 2003 $-- $15.10 $17.1500 15.22% 14.33% 2002 -- 14.04 15.7300 4.77 7.71 2001 -- 13.83 15.8500 26.24 14.18 2000 -- 12.83 13.2500 (7.22) (5.57) 1999 -- 14.41 15.1250 5.47 4.44 MARYLAND DIVIDEND ADVANTAGE (NFM) - ---------------------------------------------------------------------------------- Year Ended 5/31: 2003 .01 15.47 16.0800 9.98 15.55 2002 -- 14.18 15.4400 1.98 8.21 2001(a) (.14) 13.90 15.9900 8.02 (1.53) MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - ---------------------------------------------------------------------------------- Year Ended 5/31: 2003 .01 15.71 15.6000 12.71 18.39 2002(b) (.15) 14.01 14.6100 .52 1.01 MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - ---------------------------------------------------------------------------------- Year Ended 5/31: 2003(c) (.20) 14.89 14.9000 2.53 7.31 ================================================================================== Ratios/Supplemental Data ----------------------------------------------------------------------------------------------- Before Credit/Reimbursement After Credit/Reimbursement*** ---------------------------- ----------------------------- Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Ending Expenses Income to Expenses Income to Net to Average Average to Average Average Assets Net Assets Net Assets Net Assets Net Assets Applicable Applicable Applicable Applicable Applicable Portfolio to Common to Common to Common to Common to Common Turnover Shares (000) Shares++ Shares++ Shares++ Shares++ Rate ======================================================================================================================= MARYLAND PREMIUM INCOME (NMY) - ----------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2003 $159,415 1.26% 7.00% 1.25% 7.01% 16% 2002 147,795 1.32 7.33 1.31 7.34 13 2001 145,201 1.31 7.58 1.31 7.58 8 2000 134,299 1.29 7.69 1.28 7.70 13 1999 150,420 1.29 6.78 1.28 6.79 16 MARYLAND DIVIDEND ADVANTAGE (NFM) - ----------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2003 64,338 1.26 6.54 .79 7.01 12 2002 58,925 1.35 6.81 .82 7.34 36 2001(a) 57,740 1.17* 4.33* .75* 4.75* 10 MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - ----------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2003 65,490 1.26 6.07 .80 6.53 12 2002(b) 58,370 1.22* 5.55* .79* 5.99* 21 MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - ----------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2003(c) 79,700 1.18* 5.01* .70* 5.50* 13 ======================================================================================================================= Preferred Shares at End of Period -------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ============================================================== MARYLAND PREMIUM INCOME (NMY) - -------------------------------------------------------------- Year Ended 5/31: 2003 $79,100 $25,000 $75,384 2002 79,100 25,000 71,712 2001 79,100 25,000 70,891 2000 79,100 25,000 67,446 1999 79,100 25,000 72,541 MARYLAND DIVIDEND ADVANTAGE (NFM) - -------------------------------------------------------------- Year Ended 5/31: 2003 32,000 25,000 75,264 2002 32,000 25,000 71,035 2001(a) 32,000 25,000 70,109 MARYLAND DIVIDEND ADVANTAGE 2 (NZR) - -------------------------------------------------------------- Year Ended 5/31: 2003 32,000 25,000 76,164 2002(b) 32,000 25,000 70,601 MARYLAND DIVIDEND ADVANTAGE 3 (NWI) - -------------------------------------------------------------- Year Ended 5/31: 2003(c) 39,000 25,000 76,090 ============================================================== * 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 Common Share Net Asset Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in Common share net asset value per share. Total returns are not annualized. *** After custodian fee credit and expense reimbursement, 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 period January 25, 2001 (commencement of operations) through May 31, 2001. (b) For the period September 25, 2001 (commencement of operations) through May 31, 2002. (c) For the period September 25, 2002 (commencement of operations) through May 31, 2003. See accompanying notes to financial statements. 60-61 spread
FINANCIAL HIGHLIGHTS (continued) Selected data for a Common share outstanding throughout each period: Investment Operations Less Distributions --------------------------------------------------------------- ------------------------------- Distributions Distributions from Net from Net Beginning Net Investment Capital Investment Capital Common Realized/ Income to Gains to Income to Gains to Share Net Unrealized Preferred Preferred Common Common Net Asset Investment Investment Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ==================================================================================================================================== VIRGINIA PREMIUM INCOME (NPV) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2003 $14.69 $1.00 $ 1.21 $(.07) $-- $2.14 $(.90) $ -- $(.90) 2002 14.59 1.04 .03 (.11) -- .96 (.86) -- (.86) 2001 13.36 1.08 1.21 (.25) -- 2.04 (.81) -- (.81) 2000 14.89 1.07 (1.52) (.24) -- (.69) (.84) -- (.84) 1999 14.96 1.05 (.08) (.22) -- .75 (.82) -- (.82) VIRGINIA DIVIDEND ADVANTAGE (NGB) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2003 14.23 1.02 1.10 (.07) -- 2.05 (.86) -- (.86) 2002 13.87 1.02 .32 (.13) -- 1.21 (.85) -- (.85) 2001(a) 14.33 .24 (.28) (.05) -- (.09) (.21) -- (.21) VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 5/31: 2003 14.31 .97 1.69 (.08) -- 2.58 (.84) (.03) (.87) 2002(b) 14.33 .41 .09 (.04) -- .46 (.35) -- (.35) ====================================================================================================================================
Total Returns ---------------- Based Offering on Costs and Ending Common Preferred Common Based Share Share Share Ending on Net Underwriting Net Asset Market Market Asset Discounts Value Value Value** Value** ================================================================================ VIRGINIA PREMIUM INCOME (NPV) - -------------------------------------------------------------------------------- Year Ended 5/31: 2003 $-- $15.93 $17.6700 15.27% 14.99% 2002 -- 14.69 16.1700 6.64 6.71 2001 -- 14.59 16.0000 18.45 15.53 2000 -- 13.36 14.2500 (6.02) (4.64) 1999 -- 14.89 16.0625 4.77 5.09 VIRGINIA DIVIDEND ADVANTAGE (NGB) - -------------------------------------------------------------------------------- Year Ended 5/31: 2003 .01 15.43 17.3500 21.45 14.92 2002 -- 14.23 15.0900 5.10 8.89 2001(a) (.16) 13.87 15.1800 2.61 (1.73) VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - -------------------------------------------------------------------------------- Year Ended 5/31: 2003 -- 16.02 16.1400 14.58 18.51 2002(b) (.13) 14.31 14.9000 1.71 2.30 ================================================================================ Ratios/Supplemental Data ----------------------------------------------------------------------------------------------- Before Credit/Reimbursement After Credit/Reimbursement*** ---------------------------- ----------------------------- Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Ending Expenses Income to Expenses Income to Net to Average Average to Average Average Assets Net Assets Net Assets Net Assets Net Assets Applicable Applicable Applicable Applicable Applicable Portfolio to Common to Common to Common to Common to Common Turnover Shares (000) Shares++ Shares++ Shares++ Shares++ Rate ===================================================================================================================== VIRGINIA PREMIUM INCOME (NPV) - --------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2003 $140,223 1.25% 6.61% 1.24% 6.62% 17% 2002 128,655 1.28 7.01 1.27 7.02 14 2001 127,145 1.23 7.51 1.21 7.53 7 2000 115,760 1.29 7.72 1.28 7.73 20 1999 128,368 1.26 6.94 1.26 6.95 8 VIRGINIA DIVIDEND ADVANTAGE (NGB) - --------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2003 48,102 1.28 6.45 .81 6.92 10 2002 44,308 1.37 6.68 .84 7.21 21 2001(a) 43,155 1.27* 4.76* .80* 5.23* 20 VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - --------------------------------------------------------------------------------------------------------------------- Year Ended 5/31: 2003 91,065 1.21 6.01 .75 6.47 15 2002(b) 81,325 1.14* 5.00* .70* 5.44* 12 ===================================================================================================================== Preferred Shares at End of Period -------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share =========================================================== VIRGINIA PREMIUM INCOME (NPV) - ----------------------------------------------------------- Year Ended 5/31: 2003 $63,800 $25,000 $79,946 2002 63,800 25,000 75,413 2001 63,800 25,000 74,822 2000 63,800 25,000 70,361 1999 63,800 25,000 75,301 VIRGINIA DIVIDEND ADVANTAGE (NGB) - ----------------------------------------------------------- Year Ended 5/31: 2003 24,000 25,000 75,106 2002 24,000 25,000 71,154 2001(a) 24,000 25,000 69,953 VIRGINIA DIVIDEND ADVANTAGE 2 (NNB) - ----------------------------------------------------------- Year Ended 5/31: 2003 42,000 25,000 79,206 2002(b) 42,000 25,000 73,408 =========================================================== * 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 Common Share Net Asset Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in Common share net asset value per share. Total returns are not annualized. *** After custodian fee credit and expense reimbursement, 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 period January 26, 2001 (commencement of operations) through May 31, 2001. (b) For the period November 15, 2001 (commencement of operations) through May 31, 2002. See accompanying notes to financial statements. 62-63 spread
Trustees AND OFFICERS The management of the Fund, including general supervision of the duties performed for the Fund under the management agreement between Nuveen Advisory and the Fund, is the responsibility of the Board of Trustees of the Fund. The number of trustees of the Fund is currently set at seven. None of the trustees who are not "interested" persons of the Fund has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the trustees and officers of the Fund, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below.
NUMBER OF PORTFOLIOS IN FUND YEAR FIRST PRINCIPAL OCCUPATION(S) COMPLEX NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN AND ADDRESS WITH THE FUND APPOINTED(2) DURING PAST 5 YEARS BY TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ TRUSTEE WHO IS AN INTERESTED PERSON OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ Timothy R. Schwertfeger (1) Chairman of the 1994 Chairman and Director (since 1996) of Nuveen 140 3/28/49 Board and Investments, Inc. and Nuveen Investments, LLC; 333 W. Wacker Drive Trustee Director (since 1992) and Chairman (since 1996) of Chicago, IL 60606 Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.; Chairman and Director (since 1997) of Nuveen Asset Management, Inc.; Director (since 1996) of Institutional Capital Corporation; Chairman and Director (since 1999) of Rittenhouse Asset Management, Inc.; Chairman of Nuveen Investments Advisers Inc. (since 2002). TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ Robert P. Bremner Trustee 1997 Private Investor and Management Consultant. 122 8/22/40 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Lawrence H. Brown Trustee 1993 Retired (since 1989) as Senior Vice President of The 122 7/29/34 Northern Trust Company; Director of the United Way of 333 W. Wacker Drive Highland Park-Highwood (since 2002). Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Anne E. Impellizzeri Trustee 1994 Retired, formerly, Executive Director (since 1998) 122 1/26/33 of Manitoga/The Russel Wright Design Center; prior 333 W. Wacker Drive thereto, President and Chief Executive Officer of Chicago, IL 60606 Blanton-Peale Institute (since 1990); prior thereto, Vice President, Metropolitan Life Insurance Co. - ------------------------------------------------------------------------------------------------------------------------------------ Peter R. Sawers Trustee 1991 Adjunct Professor of Business and Economics, University 122 4/3/33 of Dubuque, Iowa; formerly (1991-2000) Adjunct Professor, 333 W. Wacker Drive Lake Forest Graduate School of Management, Lake Forest, Chicago, IL 60606 Illinois; prior thereto, Executive Director, Towers Perrin Australia, a management consulting firm; Chartered Financial Analyst; Certified Management Consultant; Director, Executive Service Corps of Chicago, a not-for-profit organization. - ------------------------------------------------------------------------------------------------------------------------------------ William J. Schneider Trustee 1997 Senior Partner and Chief Operating Officer, 122 9/24/44 Miller-Valentine Group, Vice President, Miller-Valentine 333 W. Wacker Drive Realty, a development and contract company; Chair, Chicago, IL 60606 MiamiValley Hospital; Chair, Miami Valley Economic Development Coalition; formerly, Member, Community Advisory Board, National City Bank, Dayton, Ohio and Business Advisory Council, Cleveland Federal Reserve Bank. - ------------------------------------------------------------------------------------------------------------------------------------ Judith M. Stockdale Trustee 1997 Executive Director, Gaylord and Dorothy Donnelley 122 12/29/47 Foundation (since 1994); prior thereto, Executive 333 W. Wacker Drive Director, Great Lakes Protection Fund (from 1990 to 1994). Chicago, IL 60606 64 NUMBER OF PORTFOLIOS IN FUND YEAR FIRST PRINCIPAL OCCUPATION(S) COMPLEX NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN AND ADDRESS WITH THE FUND APPOINTED(3) DURING PAST 5 YEARS BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary 140 9/9/56 Administrative and Associate General Counsel, formerly, Vice President 333 W. Wacker Drive Officer and Assistant General Counsel of Nuveen Investments, LLC; Chicago, IL 60606 Managing Director (since 2002), General Counsel and Assistant Secretary, formerly, Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.; Managing Director (since 2002), Assistant Secretary and Associate General Counsel, formerly, Vice President (since 2000), of Nuveen Asset Management, Inc.; Assistant Secretary of Nuveen Investments, Inc. (since 1994); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002); Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Managing Director, Associate General Counsel and Assistant Secretary of Rittenhouse Asset Management, Inc. (since May 2003); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant 140 2/3/66 and Assistant Vice President (since 2000), previously, Associate of 333 W. Wacker Drive Secretary Nuveen Investments, LLC. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Paul L. Brennan Vice President 1999 Vice President (since 2002), formerly, Assistant 134 11/10/66 Vice President (since 1997), of Nuveen Advisory Corp.; 333 W. Wacker Drive prior thereto, portfolio manager of Flagship Financial Chicago, IL 60606 Inc.; Chartered Financial Analyst and Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999), 140 11/28/67 and Treasurer prior thereto, Assistant Vice President (since 1997); Vice 333 W. Wacker Drive President and Treasurer of Nuveen Investments, Inc. (since Chicago, IL 60606 1999); Vice President and Treasurer of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. (since 1999); Vice President and Treasurer of Nuveen Asset Management, Inc. (since 2002) and of Nuveen Investments Advisers Inc. (since 2002); Assistant Treasurer of NWQ Investment Management Company, LLC (since 2002); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Susan M. DeSanto Vice President 2001 Vice President of Nuveen Advisory Corp. (since 2001); 140 9/8/54 previously, Vice President of Van Kampen Investment 333 W. Wacker Drive Advisory Corp. (since 1998); Vice President of Nuveen Chicago, IL 60606 Institutional Advisory Corp. (since 2002); prior thereto, Assistant Vice President of Van Kampen Investment Advisory Corp. (since 1994). - ------------------------------------------------------------------------------------------------------------------------------------ Jessica R. Droeger Vice President 2000 Vice President (since 2002) and Assistant General Counsel 140 9/24/64 and Secretary (since 1998); formerly, Assistant Vice President 333 W. Wacker Drive (since 1998) of Nuveen Investments, LLC; Vice President Chicago, IL 60606 (since 2002) and Assistant Secretary (since 1998), formerly Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. 65 Trustees AND OFFICERS (CONTINUED) NUMBER OF PORTFOLIOS IN FUND YEAR FIRST PRINCIPAL OCCUPATION(S) COMPLEX NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN AND ADDRESS WITH THE FUND APPOINTED(3) DURING PAST 5 YEARS BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Lorna C. Ferguson Vice President 1998 Vice President of Nuveen Investments, LLC; Vice 140 10/24/45 President (since 1998) of Nuveen Advisory Corp. and 333 W. Wacker Drive Nuveen Institutional Advisory Corp. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 140 3/2/64 LLC; Managing Director (since 2001), formerly Vice 333 W. Wacker Drive President of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp. (since 1995); Managing Director of Nuveen Asset Management, Inc. (since 2001); Vice President of Nuveen Investment Advisers Inc. (since 2002); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 140 5/31/54 and Controller 1998) of Nuveen Investments, LLC and Vice President and 333 W. Wacker Drive Funds Controller (since 1998) of Nuveen Investments, Inc.; Chicago, IL 60606 Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ J. Thomas Futrell Vice President 1988 Vice President of Nuveen Advisory Corp.; 134 7/5/55 Chartered Financial Analyst. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Richard A. Huber Vice President 1997 Vice President of Nuveen Institutional Advisory Corp. 134 3/26/63 (since 1998) and Nuveen Advisory Corp. (since 1997); 333 W. Wacker Drive prior thereto, Vice President and Portfolio Manager of Chicago, IL 60606 Flagship Financial, Inc. - ------------------------------------------------------------------------------------------------------------------------------------ Steven J. Krupa Vice President 1990 Vice President of Nuveen Advisory Corp. 134 8/21/57 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, LLC, 140 3/22/63 previously Assistant Vice President (since 1999); prior 333 W. Wacker Drive thereto, Associate of Nuveen Investments, LLC; Certified Chicago, IL 60606 Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant Vice 140 8/27/61 President (since 1993) of Nuveen Investments, LLC. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 140 7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and 333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp.; Assistant Secretary of Nuveen Investments, Inc. and (since 1997) Nuveen Asset Management, Inc.; Vice President (since 2000), Assistant Secretary and Assistant General Counsel (since 1998) of Rittenhouse Asset Management, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002). 66 NUMBER OF PORTFOLIOS IN FUND YEAR FIRST PRINCIPAL OCCUPATION(S) COMPLEX NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN AND ADDRESS WITH THE FUND APPOINTED(3) DURING PAST 5 YEARS BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, 140 7/7/65 LLC; Managing Director (since 1997), formerly Vice 333 W. Wacker Drive President (since 1996) of Nuveen Advisory Corp. and Chicago, IL 60606 Nuveen Institutional Advisory Corp.; Managing Director of Nuveen Asset Management, Inc. (since 1999). Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Thomas J. O'Shaughnessy Vice President 1999 Vice President (since 2002), formerly, Assistant 134 9/4/60 Vice President (since 1998), of Nuveen Advisory Corp.; 333 W. Wacker Drive prior thereto, portfolio manager. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Thomas C. Spalding Vice President 1982 Vice President of Nuveen Advisory Corp. and Nuveen 134 7/31/51 Institutional Advisory Corp.; Chartered Financial Analyst. 333 W. Wacker Drive Chicago, IL 60606 (1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the Investment Company Act of 1940, because he is an officer and trustee of Nuveen Advisory Corp. (2) Trustees serve a one-year term until his/her successor is elected. The year first elected or appointed represents the year in which the Trustee was first elected or appointed to any fund in the Nuveen Complex. (3) Officers serve a one-year term through July of each year. The year first elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen Complex. 67
Build Your Wealth AUTOMATICALLY SIDEBAR TEXT: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional fund shares. 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. Just like dividends or distributions in cash, there may be times when income or capital gains taxes may be payable on dividends or distributions that are reinvested. It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market. 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. 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 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 reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. 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 advisor or call us at (800) 257-8787. 68 Fund INFORMATION BOARD OF 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 State Street Bank & Trust Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Morgan, Lewis & Bockius LLP Washington, D.C. INDEPENDENT AUDITORS Ernst & Young LLP Chicago, IL POLICY CHANGE On November 14, 2002, the Board adopted a policy that allows these Funds, in addition to investments in municipal bonds, to invest up to 5% of its net assets (including assets attributable to preferred shares, if any) in tax-exempt or taxable fixed-income securities or equity securities for the purpose of acquiring control of an issuer whose municipal bonds (a) the Fund already owns and (b) have deteriorated or are expected shortly to deteriorate significantly in credit quality, provided Nuveen Advisory determines that such investment should enable the Fund to better maximize the value of its existing investment in such issuer. This policy is a non-fundamental policy of each Fund which means that it can be changed at any time by the Board of Trustees without vote of the shareholders. Glossary of Terms Used in this Report Average Annual Total Return: This is a commonly used method to express an investment's performance over a particular, usually multi-year time period. It expresses the return (including change in NAV and reinvested dividends) that would have been necessary on an annual basis to equal the investment's actual performance over the time period being considered. Average Effective Maturity: The average of all the maturities of the bonds in a fund's portfolio, computed by weighting each maturity date (the date the security comes due) by the market value of the security. This figure does not account for the likelihood of prepayments or the exercise of call provisions. Leverage-Adjusted Duration: Duration is a measure of a bond or bond fund's sensitivity to changes in interest rates. Generally, the longer a bond or fund's duration, the more the price of the bond or fund will change as interest rates change. Leverage-adjusted duration takes into account the leveraging process for a Fund and therefore is generally longer than the duration of the actual portfolio of individual bonds that make up the Fund. Market Yield (also known as Dividend Yield or Current Yield): An investment's current annualized dividend divided by its current market price. Net Asset Value (NAV): A fund's NAV is calculated by subtracting the liabilities of the fund from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day. Taxable-Equivalent Yield: The yield necessary from a fully taxable investment to equal, on an after-tax basis, the yield of a municipal bond investment. - --------- 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 period ended May 31, 2003. Any future repurchases will be reported to shareholders in the next annual or semiannual report. 69 Serving Investors FOR GENERATIONS Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions. For the past century, Nuveen Investments has adhered to the belief that the best approach to investing is to apply conservative risk-management principles to help minimize volatility. Building on this tradition, we today offer a range of high quality equity and fixed-income solutions that are integral to a well-diversified core portfolio. Our clients have come to appreciate this diversity, as well as our continued adherence to proven, long-term investing principles. Managing $80 billion in assets, Nuveen Investments offers access to a number of different asset classes and investing solutions through a variety of products. Nuveen Investments markets its capabilities under four distinct brands: Nuveen, a leader in tax-free investments; NWQ, a leader in value-style equities; Rittenhouse, a leader in growth-style equities; and Symphony, a leading institutional manager of market-neutral alternative investment portfolios. To learn more about the products and services Nuveen Investments offers and for a prospectus, where applicable, talk to your financial advisor, or call us at (800) 257-8787. Please read the information carefully before you invest. Distributed by NUVEEN INVESTMENTS, LLC | 333 West Wacker Drive | Chicago, Illinois 60606 | www.nuveen.com EAN-A-0503D ITEM 2. CODE OF ETHICS. Not applicable at this time. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. Not applicable at this time. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEMS 5-6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES Not applicable to this registrant. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) The registrant's principal executive officer and principal financial officer have concluded that the registrant's Disclosure Controls and Procedures are effective, based on our evaluation of such Disclosure Controls and Procedures as of a date within 90 days of the filing of this report on Form N-CSR. (b) There were no significant changes in the registrant's internal controls or in other factors that could significantly affect these controls subsequent to the date of our evaluation. ITEM 10. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable. (b) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2 under the Act (17 CFR 270.30a-2) in the exact form set forth below: Ex-99.CERT Attached hereto. (c) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Section 906 of the Sarbanes- Oxley Act of 2002. Ex-99.906 CERT attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Nuveen Maryland Dividend Advantage Municipal ----------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ---------------------------------------------- Jessica R. Droeger Vice President and Secretary Date August 1, 2003 ------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Gifford R. Zimmerman ---------------------------------------------- Gifford R. Zimmerman Chief Administrative Officer (Principal Executive Officer) Date August 1, 2003 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (Principal Financial Officer) Date August 1, 2003 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 3 file002.txt CERTIFICATIONS Certification Pursuant to Section 302 of the Sarbanes-Oxley Act I, Gifford R. Zimmerman, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen Maryland Dividend Advantage Municipal; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 1, 2003 ----------------------- /s/ Gifford R. Zimmerman --------------------- Chief Administrative Officer (principal executive officer) Certification Pursuant to Section 302 of the Sarbanes-Oxley Act I, Stephen D. Foy, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen Maryland Dividend Advantage Municipal; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; and 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report. 4. The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-2(c) under the Investment Company Act of 1940) for the registrant and have: a) designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; b) evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this report (the "Evaluation Date"); and c) presented in this report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date; 5. The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): a) all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize, and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and 6. The registrant's other certifying officers and I have indicated in this report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses. Date: August 1, 2003 ----------------------- /s/ Stephen D. Foy --------------------- Vice President and Controller (principal financial officer) EX-99.906CERT 4 file003.txt CERTIFICATIONS Certification Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. I, Gifford R. Zimmerman, Chief Administrative Officer of Nuveen Maryland Dividend Advantage Municipal (the "Fund"), certify that: 1. The Form N-CSR of the Fund for the period ended May 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Nuveen Maryland Dividend Advantage Municipal and will be retained by Nuveen Maryland Dividend Advantage Municipal and furnished to the Securities and Exchange Commission or its staff upon request. Date: August 1, 2003 ----------------------- /s/ Gifford R. Zimmerman --------------------- Chief Administrative Officer (chief executive officer) Certification Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. I, Stephen D. Foy, Vice President and Controller of Nuveen Maryland Dividend Advantage Municipal, certify that: 1. The Form N-CSR of the Fund for the period ended May 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to Nuveen Maryland Dividend Advantage Municipal and will be retained by Nuveen Maryland Dividend Advantage Municipal and furnished to the Securities and Exchange Commission or its staff upon request. Date: August 1, 2003 ----------------------- /s/ Stephen D. Foy --------------------- Vice President, Controller (Chief Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----