-----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, QQ4nPMX+ZowRwpUDbh242qlnWfHVcUbs/P1ajXqDXyGUeHSb7V2q+f2e53RUmXOT HG8iYu2Dc2L9j0FvRGcVMw== 0000891804-03-002002.txt : 20030910 0000891804-03-002002.hdr.sgml : 20030910 20030910122634 ACCESSION NUMBER: 0000891804-03-002002 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20030630 FILED AS OF DATE: 20030910 EFFECTIVENESS DATE: 20030910 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN NEW JERSEY DIVIDEND ADVANTAGE MUNICIPAL FUND 2 CENTRAL INDEX KEY: 0001161070 IRS NUMBER: 752998783 STATE OF INCORPORATION: MA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-10551 FILM NUMBER: 03889394 BUSINESS ADDRESS: STREET 1: 333 WEST WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129178146 N-CSR 1 file001.txt NUVEEN NEW JERSEY DIVIDEND ADV MUNI FUND 2 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 811-10551 --------------------- Nuveen New Jersey Dividend Advantage Municipal Fund 2 ------------------------------------------------------------------------------ (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: June 30, 2003 ------------------ Date of reporting period: June 30, 2003 ----------------- 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 June 30, 2003 NEW JERSEY NQJ NNJ NXJ NUJ PENNSYLVANIA NQP NPY NXM NVY PHOTO OF: WOMAN AND CHILD RIDING BIKES. PHOTO OF: 2 WOMEN AND 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 Timothy R. Schwertfeger Chairman of the Board Photo of: Timothy R. Schwertfeger 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 tax-free monthly 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 August 15, 2003 1 Nuveen New Jersey and Pennsylvania Municipal Closed-End Exchange-Traded Funds (NQJ, NNJ, NXJ, NUJ, NQP, NPY, NXM, NVY) 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 assumed portfolio management responsibility for these Funds in January 2003. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE TWELVE-MONTH PERIOD ENDED JUNE 30, 2003? As has been the case for some time, we believe the two biggest influences on the general economy and the municipal market for this reporting period were the slow pace of economic recovery and historically low interest rates. We don't yet see a change in this pattern. In late June 2003, the Federal Reserve, citing a U.S. economy that "has yet to exhibit sustainable growth," cut the fed funds rate by 25 basis points to 1.0%, its lowest level since 1958. A few days later, the GDP for the first quarter of 2003 was revised downward to 1.4%. In addition to historically low interest rates and sluggish economic growth, the core rate of inflation continued to hover around 1.5% throughout the second quarter of 2003, the smallest year-over-year increase in 37 years. This combination of low interest rates, slow economic recovery and the lack of inflationary pressures created conditions that helped many municipal bonds perform well over the period covered by this report. HOW WERE ECONOMIC AND MARKET CONDITIONS IN NEW JERSEY AND PENNSYLVANIA? Aided by a diverse economic base and highly skilled workforce, New Jersey's economy performed reasonably well during the reporting period, adding jobs in sectors such as construction, retail, education and healthcare. The state also benefited from an influx of financial services jobs from New York City as well as growth in its sizable pharmaceutical industry. However, like many other states, New Jersey continues to grapple with budgetary stress resulting from falling tax revenues. Since 1996, New Jersey's debt levels have increased 60%. During the first six months of 2003, New Jersey issued $9.2 billion in new municipal bonds, up 115% over the same period in 2002. As of June 30, 2003, the state's credit rating remained at Aa2 with a negative outlook, while Standard & Poor's rated the state AA with a stable outlook. Pennsylvania's economy continued to reflect the national slowdown, faring about the same as other large Northeastern states. Although Pennsylvania is working to improve its business environment and develop value-added industries, employment trends in most of its major industry groups remained weak, with only the health services and leisure/hospitality sectors showing modest growth. Manufacturing, in particular the commonwealth's makers of steel, industrial machinery, and electronic and electrical equipment, continued to suffer, with employment in this sector declining 5% from the previous year. After exhausting its rainy day reserves in fiscal 2002, the commonwealth managed to avoid a major tax increase for fiscal 2004 by relying primarily on $1.6 billion in spending cuts to close a $2.4 billion gap in the $21 billion budget. Municipal issuance in Pennsylvania during the first six months of 2003 totaled $7.6 billion, an increase of 6% over the same period in 2002. As of June 30, 2003, the commonwealth's credit rating with Moody's and Standard & Poor's was Aa2/AA, respectively, with stable outlooks. HOW DID THESE FUNDS PERFORM OVER THE TWELVE MONTHS ENDED JUNE 30, 2003? Individual results for the Funds, as well as for relevant benchmarks, are presented in the accompanying table. 2 TOTAL RETURN LEHMAN LIPPER MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2 - -------------------------------------------------------------------------------- 1 YEAR 1 YEAR 1 YEAR TAXABLE- ENDED ENDED ENDED 6/30/03 EQUIVALENT3 6/30/03 6/30/03 6/30/03 - -------------------------------------------------------------------------------- NQJ 5.95% 8.81% 10.72% 8.74% 11.86% - -------------------------------------------------------------------------------- NNJ 5.81% 8.61% 10.48% 8.74% 11.86% - -------------------------------------------------------------------------------- NXJ 6.00% 8.89% 13.18% 8.74% 11.86% - -------------------------------------------------------------------------------- NUJ 5.96% 8.83% 13.74% 8.74% 11.86% - -------------------------------------------------------------------------------- NQP 5.70% 8.14% 14.79% 8.74% 13.76% - -------------------------------------------------------------------------------- NPY 5.93% 8.47% 12.09% 8.74% 13.76% - -------------------------------------------------------------------------------- NXM 5.80% 8.29% 15.95% 8.74% 13.76% - -------------------------------------------------------------------------------- NVY 5.80% 8.29% 15.48% 8.74% 13.76% - -------------------------------------------------------------------------------- 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 June 30, 2003, all of the Funds in this report outperformed the national, unleveraged Lehman Brothers Municipal Bond Index. Much of this outperformance is attributable to the Funds use of leverage, a strategy that can provide the opportunity for additional income for common shareholders. Leverage can work especially well during periods of low short-term interest rates, as was the case for the twelve months ended June 30, 2003. In addition, a number of these Funds benefited from the length of their durations.4 During periods of declining interest rates, such as that we experienced over most of the reporting period, longer duration investments generally performed well. As of June 30, 2003, the durations of NXJ, NUJ, NQP, NXM and NVY ranged from 10.05 to 11.12, compared with 7.94 for the Lehman index (see the individual Performance Overview pages for each Fund for their individual durations). NQJ, NNJ, and NPY had relatively higher exposures to bonds with short call positions over the reporting period. This tended to shorten their durations and modestly affected their performance relative to the longer duration Funds. HOW DID THE MARKET ENVIRONMENT AFFECT THE FUNDS' DIVIDENDS AND SHARE PRICES? With short-term interest rates remaining at historically low levels, the dividend-payment capabilities of these Funds benefited from their use of leverage. The extent 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 can potentially leave more earnings to support common share dividends. During the 12 months ended June 30, 2003, the continued low level of short-term interest rates enabled us to implement three dividend increases in NNJ, NXJ and NXM, and two in NQJ and NPY. As of June 2003, NQP had paid stable, attractive dividends for 37 consecutive months, while NUJ and NVY had offered shareholders steady dividends for 14 consecutive months. Over the course of this reporting period, strong investor demand and favorable market conditions helped to boost the share prices and net asset values of all of these Funds. As of June 30, 2003, NQJ, NQP, NPY and NXM were trading at premiums to their common share NAVs, while NNJ, NXJ, NUJ and NVY were trading at discounts (see charts on the individual Performance Overview pages). WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE YEAR ENDED JUNE 30, 2003? Over this reporting period, we continued to place strong emphasis on diversifying the Funds' portfolios, enhancing their call protection and supporting their dividend-paying capabilities. Strategically, our focus centered on systematically shortening the Funds' durations, which we believe will enhance our ability to manage the Funds' interest rate risk over time. Interest rate risk is the risk that the value of the bonds in a Fund's portfolio will decline if 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 desire to shorten durations, we concentrated on finding value in the long-intermediate part of the yield curve (i.e., bonds 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 the Nuveen New Jersey Funds are compared with the average annualized return of the 12 funds in the Lipper New Jersey Municipal Debt Funds category, while the total returns of the Nuveen Pennsylvania Funds are compared with the average annualized return of the 11 funds in the Lipper Pennsylvania Municipal Debt Funds category. Fund and Lipper returns assume reinvestment of dividends. 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: New Jersey 32.5% and Pennsylvania 30%. 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 that mature in about 15 years). 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 the older Funds, especially NQJ, NNJ and NPY, general market trends over the reporting period caused a number of holdings to be priced to call dates, rather than to maturity. This also served to shorten duration. In general, continued strong issuance in the New Jersey and Pennsylvania municipal markets over the past year helped us find additional opportunities to purchase the types of bond structures we favor. However, some of the benefits of increased issuance were offset by the fact that many of the new New Jersey bonds came predominately from the tobacco and transportation sectors. Pennsylvania issuance was dominated by unusually heavy issuance of general obligation debt by smaller local governments. Over the reporting period, the New Jersey and Pennsylvania Funds generally had meaningful holdings of education and healthcare bonds, which were among the top performing Lehman revenue sectors for this reporting period. In addition, we purchased a sizable number of new New Jersey Turnpike Authority bonds. As part of a merger of the turnpike authorities in New Jersey, some of the older New Jersey Turnpike bonds were advance refunded, which enhanced the credit quality of our Funds' holdings. As of June 30, 2003, each of the New Jersey Funds held less than 5% of its portfolio in bonds backed by the 1998 master tobacco settlement agreement. Driven mainly by ongoing budget problems, the state followed an August 2002 issuance of $1.8 billion in tobacco bonds with an additional $1.7 billion issuance in February 2003. We participated in both offerings, taking advantage of the relatively higher yields (approximately 7% versus 4.5% for similarly rated bonds at that time) provided by these credits. In recent months, we have seen the prices of tobacco bonds weaken as the result of lawsuits involving the major tobacco companies as well as the increased issuance of such bonds by different states. Although the sector as a whole produced negative returns over the twelve months ended June 30, 2003, tobacco bonds showed some recovery toward the end of the reporting period. At the present time, we plan to maintain our current tobacco holdings while we continue to regularly evaluate the situation. Over the course of the reporting period, we reduced our exposure to bonds issued by U. S. territories, such as Puerto Rico or Guam. These bonds were initially purchased to add diversity and yield at times of tighter municipal supply. With bonds now more plentiful, this need is not as acute. In addition, in light of the ongoing weakness in the airline industry, we also trimmed the New Jersey Funds' exposure to airline-backed bonds, selling approximately half of NXJ's holdings backed by Continental Airlines and eliminating NQJ's and NUJ's positions in Delta-backed bonds. NQJ continues to hold less than 1% of its portfolio's par value in bonds backed by American Airlines, while we have maintained an exposure of approximately 2% to the Newark/Continental bonds in both NXJ and NUJ. In the Pennsylvania Funds, we worked to reduce our allocations of general obligation bonds (GOs), although this has been somewhat difficult given the recent preponderance of GOs in the Pennsylvania market. In addition, we have begun to limit or modestly reduce our exposure to AMT (alternative minimum tax) bonds, following a consistent widening of spreads relative to Treasuries over the reporting period. Given the geopolitical and economic climate, we believed that strong credit quality remained a vital requirement. As of June 30, 2003, each of the New Jersey and Pennsylvania Funds offered 4 excellent credit quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from 60% to 89%. 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 THE FUNDS IN PARTICULAR? Nationally, we think the supply of new municipal bonds should remain strong, as issuers continue to take advantage of the low rate environment. In addition, many states continue to face budget problems and the ongoing need to raise money to cover the costs of essential services, including infrastructure and healthcare. Looking ahead, we will continue to reduce some of the Funds' call exposure. As of June 30, 2003, the call exposure of the older Funds--NQJ, NNJ, NQP and NPY--ranged from 9% to 17% through 2005. The number of actual calls will depend largely on market interest rates in coming months. The newer Funds--NXJ, NUJ, NXM, and NVY--will not face any significant call exposure for several years. In the months ahead, our primary goal will be to continue managing the Funds' durations. We also plan to continue to closely monitor the New Jersey Funds' holdings of tobacco and airline bonds as well as the budgetary situations in both states for any potential impact on credit ratings. Overall, we plan to continue to emphasize strategies that we think will add value for our shareholders and provide support for the Funds' long-term dividend-paying capabilities. 5 Nuveen New Jersey Investment Quality Municipal Fund, Inc. Performance OVERVIEW As of June 30, 2003 NQJ Pie Chart: CREDIT QUALITY AAA/U.S. Guaranteed 74% AA 8% A 9% BBB 6% NR 1% BB or lower 2% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $15.94 - -------------------------------------------------- Common Share Net Asset Value $15.65 - -------------------------------------------------- Market Yield 5.95% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.26% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 8.81% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $316,970 - -------------------------------------------------- Average Effective Maturity (Years) 20.65 - -------------------------------------------------- Leverage-Adjusted Duration 8.11 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 2/21/91) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 11.68% 10.72% - -------------------------------------------------- 5-Year 4.82% 6.47% - -------------------------------------------------- 10-Year 5.72% 6.47% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Transportation 25% - -------------------------------------------------- Healthcare 13% - -------------------------------------------------- Tax Obligation/Limited 11% - -------------------------------------------------- Education and Civic Organizations 9% - -------------------------------------------------- Tax Obligation/General 8% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.0765 Aug 0.0765 Sep 0.0765 Oct 0.0765 Nov 0.0765 Dec 0.0765 Jan 0.0765 Feb 0.0765 Mar 0.078 Apr 0.078 May 0.078 Jun 0.079 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/02 15.57 15.68 15.75 15.44 15.55 15.47 15.79 15.6 15.55 15.88 15.64 15.5 14.84 14.6 15.03 15 15.19 14.94 15.08 15.13 14.79 14.73 14.86 15.14 15.02 14.75 14.88 15.12 15.48 15.36 15.31 15.46 15.68 15.4 15.14 15.3 15.42 15.21 15.42 15.47 15.52 15.73 15.92 15.91 16.12 16.1 6/30/03 15.94 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 32.5%. 2 The Fund also paid shareholders a capital gains distribution in December 2002 of $0.0664 per share. 6 Nuveen New Jersey Premium Income Municipal Fund, Inc. Performance OVERVIEW As of June 30, 2003 NNJ Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 78% AA 9% A 9% BBB 2% NR 1% BB OR LOWER 1% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $16.10 - -------------------------------------------------- Common Share Net Asset Value $16.28 - -------------------------------------------------- Market Yield 5.81% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.07% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 8.61% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $195,568 - -------------------------------------------------- Average Effective Maturity (Years) 15.61 - -------------------------------------------------- Leverage-Adjusted Duration 7.78 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 12/17/92) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 10.18% 10.48% - -------------------------------------------------- 5-Year 6.62% 7.07% - -------------------------------------------------- 10-Year 6.78% 7.02% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Transportation 23% - -------------------------------------------------- Tax Obligation/Limited 13% - -------------------------------------------------- U.S. Guaranteed 13% - -------------------------------------------------- Water and Sewer 11% - -------------------------------------------------- Education and Civic Organizations 10% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.073 Aug 0.073 Sep 0.0745 Oct 0.0745 Nov 0.0745 Dec 0.0755 Jan 0.0755 Feb 0.0755 Mar 0.078 Apr 0.078 May 0.078 Jun 0.078 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/02 15.58 15.45 15.52 15.3 15.35 15.42 15.5 15.37 15.45 15.55 15.58 15.6 16 15.86 15.58 15.21 15.07 15.14 15.09 15.01 15.01 15.02 14.83 14.82 14.85 15.18 15.42 15.2 14.94 15.04 15.1 15.15 15.28 15.23 15.55 15.64 15.6 15.2 15.34 15.34 15.16 15.38 15.52 15.58 15.9 16.03 15.95 16.22 16 6/30/03 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 32.5%. 2 The Fund also paid shareholders a net ordinary income distribution in December 2002 of $0.0099 per share. 7 Nuveen New Jersey Dividend Advantage Municipal Fund Performance OVERVIEW As of June 30, 2003 NXJ Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 70% AA 1% A 19% BBB 6% BB OR LOWER 4% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $15.30 - -------------------------------------------------- Common Share Net Asset Value $15.35 - -------------------------------------------------- Market Yield 6.00% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.33% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 8.89% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $100,502 - -------------------------------------------------- Average Effective Maturity (Years) 22.94 - -------------------------------------------------- Leverage-Adjusted Duration 10.05 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 15.09% 13.18% - -------------------------------------------------- Since Inception 6.76% 9.11% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Healthcare 21% - -------------------------------------------------- Water and Sewer 18% - -------------------------------------------------- Transportation 16% - -------------------------------------------------- Tax Obligation/General 12% - -------------------------------------------------- Education and Civic Organizations 12% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE Jul 0.071 Aug 0.071 Sep 0.071 Oct 0.071 Nov 0.071 Dec 0.072 Jan 0.072 Feb 0.072 Mar 0.075 Apr 0.075 May 0.075 Jun 0.0765 LINE CHART: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/02 14.49 14.3 14.55 14.26 14.5 14.62 14.4 14.55 14.59 14.71 14.66 14.75 14.82 14.63 14.5 13.91 13.6 13.94 13.67 13.86 13.29 13.38 13.6 13.69 13.8 14.16 14 13.99 14 14.02 14.13 14.1 14.06 13.95 14.22 14.6 14.43 14.05 14.29 14.43 14.39 14.49 14.5 14.71 14.8 15.19 15.04 15.16 15.12 6/30/03 15.12 1 Taxable-equivalent yield represents the yield on a taxable investment necessary to equal the yield of the Nuveen Fund on an after-tax basis. 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 32.5%. 8 Nuveen New Jersey Dividend Advantage Municipal Fund 2 Performance OVERVIEW As of June 30, 2003 NUJ Pie Chart: CREDIT QUALITY AAA/U.S. Guaranteed 58% AA 2% A 16% BBB 19% NR 1% BB or lower 4% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $15.40 - -------------------------------------------------- Common Share Net Asset Value $15.44 - -------------------------------------------------- Market Yield 5.96% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.28% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 8.83% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $69,616 - -------------------------------------------------- Average Effective Maturity (Years) 21.97 - -------------------------------------------------- Leverage-Adjusted Duration 10.81 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 9.14% 13.74% - -------------------------------------------------- Since Inception 8.26% 12.48% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Transportation 19% - -------------------------------------------------- Healthcare 18% - -------------------------------------------------- Tax Obligation/Limited 12% - -------------------------------------------------- Education and Civic Organizations 11% - -------------------------------------------------- U.S. Guaranteed 10% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.0765 Aug 0.0765 Sep 0.0765 Oct 0.0765 Nov 0.0765 Dec 0.0765 Jan 0.0765 Feb 0.0765 Mar 0.0765 Apr 0.0765 May 0.0765 Jun 0.0765 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/02 15.55 15.2 15.13 15.22 15.85 15.37 15.16 15.32 15.16 15.48 15.52 15.47 15.54 15.57 15.37 14.84 14.4 14.28 14.2 14.26 13.92 14.03 14.01 14.42 14.35 14.65 14.72 14.25 14.45 14.65 14.66 14.61 14.57 14.78 14.7 14.82 14.5 14.22 14.57 14.88 14.62 14.54 14.78 15 15.04 15.15 15.2 15.29 15.35 6/30/03 15.39 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 32.5%. 2 The Fund also paid shareholders a capital gains distribution in December 2002 of $0.0319 per share. 9 Nuveen Pennsylvania Investment Quality Municipal Fund Performance OVERVIEW As of June 30, 2003 NQP Pie Chart: CREDIT QUALITY AAA/U.S. Guaranteed 70% AA 19% A 7% BBB 4% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $16.01 - -------------------------------------------------- Common Share Net Asset Value $15.91 - -------------------------------------------------- Market Yield 5.70% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 7.92% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 8.14% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $258,924 - -------------------------------------------------- Average Effective Maturity (Years) 21.51 - -------------------------------------------------- Leverage-Adjusted Duration 10.36 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 2/21/91) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 11.98% 14.79% - -------------------------------------------------- 5-Year 4.89% 6.55% - -------------------------------------------------- 10-Year 5.70% 6.48% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 22% - -------------------------------------------------- Tax Obligation/Limited 17% - -------------------------------------------------- Education and Civic Organizations 13% - -------------------------------------------------- Water and Sewer 11% - -------------------------------------------------- Transportation 8% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.0765 Aug 0.0765 Sep 0.0765 Oct 0.0765 Nov 0.0765 Dec 0.0765 Jan 0.0765 Feb 0.0765 Mar 0.078 Apr 0.078 May 0.078 Jun 0.079 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/02 15.4 15.3 15.15 15.15 15.24 15.32 15.1 15.12 15.15 15.47 15.4 15.48 15.65 15.6 15.22 14.76 14.25 14.3 14.75 14.6 14.44 14.56 14.89 14.4 14.28 14.5 14.75 14.54 14.8 14.7 14.81 15.04 14.9 14.9 15.02 15.1 14.91 15.01 15.23 15.24 15.03 15.15 15.24 15.58 15.91 15.96 15.92 16.02 16.01 6/30/03 15.95 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 30%. 10 Nuveen Pennsylvania Premium Income Municipal Fund 2 Performance OVERVIEW As of June 30, 2003 NPY Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 73% AA 10% A 5% BBB 9% NR 2% BB OR LOWER 1% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $16.00 - -------------------------------------------------- Common Share Net Asset Value $15.65 - -------------------------------------------------- Market Yield 5.93% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.24% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 8.47% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $246,604 - -------------------------------------------------- Average Effective Maturity (Years) 18.84 - -------------------------------------------------- Leverage-Adjusted Duration 8.93 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 15.09% 12.09% - -------------------------------------------------- 5-Year 10.00% 7.00% - -------------------------------------------------- 10-Year 7.20% 6.82% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Healthcare 15% - -------------------------------------------------- Tax Obligation/General 12% - -------------------------------------------------- U.S. Guaranteed 12% - -------------------------------------------------- Transportation 10% - -------------------------------------------------- Utilities 9% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.0755 Aug 0.0755 Sep 0.0755 Oct 0.0755 Nov 0.0755 Dec 0.0765 Jan 0.0765 Feb 0.0765 Mar 0.079 Apr 0.079 May 0.079 Jun 0.079 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/02 14.95 15.17 14.84 15.06 15.05 15.1 14.92 14.8 14.79 14.89 14.95 15.14 15.13 15.08 14.74 14.33 13.93 14.02 14.27 14.18 14.23 14.04 14.27 14.09 14.15 14.22 14.34 14.52 14.39 14.83 14.59 14.75 14.56 14.7 14.9 15 15.03 14.74 14.91 14.7 14.88 15.04 15 15.54 15.42 15.9 15.86 16 16.06 6/30/03 16 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 30%. 2 The Fund also paid shareholders a net ordinary income distribution in December 2002 of $0.0053 per share. 11 Nuveen Pennsylvania Dividend Advantage Municipal Fund Performance OVERVIEW As of June 30, 2003 NXM Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 56% AA 16% A 14% BBB 9% NR 5% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $16.46 - -------------------------------------------------- Common Share Net Asset Value $16.25 - -------------------------------------------------- Market Yield 5.80% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.06% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 8.29% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $53,591 - -------------------------------------------------- Average Effective Maturity (Years) 20.81 - -------------------------------------------------- Leverage-Adjusted Duration 11.12 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 18.13% 15.95% - -------------------------------------------------- Since Inception 10.69% 12.23% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 28% - -------------------------------------------------- Education and Civic Organizations 20% - -------------------------------------------------- Healthcare 13% - -------------------------------------------------- Long-Term Care 8% - -------------------------------------------------- Transportation 7% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.0735 Aug 0.0735 Sep 0.0745 Oct 0.0745 Nov 0.0745 Dec 0.0765 Jan 0.0765 Feb 0.0765 Mar 0.0795 Apr 0.0795 May 0.0795 Jun 0.0795 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/02 15.19 15.2 14.92 14.92 15.5 15.28 15.25 15.1 15.09 15.3 15.25 15.3 15.65 15.7 15.4 14.83 14.68 14.3 14.49 14.59 14.27 14.6 14.59 14.31 14.32 14.42 15.04 14.82 14.68 15 15.13 15.17 14.97 15.4 15.6 15.46 15.5 15.32 15.36 15.32 15.33 15.48 15.43 15.44 15.85 16.06 16.22 16.33 16.18 6/30/03 16.4 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 30%. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2002 of $0.0995 per share. 12 Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 Performance OVERVIEW As of June 30, 2003 NVY Pie Chart: CREDIT QUALITY AAA/U.S. GUARANTEED 59% AA 28% A 3% BBB 9% NR 1% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $15.84 - -------------------------------------------------- Common Share Net Asset Value $15.90 - -------------------------------------------------- Market Yield 5.80% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 8.06% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State Income Tax Rate)1 8.29% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $59,202 - -------------------------------------------------- Average Effective Maturity (Years) 18.60 - -------------------------------------------------- Leverage-Adjusted Duration 10.74 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 14.38% 15.48% - -------------------------------------------------- Since Inception 10.56% 14.92% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 27% - -------------------------------------------------- Tax Obligation/Limited 24% - -------------------------------------------------- Education and Civic Organizations 13% - -------------------------------------------------- Utilities 7% - -------------------------------------------------- Healthcare 7% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.0765 Aug 0.0765 Sep 0.0765 Oct 0.0765 Nov 0.0765 Dec 0.0765 Jan 0.0765 Feb 0.0765 Mar 0.0765 Apr 0.0765 May 0.0765 Jun 0.0765 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/02 14.74 15.15 15.2 15.83 14.99 14.2 14.58 15.01 15.13 15.19 15.26 15.79 6/30/03 15.84 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 30%. 2 The Fund also paid shareholders a capital gains distribution in December 2002 of $0.0295 per share. 13 Report of INDEPENDENT AUDITORS THE BOARDS OF DIRECTORS, TRUSTEES AND SHAREHOLDERS NUVEEN NEW JERSEY INVESTMENT QUALITY MUNICIPAL FUND, INC. NUVEEN NEW JERSEY PREMIUM INCOME MUNICIPAL FUND, INC. NUVEEN NEW JERSEY DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN NEW JERSEY DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NUVEEN PENNSYLVANIA INVESTMENT QUALITY MUNICIPAL FUND NUVEEN PENNSYLVANIA PREMIUM INCOME MUNICIPAL FUND 2 NUVEEN PENNSYLVANIA DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN PENNSYLVANIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen New Jersey Investment Quality Municipal Fund, Inc., Nuveen New Jersey Premium Income Municipal Fund, Inc., Nuveen New Jersey Dividend Advantage Municipal Fund, Nuveen New Jersey Dividend Advantage Municipal Fund 2, Nuveen Pennsylvania Investment Quality Municipal Fund, Nuveen Pennsylvania Premium Income Municipal Fund 2, Nuveen Pennsylvania Dividend Advantage Municipal Fund and Nuveen Pennsylvania Dividend Advantage Municipal Fund 2, as of June 30, 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 June 30, 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 positions of Nuveen New Jersey Investment Quality Municipal Fund, Inc., Nuveen New Jersey Premium Income Municipal Fund, Inc., Nuveen New Jersey Dividend Advantage Municipal Fund, Nuveen New Jersey Dividend Advantage Municipal Fund 2, Nuveen Pennsylvania Investment Quality Municipal Fund, Nuveen Pennsylvania Premium Income Municipal Fund 2, Nuveen Pennsylvania Dividend Advantage Municipal Fund and Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 at June 30, 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. Ernst & Young LLP Chicago, Illinois August 8, 2003 14 Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ) Portfolio of INVESTMENTS June 30, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 5.0% Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: $ 9,125 5.750%, 6/01/32 6/12 at 100.00 A- $ 8,042,958 3,000 6.000%, 6/01/37 6/12 at 100.00 A- 2,471,010 Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2003: 3,200 6.125%, 6/01/24 6/13 at 100.00 A- 2,950,528 2,625 6.375%, 6/01/32 6/13 at 100.00 A- 2,368,774 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 13.1% 2,500 Bergen County Improvement Authority, New Jersey, Revenue 9/12 at 101.00 N/R 2,591,650 Bonds, Yeshiva Ktana of Passaic Project, Series 2002, 6.000%, 9/15/27 4,390 New Jersey Higher Education Student Assistance Authority, 6/10 at 101.00 AAA 4,842,214 Student Loan Revenue Bonds, Series 2000A, 6.125%, 6/01/17 (Alternative Minimum Tax) - MBIA Insured New Jersey Educational Facilities Authority, Revenue Bonds, Saint Peter's College Issue, Series 1998B: 1,000 5.375%, 7/01/18 7/08 at 102.00 BB+ 909,710 1,750 5.500%, 7/01/27 7/08 at 102.00 BB+ 1,507,503 1,250 New Jersey Educational Facilities Authority, Revenue Refunding 7/08 at 101.00 AAA 1,303,588 Bonds, Seton Hall University Project, Series 1998F, 5.000%, 7/01/21 - AMBAC Insured 1,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/11 at 100.00 AAA 1,043,190 Ramapo College, Series 2001D, 5.000%, 7/01/31 - AMBAC Insured New Jersey Educational Facilities Authority, Revenue Bonds, New Jersey Institute of Technology, Series 2001G: 1,000 5.250%, 7/01/20 - MBIA Insured 7/11 at 100.00 AAA 1,083,670 1,945 5.250%, 7/01/21 - MBIA Insured 7/11 at 100.00 AAA 2,091,478 1,250 New Jersey Educational Facilities Authority, Revenue Bonds, No Opt. Call AAA 1,250,163 Princeton University, Series 2000E, 5.500%, 7/01/03 750 New Jersey Educational Facilities Authority, Revenue 7/12 at 100.00 AA 804,765 Refunding Bonds, Rider University, Series 2002A, 5.000%, 7/01/17 - RAAI Insured 2,000 New Jersey Educational Facilities Authority, Revenue 7/12 at 100.00 AAA 2,095,220 Bonds, New Jersey City University, Series 2002A, 5.000%, 7/01/32 - AMBAC Insured 2,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/13 at 100.00 A 2,052,440 Fairleigh Dickinson University, Series 2002D, 5.250%, 7/01/32 - ACA Insured 5,120 New Jersey Higher Education Assistance Authority, Student 6/07 at 102.00 AAA 5,382,246 Loan Revenue Bonds, New Jersey Class Loan Program, Series 1997A, 5.800%, 6/01/16 (Alternative Minimum Tax) - MBIA Insured 4,235 Puerto Rico Industrial, Tourist, Educational, Medical, and 9/11 at 100.00 BBB 4,395,591 Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, University of the Sacred Heart Project, Series 2001, 5.250%, 9/01/21 University of Medicine and Dentistry, New Jersey, Certificates of Participation, Series 2003: 1,945 5.000%, 4/15/20 - AMBAC Insured 4/13 at 100.00 AAA 2,087,335 1,370 5.000%, 4/15/22 - AMBAC Insured 4/13 at 100.00 AAA 1,452,077 University of Medicine and Dentistry, New Jersey, Revenue Bonds, Series 2002A: 2,000 5.000%, 12/01/24 - AMBAC Insured 12/12 at 100.00 AAA 2,101,900 4,000 5.500%, 12/01/27 - AMBAC Insured 12/12 at 100.00 AAA 4,432,480 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 19.0% 1,500 New Jersey Health Care Facilities Financing Authority, 7/07 at 102.00 BBB- 1,507,110 Revenue Refunding Bonds, St. Elizabeth Hospital Obligated Group, Series 1997, 6.000%, 7/01/27 15 Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) $ 4,350 New Jersey Health Care Facilities Financing Authority, Revenue 7/03 at 100.00 AAA $ 4,368,879 Bonds, Mercer Medical Center Issue, Series 1991, 6.500%, 7/01/10 - MBIA Insured 2,535 New Jersey Health Care Facilities Financing Authority, Revenue 7/03 at 102.00 Baa2 2,581,669 Bonds, Deborah Heart and Lung Center Issue, Series 1993, 6.200%, 7/01/13 6,150 New Jersey Health Care Facilities Financing Authority, 8/11 at 100.00 AAA 6,377,796 FHA-Insured Mortgage Revenue Bonds, Jersey City Medical Center Issue, Series 2001, 5.000%, 8/01/41 - AMBAC Insured 3,000 New Jersey Health Care Facilities Financing Authority, Revenue 7/11 at 100.00 A3 3,133,110 Bonds, Kennedy Health System, Series 2001, 5.500%, 7/01/21 3,135 New Jersey Health Care Facilities Financing Authority, 1/12 at 100.00 AA 3,264,287 Revenue Refunding Bonds, Bayshore Community Hospital, Series 2002, 5.125%, 7/01/32 - RAAI Insured 7,400 New Jersey Health Care Facilities Financing Authority, Revenue 7/12 at 100.00 Baa1 7,728,412 Bonds, South Jersey Hospital System, Series 2002, 5.875%, 7/01/21 3,000 New Jersey Health Care Facilities Financing Authority, 7/13 at 100.00 Baa2 3,003,420 Revenue Bonds, Somerset Medical Center, Series 2003, 5.500%, 7/01/33 2,155 New Jersey Health Care Facilities Financing Authority, No Opt. Call AAA 2,340,179 Revenue Bonds, Kennedy Health System Obligated Group, Series 1998B, 5.750%, 7/01/05 - MBIA Insured New Jersey Health Facilities Financing Authority, Revenue Bonds, Robert Wood Johnson University Hospital, Series 2000: 3,850 5.750%, 7/01/25 7/10 at 100.00 A+ 4,188,107 2,000 5.750%, 7/01/31 7/10 at 100.00 A+ 2,170,620 4,320 New Jersey Health Care Facilities Financing Authority, 7/08 at 101.00 Aaa 4,475,045 Revenue and Refunding Bonds, Saint Barnabas Health Care System, West Hudson Hospital Obligated Group, Series 1998A, 5.000%, 7/01/23 - MBIA Insured 5,040 New Jersey Health Care Facilities Financing Authority, 7/10 at 100.00 AAA 5,290,337 Revenue Bonds, Society of the Valley Hospital Obligated Group, Series 2000, 5.375%, 7/01/31 - AMBAC Insured 2,000 New Jersey Health Facilities Financing Authority, Revenue 7/10 at 100.00 Baa1 2,192,080 Bonds, Saint Peter's University Hospital, Series 2000A, 6.875%, 7/01/20 3,500 New Jersey Health Care Facilities Financing Authority, 7/09 at 101.00 AAA 3,635,940 Revenue Bonds, Meridian Health System Obligated Group, Series 1999, 5.250%, 7/01/29 - FSA Insured 3,945 Newark, New Jersey, GNMA Collateralized Health Care Facility 6/12 at 102.00 Aaa 4,208,763 Revenue Bonds, New Community Urban Renewal Corporation, Series 2001A, 5.200%, 6/01/30 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 9.4% 3,790 Hudson County Improvement Authority, New Jersey, 6/04 at 100.00 AA- 3,853,710 Multifamily Housing Revenue Bonds, Conduit Financing - Observer Park Project, Series 1992A, 6.900%, 6/01/22 (Alternative Minimum Tax) 1,175 Long Branch Housing Finance Corporation New Jersey, 10/03 at 100.00 N/R 1,180,616 Housing Revenue Bonds, Washington Manor Associates Ltd. Section 8 Assisted Elderly Project, Series 1980, 10.000%, 10/01/11 12,000 New Jersey Housing and Mortgage Finance Agency, 11/03 at 100.00 AAA 12,339,000 Multifamily Housing Revenue Refunding Bonds, Presidential Plaza at Newport Project, FHA-Insured Mortgages, Series 1991-1, 7.000%, 5/01/30 4,500 New Jersey Housing and Mortgage Finance Agency, 5/05 at 102.00 AAA 4,723,560 Multifamily Housing Revenue Bonds, Series 1995A, 6.000%, 11/01/14 - AMBAC Insured 4,500 New Jersey Housing and Mortgage Finance Agency, Multifamily 5/06 at 102.00 AAA 4,739,580 Housing Revenue Bonds, Series 1996A, 6.250%, 5/01/28 (Alternative Minimum Tax) - AMBAC Insured 2,743 Newark Housing Authority, New Jersey, GNMA Collateralized 10/09 at 102.00 Aaa 2,938,641 Housing Revenue Bonds, Fairview Apartments Project, Series 2000A, 6.400%, 10/20/34 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 9.8% 1,585 New Jersey Housing and Mortgage Finance Agency, Home 10/05 at 101.50 AAA 1,653,662 Buyer Revenue Bonds, Series 1995-O, 6.350%, 10/01/27 (Alternative Minimum Tax) - MBIA Insured 1,690 New Jersey Housing and Mortgage Finance Agency, Home Buyer 4/07 at 101.50 AAA 1,776,038 Revenue Bonds, Series 1996S, 6.050%, 10/01/28 (Alternative Minimum Tax) - MBIA Insured 16 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY (continued) $ 10,000 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/07 at 101.50 AAA $ 10,474,100 Revenue Bonds, Series 1997U, 5.850%, 4/01/29 (Alternative Minimum Tax) - MBIA Insured 10,285 New Jersey Housing and Mortgage Finance Agency, Home 10/10 at 100.00 AAA 10,864,354 Buyer Revenue Bonds, Series 2000CC, 5.875%,10/01/31 (Alternative Minimum Tax) - MBIA Insured 2,965 Puerto Rico Housing Finance Corporation, Mortgage-Backed 6/11 at 100.00 AAA 3,081,643 Securities, Home Mortgage Revenue Bonds, Series 2001A, 5.200%, 12/01/33 2,965 Puerto Rico Housing Finance Corporation, Mortgage-Backed 6/11 at 100.00 AAA 3,067,915 Securities, Home Mortgage Revenue Bonds, Series 2001B, 5.300%, 12/01/28 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 1.6% 5,000 New Jersey Economic Development Authority, Economic No Opt. Call Baa3 5,195,150 Development Revenue Refunding Bonds, Kapkowski Road Landfill Project, Series 2002, 5.750%, 10/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 1.8% New Jersey Health Care Facilities Financing Authority, Revenue Bonds, House of the Good Shepherd Obligated Group, Series 2001: 1,000 5.100%, 7/01/21 - RAAI Insured 7/11 at 100.00 AA 1,051,680 1,500 5.200%, 7/01/31 - RAAI Insured 7/11 at 100.00 AA 1,568,775 2,965 New Jersey Economic Development Authority, GNMA 12/11 at 103.00 Aaa 3,158,110 Collateralized Mortgage Revenue Bonds, Victoria Health Corporation Project, Series 2001A, 5.200%, 12/20/36 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 2.0% 6,250 Salem County Pollution Control Financing Authority, 11/03 at 100.00 AA- 6,312,250 New Jersey, Waste Disposal Revenue Bonds, E.I. DuPont de Nemours and Company - Chambers Works Project, Series 1991A, 6.500%, 11/15/21 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 12.5% Clifton, New Jersey, General Obligation Bonds, Series 2002: 1,700 5.000%, 1/15/21 - FGIC Insured 1/11 at 100.00 AAA 1,781,396 1,625 5.000%, 1/15/22 - FGIC Insured 1/11 at 100.00 AAA 1,706,656 Essex County, New Jersey, General Obligation Refunding Bonds, Series 1996A-1: 3,000 6.000%, 11/15/07 - FGIC Insured No Opt. Call Aaa 3,499,530 1,000 5.000%, 11/15/11 - FGIC Insured 11/07 at 101.00 Aaa 1,128,150 2,320 Hoboken, New Jersey, Fiscal Year Adjustment, General No Opt. Call AAA 2,825,899 Obligation Bonds, Series 1991, 8.900%, 8/01/06 - FSA Insured 3,675 Jersey City, New Jersey, Hudson County, Fiscal Year Adjustment No Opt. Call AAA 4,368,840 Bonds, Series 1991B, 8.400%, 5/15/06 - FSA Insured Middleton Township Board of Education, Monmouth County, New Jersey, Refunding School Bonds: 3,500 5.000%, 8/01/22 - FSA Insured 8/10 at 100.00 AAA 3,671,045 1,500 5.000%, 8/01/27 - FSA Insured 8/10 at 100.00 AAA 1,565,265 2,000 Morristown, New Jersey, General Obligation Bonds, 8/05 at 102.00 AAA 2,226,580 Series 1995 Refunding, 6.500%, 8/01/19 - FSA Insured New Jersey, General Obligation Bonds, Series 1992D: 4,000 5.750%, 2/15/06 No Opt. Call AA 4,434,800 5,000 6.000%, 2/15/11 No Opt. Call AA 5,993,900 2,000 Puerto Rico Public Improvement, General Obligation Refunding 7/11 at 100.00 AAA 2,114,480 Bonds, Series 2001, 5.125%, 7/01/30 - FSA Insured Sayreville School District, Middlesex County, New Jersey, General Obligation Bonds, Series 2002: 1,470 5.000%, 3/01/24 - FGIC Insured 3/12 at 100.00 AAA 1,547,528 1,545 5.000%, 3/01/25 - FGIC Insured 3/12 at 100.00 AAA 1,624,428 900 West Deptford Township, Gloucester County, New Jersey, 3/06 at 102.00 AAA 986,499 General Obligation Bonds, Series 1996, 5.250%, 3/01/14 - AMBAC Insured 17 Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 17.1% $ 3,320 Atlantic County, New Jersey, Improvement Authority, 11/10 at 100.00 Aaa $ 3,546,623 Egg Harbor Township Guaranteed Revenue Bonds, The Egg Harbor Township Golf Corporation Project, Series 2000, 5.400%, 11/01/30 - AMBAC Insured 2,225 Essex County Improvement Authority, New Jersey, General 10/13 at 100.00 Aaa 2,339,321 Obligation Lease Bonds, Correctional Facilities Project, Series 2003A, 5.000%, 10/01/28 - FGIC Insured 10,000 Essex County Improvement Authority, New Jersey, General 10/10 at 100.00 Aaa 11,583,000 Obligation Guaranteed Lease Revenue Bonds, County Correctional Facility Project, Series 2000, 6.000%, 10/01/25 - FGIC Insured Garden State Preservation Trust, New Jersey, Open Space and Farmland Preservation Bonds, Series 2003A: 2,000 5.250%, 11/01/19 - FSA Insured 11/13 at 100.00 AAA 2,217,880 3,000 5.000%, 11/01/20 - FSA Insured 11/13 at 100.00 AAA 3,229,380 3,365 5.000% 11/01/21 - FSA Insured 11/13 at 100.00 AAA 3,598,868 2,535 Mansfield Township Board of Education, Warren County, 3/06 at 102.00 AAA 2,835,195 New Jersey, Certificates of Participation, 5.900%, 3/01/15 - MBIA Insured 1,500 Middlesex County, New Jersey, Certificates of Participation, 8/11 at 100.00 AAA 1,570,500 Series 2001, 5.000%, 8/01/31 - MBIA Insured New Jersey Economic Development Authority, Lease Revenue Bonds, Bergen County Administration Complex, Series 1998: 500 4.050%, 11/15/03 - MBIA Insured No Opt. Call Aaa 505,830 4,000 4.750%, 11/15/26 - MBIA Insured 11/08 at 101.00 Aaa 4,073,280 5,000 New Jersey Economic Development Authority, School 6/12 at 100.00 AAA 5,332,550 Facilities Construction Financing Act Bonds, Series 2002C, 5.000%, 6/15/20 - MBIA Insured 5,670 New Jersey Transportation Trust Fund Authority, Transportation 12/11 at 100.00 AAA 5,950,892 System Bonds, Series 2001B, 5.000%, 12/15/21 - MBIA Insured 1,895 North Bergen Township Municipal Utilities Authority, No Opt. Call AAA 2,485,463 Hudson County, New Jersey, Sewer Revenue Refunding Bonds, Series 1993, 7.875%, 12/15/09 - FGIC Insured 1,000 Ocean County Utilities Authority, New Jersey, Wastewater 1/07 at 102.00 Aa1 1,122,770 Revenue Refunding Bonds, Series 1997, 5.125%, 1/01/10 1,250 Ocean County Utilities Authority, New Jersey, Wastewater 1/11 at 101.00 Aa1 1,345,088 Revenue Refunding Bonds, Series 2000, 5.000%, 1/01/18 2,000 West Orange Board of Education, Essex County, New Jersey, 10/09 at 101.00 Aaa 2,319,760 Certificates of Participation, Series 1999, 6.000%, 10/01/24 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 38.5% 3,275 Delaware River and Bay Authority, States of Delaware and 1/10 at 101.00 AAA 3,666,330 New Jersey, Revenue Bonds, Series 2000A, 5.750%, 1/01/29 - AMBAC Insured 2,960 Delaware River Port Authority, Pennsylvania and New Jersey, 1/12 at 100.00 AAA 3,141,330 Port District Project Revenue Refunding Bonds, Series 2001A, 5.200%, 1/01/27 - FSA Insured 7,000 Delaware River Port Authority, New Jersey and Pennsylvania, 1/06 at 102.00 AAA 7,562,310 Revenue Bonds, Series 1995, 5.500%, 1/01/26 - FGIC Insured 3,500 Delaware River Port Authority, New Jersey and Pennsylvania, 1/10 at 100.00 AAA 3,936,695 Revenue Bonds, Series 1999, 5.750%, 1/01/22 - FSA Insured 3,000 New Jersey Economic Development Authority, Economic 11/03 at 100.00 CCC 1,605,000 Development Bonds, American Airlines, Inc. Project, 7.100%, 11/01/31 (Alternative Minimum Tax) 3,000 New Jersey Highway Authority, Garden State Senior Parkway, 1/10 at 101.00 AA- 3,275,580 Revenue Refunding Bonds, Series 1999, 5.625%, 1/01/30 New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991C: 9,000 6.500%, 1/01/08 - MBIA Insured No Opt. Call AAA 10,622,880 740 6.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 930,713 New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 2000A: 9,275 5.500%, 1/01/25 - MBIA Insured 1/10 at 100.00 AAA 10,059,758 10,000 5.500%, 1/01/27 1/10 at 100.00 A 10,747,800 2,000 5.500%, 1/01/30 - MBIA Insured 1/10 at 100.00 AAA 2,163,740 18 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION (continued) $ 9,500 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 7/13 at 100.00 AAA $ 10,280,900 Series 2003A, 5.000%, 1/01/19 (WI, settling 7/09/03) - FGIC Insured 5,000 Port Authority of New York and New Jersey, Consolidated 6/05 at 101.00 AAA 5,391,750 Revenue Bonds, One Hundredth Series 1995, 5.750%, 6/15/30 - MBIA Insured 3,150 Port Authority of New York and New Jersey, Consolidated 7/04 at 101.00 AA- 3,302,366 Revenue Bonds, Ninety-Fifth Series 1994, 6.125%, 7/15/29 (Alternative Minimum Tax) 3,930 Port Authority of New York and New Jersey, Consolidated 7/08 at 101.00 AA- 3,979,715 Revenue Bonds, One Hundred Twenty-Second Series 2001, 5.125%, 1/15/36 (Alternative Minimum Tax) Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Twenty-Fifth Series 2002: 2,280 5.000%, 10/15/26 - FSA Insured 4/12 at 101.00 AAA 2,406,722 5,000 5.000%, 4/15/32 - FSA Insured 4/12 at 101.00 AAA 5,259,900 6,850 Port Authority of New York and New Jersey, Consolidated 10/07 at 101.00 AAA 7,298,881 Revenue Bonds, One Hundred Twenty-First Series 2000, 5.375%, 10/15/35 - MBIA Insured Port Authority of New York and New Jersey, Special Project Bonds, JFK International Air Terminal LLC Project, Series 6: 3,500 7.000%, 12/01/12 (Alternative Minimum Tax) - MBIA Insured No Opt. Call AAA 4,375,630 6,605 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 12/07 at 102.00 AAA 7,118,407 12,130 5.750%, 12/01/25 (Alternative Minimum Tax) - MBIA Insured 12/07 at 100.00 AAA 13,151,831 2,000 South Jersey Port Corporation, New Jersey, Marine Terminal 1/13 at 100.00 A 2,051,640 Revenue Refunding Bonds, Series 2002K, 5.100%, 1/01/33 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 5.9% 5,175 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 AAA 5,806,919 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded to 7/01/10) 1,000 Monmouth County Improvement Authority, New Jersey, 7/07 at 101.00 AAA 1,163,560 Revenue Bonds, Howell Township Board of Education Project, Series 1997, 5.800%, 7/15/17 (Pre-refunded to 7/15/07) - AMBAC Insured 2,770 New Jersey Turnpike Authority, Turnpike Revenue Bonds, No Opt. Call A*** 3,425,105 Series 1991C, 6.500%, 1/01/16 7,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 8,289,900 Obligation Bonds, Series 2000A, 5.500%, 10/01/34 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 8.0% 3,255 Camden County Pollution Control Financing Authority, 12/03 at 100.00 B2 3,116,044 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991B, 7.500%, 12/01/09 (Alternative Minimum Tax) 3,500 Camden County Pollution Control Financing Authority, 12/03 at 100.00 B2 3,349,220 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991A, 7.500%, 12/01/10 (Alternative Minimum Tax) 400 New Jersey Economic Development Authority, Adjustable 7/03 at 102.00 A2 420,680 Fixed-Rate Pollution Control Revenue Bonds, Jersey Central Power and Light Company Project, Series 1985, 7.100%, 7/01/15 5,950 Puerto Rico Electric Power Authority, Power Revenue 7/09 at 101.50 AAA 6,818,760 Refunding Bonds, Series FF, 5.250%, 7/01/13 - MBIA Insured 5,000 Puerto Rico Electric Power Authority, Power Revenue Refunding No Opt. Call AAA 5,979,450 Bonds, Series 1995Y, 7.000%, 7/01/07 - MBIA Insured 2,500 Salem County Pollution Control Financing Authority, 4/12 at 101.00 Baa1 2,504,725 New Jersey, Pollution Control Revenue Refunding Bonds, PSEG Power LLC Project, Series 2001A, 5.750%, 4/01/31 (Alternative Minimum Tax) 3,000 Union County Utilities Authority, New Jersey, Solid Waste 6/08 at 101.00 AAA 3,065,850 Facility Senior Lease Revenue Bonds, Ogden Martin Systems of Union, Inc. Lessee, Series 1998A, 5.000%, 6/01/23 (Alternative Minimum Tax) - AMBAC Insured 19 Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 6.3% $ 3,000 Jersey City Municipal Utilities Authority, Hudson County, 7/08 at 102.00 AAA $ 3,085,350 New Jersey, Sewer Revenue Bonds, Series 2001A-2, 5.200%, 7/15/21 (Alternative Minimum Tax) - FGIC Insured 7,500 New Jersey Economic Development Authority, Water 5/06 at 102.00 AAA 8,020,725 Facilities Revenue Bonds, American Water Works Company Project, Series 1996, 6.000%, 5/01/36 (Alternative Minimum Tax) - FGIC Insured 5,250 New Jersey Economic Development Authority, Water 7/08 at 102.00 AAA 5,463,465 Facilities Revenue Bonds, American Water Works Company Project, Series 1998A, 5.250%, 7/01/38 (Alternative Minimum Tax) - FGIC Insured 3,000 North Hudson Sewer Authority, New Jersey, Sewer Revenue 8/12 at 100.00 Aaa 3,313,286 Refunding Bonds, Series 2002A, 5.250%, 8/01/18 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 447,238 Total Long-Term Investments (cost $448,199,531) - 150.0% 475,389,341 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.1% 3,580,246 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.1)% (162,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $316,969,587 ==================================================================================================================== (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. See accompanying notes to financial statements. 20
Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ) Portfolio of INVESTMENTS June 30, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 4.3% $ 3,500 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 A- $ 3,084,970 Tobacco Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2003: 3,520 6.125%, 6/01/24 6/13 at 100.00 A- 3,245,581 2,250 6.375%, 6/01/32 6/13 at 100.00 A- 2,030,378 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 14.1% New Jersey Higher Education Student Assistance Authority, Student Loan Revenue Bonds, Series 2000A: 3,180 5.700%, 6/01/08 (Alternative Minimum Tax) - MBIA Insured No Opt. Call AAA 3,550,311 2,140 6.000%, 6/01/15 (Alternative Minimum Tax) - MBIA Insured 6/10 at 101.00 AAA 2,375,678 3,180 New Jersey Economic Development Authority, Economic No Opt. Call N/R 3,459,204 Development Bonds, Yeshiva Ktana of Passaic 1992 Project, 8.000%, 9/15/18 515 New Jersey Educational Facilities Authority, Revenue Bonds, 7/03 at 100.00 A- 517,292 Trenton State College Issue, Series 1976D, 6.750%, 7/01/08 1,000 New Jersey Educational Facilities Authority, Revenue 7/04 at 102.00 AAA 1,059,950 Bonds, New Jersey Institute of Technology Issue, Series 1994A, 6.000%, 7/01/24 - MBIA Insured 3,330 New Jersey Educational Facilities Authority, Revenue 7/06 at 101.00 AAA 3,722,108 Bonds, Montclair State University, Dormitory/Cafeteria Facility, Series 1996C, 5.400%, 7/01/12 - AMBAC Insured 2,500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/10 at 100.00 AAA 2,816,425 Princeton University, Series 2000E, 5.500%, 7/01/17 500 New Jersey Educational Facilities Authority, Revenue 7/13 at 100.00 A 513,110 Bonds, Fairleigh Dickinson University, Series 2002D, 5.250%, 7/01/32 - ACA Insured 445 New Jersey Higher Education Assistance Authority, Student 7/03 at 101.00 A+ 450,229 Loan Revenue Bonds, New Jersey Class Loan Program, Series 1992A, 6.125%, 7/01/09 (Alternative Minimum Tax) 3,640 New Jersey Higher Education Assistance Authority, Student 6/09 at 101.00 AAA 3,891,488 Loan Revenue Bonds, Series 1999A, 5.250%, 6/01/18 (Alternative Minimum Tax) - MBIA Insured 2,025 University of Medicine and Dentistry, New Jersey, 4/13 at 100.00 AAA 2,159,703 Certificates of Participation, Series 2003, 5.000%, 4/15/21 - AMBAC Insured 3,000 University of Medicine and Dentistry, New Jersey, Revenue 12/12 at 100.00 AAA 3,148,110 Bonds, Series 2002A, 5.000%, 12/01/31 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 11.0% 3,500 New Jersey Health Care Facilities Financing Authority, Revenue 7/11 at 100.00 A3 3,658,060 Bonds, Kennedy Health System, Series 2001, 5.625%, 7/01/31 1,710 New Jersey Health Care Facilities Financing Authority, 1/12 at 100.00 AA 1,779,050 Revenue Refunding Bonds, Bayshore Community Hospital, Series 2002, 5.000%, 7/01/22 - RAAI Insured 1,130 New Jersey Health Care Facilities Financing Authority, 7/12 at 100.00 A- 1,208,151 Revenue Refunding Bonds, Atlantic City Medical Center, Series 2002, 5.750%, 7/01/25 2,500 New Jersey Health Care Facilities Financing Authority, 7/12 at 100.00 Baa1 2,610,950 Revenue Bonds, South Jersey Hospital System, Series 2002, 5.875%, 7/01/21 1,875 New Jersey Health Care Facilities Financing Authority, 7/13 at 100.00 Baa2 1,877,138 Revenue Bonds, Somerset Medical Center, Series 2003, 5.500%, 7/01/33 2,900 New Jersey Health Care Facilities Financing Authority, 1/10 at 101.00 A2 3,061,965 Revenue Bonds, Hackensack University Medical Center, Series 2000, 6.000%, 1/01/34 2,000 New Jersey Health Care Facilities Financing Authority, 7/10 at 100.00 AAA 2,282,680 Revenue Bonds, Society of the Valley Hospital Obligated Group, Series 2000, 5.750%, 7/01/15 - AMBAC Insured 21 Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) $ 1,800 New Jersey Health Care Facilities Financing Authority, 7/09 at 101.00 AAA $ 2,085,102 Revenue Bonds, Meridian Health System Obligated Group, Series 1999, 5.625%, 7/01/12 - FSA Insured 2,900 Puerto Rico Industrial, Medical, Educational, and 12/03 at 103.00 A2 2,992,626 Environmental Pollution Control Facilities Financing Authority, Adjustable Rate Industrial Revenue Bonds, American Home Products Corporation, Series 1983A, 5.100%, 12/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 7.9% 340 Essex County Improvement Authority, New Jersey, FNMA 11/12 at 100.00 Aaa 343,815 Multifamily Enhanced Revenue Bonds, Mount Carmel Towers Project, Series 2002, 4.750%, 11/01/22 (Alternative Minimum Tax) 710 Long Branch Housing Finance Corporation, New Jersey, 10/03 at 100.00 N/R 713,394 Housing Revenue Bonds, Washington Manor Associates Ltd. Section 8 Assisted Elderly Project, Series 1980, 10.000%, 10/01/11 4,000 New Jersey Housing and Mortgage Finance Agency, 11/03 at 100.00 AAA 4,113,000 Multifamily Housing Revenue Refunding Bonds, Presidential Plaza at Newport Project, FHA-Insured Mortgages, Series 1991-1, 7.000%, 5/01/30 2,875 New Jersey Housing and Mortgage Finance Agency, 5/05 at 102.00 AAA 3,017,830 Multifamily Housing Revenue Bonds, Series 1995A, 6.000%, 11/01/14 - AMBAC Insured 7,000 New Jersey Housing and Mortgage Finance Agency, 11/07 at 101.50 AAA 7,293,510 Multifamily Housing Revenue Bonds, Series 1997A, 5.550%, 5/01/27 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 4.6% 1,000 New Jersey Housing and Mortgage Finance Agency, Home 10/05 at 101.50 AAA 1,044,970 Buyer Revenue Bonds, Series 1995-O, 6.300%, 10/01/23 (Alternative Minimum Tax) - MBIA Insured 155 New Jersey Housing and Mortgage Finance Agency, Home 4/06 at 101.50 AAA 163,533 Buyer Revenue Bonds, Series 1996-P, 5.650%, 4/01/14 - MBIA Insured 2,345 New Jersey Housing and Mortgage Finance Agency, Home 4/07 at 101.50 AAA 2,464,384 Buyer Revenue Bonds, Series 1996S, 6.050%, 10/01/28 (Alternative Minimum Tax) - MBIA Insured New Jersey Housing and Mortgage Finance Agency, Home Buyer Revenue Bonds, Series 1997U: 1,965 5.700%, 10/01/14 (Alternative Minimum Tax) - MBIA Insured 10/07 at 101.50 AAA 2,085,081 1,500 5.850%, 4/01/29 (Alternative Minimum Tax) - MBIA Insured 10/07 at 101.50 AAA 1,571,115 1,000 New Jersey Housing and Mortgage Finance Agency, Home 10/08 at 101.50 AAA 1,030,430 Buyer Revenue Bonds, Series 1998X, 5.350%, 4/01/29 (Alternative Minimum Tax) - MBIA Insured 500 New Jersey Housing and Mortgage Finance Agency, Home No Opt. Call AAA 540,125 Buyer Revenue Bonds, Series 2000CC, 4.600%, 10/01/09 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 0.5% 1,000 New Jersey Economic Development Authority, Economic No Opt. Call Baa3 1,039,030 Development Revenue Refunding Bonds, Kapkowski Road Landfill Project, Series 2002, 5.750%, 10/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 1.7% 3,255 New Jersey Economic Development Authority, Revenue 10/03 at 103.00 A+ 3,358,476 Bonds, Morris Hall-St. Lawrence, Inc. Project, Series 1993A, 6.150%, 4/01/13 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 0.3% 600 New Jersey Economic Development Authority, Economic 12/03 at 102.00 Aa3 619,332 Growth Bonds, Composite Issue - Second Series 1992T, 5.300%, 12/01/07 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 12.4% 2,460 Freehold Regional High School District, Monmouth County No Opt. Call AAA 2,793,478 Board of Education, New Jersey, School District Refunding Bonds, Series 2001, 5.000%, 3/01/17 - FGIC Insured 2,000 Jersey City, New Jersey, General Obligation Bonds, Refunding No Opt. Call AAA 2,323,220 and School Improvements, Series 2002B, 5.250%, 3/01/13 - AMBAC Insured New Jersey, General Obligation Bonds, Series 1992D: 2,760 5.750%, 2/15/06 No Opt. Call AA 3,060,012 4,000 5.800%, 2/15/07 No Opt. Call AA 4,543,880 2,500 6.000%, 2/15/11 No Opt. Call AA 2,996,950 1,560 6.000%, 2/15/13 No Opt. Call AA 1,905,571 22 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 4,000 Passaic County, New Jersey, General Improvement Refunding No Opt. Call AAA $ 4,649,640 Bonds, Series 1993, 5.125%, 9/01/12 - FGIC Insured 1,800 Woodbridge Township, Middlesex County, New Jersey, 7/09 at 102.00 Aaa 1,949,544 Sewer Utility Bonds, Series 1999, 5.300%, 7/01/20 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 19.2% 2,225 Essex County Improvement Authority, New Jersey, General 10/13 at 100.00 Aaa 2,339,321 Obligation Lease Bonds, Correctional Facilities Project, Series 2003A, 5.000%, 10/01/28 - FGIC Insured Garden State Preservation Trust, New Jersey, Open Space and Farmland Preservation Bonds, Series 2003A: 1,200 5.250%, 11/01/19 - FSA Insured 11/13 at 100.00 AAA 1,330,728 1,750 5.000%, 11/01/20 - FSA Insured 11/13 at 100.00 AAA 1,883,805 1,965 5.000%, 11/01/21 - FSA Insured 11/13 at 100.00 AAA 2,101,568 1,000 Hudson County Improvement Authority, New Jersey, Utility 1/08 at 101.50 AAA 1,064,140 System Revenue Bonds, Harrison Franchise Acquisition Project, Series 1997, 5.350%, 1/01/27 - FSA Insured 2,250 New Jersey Building Authority, State Building Revenue 6/10 at 100.00 AA- 2,404,508 Bonds, Series 2000A, 5.125%, 6/15/20 2,000 New Jersey Economic Development Authority, Lease Revenue 11/08 at 101.00 Aaa 2,036,640 Bonds, Bergen County Administration Complex, Series 1998, 4.750%, 11/15/26 - MBIA Insured 1,000 New Jersey Economic Development Authority, Revenue 8/03 at 102.00 AAA 1,025,170 Bonds, Public Schools Small Project Loan Program, Series 1993, 5.400%, 8/15/12 2,000 New Jersey Economic Development Authority, School Facilities 6/12 at 100.00 AAA 2,133,020 Construction Financing Act Bonds, Series 2002C, 5.000%, 6/15/20 - MBIA Insured New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 1995A: 385 5.500%, 6/15/12 - MBIA Insured 6/05 at 102.00 AAA 422,203 5,000 5.000%, 6/15/15 - MBIA Insured 6/05 at 102.00 AAA 5,373,750 685 New Jersey Transportation Trust Fund Authority, Transportation 6/05 at 102.00 AAA 745,520 System Bonds, Series 1995B, 5.500%, 6/15/15 - MBIA Insured 7,500 Puerto Rico Municipal Finance Agency, Loan Pool Bonds, 8/09 at 101.00 AAA 8,545,725 Series 1999A, 5.500%, 8/01/17 - FSA Insured 1,000 Stony Brook Regional Sewer Authority, Princeton, New Jersey, No Opt. Call AA- 1,183,220 Revenue Refunding Bonds, Series 1993B, 5.450%, 12/01/12 2,445 Union County Improvement Authority, New Jersey, General 6/13 at 100.00 Aa1 2,581,407 Obligation Lease Revenue Bonds, Series 2003, 5.000%, 6/15/23 2,250 Western Monmouth Utilities Authority, Monmouth County, 2/05 at 102.00 AAA 2,423,475 New Jersey, Revenue Refunding Bonds, Series 1995A, 5.600%, 2/01/14 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 33.3% 5,000 Delaware River Port Authority, New Jersey and Pennsylvania, 1/08 at 101.00 AAA 5,263,950 Port District Project Bonds, Series 1998B, 5.000%, 1/01/19 - MBIA Insured New Jersey Turnpike Authority, Turnpike Revenue Bonds, Series 1991C: 1,340 6.500%, 1/01/08 No Opt. Call A 1,575,358 2,185 6.500%, 1/01/16 - AMBAC Insured No Opt. Call AAA 2,748,118 3,505 6.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 4,408,309 2,495 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 1/10 at 100.00 AAA 2,706,102 Series 2000A, 5.500%, 1/01/25 - MBIA Insured 5,750 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 7/13 at 100.00 AAA 6,222,650 Series 2003A, 5.000%, 1/01/19 (WI, settling 7/09/03) - FGIC Insured 3,000 Port Authority of New York and New Jersey, Consolidated 10/04 at 101.00 AAA 3,185,490 Revenue Bonds, Ninety-Sixth Series 1994, 6.600%, 10/01/23 (Alternative Minimum Tax) - FGIC Insured Port Authority of New York and New Jersey, Consolidated Revenue Bonds, Ninety-Ninth Series 1995: 1,200 5.750%, 11/01/09 (Alternative Minimum Tax) - FGIC Insured 5/05 at 101.00 AAA 1,296,360 2,500 5.750%, 11/01/14 (Alternative Minimum Tax) - FGIC Insured 5/05 at 101.00 AAA 2,664,525 1,500 Port Authority of New York and New Jersey, Consolidated 7/06 at 101.00 AA- 1,660,275 Revenue Bonds, One Hundred Sixth Series 1996, 6.000%, 7/01/16 (Alternative Minimum Tax) 23 Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION (continued) Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundredth Series 1995: $ 2,500 5.750%, 12/15/20 - FGIC Insured 6/05 at 101.00 AAA $ 2,696,650 2,000 5.750%, 6/15/30 - MBIA Insured 6/05 at 101.00 AAA 2,156,700 2,000 Port Authority of New York and New Jersey, Consolidated 6/05 at 101.00 AA- 2,071,240 Revenue Bonds, One Hundred Twelfth Series 1998, 5.250%, 12/01/13 (Alternative Minimum Tax) 2,000 Port Authority of New York and New Jersey, Consolidated 4/12 at 101.00 AAA 2,103,960 Revenue Bonds, One Hundred Twenty-Fifth Series 2002, 5.000%, 4/15/32 - FSA Insured Port Authority of New York and New Jersey, Special Project Bonds, JFK International Air Terminal LLC Project, Series 6: 10,000 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 12/07 at 102.00 AAA 10,777,300 11,000 5.750%, 12/01/25 (Alternative Minimum Tax) - MBIA Insured 12/07 at 100.00 AAA 11,926,640 1,435 South Jersey Transportation Authority New Jersey, 11/09 at 101.00 AAA 1,517,068 Transportation System Revenue Bonds, Series 1999, 5.125%, 11/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 18.3% 1,275 Camden County Improvement Authority, New Jersey, County 10/05 at 102.00 AAA 1,422,836 Guaranteed Lease Revenue Bonds, Series 1995, 5.625%, 10/01/15 (Pre-refunded to 10/01/05) - MBIA Insured 5,175 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 AAA 5,806,919 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded to 7/01/10) 1,000 Essex County Utilities Authority, New Jersey, Solid Waste 4/06 at 102.00 AAA 1,131,230 System Revenue Bonds, Secured by a Count Deficiency Agreement, Series 1996A, 5.600%, 4/01/16 (Pre-refunded to 4/01/06) - FSA Insured 685 New Jersey Health Care Facilities Financing Authority, 8/04 at 102.00 Aa2*** 733,745 FHA-Insured Mortgage Revenue Refunding Bonds, Wayne General Hospital Issue, Series 1994B, 5.750%, 8/01/11 (Pre-refunded to 8/01/04) 3,750 New Jersey Educational Facilities Authority, Revenue 7/06 at 101.00 AAA 4,187,663 Bonds, Trenton State College Issue, Series 1996A, 5.125%, 7/01/24 (Pre-refunded to 7/01/06) - MBIA Insured 2,500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/06 at 101.00 AAA 2,855,800 Rowan College Issue, Series 1996E, 6.000%, 7/01/21 (Pre-refunded to 7/01/06) - AMBAC Insured 2,000 New Jersey Transit Corporation, Federal Transit 9/09 at 100.00 AAA 2,425,200 Administration Grants, Certificates of Participation, Series 2000A, 6.125%, 9/15/15 (Pre-refunded to 9/15/09) - AMBAC Insured 2,025 New Jersey Transportation Trust Fund Authority, Transportation 12/11 at 100.00 AAA 2,503,811 System Bonds, Series 2001B, 6.000%, 12/15/19 (Pre-refunded to 12/15/11) - MBIA Insured 115 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 126,770 System Bonds, Series 1995A, 5.500%, 6/15/12 - MBIA Insured 415 New Jersey Transportation Trust Fund Authority, Transportation 6/05 at 102.00 AAA 457,475 System Bonds, Series 1995B, 5.500%, 6/15/15 (Pre-refunded to 6/15/05) - MBIA Insured 8,420 New Jersey Turnpike Authority, Turnpike Revenue Bonds, No Opt. Call A*** 10,411,330 Series 1991C, 6.500%, 1/01/16 Sparta Township School District, Sussex County, New Jersey, General Obligation Bonds, Series 1996: 1,100 5.800%, 9/01/19 (Pre-refunded to 9/01/06) - MBIA Insured 9/06 at 100.00 AAA 1,246,652 1,100 5.800%, 9/01/20 (Pre-refunded to 9/01/06) - MBIA Insured 9/06 at 100.00 AAA 1,246,652 1,100 5.800%, 9/01/21 (Pre-refunded to 9/01/06) - MBIA Insured 9/06 at 100.00 AAA 1,246,652 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 2.3% 2,330 Camden County Pollution Control Financing Authority, 12/03 at 100.00 B2 2,237,289 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991D, 7.250%, 12/01/10 2,000 Puerto Rico Electric Power Authority, Power Revenue Refunding 7/09 at 101.50 AAA 2,292,020 Bonds, Series FF, 5.250%, 7/01/13 - MBIA Insured 24 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 15.8% Bayonne Municipal Utilities Authority, New Jersey, Water System Revenue Bonds, Series 2003A Refunding: $ 1,450 5.000%, 4/01/19 - XLCA Insured 4/13 at 100.00 Aaa $ 1,554,545 1,250 5.000%, 4/01/24 - XLCA Insured 4/13 at 100.00 Aaa 1,307,363 1,000 Jersey City Sewer Authority, Hudson County, New Jersey, No Opt. Call AAA 1,242,450 Sewer Revenue Refunding Bonds, Series 1993, 6.250%, 1/01/14 - AMBAC Insured 3,100 New Jersey Economic Development Authority, Water 3/04 at 102.00 AAA 3,197,929 Facilities Revenue Refunding Bonds, Hackensack Water Company Project, Series 1994B, 5.900%, 3/01/24 (Alternative Minimum Tax) - MBIA Insured 3,250 New Jersey Economic Development Authority, Water 7/08 at 102.00 AAA 3,382,145 Facilities Revenue Bonds, American Water Works Company Project, Series 1998A, 5.250%, 7/01/38 (Alternative Minimum Tax) - FGIC Insured 6,950 New Jersey Environmental Infrastructure Trust, 9/11 at 101.00 AAA 7,253,785 Environmental Infrastructure Bonds, Series 2001A, 4.750%, 9/01/20 7,000 North Hudson Sewer Authority, New Jersey, Sewer Revenue 8/06 at 101.00 AAA 7,241,780 Bonds, Series 1996, 5.125%, 8/01/22 - FGIC Insured 3,500 North Hudson Sewer Authority, New Jersey, Sewer Revenue 8/12 at 100.00 Aaa 3,843,000 Refunding Bonds, Series 2002A, 5.250%, 8/01/19 - FGIC Insured 1,500 Wanaque Valley Regional Sewer Authority, Passaic County, No Opt. Call AAA 1,808,678 New Jersey, Sewer Revenue Refunding Bond, Series 1993B, 5.750%, 9/01/18 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 262,420 Total Long-Term Investments (cost $262,699,786) - 145.7% 284,939,193 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.1% 2,228,830 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (46.8)% (91,600,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $195,568,023 ==================================================================================================================== (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. See accompanying notes to financial statements. 25
Nuveen New Jersey Dividend Advantage Municipal Fund (NXJ) Portfolio of INVESTMENTS June 30, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 0.2% $ 250 New Jersey Economic Development Authority, Industrial 4/06 at 102.00 Ba3 $ 248,333 Development Revenue Bonds, Newark Airport Marriott Hotel, Series 1996 Refunding, 7.000%, 10/01/14 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 3.9% 1,000 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 A- 881,420 Tobacco Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2003: 2,240 6.125%, 6/01/24 6/13 at 100.00 A- 2,065,370 1,125 6.375%, 6/01/32 6/13 at 100.00 A- 1,015,189 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 17.4% 2,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/11 at 101.00 AAA 2,095,220 Rowan College, Series 2001C, 5.000%, 7/01/31 - FGIC Insured 200 New Jersey Educational Facilities Authority, Revenue 7/11 at 100.00 AAA 222,652 Refunding Bonds, Seton Hall University Project, Series 2001A, 5.250%, 7/01/16 - AMBAC Insured New Jersey Educational Facilities Authority, Revenue Refunding Bonds, Seton Hall University Project, Series 2001G: 3,820 4.875%, 7/01/21 - AMBAC Insured 7/11 at 100.00 AAA 3,968,713 1,600 5.000%, 7/01/26 - AMBAC Insured 7/11 at 100.00 AAA 1,671,856 1,000 New Jersey Educational Facilities Authority, Revenue 7/11 at 100.00 AAA 1,097,510 Bonds, New Jersey Institute of Technology, Series 2001G, 5.250%, 7/01/18 - MBIA Insured 1,565 New Jersey Educational Facilities Authority, Revenue 7/10 at 100.00 AAA 1,742,017 Bonds, Princeton University, Series 2000E, 5.250%, 7/01/16 Puerto Rico Industrial, Tourist, Educational, Medical, and Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, University of the Sacred Heart Project, Series 2001: 2,000 5.250%, 9/01/21 9/11 at 100.00 BBB 2,075,840 2,000 5.250%, 9/01/31 9/11 at 100.00 BBB 2,058,060 500 Puerto Rico Industrial, Tourist, Educational, Medical, and 12/12 at 101.00 BBB 519,060 Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, Ana G. Mendez University System Project, Refunding Series 2002, 5.500%, 12/01/31 1,905 University of Puerto Rico, University System Revenue Bonds, 6/05 at 101.50 AAA 2,026,082 Series 1995M, 5.250%, 6/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ ENERGY - 1.0% 1,000 Virgin Islands Government Refinery Facilities, Senior 1/13 at 100.00 BBB- 1,023,100 Secured Revenue Bonds, Hovensa LLC Coker Project, Series 2002, 6.500%, 7/01/21 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 31.1% 3,500 New Jersey Health Care Facilities Financing Authority, 7/11 at 100.00 A3 3,658,060 Revenue Bonds, Kennedy Health System, Series 2001, 5.625%, 7/01/31 1,350 New Jersey Health Care Facilities Financing Authority, 7/12 at 100.00 Baa1 1,409,913 Revenue Bonds, South Jersey Hospital System, Series 2002, 5.875%, 7/01/21 1,000 New Jersey Health Care Facilities Financing Authority, 7/13 at 100.00 Baa2 1,001,140 Revenue Bonds, Somerset Medical Center, Series 2003, 5.500%, 7/01/33 1,100 New Jersey Health Care Facilities Financing Authority, No Opt. Call AAA 1,232,110 Revenue Bonds, Kennedy Health System Obligated Group, Series 1998B, 5.750%, 7/01/06 - MBIA Insured 500 New Jersey Health Care Facilities Financing Authority, 7/10 at 101.00 BBB- 551,095 Revenue Bonds, Trinitas Hospital Obligated Group, Series 2000, 7.500%, 7/01/30 26 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Robert Wood Johnson University Hospital, Series 2000: $ 3,000 5.750%, 7/01/25 7/10 at 100.00 A+ $ 3,263,460 12,000 5.750%, 7/01/31 7/10 at 100.00 A+ 13,023,720 4,500 New Jersey Health Care Facilities Financing Authority, 1/09 at 101.00 AAA 4,453,335 Revenue Bonds, Virtua Health System, Series 1998, 4.500%, 7/01/28 - FSA Insured 2,500 New Jersey Health Care Facilities Financing Authority, 7/09 at 101.00 A2 2,569,375 Revenue Refunding Bonds, Burdette Tomlin Memorial Hospital, Series 1999, 5.500%, 7/01/29 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 0.3% 275 New Jersey Economic Development Authority, District 12/03 at 102.00 BBB- 277,302 Heating and Cooling Revenue Bonds, Trigen-Trenton Project, Series 1993B, 6.100%, 12/01/04 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 1.5% New Jersey Economic Development Authority, Economic Development Revenue Bonds, Masonic Charity Foundation Project, Series 2001: 1,000 6.000%, 6/01/25 6/11 at 102.00 A+ 1,132,740 335 5.500%, 6/01/31 6/11 at 102.00 A+ 361,415 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 17.4% Hamilton Township, Mercer County Board of Education, New Jersey, General Obligation Bonds, Series 2001: 1,850 4.750%, 8/15/18 - FSA Insured 8/10 at 100.00 AAA 1,935,785 1,630 4.750%, 8/15/19 - FSA Insured 8/10 at 100.00 AAA 1,697,368 1,000 Jersey City, New Jersey, General Obligation Bonds, No Opt. Call AAA 1,161,610 Refunding and School Improvements, Series 2002B, 5.250%, 3/01/13 - AMBAC Insured Puerto Rico Public Improvement, General Obligation Refunding Bonds, Series 2001: 3,500 5.250%, 7/01/27 - FSA Insured 7/11 at 100.00 AAA 3,753,995 8,500 5.125%, 7/01/30 - FSA Insured 7/11 at 100.00 AAA 8,986,540 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 8.9% Garden State Preservation Trust, New Jersey, Open Space and Farmland Preservation Bonds, Series 2003A: 550 5.250%, 11/01/19 - FSA Insured 11/13 at 100.00 AAA 609,917 900 5.000%, 11/01/20 - FSA Insured 11/13 at 100.00 AAA 968,814 1,015 5.000%, 11/01/21 - FSA Insured 11/13 at 100.00 AAA 1,085,543 New Jersey Economic Development Authority, School Facilities Construction Bonds, Series 2001A: 2,000 5.250%, 6/15/19 - AMBAC Insured 6/11 at 100.00 AAA 2,181,880 2,400 5.000%, 6/15/21 - AMBAC Insured 6/11 at 100.00 AAA 2,516,784 1,500 Virgin Islands Public Finance Authority, Revenue Refunding 10/08 at 101.00 AA 1,591,725 Senior Lien Bonds, Matching Fund Loan Notes, Series 1998A, 5.500%, 10/01/18 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 23.2% 1,000 Delaware River and Bay Authority, Delaware and New Jersey, 1/13 at 100.00 AAA 1,108,440 Revenue Bonds, Series 2003, 5.250%, 1/01/18 - MBIA Insured 3,000 New Jersey Economic Development Authority, Special 11/10 at 101.00 B 2,505,240 Facilities Revenue Bonds, Continental Airlines, Inc. Project, Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax) 3,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 7/13 at 100.00 AAA 3,246,600 Series 2003A, 5.000%, 1/01/19 (WI, settling 7/09/03) - FGIC Insured 3,000 Port Authority of New York and New Jersey, Consolidated 1/07 at 101.00 AAA 3,186,210 Revenue Bonds, One Hundred Ninth Series 1997, 5.375%, 1/15/32 - MBIA Insured 3,500 Port Authority of New York and New Jersey, Consolidated 10/07 at 101.00 AAA 3,693,200 Revenue Bonds, One Hundred Twentieth Series 2000, 5.500%, 10/15/35 (Alternative Minimum Tax) - MBIA Insured 5,000 Port Authority of New York and New Jersey, Special 12/07 at 102.00 AAA 5,388,650 Project Bonds, JFK International Air Terminal LLC Project, Series 6, 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 27 Nuveen New Jersey Dividend Advantage Municipal Fund (NXJ) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION (continued) $ 4,000 South Jersey Transportation Authority, New Jersey, 11/09 at 101.00 AAA $ 4,228,760 Transportation System Revenue Bonds, Series 1999, 5.125%, 11/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 14.2% 5,215 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 AAA 6,332,366 Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26 (Pre-refunded to 7/01/10) 3,110 New Jersey Transportation Trust Fund Authority, Transportation 6/09 at 100.00 AA-*** 3,554,730 System Bonds, Series 1998A, 5.000%, 6/15/17 (Pre-refunded to 6/15/09) 4,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 4,414,080 Obligation Bonds, Series 2000A, 5.500%, 10/01/40 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 2.6% 2,680 Camden County Pollution Control Financing Authority, 12/03 at 100.00 B2 2,565,591 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991B, 7.500%, 12/01/09 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 26.4% 4,635 New Jersey Economic Development Authority, Water Facilities 5/08 at 102.00 Aaa 4,903,227 Revenue Bonds, American Water Works Company Project, Series 1997B, 5.375%, 5/01/32 (Alternative Minimum Tax) - FGIC Insured 7,000 New Jersey Economic Development Authority, Water 2/08 at 102.00 AAA 7,355,530 Facilities Revenue Bonds, Middlesex Water Company Project, Series 1998, 5.350%, 2/01/38 (Alternative Minimum Tax) - MBIA Insured 5,000 New Jersey Economic Development Authority, Water 7/08 at 102.00 AAA 5,203,300 Facilities Revenue Bonds, American Water Works Company Project, Series 1998A, 5.250%, 7/01/38 (Alternative Minimum Tax) - FGIC Insured 2,775 New Jersey Environmental Infrastructure Trust, 9/08 at 101.00 AAA 2,856,252 Environmental Infrastructure Bonds, Series 1998A, 4.500%, 9/01/18 15,840 North Hudson Sewer Authority, New Jersey, Sewer Revenue No Opt. Call Aaa 6,163,341 Refunding Bonds, Series 2001A, 0.000%, 8/01/23 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 150,865 Total Long-Term Investments (cost $140,849,524) - 148.1% 148,839,565 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - (0.3)% (337,823) -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (47.8)% (48,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $100,501,742 ==================================================================================================================== (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. (WI) Security purchased on a when-issued basis. See accompanying notes to financial statements. 28
Nuveen New Jersey Dividend Advantage Municipal Fund 2 (NUJ) Portfolio of INVESTMENTS June 30, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 1.8% $ 1,250 New Jersey Economic Development Authority, Industrial 4/06 at 102.00 Ba3 $ 1,241,663 Development Revenue Bonds, Newark Airport Marriott Hotel, Series 1996 Refunding, 7.000%, 10/01/14 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 5.1% 1,125 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 A- 991,598 Tobacco Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 1,600 Tobacco Settlement Financing Corporation, New Jersey, 6/13 at 100.00 A- 1,475,264 Tobacco Settlement Asset-Backed Bonds, Series 2003, 6.125%, 6/01/24 1,325 Tobacco Settlement Financing Corporation, Virgin Islands, 5/11 at 100.00 Baa2 1,073,436 Asset-Backed Bonds, Series 2001, 5.000%, 5/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 16.7% 1,000 Bergen County Improvement Authority, New Jersey, 9/12 at 101.00 N/R 1,036,660 Revenue Bonds, Yeshiva Ktana of Passaic Project, Series 2002, 6.000%, 9/15/27 1,090 New Jersey Educational Facilities Authority, Revenue 7/12 at 100.00 AA 1,169,592 Refunding Bonds, Rider University, Series 2002A, 5.000%, 7/01/17 - RAAI Insured 3,000 New Jersey Educational Facilities Authority, Revenue 7/12 at 100.00 AAA 3,139,800 Bonds, College of New Jersey Project, Series 2002C, 4.750%, 7/01/19 - FGIC Insured Puerto Rico Industrial, Tourist, Educational, Medical, and Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, Ana G. Mendez University System Project, Series 1999: 2,000 5.375%, 2/01/19 2/09 at 101.00 BBB 2,083,500 1,000 5.375%, 2/01/29 2/09 at 101.00 BBB 1,023,070 3,000 University of Medicine and Dentistry, New Jersey, Revenue 12/12 at 100.00 AAA 3,148,110 Bonds, Series 2002A, 5.000%, 12/01/31 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ENERGY - 1.5% 1,000 Virgin Islands Government Refinery Facilities, Senior 1/13 at 100.00 BBB- 1,023,100 Secured Revenue Bonds, Hovensa LLC Coker Project, Series 2002, 6.500%, 7/01/21 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 27.3% 1,500 New Jersey Health Care Facilities Financing Authority, 7/07 at 102.00 BBB- 1,507,110 Revenue Refunding Bonds, St. Elizabeth Hospital Obligated Group, Series 1997, 6.000%, 7/01/27 New Jersey Health Care Facilities Financing Authority, FHA-Insured Mortgage Revenue Bonds, Jersey City Medical Center Issue, Series 2001: 1,000 5.000%, 8/01/31 - AMBAC Insured 8/11 at 100.00 AAA 1,040,760 1,925 5.000%, 8/01/41 - AMBAC Insured 8/11 at 100.00 AAA 1,996,302 1,150 New Jersey Health Care Facilities Financing Authority, 1/12 at 100.00 AA 1,197,426 Revenue Refunding Bonds, Bayshore Community Hospital, Series 2002, 5.125%, 7/01/32 - RAAI Insured 1,000 New Jersey Health Care Facilities Financing Authority, 7/12 at 101.00 BBB- 1,047,650 Revenue Bonds, Palisades Medical Center of New York, Presbyterian Healthcare System, Series 2002, 6.625%, 7/01/31 2,500 New Jersey Health Care Facilities Financing Authority, 7/12 at 100.00 A- 2,672,900 Revenue Refunding Bonds, Atlantic City Medical Center, Series 2002, 5.750%, 7/01/25 2,460 New Jersey Health Care Facilities Financing Authority, 7/12 at 100.00 Baa1 2,569,175 Revenue Bonds, South Jersey Hospital System, Series 2002, 5.875%, 7/01/21 500 New Jersey Health Care Facilities Financing Authority, 7/13 at 100.00 Baa2 500,570 Revenue Bonds, Somerset Medical Center, Series 2003, 5.500%, 7/01/33 3,500 New Jersey Health Care Facilities Financing Authority, 7/10 at 100.00 A+ 3,798,585 Revenue Bonds, Robert Wood Johnson University Hospital, Series 2000, 5.750%, 7/01/31 29 Nuveen New Jersey Dividend Advantage Municipal Fund 2 (NUJ) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) $ 510 New Jersey Health Care Facilities Financing Authority, 7/09 at 101.00 AAA $ 529,808 Revenue Bonds, Meridian Health System Obligated Group, Series 1999, 5.250%, 7/01/29 - MBIA Insured 2,100 Puerto Rico Industrial, Medical, Educational, and 12/03 at 103.00 A2 2,167,074 Environmental Pollution Control Facilities Financing Authority, Adjustable Rate Industrial Revenue Bonds, American Home Products Corporation, Series 1983A, 5.100%, 12/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 3.4% 2,250 New Jersey Housing and Mortgage Finance Agency, 11/07 at 101.50 AAA 2,344,275 Multifamily Housing Revenue Bonds, Series 1997A, 5.650%, 5/01/40 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 4.0% 2,700 New Jersey Economic Development Authority, Economic No Opt. Call Baa3 2,805,381 Development Revenue Refunding Bonds, Kapkowski Road Landfill Project, Series 2002, 5.750%, 10/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 7.8% New Jersey Economic Development Authority, Economic Development Revenue Bonds, Masonic Charity Foundation Project, Series 2001: 1,000 5.500%, 6/01/21 6/11 at 102.00 A+ 1,093,710 4,000 5.500%, 6/01/31 6/11 at 102.00 A+ 4,315,400 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 9.6% 3,000 Jackson Township School District, Ocean County, 4/12 at 100.00 AAA 3,182,640 New Jersey, General Obligation Bonds, Series 2002, 5.000%, 4/15/21 - FGIC Insured 1,225 Jersey City, New Jersey, General Obligation Bonds, No Opt. Call AAA 1,422,972 Refunding and School Improvements, Series 2002B, 5.250%, 3/01/13 - AMBAC Insured 1,000 Old Bridge Township Board of Education, Middlesex 7/11 at 100.00 AAA 1,047,490 County, New Jersey, General Obligation Bonds, Series 2002, 5.000%, 7/15/30 - MBIA Insured 1,000 Puerto Rico Public Improvement, General Obligation Bonds, 7/11 at 100.00 AAA 1,063,440 Series 2001, 5.125%, 7/01/23 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 17.6% 3,000 Ocean County, New Jersey, Brick Township Municipal 12/12 at 100.00 Aaa 3,154,980 Utilities Authority, Revenue Bonds, Series 2002, 5.000%, 12/01/25 - FGIC Insured Garden State Preservation Trust, New Jersey, Open Space and Farmland Preservation Bonds, Series 2003A: 500 5.250%, 11/01/19 - FSA Insured 11/13 at 100.00 AAA 554,470 625 5.000%, 11/01/20 - FSA Insured 11/13 at 100.00 AAA 672,788 700 5.000%, 11/01/21 - FSA Insured 11/13 at 100.00 AAA 748,650 1,000 New Jersey Economic Development Authority, School 6/12 at 100.00 AAA 1,066,510 Facilities Construction Financing Act Bonds, Series 2002C, 5.000%, 6/15/20 - MBIA Insured 680 New Jersey Transportation Trust Fund Authority, 12/11 at 100.00 AAA 713,687 Transportation System Bonds, Series 2001B, 5.000%, 12/15/21 - MBIA Insured 1,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 1,119,690 Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 - AMBAC Insured 4,000 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB+ 4,248,440 Appropriation Bonds, Series 2002E, 5.500%, 8/01/29 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 28.9% 770 Delaware River and Bay Authority, Delaware and 1/13 at 100.00 AAA 853,499 New Jersey, Revenue Bonds, Series 2003, 5.250%, 1/01/18 - MBIA Insured 2,000 New Jersey Economic Development Authority, Special 11/10 at 101.00 B 1,670,160 Facilities Revenue Bonds, Continental Airlines, Inc. Project, Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax) 2,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 7/13 at 100.00 AAA 2,164,400 Series 2003A, 5.000%, 1/01/19 (WI, settling 7/09/03) - FGIC Insured 4,000 Port Authority of New York and New Jersey, Consolidated 6/14 at 100.00 AAA 4,119,360 Revenue Bonds, One Hundred Twenty-Seventh Series 2002, 5.125%, 6/15/37 (Alternative Minimum Tax) 30 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION (continued) Port Authority of New York and New Jersey, Consolidated Revenue Bonds, One Hundred Twenty-Fifth Series 2002: $ 3,000 5.000%, 10/15/26 - FSA Insured 4/12 at 101.00 AAA $ 3,166,740 2,000 5.000%, 4/15/32 - FSA Insured 4/12 at 101.00 AAA 2,103,960 1,000 Port Authority of New York and New Jersey, Consolidated 10/07 at 101.00 AAA 1,038,490 Revenue Bonds, One Hundred Twenty-First Series 2000, 5.125%, 10/15/30 - MBIA Insured 4,000 Port Authority of New York and New Jersey, Special Project No Opt. Call AAA 5,000,720 Bonds, JFK International Air Terminal LLC Project, Series 6, 7.000%, 12/01/12 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 14.7% 3,000 The Children's Trust Fund, Puerto Rico, Tobacco Settlement 7/10 at 100.00 AAA 3,642,780 Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26 (Pre-refunded to 7/01/10) 3,105 New Jersey Turnpike Authority, Turnpike Revenue Bonds, No Opt. Call A*** 3,839,333 Series 1991C, 6.500%, 1/01/16 2,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 2,758,800 Obligation Bonds, Series 2000A, 5.500%, 10/01/40 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 13.7% 1,220 Camden County Pollution Control Financing Authority, 12/03 at 100.00 B2 1,167,918 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991B, 7.500%, 12/01/09 (Alternative Minimum Tax) 2,500 Guam Power Authority, Revenue Bonds, Series 1999A, 10/09 at 101.00 AAA 2,667,400 5.250%, 10/01/34 - MBIA Insured 2,500 New Jersey Economic Development Authority, Pollution No Opt. Call Baa1 2,518,200 Control Revenue Refunding Bonds, PSEG Power LLC Project, Series 2001A, 5.000%, 3/01/12 3,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/12 at 101.00 AAA 3,213,868 Series 2002II, 5.125%, 7/01/26 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 99,810 Total Long-Term Investments (cost $100,628,657) - 152.1% 105,913,304 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - (2.5)% (1,797,436) -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (49.6)% (34,500,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $69,615,868 ==================================================================================================================== (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. See accompanying notes to financial statements. 31
Nuveen Pennsylvania Investment Quality Municipal Fund (NQP) Portfolio of INVESTMENTS June 30, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 5.6% $ 13,300 Pennsylvania Economic Development Financing Authority, No Opt. Call AA- $14,560,707 Solid Waste Disposal Revenue Bonds, Procter & Gamble Paper Project, Series 2001, 5.375%, 3/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 18.6% 10,000 Allegheny County Higher Education Building Authority, 3/12 at 100.00 AA- 10,411,100 Pennsylvania, Revenue Bonds, Carnegie Mellon University, Series 2002, 5.125%, 3/01/32 2,000 Allegheny County Higher Education Building Authority, 9/08 at 102.00 BBB 2,028,460 Pennsylvania, College Revenue Bonds, Chatham College, Series 1998A, 5.250%, 9/01/18 2,000 Chester County Industrial Development Authority, 1/12 at 100.00 AAA 2,087,960 Pennsylvania, Educational Facilities Revenue Bonds, The Westtown School Project, Series 2002, 5.000%, 1/01/26 - AMBAC Insured 3,000 Delaware County Authority, Pennsylvania, Revenue Bonds, 11/10 at 101.00 AA 3,364,710 Haverford College, Series 2000, 5.750%, 11/15/29 1,000 Harveys Lake General Municipal Authority, Pennsylvania, 11/09 at 100.00 A 1,069,600 College Revenue Bonds, College of Misericordia Project, Series 1999, 6.000%, 5/01/19 - ACA Insured 1,450 Indiana County Industrial Development Authority, 11/06 at 100.00 AAA 1,592,607 Pennsylvania, Revenue Bonds, The Student Cooperative Association, Inc.- Indiana University of Pennsylvania Student Union Project, Series 1999A, 5.875%, 11/01/29 - AMBAC Insured Indiana County Industrial Development Authority, Pennsylvania, Revenue Bonds, The Student Cooperative Association, Inc.- Indiana University of Pennsylvania Student Union Project, Series 1999B: 815 0.000%, 11/01/15 - AMBAC Insured No Opt. Call AAA 495,186 815 0.000%, 11/01/16 - AMBAC Insured No Opt. Call AAA 465,145 815 0.000%, 11/01/17 - AMBAC Insured No Opt. Call AAA 439,155 815 0.000%, 11/01/18 - AMBAC Insured No Opt. Call AAA 412,488 815 0.000%, 11/01/19 - AMBAC Insured No Opt. Call AAA 387,084 8,000 Pennsylvania Higher Education Assistance Agency, 11/11 at 100.00 Aaa 8,322,960 Capital Acquisition Revenue Refunding Bonds, Series 2001, 5.000%, 12/15/30 - MBIA Insured 1,000 Pennsylvania Higher Educational Facilities Authority, 1/13 at 100.00 A1 1,036,360 Revenue Bonds, Thomas Jefferson University, Series 2002, 5.000%, 1/01/20 5,000 Pennsylvania Higher Educational Facilities Authority, Revenue 7/11 at 100.00 AA 5,303,350 Bonds, Moravian College, Series 2001, 5.375%, 7/01/31 - RAAI Insured 8,445 Swarthmore Borough Authority, Pennsylvania, Swarthmore 9/08 at 100.00 AA+ 8,686,358 College Revenue Bonds, Series 1998, 5.000%, 9/15/28 1,665 Union County, Higher Education Facilities Financing 4/13 at 100.00 Aa3 1,847,934 Authority, Pennsylvania, Revenue Bonds, Bucknell University, Series 2002A, 5.250%, 4/01/18 275 Wilkes-Barre General Municipal Authority, Pennsylvania, 12/03 at 101.00 N/R 281,234 College Revenue Refunding Bonds, College of Misericordia, Series 1992B, 7.750%, 12/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 6.8% 1,115 Erie County Hospital Authority, Pennsylvania, Revenue 11/12 at 100.00 AAA 1,228,574 Bonds, Hamot Health Foundation, Series 2002, 5.250%, 11/01/15 - AMBAC Insured 1,000 Montour County Geisinger Authority, Pennsylvania, Health 8/08 at 101.00 Aa2 1,011,050 System Revenue Bonds, Penn State Geisinger Health System, Series 1998A, 5.000%, 8/15/28 2,500 Lehigh County General Purpose Authority, Pennsylvania, 8/13 at 100.00 BBB 2,432,575 Hospital Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 (WI, settling 7/01/03) 9,500 Pennsylvania Higher Educational Facilities Authority, 1/11 at 101.00 A 10,062,210 Revenue Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31 32 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) $ 1,000 Philadelphia Hospitals and Higher Education Facilities 11/03 at 102.00 BBB $ 1,007,080 Authority, Pennsylvania, Hospital Revenue Bonds, Temple University Hospital, Series 1993A, 6.625%, 11/15/23 1,615 Sayre Health Care Facility Authority, Pennsylvania, 7/12 at 100.00 AAA 1,812,418 Revenue Bonds, Latrobe Area Hospital, Series 2002A, 5.250%, 7/01/13 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 0.4% 960 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 8/03 at 101.00 A2 976,080 Mortgage Revenue Bonds, Series 1992C, 7.125%, 8/01/13 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 10.1% 4,990 Allegheny County Residential Finance Authority, Pennsylvania, No Opt. Call Aaa 886,923 Single Family Mortgage Revenue Bonds, GNMA Mortgage-Backed Securities Program, Series 1994Z, 0.000%, 5/01/27 (Alternative Minimum Tax) 490 Berks County Redevelopment Authority, Pennsylvania, No Opt. Call A+ 531,621 Senior Single Family Mortgage Revenue Bonds, Series 1986A, 8.000%, 12/01/17 (Alternative Minimum Tax) 2,000 Pennsylvania Housing Finance Agency, Single Family 10/05 at 102.00 AA+ 2,096,900 Mortgage Revenue Bonds, Series 1995-46, 6.200%, 10/01/14 (Alternative Minimum Tax) 1,000 Pennsylvania Housing Finance Agency, Single Family 4/06 at 102.00 AA+ 1,044,970 Mortgage Revenue Bonds, Series 1996-48, 6.150%, 4/01/25 (Alternative Minimum Tax) 5,725 Pennsylvania Housing Finance Agency, Single Family 4/06 at 102.00 AA+ 6,022,414 Mortgage Revenue Bonds, Series 1996-49, 6.450%, 4/01/25 (Alternative Minimum Tax) 220 Pennsylvania Housing Finance Agency, Single Family 4/06 at 102.00 AA+ 231,207 Mortgage Revenue Bonds, Series 1996-50B, 6.350%, 10/01/27 (Alternative Minimum Tax) 5,000 Pennsylvania Housing Finance Agency, Single Family 4/06 at 102.00 AA+ 5,244,400 Mortgage Revenue Bonds, Series 1996-52B, 6.250%, 10/01/24 (Alternative Minimum Tax) 5,000 Pennsylvania Housing Finance Agency, Single Family 10/07 at 101.50 AA+ 5,245,600 Mortgage Revenue Bonds, Series 1997-59A, 5.750%, 10/01/23 (Alternative Minimum Tax) 2,215 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 10/11 at 100.00 AAA 2,289,114 Mortgage Revenue Bonds, Series 2001B, 5.450%, 10/01/32 (Alternative Minimum Tax) 1,250 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 4/06 at 102.00 AAA 1,299,875 Mortgage Revenue Bonds, Series 1996C, 6.550%, 4/01/28 (Alternative Minimum Tax) 1,030 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 4/07 at 102.00 AAA 1,088,762 Mortgage Revenue Bonds, Series 1997A, 6.250%, 10/01/28 (Alternative Minimum Tax) 180 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 10/03 at 100.00 AAA 180,574 Mortgage Revenue Bonds, Series 1991G, 7.050%, 4/01/23 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 4.0% 5,000 Pennsylvania Economic Development Financing Authority, 5/11 at 101.00 A3 4,572,600 Exempt Facilities Revenue Bonds, Amtrak Project, Series 2001A, 6.375%, 11/01/41 (Alternative Minimum Tax) 5,000 Pennsylvania Industrial Development Authority, Economic No Opt. Call AAA 5,891,250 Development Revenue Bonds, Series 2002, 5.500%, 7/01/12 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 2.4% 1,500 Cumberland County Municipal Authority, Pennsylvania, 12/12 at 100.00 AA 1,508,340 Revenue Bonds, Presbyterian Homes Inc., Series 2003A, 5.000%, 12/01/26 - RAAI Insured 3,225 Montgomery County Higher Education and Health 1/06 at 101.00 BBB 3,225,000 Authority, Pennsylvania, Mortgage Revenue Bonds, Waverly Heights Project, Series 1996, 6.375%, 1/01/26 1,500 Philadelphia Authority for Industrial Development, 7/11 at 101.00 AAA 1,599,480 Pennsylvania, Revenue Bonds, Philadelphia Corporation for the Aging Project, Series 2001B, 5.250%, 7/01/26 - AMBAC Insured 33 Nuveen Pennsylvania Investment Quality Municipal Fund (NQP) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 33.2% $ 3,550 Allegheny County, Pennsylvania, General Obligation Bonds, 5/11 at 100.00 AAA $ 3,784,549 Series C-52, 5.250%, 11/01/23 - FGIC Insured 3,120 Allegheny County, Pennsylvania, General Obligation 5/11 at 100.00 AAA 3,384,108 Refunding Bonds, Series C-53, 5.250%, 11/01/20 - FGIC Insured 2,000 Canon-McMillan School District, Washington County, No Opt. Call AAA 652,220 Pennsylvania, General Obligation Bonds, Series 2001A, 0.000%, 12/01/25 - FGIC Insured Carlisle Area School District, Cumberland County, Pennsylvania, General Obligation Bonds, Series 2002: 1,665 4.750%, 3/01/20 - MBIA Insured 3/12 at 100.00 Aaa 1,726,588 5,760 5.000%, 3/01/22 - MBIA Insured 3/12 at 100.00 Aaa 6,063,782 2,200 Central Bucks School District, Bucks County, Pennsylvania, 5/13 at 100.00 Aaa 2,321,836 General Obligation Bonds, Series 2003, 5.000%, 5/15/23 - MBIA Insured 2,000 Claysburg-Kimmel School District, Blair County, Pennsylvania, 1/09 at 100.00 AAA 2,055,940 General Obligation Bonds, Series 2002 Refunding, 5.000%, 1/15/31 - FGIC Insured 4,600 Delaware County, Pennsylvania, General Obligation Bonds, 8/11 at 100.00 Aaa 4,810,588 Garnet Valley School District, Series 2001A, 5.000%, 2/15/25 - FGIC Insured 2,750 Harrisburg Redevelopment Authority, Dauphin County, 5/16 at 68.04 AAA 904,255 Pennsylvania, Guaranteed Revenue Bonds, Series1998B, 0.000%, 5/01/24 - FSA Insured 6,275 Hempfield Area School District, Westmoreland County, 2/12 at 100.00 AAA 6,959,226 Pennsylvania, General Obligation Bonds, Series 2002, 5.375%, 2/15/18 - FGIC Insured McKeesport Area School District, Allegheny County, Pennsylvania, General Obligation Bonds, Series 1999C: 3,430 0.000%, 10/01/23 - AMBAC Insured No Opt. Call AAA 1,274,108 3,380 0.000%, 10/01/24 - AMBAC Insured No Opt. Call AAA 1,180,837 3,420 0.000%, 10/01/25 - AMBAC Insured No Opt. Call AAA 1,127,300 2,340 0.000%, 10/01/26 - AMBAC Insured No Opt. Call AAA 730,478 2,340 0.000%, 10/01/27 - AMBAC Insured No Opt. Call AAA 693,646 2,340 0.000%, 10/01/29 - AMBAC Insured No Opt. Call AAA 625,388 7,500 Montgomery County, Pennsylvania, General Obligation 7/09 at 100.00 Aaa 7,816,725 Bonds, Series 1999, 5.000%, 7/15/24 Norristown Area School District, Montgomery County, Pennsylvania, General Obligation Bonds, Series 2003: 1,025 5.000%, 9/01/19 - FGIC Insured 3/13 at 100.00 Aaa 1,101,793 1,125 5.000%, 9/01/20 - FGIC Insured 3/13 at 100.00 Aaa 1,203,705 1,000 Pennsylvania, General Obligation Bonds, Second 9/11 at 101.00 AA 1,105,010 Series 2001, 5.000%, 9/15/15 1,700 Philadelphia, Pennsylvania, General Obligation Bonds, 3/11 at 100.00 AAA 1,768,782 Series 2001, 5.000%, 9/15/31 - FSA Insured 3,400 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 AAA 3,849,140 Obligation Bonds, Series 2002B, 5.625%, 8/01/18 - FGIC Insured 15,000 Philadelphia School District, Pennsylvania, General 9/05 at 101.00 AAA 16,039,950 Obligation Bonds, Series 1995B, 5.500%, 9/01/25 - AMBAC Insured 3,000 Pittsburgh School District, Allegheny County, Pennsylvania, No Opt. Call AAA 3,572,220 General Obligation Refunding Bonds, Series 2002A, 5.500%, 9/01/15 - FSA Insured 6,100 Plum Borough School District, Allegheny County, 9/11 at 100.00 AAA 6,465,207 Pennsylvania, General Obligation Bonds, Series 2001, 5.250%, 9/15/30 - FGIC Insured 1,590 Red Lion Area School District, York County, Pennsylvania, 10/11 at 100.00 Aaa 1,677,514 General Obligation Bonds, Series 2001, 5.000%, 4/15/20 - FSA Insured 1,230 State Public School Building Authority, Pennsylvania, 11/13 at 100.00 AAA 1,337,859 School Revenue Bonds, Conneaut School District Project, Series 2003, 5.250%, 11/01/21 - FGIC Insured 1,465 Stroudsburg Area School District, Monroe County, 4/12 at 100.00 AAA 1,573,879 Pennsylvania, General Obligation Bonds, Series 2001A, 5.000%, 4/01/18 - FSA Insured 34 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 24.7% $ 5,000 Allegheny County Industrial Development Authority, 11/12 at 100.00 AAA $ 5,268,500 Pennsylvania, Guaranteed Revenue Bonds, County Building Project, Series 2002A, 5.000%, 11/01/22 - MBIA Insured 2,900 Allegheny County Industrial Development Authority, 11/12 at 100.00 AAA 3,030,732 Pennsylvania, Guaranteed Revenue Bonds, Allegheny County Office Building Project, Series 2002B, 5.000%, 11/01/29 - MBIA Insured 5,750 Port Authority of Allegheny County, Pennsylvania, Special 3/11 at 101.00 AAA 5,993,972 Transportation Revenue Bonds, Series 2001, 5.000%, 3/01/29 - FGIC Insured 6,000 Delaware Valley Regional Finance Authority, Pennsylvania, No Opt. Call Aa2 7,149,480 Local Government Revenue Bonds, Series 2002, 5.750%, 7/01/17 8,725 Pennsylvania Intergovernmental Cooperative Authority, 6/09 at 100.00 AAA 8,844,533 Special Tax Revenue Refunding Bonds, Philadelphia Funding Program, Series 1999, 4.750%, 6/15/23 - FGIC Insured 3,500 Pennsylvania Turnpike Commission, Oil Franchise Revenue 12/08 at 100.00 AAA 3,550,960 Bonds, Series 1998A, 4.750%, 12/01/27 - AMBAC Insured 4,150 Pennsylvania Turnpike Commission, Registration Fee Revenue 7/11 at 101.00 AAA 4,330,235 Bonds, Series 2001, 5.000%, 7/15/41 - AMBAC Insured 10,935 Philadelphia Authority for Industrial Development, 10/11 at 101.00 AAA 11,591,756 Pennsylvania, Lease Revenue Bonds, Series 2001B, 5.250%, 10/01/30 - FSA Insured 5,000 Pittsburgh and Allegheny County Public Auditorium Authority, 8/09 at 101.00 AAA 5,179,200 Pennsylvania, Regional Asset District, Sales Tax Revenue Bonds, Series 1999, 5.000%, 2/01/29 - AMBAC Insured 1,090 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 5/09 at 100.00 A2 1,198,084 Tax Increment Bonds, Center Triangle Tax Increment Financing District, PNC Bank Corp. Project, Series 1999A, 6.100%, 5/01/19 1,410 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 1,668,143 Revenue Bonds, Series 2003AA, 5.500%, 7/01/20 - MBIA Insured 6,000 Southeastern Transportation Authority, Pennsylvania, Special 3/09 at 101.00 AAA 6,090,180 Revenue Bonds, Series 1999A, 4.750%, 3/01/29 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 12.2% 2,000 Lehigh-Northampton Airport Authority, Pennsylvania, 5/10 at 100.00 Aaa 2,171,280 Airport Revenue Bonds, Lehigh Valley Airport System, Series 2000A, 6.000%, 5/15/30 (Alternative Minimum Tax) - MBIA Insured 5,400 Pennsylvania Economic Development Financing Authority, 6/12 at 102.00 A 5,639,652 Revenue Bonds, Amtrak 30th Street Station Parking Garage Project, Series 2002, 5.800%, 6/01/23 - ACA Insured 2,500 Pennsylvania Turnpike Commission, Pennsylvania Turnpike 12/11 at 101.00 AAA 2,624,525 Revenue Bonds, Series 2001R, 5.000%, 12/01/30 - AMBAC Insured 5,000 Philadelphia, Pennsylvania, Airport Revenue Bonds, 6/11 at 101.00 AAA 5,131,000 Philadelphia Airport System, Series 2001B, 5.250%, 6/15/31 (Alternative Minimum Tax) - FGIC Insured Philadelphia Authority for Industrial Development, Pennsylvania, Airport Revenue Bonds, Philadelphia Airport System Project, Series 1998A: 7,315 5.000%, 7/01/23 (Alternative Minimum Tax) - FGIC Insured 7/08 at 101.00 AAA 7,425,018 3,085 5.125%, 7/01/28 (Alternative Minimum Tax) - FGIC Insured 7/08 at 101.00 AAA 3,131,213 3,250 Philadelphia Parking Authority, Pennsylvania, Airport Parking 9/09 at 101.00 AAA 3,379,577 Revenue Bonds, Series 1999, 5.250%, 9/01/29 - FSA Insured 1,885 Pittsburgh Public Parking Authority, Pennsylvania, Parking No Opt. Call AAA 2,156,855 System Revenue Refunding Bonds, Series 2002, 5.000%, 12/01/12 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 7.7% 1,355 Bensalem Township School District, Bucks County, 7/06 at 100.00 AAA 1,530,987 Pennsylvania, General Obligation Bonds, Series 1996, 5.850%, 7/15/12 (Pre-refunded to 7/15/06) - FGIC Insured 2,000 Hampton Township School District, Allegheny County, 11/04 at 100.00 AAA 2,156,620 Pennsylvania, General Obligation Bonds, Series 1995, 6.750%, 11/15/21 (Pre-refunded to 11/15/04) - AMBAC Insured 1,980 Pittsburgh Water and Sewer Authority, Pennsylvania, Water No Opt. Call AAA 2,065,675 and Sewer System Revenue Refunding Bonds, Series 1986, 7.625%, 9/01/04 - FGIC Insured 2,000 Sto-Rox School District, Allegheny County, Pennsylvania, 12/10 at 100.00 AAA 2,414,160 General Obligation Bonds, Series 2000, 5.800%, 6/15/30 (Pre-refunded to 12/15/10) - MBIA Insured 35 Nuveen Pennsylvania Investment Quality Municipal Fund (NQP) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED (continued) $ 3,000 Warrington Township Municipal Authority, Bucks County, 11/15 at 100.00 AAA $ 4,000,650 Pennsylvania, Water and Sewer Revenue Bonds, Series 1991, 7.100%, 12/01/21 (Pre-refunded to 11/15/15) - FGIC Insured 5,450 West View Borough Municipal Authority, Allegheny County, No Opt. Call AAA 7,848,763 Pennsylvania, Special Obligation Bonds, Series 1985A, 9.500%, 11/15/14 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 6.4% 1,250 Allegheny County Industrial Development Authority, No Opt. Call AAA 1,327,138 Pennsylvania, Pollution Control Revenue Refunding Bonds, Duquesne Light Company Project, Series 1999A, 4.350%, 12/01/13 - AMBAC Insured 2,785 Carbon County Industrial Development Authority, No Opt. Call BBB- 2,989,113 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 4,000 Lehigh County Industrial Development Authority, 8/05 at 102.00 AAA 4,409,800 Pennsylvania, Pollution Control Revenue Refunding Bonds, Pennsylvania Power & Light Company Project, Series 1995A, 6.150%, 8/01/29 - MBIA Insured 3,500 Montgomery County Industrial Development Authority, No Opt. Call AAA 4,036,410 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Montenay Montgomery County Project, Series 2002A, 5.250%, 11/01/13 - MBIA Insured 3,700 York County Industrial Development Authority, Pennsylvania, 3/12 at 101.00 Baa1 3,729,415 Pollution Control Revenue Refunding Bonds, PSEG Power Project, Series 2001A, 5.500%, 9/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 16.0% 5,000 Delaware County Industrial Development Authority, 10/12 at 100.00 AAA 5,220,600 Pennsylvania, Water Facilities Revenue Bonds, Philadelphia Water Company Project, Series 2001, 5.350%, 10/01/31 (Alternative Minimum Tax) - AMBAC Insured Delaware County Regional Water Quality Control Authority, Pennsylvania, Sewer Revenue Bonds, Series 2001A: 5,325 5.100%, 5/01/20 - FGIC Insured 11/11 at 100.00 AAA 5,675,438 1,465 5.100%, 5/01/21 - FGIC Insured 11/11 at 100.00 AAA 1,550,717 Erie Water Authority, Pennsylvania, Water Revenue Bonds, Series 2001A: 2,670 0.000%, 12/01/23 - MBIA Insured No Opt. Call AAA 979,837 5,000 5.200%, 12/01/30 - MBIA Insured 12/11 at 100.00 AAA 5,269,350 5,000 Luzerne County Industrial Development Authority, Exempt 12/04 at 102.00 AAA 5,423,000 Facilities Revenue Refunding Bonds, Pennsylvania Gas and Water Company Project, Series 1994A, 7.000%, 12/01/17 (Alternative Minimum Tax) - AMBAC Insured Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, Series 2001A: 5,525 5.375%, 11/01/20 - FGIC Insured 11/12 at 100.00 AAA 6,086,837 10,750 5.000%, 11/01/31 - FGIC Insured 11/12 at 100.00 AAA 11,242,992 - ------------------------------------------------------------------------------------------------------------------------------------ $ 382,180 Total Long-Term Investments (cost $355,190,415) - 148.1% 383,600,445 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.8% 2,000 Chester County Industrial Development Authority, VMIG-1 2,000,000 Pennsylvania, Archdiocese of Philadelphia, Variable Rate Demand Revenue Bonds, Series 2001, 1.000%, 7/01/31+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 2,000 Total Short-Term Investments (cost $2,000,000) 2,000,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $357,190,415) - 148.9% 385,600,445 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.1% 5,323,719 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.0)% (132,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $258,924,164 ==================================================================================================================== (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. 36
Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY) Portfolio of INVESTMENTS June 30, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 1.7% $ 4,500 Pennsylvania Economic Development Financing Authority, 11/08 at 102.00 N/R $ 4,206,285 Exempt Facilities Revenue Bonds, National Gypsum Project, Series 1997B, 6.125%, 11/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 9.7% 1,045 Allegheny County Higher Education Building Authority, 5/09 at 102.00 A 1,066,433 Commonwealth of Pennsylvania, College Revenue Bonds, Thiel College, Series 1999A, 5.375%, 11/15/29 - ACA Insured 3,000 Chester County Health and Education Facilities Authority, 10/08 at 102.00 BBB- 3,053,520 Pennsylvania, College Revenue Bonds, Immaculata College, Series 1998, 5.625%, 10/15/27 1,000 Pennsylvania Higher Educational Facilities Authority, 5/08 at 101.00 Aaa 1,056,700 Revenue Bonds, LaSalle University, Series 1998, 5.250%, 5/01/23 - MBIA Insured 2,100 Pennsylvania Higher Educational Facilities Authority, 6/10 at 100.00 AA 2,289,588 Revenue Bonds, Philadelphia University, Series 2000, 6.000%, 6/01/29 - RAAI Insured 4,615 Pennsylvania Higher Educational Facilities Authority, 7/03 at 102.00 AAA 4,722,437 Revenue Bonds, Widener University, Series 1993A, 5.250%, 7/15/11 - CONNIE LEE/AMBAC Insured 1,500 Pennsylvania Higher Educational Facilities Authority, 7/11 at 101.00 AAA 1,563,675 Revenue Bonds, Temple University, Series 2001, 5.000%, 7/15/31 - MBIA Insured 5,750 Pennsylvania Higher Educational Facilities Authority, 1/13 at 100.00 A1 5,878,743 Revenue Bonds, Thomas Jefferson University, Series 2002, 5.000%, 1/01/32 750 Union County Higher Education Facilities Financing 4/13 at 100.00 Aa3 826,642 Authority, Pennsylvania, Revenue Bonds, Bucknell University, Series 2002A, 5.250%, 4/01/19 2,500 West Cornwall Township Municipal Authority, Pennsylvania, 12/11 at 100.00 BBB+ 2,645,625 College Revenue Bonds, Elizabethtown College Project, Series 2001, 5.900%, 12/15/18 700 Wilkes-Barre General Municipal Authority, Pennsylvania, 12/03 at 101.00 N/R 715,869 College Revenue Refunding Bonds, College of Misericordia, Series 1992B, 7.750%, 12/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 21.7% 8,500 Allegheny County Hospital Development Authority, 5/06 at 102.00 AAA 9,414,005 Pennsylvania, Hospital Revenue Bonds, South Hills Health System, Series 1996A, 5.875%, 5/01/26 - MBIA Insured 14,000 Allegheny County Hospital Development Authority, 4/07 at 102.00 AAA 15,054,900 Pennsylvania, Health Center Revenue Bonds, University of Pittsburgh Medical Center System, Series 1997A, 5.625%, 4/01/27 - MBIA Insured 1,230 Erie County Hospital Authority, Pennsylvania, Revenue 11/12 at 100.00 AAA 1,340,233 Bonds, Hamot Health Foundation, Series 2002, 5.250%, 11/01/16 - AMBAC Insured 5,000 Lebanon County Health Facilities Authority, Pennsylvania, 11/12 at 101.00 BBB+ 5,112,900 Revenue Bonds, Good Samaritan Hospital Project, Series 2002, 5.900%, 11/15/28 2,400 Lehigh County General Purpose Authority, Pennsylvania, 8/13 at 100.00 BBB 2,335,272 Hospital Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 (WI, settling 7/01/03) 7,900 Montgomery County Higher Education and Health 1/09 at 101.00 AAA 8,096,078 Authority, Pennsylvania, Revenue Bonds, Pottstown Healthcare Corporation, Series 1998, 5.000%, 1/01/27 - FSA Insured 485 Montgomery County Higher Education and Health Authority, 12/03 at 102.00 AAA 496,291 Pennsylvania, Hospital Revenue Bonds, Abington Memorial Hospital, Series 1993A, 6.000%, 6/01/22 - AMBAC Insured 4,700 Pennsylvania Higher Educational Facilities Authority, 1/06 at 101.00 A 4,852,045 University of Pennsylvania Health Services Revenue Bonds, Series 1996A, 5.750%, 1/01/22 37 Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) Pottsville Hospital Authority, Pennsylvania, Hospital Revenue Bonds, Pottsville Hospital and Warne Clinic, Series 1998: $ 2,000 5.500%, 7/01/18 7/08 at 100.00 BBB- $ 1,809,260 2,000 5.625%, 7/01/24 7/08 at 100.00 BBB- 1,767,280 Sayre Health Care Facility Authority, Pennsylvania, Revenue Bonds, Latrobe Area Hospital, Series 2002A: 1,700 5.250%, 7/01/14 - AMBAC Insured 7/12 at 100.00 AAA 1,887,136 1,200 5.250%, 7/01/15 - AMBAC Insured 7/12 at 100.00 AAA 1,318,656 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 4.2% 4,345 Bucks County Redevelopment Authority, Pennsylvania, 8/03 at 100.00 Baa2 4,296,771 Second Lien Multifamily Mortgage Revenue Bonds, Section 8 Assisted, Country Commons Apartments, Series 1993A, 6.200%, 8/01/14 (Alternative Minimum Tax) 2,000 Delaware County Industrial Development Authority, No Opt. Call AAA 2,119,460 Pennsylvania, Multifamily Housing Revenue Bonds, Darby Townhouses Project, Series 2002A, 5.500%, 4/01/32 (Alternative Minimum Tax) (Mandatory put 4/01/22) 1,575 Luzerne County Housing Corporation, Pennsylvania, 9/03 at 100.00 Aaa 1,576,717 Mortgage Revenue Refunding Bonds, FHA-Insured Mortgage Loan - Section 8 Assisted Project, Freeland Apartments, Series 1993, 6.125%, 7/15/23 2,345 Swissvale Housing Development Corporation, Allegheny 7/03 at 100.00 Aa2 2,346,290 County, Pennsylvania, Multifamily Mortgage Revenue Refunding Bonds, FHA-Insured Mortgage Loan - Section 8 Assisted Swissvale Project, Series 1993C, 6.100%, 7/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 11.3% 1,315 Allegheny County Residential Finance Authority, Pennsylvania, 11/10 at 100.00 Aaa 1,387,654 Single Family Mortgage Revenue Bonds, GNMA Mortgage-Backed Securities Program, Series 2000-II-2, 5.900%, 11/01/32 (Alternative Minimum Tax) 2,000 Pennsylvania Housing Finance Agency, Single Family 10/03 at 102.00 AA+ 2,053,880 Mortgage Revenue Bonds, Series 1993-37A, 5.450%, 10/01/17 1,120 Pennsylvania Housing Finance Agency, Single Family Mortgage No Opt. Call AA+ 1,219,546 Revenue Bonds, Series 1996-47, 6.750%, 10/01/06 (Alternative Minimum Tax) 2,815 Pennsylvania Housing Finance Agency, Single Family 4/06 at 102.00 AA+ 2,948,910 Mortgage Revenue Bonds, Series 1996-51, 6.375%, 4/01/28 (Alternative Minimum Tax) 1,990 Pennsylvania Housing Finance Agency, Single Family 10/06 at 102.00 AA+ 2,096,783 Mortgage Revenue Bonds, Series 1997-54A,6.150%, 10/01/22 (Alternative Minimum Tax) Pennsylvania Housing Finance Agency, Single Family Mortgage Revenue Bonds, Series 1997-56A: 1,500 6.050%, 10/01/16 (Alternative Minimum Tax) 4/07 at 102.00 AA+ 1,596,135 4,000 6.150%, 10/01/27 (Alternative Minimum Tax) 4/07 at 102.00 AA+ 4,214,400 1,565 Pennsylvania Housing Finance Agency, Single Family Mortgage 4/07 at 101.50 AA+ 1,628,664 Revenue Bonds, Series 1997-58A, 5.950%, 10/01/28 (Alternative Minimum Tax) 1,645 Pennsylvania Housing Finance Agency, Single Family 10/07 at 101.50 AA+ 1,711,507 Mortgage Revenue Bonds, Series 1997-59A, 5.700%, 4/01/17 (Alternative Minimum Tax) 1,190 Pennsylvania Housing Finance Agency, Single Family 6/08 at 101.50 AA+ 1,238,159 Mortgage Revenue Bonds, Series 1998-62A, 5.500%, 10/01/22 (Alternative Minimum Tax) 1,500 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 4/06 at 102.00 AAA 1,562,460 Mortgage Revenue Bonds, Series 1996C, 6.500%, 10/01/23 (Alternative Minimum Tax) Pittsburgh Urban Redevelopment Authority, Pennsylvania, Mortgage Revenue Bonds, Series 1997A: 845 6.150%, 10/01/16 (Alternative Minimum Tax) 4/07 at 102.00 AAA 902,038 765 6.200%, 10/01/21 (Alternative Minimum Tax) 4/07 at 102.00 AAA 813,088 1,375 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 10/03 at 102.00 AAA 1,408,866 Mortgage Revenue Bonds, Series 1992D, 6.500%, 4/01/17 2,450 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 10/03 at 102.00 AAA 2,508,114 Mortgage Revenue Bonds, Series 1992C-1, 6.800%, 10/01/25 (Alternative Minimum Tax) 615 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 4/04 at 102.00 AAA 635,215 Mortgage Revenue Bonds, Series 1994B, 6.950%, 10/01/10 (Alternative Minimum Tax) 38 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 4.9% $ 2,000 New Morgan Industrial Development Authority, Pennsylvania, 4/04 at 102.00 BB- $ 1,812,360 Solid Waste Disposal Revenue Bonds, New Morgan Landfill Company, Inc. Project, Series 1994, 6.500%, 4/01/19 (Alternative Minimum Tax) 2,000 Pennsylvania Economic Development Financing Authority, 5/11 at 101.00 A3 1,822,820 Exempt Facilities Revenue Bonds, Amtrak Project, Series 2001A, 6.250%, 11/01/31 (Alternative Minimum Tax) Pennsylvania Industrial Development Authority, Economic Development Revenue Bonds, Series 1994: 2,000 7.000%, 7/01/06 - AMBAC Insured No Opt. Call AAA 2,312,540 1,550 7.000%, 1/01/07 - AMBAC Insured No Opt. Call AAA 1,811,780 1,000 7.000%, 7/01/07 - AMBAC Insured No Opt. Call AAA 1,189,930 2,750 Pennsylvania Industrial Development Authority, Economic 7/12 at 101.00 AAA 3,133,378 Development Revenue Bonds, Series 2002, 5.500%, 7/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 4.3% 1,000 Cumberland County Municipal Authority, Pennsylvania, 12/12 at 100.00 AA 1,011,570 Revenue Bonds, Presbyterian Homes Inc., Series 2003A, 5.000%, 12/01/22 - RAAI Insured 1,230 Pennsylvania Economic Development Financing Authority, 6/08 at 100.00 BB+ 905,624 Revenue Bonds, Northwestern Human Services Inc. Project, Series 1998A, 5.250%, 6/01/28 Pennsylvania Economic Development Financing Authority, Revenue Bonds, Dr. Gertrude A. Barber Center Inc., Series 2000: 1,000 6.150%, 12/01/20 - RAAI Insured 8/03 at 100.00 AA 1,003,100 2,000 5.900%, 12/01/30 - RAAI Insured 12/10 at 100.00 AA 2,158,260 Philadelphia Authority for Industrial Development, Pennsylvania, Healthcare Facilities Revenue Bonds, Paul's Run, Series 1998A: 1,350 5.750%, 5/15/18 5/08 at 102.00 N/R 1,270,188 1,650 5.875%, 5/15/28 5/08 at 102.00 N/R 1,515,921 2,700 Philadelphia Hospitals and Higher Education Facilities 8/03 at 102.00 BBB+ 2,757,969 Authority, Pennsylvania, Revenue Refunding Bonds, Philadelphia MR Project, Series 1992, 5.625%, 8/01/04 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 0.2% 500 Erie County Industrial Development Authority, Pennsylvania, 9/10 at 101.00 BBB 536,500 Environmental Improvement Revenue Refunding Bonds, Series 2000B, 6.000%, 9/01/16 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 17.5% 2,120 Central Bucks School District, Bucks County, Pennsylvania, 5/13 at 100.00 Aaa 2,237,406 General Obligation Bonds, Series 2003, 5.000%, 5/15/23 - MBIA Insured 2,000 Centre County, Pennsylvania, General Obligation Bonds, 7/13 at 100.00 Aaa 2,052,700 Series 2003, 4.500%, 7/01/19 - MBIA Insured Chichester School District, Delaware County, Pennsylvania, General Obligation Bonds, Series 1999: 3,125 0.000%, 3/01/23 - FGIC Insured No Opt. Call AAA 1,223,406 3,125 0.000%, 3/01/24 - FGIC Insured No Opt. Call AAA 1,150,094 3,125 0.000%, 3/01/25 - FGIC Insured No Opt. Call AAA 1,084,281 Harrisburg Redevelopment Authority, Dauphin County, Pennsylvania, Guaranteed Revenue Bonds, Series 1998B: 1,750 0.000%, 5/01/22 - FSA Insured 5/16 at 75.56 AAA 654,273 2,750 0.000%, 11/01/22 - FSA Insured 5/16 at 73.64 AAA 1,001,633 2,750 0.000%, 5/01/23 - FSA Insured 5/16 at 71.71 AAA 962,885 2,750 0.000%, 11/01/23 - FSA Insured 5/16 at 69.88 AAA 937,750 1,500 Lancaster County, Pennsylvania, General Obligation Bonds, 11/12 at 100.00 Aaa 1,552,305 Series 2002A, 4.700%, 11/01/20 - FGIC Insured 4,305 Montgomery County, Pennsylvania, General Obligation 10/06 at 100.00 Aaa 4,655,858 Bonds, Series 1996B, 5.375%, 10/15/21 39 Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) Norristown Area School District, Montgomery County, Pennsylvania, General Obligation Bonds, Series 2003: $ 1,000 5.000%, 9/01/19 - FGIC Insured 3/13 at 100.00 Aaa $ 1,074,920 1,000 5.000%, 9/01/20 - FGIC Insured 3/13 at 100.00 Aaa 1,069,960 1,735 5.000%, 9/01/21 - FGIC Insured 3/13 at 100.00 Aaa 1,843,559 2,000 5.000%, 9/01/22 - FGIC Insured 3/13 at 100.00 Aaa 2,115,360 2,270 5.000%, 9/01/23 - FGIC Insured 3/13 at 100.00 Aaa 2,393,579 2,600 5.000%, 9/01/24 - FGIC Insured 3/13 at 100.00 Aaa 2,739,438 2,000 Philadelphia School District, Pennsylvania, General No Opt. Call AAA 2,419,240 Obligation Refunding Bonds, Series 1995A, 6.250%, 9/01/09 - AMBAC Insured 1,700 Pine-Richland School District, Allegheny County, Pennsylvania, 9/11 at 100.00 AAA 1,772,216 General Obligation Refunding Bonds, Series 2001, 5.000%, 9/01/29 - FSA Insured State Public School Building Authority, Pennsylvania, School Revenue Bonds, Conneaut School District Project, Series 2003: 1,000 5.250%, 11/01/21 - FGIC Insured 11/13 at 100.00 AAA 1,087,690 1,355 5.250%, 11/01/22 - FGIC Insured 11/13 at 100.00 AAA 1,467,899 State Public School Building Authority, Pennsylvania, School Revenue Bonds, York City School District, Series 2003: 1,575 5.000%, 5/01/18 - FSA Insured 5/13 at 100.00 Aaa 1,701,284 1,655 5.000%, 5/01/19 - FSA Insured 5/13 at 100.00 Aaa 1,777,950 2,550 4.000%, 5/01/21 - FSA Insured 5/13 at 100.00 Aaa 2,435,352 1,535 Stroudsburg Area School District, Monroe County, 4/12 at 100.00 AAA 1,640,884 Pennsylvania, General Obligation Bonds, Series 2001A, 5.000%, 4/01/19 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 11.9% 4,060 Delaware Valley Regional Finance Authority, Pennsylvania, 4/06 at 100.00 AAA 4,464,944 Local Government Revenue Bonds, Series 1996A, 6.000%, 4/15/26 - AMBAC Insured 8,500 Pittsburgh and Allegheny County Public Auditorium 8/09 at 101.00 AAA 8,391,540 Authority, Pennsylvania, Hotel Room Excise Tax Revenue Bonds, Series 1999, 4.500%, 2/01/29 - AMBAC Insured 2,405 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 2,861,469 Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured 11,225 Southeastern Transportation Authority, Pennsylvania, Special 3/09 at 101.00 AAA 11,393,712 Revenue Bonds, Series 1999A, 4.750%, 3/01/29 - FGIC Insured York County School of Technology Authority, Pennsylvania, Lease Revenue Bonds, Series 2003: 1,000 5.375%, 2/15/20 - FGIC Insured 2/13 at 100.00 Aaa 1,100,090 1,000 5.500%, 2/15/22 - FGIC Insured 2/13 at 100.00 Aaa 1,106,590 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 14.4% 2,300 Allegheny County, Pennsylvania, Airport Revenue Refunding 1/08 at 101.00 AAA 2,420,497 Bonds, Pittsburgh International Airport, Series 1997A, 5.250%, 1/01/16 (Alternative Minimum Tax) - MBIA Insured 4,600 Pennsylvania Economic Development Financing Authority, 6/12 at 102.00 A 4,785,932 Revenue Bonds, Amtrak 30th Street Station Parking Garage Project, Series 2002, 5.875%, 6/01/33 - ACA Insured 3,575 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/11 at 101.00 AAA 3,753,071 Series 2001R, 5.000%, 12/01/30 - AMBAC Insured 10,000 Philadelphia Authority for Industrial Development, 7/11 at 101.00 AAA 10,318,400 Pennsylvania, Airport Revenue Bonds, Philadelphia Airport System Project, Series 2001A, 5.250%, 7/01/28 (Alternative Minimum Tax) - FGIC Insured 6,525 Pittsburgh and Allegheny County Sports and Exhibition 12/06 at 100.00 Aaa 6,931,638 Authority, Pennsylvania, Parking Revenue Bonds, Series 2001A, 5.350%, 12/01/26 - AMBAC Insured 7,000 Susquehanna Area Regional Airport Authority, 1/13 at 100.00 Aaa 7,238,070 Pennsylvania, Airport System Revenue Bonds, Series 2003B, 5.000%, 1/01/33 - AMBAC Insured 40 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 17.3% $ 2,000 Bangor Area School District, Northampton County, 3/06 at 100.00 AAA $ 2,215,500 Pennsylvania, General Obligation Bonds, Series 1996B, 5.500%, 3/15/18 (Pre-refunded to 3/15/06) - FGIC Insured 2,500 Bensalem Township School District, Bucks County, 7/06 at 100.00 AAA 2,826,550 Pennsylvania, General Obligation Bonds, Series 1996, 5.875%, 7/15/16 (Pre-refunded to 7/15/06) - FGIC Insured 2,110 Fayette County, Pennsylvania, General Obligation Bonds, 11/10 at 100.00 AAA 2,516,871 Series 2000, 5.625%, 11/15/28 (Pre-refunded to 11/15/10) - AMBAC Insured 17,895 Harrisburg Authority, Dauphin County, Pennsylvania, 9/07 at 100.00 AAA 20,612,714 Tax-Exempt Revenue Bonds, City of Harrisburg Project, Series 1997-II, 5.625%, 9/15/22 (Pre-refunded to 9/15/07) - MBIA Insured 1,500 Ligonier Valley School District, Westmoreland County, 3/04 at 100.00 AAA 1,551,075 Pennsylvania, General Obligation Bonds, Series 1994, 6.000%, 3/01/23 (Pre-refunded to 3/01/04) - MBIA Insured 1,380 Pennsylvania Higher Educational Facilities Authority, No Opt. Call Aaa 1,727,801 College Revenue Bonds, Ninth Series 1976, 7.625%, 7/01/15 1,005 Philadelphia Hospitals and Higher Education Facilities 5/04 at 102.00 AAA 1,068,275 Authority, Pennsylvania, Revenue Bonds, Philadelphia Community College, Series 1994, 6.100%, 5/01/10 (Pre-refunded to 5/01/04) - MBIA Insured Philadelphia Hospitals and Higher Education Facilities Authority, Pennsylvania, Hospital Revenue Bonds, Presbyterian Medical Center of Philadelphia, Series 1993: 1,000 6.500%, 12/01/11 12/03 at 102.00 AAA 1,212,470 3,690 6.650%, 12/01/19 12/03 at 102.00 AAA 4,776,152 1,750 Pine-Richland School District, Allegheny County, 9/03 at 100.00 AAA 1,765,243 Pennsylvania, General Obligation Bonds, Series 1993A, 6.100%, 9/01/18 (Pre-refunded to 9/01/03) - AMBAC Insured 1,650 West View Borough, Municipal Authority, Allegheny No Opt. Call AAA 2,376,231 County, Pennsylvania, Special Obligation Bonds, Series 1985A, 9.500%, 11/15/14 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 12.8% 1,125 Allegheny County Industrial Development Authority, No Opt. Call AAA 1,194,424 Pennsylvania, Pollution Control Revenue Refunding Bonds, Duquesne Light Company Project, Series 1999A, 4.350%, 12/01/13 - AMBAC Insured 8,000 Beaver County Industrial Development Authority, 6/08 at 102.00 AAA 8,300,720 Pennsylvania, Exempt Facilities Revenue Bonds, Shippingport Project, Series 1998A, 5.375%, 6/01/28 (Alternative Minimum Tax) - AMBAC Insured 3,785 Carbon County Industrial Development Authority, No Opt. Call BBB- 4,062,403 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 7,590 Indiana County Industrial Development Authority, 5/07 at 102.00 AAA 8,370,100 Pennsylvania, Pollution Control Revenue Bonds, Metropolitan Edison Company Project, Series 1997A, 5.950%, 5/01/27 (Alternative Minimum Tax) - AMBAC Insured 2,000 Indiana County Industrial Development Authority, 6/12 at 101.00 Baa1 2,013,520 Pennsylvania, Pollution Control Revenue Refunding Bonds, PSEG Power LLC Project, Series 2001A, 5.850%, 6/01/27 (Alternative Minimum Tax) 1,530 Montgomery County Industrial Development Authority, No Opt. Call AAA 1,764,488 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Montenay/Montgomery County Project, Series 2002A, 5.250%, 11/01/13 - MBIA Insured 5,750 Philadelphia, Pennsylvania, Gas Works Revenue Bonds, 7/09 at 101.00 AAA 5,936,760 General Ordinance, Second Series 1999, 5.000%, 7/01/29 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 10.2% 2,000 Allegheny County Sanitary Authority, Pennsylvania, Sewer 12/10 at 101.00 AAA 2,160,300 Revenue Bonds, Series 2000, 5.500%, 12/01/30 - MBIA Insured 4,000 Bucks County Industrial Development Authority, Pennsylvania, 3/12 at 100.00 AAA 4,244,200 Water Facility Revenue Bonds, Pennsylvania Suburban Water Company Project, Series 2002, 5.550%, 9/01/32 (Alternative Minimum Tax) - FGIC Insured 3,360 Mercer County Industrial Development Authority, Pennsylvania, 7/10 at 100.00 AAA 3,673,589 Water Facility Revenue Bonds, Consumers Water Company, Shenango Valley Division Project, Series 2000, 6.000%, 7/01/30 (Alternative Minimum Tax) - MBIA Insured 41 Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER (continued) $ 5,500 Northumberland County Industrial Development Authority, 10/03 at 102.00 AA- $ 5,672,700 Pennsylvania, Exempt Facilities Revenue Bonds, Roaring Creek Water Company Project, Series 1993, 6.375%, 10/15/23 (Alternative Minimum Tax) Philadelphia, Pennsylvania, Water and Wastewater Revenue Bonds, Series 1995: 3,000 6.750%, 8/01/05 - MBIA Insured No Opt. Call AAA 3,332,220 2,730 6.250%, 8/01/10 - MBIA Insured No Opt. Call AAA 3,322,082 10,000 Pittsburgh Water and Sewer Authority, Pennsylvania, Water No Opt. Call AAA 2,784,294 and Sewer System First Lien Revenue Bonds, Series 1998B, 0.000%, 9/01/28 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 350,575 Total Long-Term Investments (cost $323,040,254) - 142.1% 350,314,727 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.2% 500 Puerto Rico Government Development Bank, Adjustable VMIG-1 500,000 Refunding Bonds, Variable Rate Demand Obligations, Series 1985, 0.870%, 12/01/15 - MBIA Insured+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 500 Total Short-Term Investments (cost $500,000) 500,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $323,540,254) - 142.3% 350,814,727 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 5.6% 13,888,950 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (47.9)% (118,100,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $246,603,677 ==================================================================================================================== (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. 42
Nuveen Pennsylvania Dividend Advantage Municipal Fund (NXM) Portfolio of INVESTMENTS June 30, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 5.2% $ 3,000 Pennsylvania Economic Development Financing Authority, 11/08 at 102.00 N/R $ 2,804,190 Exempt Facilities Revenue Bonds, National Gypsum Project, Series 1997B, 6.125%, 11/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 4.5% 2,200 Pennsylvania Economic Development Financing Authority, No Opt. Call AA- 2,408,538 Solid Waste Disposal Revenue Bonds, Procter & Gamble Paper Project, Series 2001, 5.375%, 3/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 28.3% 2,250 Bucks County Industrial Development Authority, Pennsylvania, 9/11 at 100.00 Aaa 2,362,320 Revenue Bonds, George School Project, Series 2001, 5.125%, 9/15/31 - AMBAC Insured 1,825 Delaware County Authority, Pennsylvania, College Revenue 10/11 at 100.00 BBB- 1,895,117 Refunding Bonds, Neumann College, Series 2001, 6.000%, 10/01/31 2,370 Montgomery County Industrial Development Authority, 8/07 at 100.00 AAA 2,516,821 Pennsylvania, Revenue Bonds, Hill School Project, Series 1997, 5.350%, 8/15/27 - MBIA Insured 1,090 Pennsylvania Higher Educational Facilities Authority, 1/13 at 100.00 A1 1,206,837 Revenue Bonds, Thomas Jefferson University, Series 2002, 5.500%, 1/01/16 1,500 Pennsylvania Higher Educational Facilities Authority, Revenue 7/11 at 100.00 AA 1,591,005 Bonds, Moravian College, Series 2001, 5.375%, 7/01/31 - RAAI Insured 3,000 Pennsylvania State University, General Obligation Refunding No Opt. Call AA 3,511,920 Bonds, Series 2002, 5.250%, 8/15/14 2,000 West Cornwall Township Municipal Authority, Pennsylvania, 12/11 at 100.00 BBB+ 2,084,000 College Revenue Bonds, Elizabethtown College Project, Series 2001, 6.000%, 12/15/27 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 17.9% 2,500 Chester County Health and Educational Facilities Authority, 5/08 at 101.00 AA- 2,556,025 Pennsylvania, Health System Revenue Bonds, Jefferson Health System, Series 1997B, 5.375%, 5/15/27 600 Lehigh County General Purpose Authority, Pennsylvania, 8/13 at 100.00 BBB 583,818 Hospital Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 (WI, settling 7/01/03) 2,900 Pennsylvania Higher Educational Facilities Authority, Revenue 1/11 at 101.00 A 3,071,622 Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31 1,000 Washington County Hospital Authority, Pennsylvania, 6/12 at 101.00 A3 1,061,080 Revenue Bonds, Monongahela Valley Hospital Project, Series 2002, 5.500%, 6/01/17 2,250 West Shore Area Hospital Authority, Cumberland County, 1/12 at 100.00 BBB+ 2,339,393 Pennsylvania, Hospital Revenue Bonds, Holy Spirit Hospital of the Sisters of Christian Charity Project, Series 2001, 6.250%, 1/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 4.0% 2,090 Allegheny County Residential Finance Authority, Pennsylvania, 11/08 at 102.00 Aaa 2,152,303 Single Family Mortgage Revenue Bonds, Series 1998-DD2, 5.400%, 11/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 6.1% 2,000 Pennsylvania Economic Development Financing Authority, 5/11 at 101.00 A3 1,822,820 Exempt Facilities Revenue Bonds, Amtrak Project, Series 2001A, 6.250%, 11/01/31 (Alternative Minimum Tax) 1,250 Pennsylvania Industrial Development Authority, Economic 7/12 at 101.00 AAA 1,424,263 Development Revenue Bonds, Series 2002, 5.500%, 7/01/17 - AMBAC Insured 43 Nuveen Pennsylvania Dividend Advantage Municipal Fund (NXM) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 11.5% $ 1,000 Cumberland County Municipal Authority, Pennsylvania, 1/13 at 101.00 N/R $ 996,620 Retirement Community Revenue Bonds, Wesley Affiliated Services Inc., Series 2002A, 7.125%, 1/01/25 2,100 Lancaster County Hospital Authority, Pennsylvania, Health 12/11 at 100.00 A- 2,173,836 Center Revenue Bonds, Willow Valley Retirement Communities Project, Series 2001, 5.875%, 6/01/31 2,875 Philadelphia Authority for Industrial Development, 7/11 at 101.00 AAA 3,018,923 Pennsylvania, Revenue Bonds, Philadelphia Corporation for the Aging Project, Series 2001B, 5.250%, 7/01/31 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 39.4% 2,415 Bucks County, Pennsylvania, Central Bucks School District, 5/12 at 100.00 Aaa 2,728,515 General Obligation Bonds, Series 2002, 5.500%, 5/15/18 - FGIC Insured Lake-Lehman School District, Luzerne County, Pennsylvania, General Obligation Bonds, Series 2001: 1,315 0.000%, 4/01/25 - MBIA Insured No Opt. Call AAA 442,511 1,315 0.000%, 4/01/26 - MBIA Insured No Opt. Call AAA 419,038 1,105 Oxford Area School District, Chester County, Pennsylvania, 2/12 at 100.00 AAA 1,247,633 General Obligation Bonds, Series 2001A, 5.500%, 2/15/17 - FGIC Insured 2,000 Pennsylvania General Obligation Bonds, Second 9/11 at 101.00 AA 2,255,000 Series 2001, 5.000%, 9/15/13 2,500 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA 2,830,250 Bonds, Series 2002B, 5.625%, 8/01/18 - FGIC Insured 3,000 Pittsburgh School District, Allegheny County, Pennsylvania, No Opt. Call AAA 3,582,810 General Obligation Refunding Bonds, Series 2002A, 5.500%, 9/01/14 - FSA Insured 9,270 Reading School District, Berks County, Pennsylvania, General 7/11 at 54.58 AAA 3,438,243 Obligation Bonds, Series 2001A, 0.000%, 1/15/22 - FGIC Insured 2,625 Sto-Rox School District, Allegheny County, Pennsylvania, 12/11 at 100.00 AAA 2,768,955 General Obligation Refunding Bonds, Series 2001, 5.125%, 12/15/29 - FGIC Insured 1,230 Stroudsburg Area School District, Monroe County, 4/12 at 100.00 AAA 1,354,845 Pennsylvania, General Obligation Bonds, Series 2001A, 5.000%, 4/01/15 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 4.7% 1,500 Philadelphia Redevelopment Authority, Pennsylvania, 4/12 at 100.00 AAA 1,675,320 Revenue Bonds, Philadelphia Neighborhood Transformation Initiative, Series 2002A, 5.500%, 4/15/19 - FGIC Insured 700 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 832,860 Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 9.7% 1,000 Pennsylvania Economic Development Financing Authority, 6/12 at 102.00 A 1,040,420 Revenue Bonds, Amtrak 30th Street Station Parking Garage Project, Series 2002, 5.875%, 6/01/33 - ACA Insured 1,750 Philadelphia Authority for Industrial Development, 7/11 at 101.00 AAA 1,805,720 Pennsylvania, Airport Revenue Bonds, Philadelphia Airport System Project, Series 2001A, 5.250%, 7/01/28 (Alternative Minimum Tax) - FGIC Insured 2,210 Pittsburgh and Allegheny County Sports and Exhibition 12/06 at 100.00 Aaa 2,344,589 Authority, Pennsylvania, Parking Revenue Bonds, Series 2001A, 5.375%, 12/01/30 - AMBAC Insured 44 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 9.6% $ 500 Allegheny County Industrial Development Authority, No Opt. Call AAA $ 530,855 Pennsylvania, Pollution Control Revenue Refunding Bonds, Duquesne Light Company Project, Series 1999A, 4.350%, 12/01/13 - AMBAC Insured 3,100 Montgomery County Industrial Development Authority, No Opt. Call AAA 3,512,424 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Montenay/Montgomery County Project, Series 2002A, 5.000%, 11/01/10 - MBIA Insured 1,000 Philadelphia, Pennsylvania, Gas Works Revenue Bonds, 8/13 at 100.00 AAA 1,097,219 General Ordinance, Fourth Series 1998, 5.250%, 8/01/19 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 78,335 Total Long-Term Investments (cost $69,694,452) - 140.9% 75,488,658 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 5.7% 3,102,703 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (46.6)% (25,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $53,591,361 ==================================================================================================================== (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. 45
Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 (NVY) Portfolio of INVESTMENTS June 30, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 19.1% $ 700 Allegheny County Higher Education Building Authority, No Opt. Call AA- $ 701,253 Pennsylvania, Revenue Bonds, Carnegie Mellon University, Series 2002, 5.450%, 3/01/27 1,500 Allegheny County Higher Education Building Authority, No Opt. Call Baa3 1,603,965 Pennsylvania, College Revenue Refunding Bonds, Robert Morris College, Series 1998A, 6.000%, 5/01/28 2,000 Pennsylvania Higher Educational Facilities Authority, 7/11 at 101.00 AAA 2,084,900 Revenue Bonds, Temple University, Series 2001, 5.000%, 7/15/31 - MBIA Insured 5,000 Pennsylvania State University, General Obligation Refunding No Opt. Call AA 5,802,400 Bonds, Series 2002, 5.250%, 8/15/12 1,000 Union County Higher Education Facilities Financing Authority, 4/13 at 100.00 Aa3 1,095,410 Pennsylvania, Revenue Bonds, Bucknell University, Series 2002A, 5.250%, 4/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 9.9% 2,000 Chester County Health and Educational Facilities Authority, 5/08 at 101.00 AA- 2,044,820 Pennsylvania, Health System Revenue Bonds, Jefferson Health System, Series 1997B, 5.375%, 5/15/27 600 Lehigh County General Purpose Authority, Pennsylvania, 8/13 at 100.00 BBB 583,818 Hospital Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 (WI, settling 7/01/03) 1,000 Philadelphia Hospitals and Higher Education Facilities 11/03 at 102.00 BBB 1,007,080 Authority, Pennsylvania, Hospital Revenue Bonds, Temple University Hospital, Series 1993A, 6.625%, 11/15/23 1,450 Washington County Hospital Authority, Pennsylvania, 6/12 at 101.00 A3 1,581,950 Revenue Bonds, Monongahela Valley Hospital Project, Series 2002, 6.250%, 6/01/22 600 West Shore Area Hospital Authority, Cumberland County, 1/12 at 100.00 BBB+ 623,838 Pennsylvania, Hospital Revenue Bonds, Holy Spirit Hospital of the Sisters of Christian Charity Project, Series 2001, 6.250%, 1/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 5.7% 3,000 Pennsylvania Industrial Development Authority, Economic 7/12 at 101.00 AAA 3,379,020 Development Revenue Bonds, Series 2002, 5.500%, 7/01/19 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 5.4% 965 Allegheny County Residential Finance Authority, Pennsylvania, 5/12 at 102.00 Aaa 1,020,410 Healthcare Facilities Revenue Bonds - GNMA Collateralized, Lemington Home for the Aged Project, Series 2002A, 5.750%, 5/20/37 1,155 Bucks County Industrial Development Authority, Pennsylvania, 10/12 at 101.00 BBB+ 1,204,561 Revenue Bonds, Pennswood Village Project, Series 2002A, 6.000%, 10/01/34 1,000 Cumberland County Municipal Authority, Pennsylvania, 1/13 at 101.00 N/R 996,620 Retirement Community Revenue Bonds, Wesley Affiliated Services Inc., Series 2002A, 7.125%, 1/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 4.1% 2,190 Bucks County Industrial Development Authority, Pennsylvania, No Opt. Call BBB+ 2,412,614 Environmental Improvement Revenue Bonds, USX Corp. Project, Series 1995, 5.400%, 11/01/17 (Mandatory put 11/01/11) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 38.1% 2,500 Ambridge Area School District, Beaver County, Pennsylvania, 11/12 at 100.00 AAA 2,656,475 General Obligation Bonds, Series 2002B, 5.125%, 5/01/23 - FGIC Insured 1,740 Butler Area School District, Butler County, Pennsylvania, 10/12 at 100.00 AAA 1,894,599 General Obligation Bonds, Series 2002A, 5.375%, 10/01/26 - FGIC Insured 765 Butler Area School District, Butler County, Pennsylvania, 10/12 at 100.00 AAA 831,134 General Obligation Bonds, Series 2002B, 5.375%, 10/01/29 - FGIC Insured 46 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) Greensburg Salem School District, Westmoreland County, Pennsylvania, General Obligation Bonds, Series 2002 Refunding: $ 725 5.375%, 9/15/15 - FGIC Insured 9/12 at 100.00 AAA $ 823,542 1,000 5.375%, 9/15/16 - FGIC Insured 9/12 at 100.00 AAA 1,126,740 4,280 Lehigh County, Pennsylvania, General Obligation Bonds, 11/11 at 100.00 Aa3 4,696,444 Series 2001, 5.000%, 11/15/15 1,100 Luzerne County, Pennsylvania, General Obligation Bonds, 11/12 at 57.97 Aaa 415,019 Series 2002B, 0.000%, 11/15/21 - MBIA Insured 4,000 Pennsylvania General Obligation Bonds, Second Series 2001, 9/11 at 101.00 AA 4,420,040 5.000%, 9/15/15 2,000 Philadelphia School District, Pennsylvania, General Obligation 2/12 at 100.00 AAA 2,174,460 Bonds, Series 2002A, 5.500%, 2/01/31 - FSA Insured 3,170 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA 3,588,757 Bonds, Series 2002B, 5.625%, 8/01/18 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 34.2% 4,000 Delaware Valley Regional Finance Authority, Pennsylvania, No Opt. Call Aa2 4,766,320 Local Government Revenue Bonds, Series 2002, 5.750%, 7/01/17 2,000 Grove City Area Hospital Authority, Mercer County, 3/12 at 100.00 AAA 2,118,320 Pennsylvania, Revenue Bonds, County Guaranteed, Woodland Place Project, Series 2002, 5.400%, 3/01/31 - FGIC Insured 4,000 Harrisburg Parking Authority, Pennsylvania, Guaranteed 9/11 at 100.00 Aaa 4,171,320 Revenue Refunding Bonds, Series 2001J, 5.000%, 9/01/22 - MBIA Insured 2,945 Pennsylvania Turnpike Commission, Registration Fee Revenue 7/11 at 101.00 AAA 3,220,593 Bonds, Series 2001, 5.500%, 7/15/33 - AMBAC Insured 2,000 Philadelphia Authority for Industrial Development, 10/11 at 101.00 AAA 2,107,080 Pennsylvania, Lease Revenue Bonds, Series 2001B, 5.125%, 10/01/26 - FSA Insured Philadelphia Redevelopment Authority, Pennsylvania, Revenue Bonds, Philadelphia Neighborhood Transformation Initiative, Series 2002A: 1,000 5.500%, 4/15/18 - FGIC Insured 4/12 at 100.00 AAA 1,123,200 1,750 5.500%, 4/15/22 - FGIC Insured 4/12 at 100.00 AAA 1,923,110 700 Puerto Rico Highway and Transportation Authority, Highway No Opt. Call AAA 832,860 Revenue Bonds, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 3.5% 1,000 Pennsylvania Economic Development Financing Authority, 6/12 at 102.00 A 1,040,420 Revenue Bonds, Amtrak 30th Street Station Parking Garage Project, Series 2002, 5.875%, 6/01/33 - ACA Insured 1,000 Susquehanna Area Regional Airport Authority, Pennsylvania, 1/13 at 100.00 Aaa 1,008,660 Airport System Revenue Bonds, Series 2003A, 5.000%, 1/01/28 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 4.0% 2,000 Adams County, Pennsylvania, General Obligation Bonds, 5/11 at 100.00 AAA 2,365,540 Series 2001, 5.500%, 11/15/26 (Pre-refunded to 5/15/11) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 10.5% 3,135 Montgomery County Industrial Development Authority, No Opt. Call AAA 3,552,080 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Montenay/Montgomery County Project, Series 2002A, 5.000%, 11/01/10 - MBIA Insured 2,420 Philadelphia, Pennsylvania, Gas Works Revenue Bonds, 8/13 at 100.00 AAA 2,636,445 General Ordinance, Fourth Series 1998, 5.250%, 8/01/20 - FSA Insured 47 Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 (NVY) (continued) Portfolio of INVESTMENTS June 30, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 8.1% $ 4,500 Bucks County Industrial Development Authority, Pennsylvania, 3/12 at 100.00 AAA $ 4,774,725 Water Facility Revenue Bonds, Pennsylvania Suburban Water Company Project, Series 2002, 5.550%, 9/01/32 (Alternative Minimum Tax) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 77,890 Total Long-Term Investments (cost $78,550,771) - 142.6% 84,410,542 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 5.5% 3,291,896 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.1)% (28,500,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $59,202,438 ==================================================================================================================== (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. 48
Statement of ASSETS AND LIABILITIES June 30, 2003
NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at market value (cost $448,199,531, $262,699,786, $140,849,524 and $100,628,657, respectively) $475,389,341 $284,939,193 $148,839,565 $105,913,304 Cash 3,467,846 -- 443,827 -- Receivables: Interest 7,621,938 4,488,192 2,536,206 1,575,257 Investments sold 3,115,000 7,958,358 -- -- Other assets 13,067 18,539 8,221 9,950 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 489,607,192 297,404,282 151,827,819 107,498,511 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft -- 3,728,720 -- 1,164,253 Payable for investments purchased 10,258,860 6,209,310 3,239,640 2,159,760 Accrued expenses: Management fees 252,431 152,853 51,722 34,881 Other 115,374 139,148 29,185 20,910 Preferred share dividends payable 10,940 6,228 5,530 2,839 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 10,637,605 10,236,259 3,326,077 3,382,643 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 162,000,000 91,600,000 48,000,000 34,500,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $316,969,587 $195,568,023 $100,501,742 $ 69,615,868 ==================================================================================================================================== Common shares outstanding 20,258,649 12,012,930 6,547,000 4,507,534 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.65 $ 16.28 $ 15.35 $ 15.44 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 202,586 $ 120,129 $ 65,470 $ 45,075 Paid-in surplus 285,497,149 171,436,986 92,923,228 63,910,979 Undistributed (Over-distribution of) net investment income 2,854,424 2,138,313 831,478 193,421 Accumulated net realized gain (loss) from investments 1,225,618 (366,812) (1,308,475) 181,746 Net unrealized appreciation of investments 27,189,810 22,239,407 7,990,041 5,284,647 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $316,969,587 $195,568,023 $100,501,742 $ 69,615,868 ==================================================================================================================================== Authorized shares: Common 200,000,000 200,000,000 Unlimited Unlimited Preferred 1,000,000 1,000,000 Unlimited Unlimited ==================================================================================================================================== See accompanying notes to financial statements. 49
Statement of ASSETS AND LIABILITIES June 30, 2003 (continued)
PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at market value (cost $357,190,415, $323,540,254, $69,694,452 and $78,550,771, respectively) $385,600,445 $350,814,727 $75,488,658 $84,410,542 Cash 2,881,293 -- 336,625 -- Receivables: Interest 5,187,102 5,260,387 1,109,374 1,329,701 Investments sold -- 13,690,673 2,284,800 2,652,000 Other assets 19,931 31,265 9,466 9,904 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 393,688,771 369,797,052 79,228,923 88,402,147 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft -- 2,402,121 -- 53,682 Payable for investments purchased 2,429,025 2,331,864 582,966 582,966 Accrued expenses: Management fees 206,997 193,142 31,675 30,197 Organization and offering costs -- -- -- -- Other 112,345 156,101 20,127 27,403 Preferred share dividends payable 16,240 10,147 2,794 5,461 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 2,764,607 5,093,375 637,562 699,709 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 132,000,000 118,100,000 25,000,000 28,500,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $258,924,164 $246,603,677 $53,591,361 $59,202,438 ==================================================================================================================================== Common shares outstanding 16,275,318 15,753,059 3,296,957 3,723,722 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.91 $ 15.65 $ 16.25 $ 15.90 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 162,753 $ 157,531 $ 32,970 $ 37,237 Paid-in surplus 230,329,016 215,375,462 46,757,196 52,783,463 Undistributed (Over-distribution of) net investment income 1,125,245 2,790,848 513,680 (55,552) Accumulated net realized gain (loss) from investments (1,102,880) 1,005,363 493,309 577,519 Net unrealized appreciation of investments 28,410,030 27,274,473 5,794,206 5,859,771 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $258,924,164 $246,603,677 $53,591,361 $59,202,438 ==================================================================================================================================== Authorized shares: Common Unlimited Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited Unlimited ==================================================================================================================================== See accompanying notes to financial statements. 50
Statement of OPERATIONS Year Ended June 30, 2003
NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) - ----------------------------------------------------------------------------------------------------------------------------------- INVESTMENT INCOME $25,040,498 $14,788,463 $ 7,522,491 $5,233,470 - ----------------------------------------------------------------------------------------------------------------------------------- EXPENSES Management fees 3,009,119 1,822,624 940,082 662,395 Preferred shares - auction fees 405,133 225,380 120,140 84,940 Preferred shares - dividend disbursing agent fees 30,000 30,000 10,000 10,000 Shareholders' servicing agent fees and expenses 66,433 40,149 2,583 2,747 Custodian's fees and expenses 120,493 75,492 36,731 31,974 Directors'/Trustees' fees and expenses 6,432 3,758 1,970 1,472 Professional fees 20,279 16,469 11,475 11,121 Shareholders' reports - printing and mailing expenses 60,653 29,273 8,370 9,883 Stock exchange listing fees 16,378 16,224 759 205 Investor relations expense 55,526 35,182 13,432 9,931 Other expenses 32,030 20,677 10,274 5,683 - ----------------------------------------------------------------------------------------------------------------------------------- Total expenses before custodian fee credit and expense reimbursement 3,822,476 2,315,228 1,155,816 830,351 Custodian fee credit (20,645) (9,764) (10,065) (15,051) Expense reimbursement -- -- (426,238) (301,086) - ----------------------------------------------------------------------------------------------------------------------------------- Net expenses 3,801,831 2,305,464 719,513 514,214 - ----------------------------------------------------------------------------------------------------------------------------------- Net investment income 21,238,667 12,482,999 6,802,978 4,719,256 - ----------------------------------------------------------------------------------------------------------------------------------- REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS Net realized gain (loss) from investments 1,346,875 1,350,825 (1,018,294) 345,915 Change in net unrealized appreciation (depreciation) of investments 10,671,351 6,255,134 6,715,619 4,054,385 - ----------------------------------------------------------------------------------------------------------------------------------- Net gain from investments 12,018,226 7,605,959 5,697,325 4,400,300 - ----------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (1,419,468) (886,855) (452,229) (345,886) From accumulated net realized gains from investments (169,479) -- -- (20,192) - ----------------------------------------------------------------------------------------------------------------------------------- Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (1,588,947) (886,855) (452,229) (366,078) - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets applicable to Common shares from operations $31,667,946 $19,202,103 $12,048,074 $8,753,478 =================================================================================================================================== See accompanying notes to financial statements. 51
Statement of OPERATIONS Year Ended June 30, 2003 (continued) PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $19,692,120 $19,193,515 $3,961,852 $4,176,560 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 2,437,870 2,291,689 497,911 556,399 Preferred shares - auction fees 330,036 295,164 62,573 74,076 Preferred shares - dividend disbursing agent fees 30,000 30,000 10,000 10,000 Shareholders' servicing agent fees and expenses 75,625 60,532 3,183 3,886 Custodian's fees and expenses 115,102 96,544 29,712 34,288 Directors'/Trustees' fees and expenses 5,832 3,489 630 1,321 Professional fees 18,939 16,582 10,394 10,140 Shareholders' reports - printing and mailing expenses 62,956 33,810 4,636 6,028 Stock exchange listing fees 16,339 16,234 438 168 Investor relations expense 52,853 41,158 6,546 11,238 Other expenses 26,857 16,769 9,589 4,217 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 3,172,409 2,901,971 635,612 711,761 Custodian fee credit (16,230) (30,084) (5,881) (15,777) Expense reimbursement -- -- (221,005) (252,149) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 3,156,179 2,871,887 408,726 443,835 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 16,535,941 16,321,628 3,553,126 3,732,725 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS Net realized gain (loss) from investments 1,884,672 1,698,255 685,967 618,914 Change in net unrealized appreciation (depreciation) of investments 17,527,987 10,810,137 3,644,254 4,220,745 - ------------------------------------------------------------------------------------------------------------------------------------ Net gain from investments 19,412,659 12,508,392 4,330,221 4,839,659 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (1,392,205) (1,223,173) (246,805) (317,893) From accumulated net realized gains from investments -- -- (47,322) (17,220) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (1,392,205) (1,223,173) (294,127) (335,113) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $34,556,395 $27,606,847 $7,589,220 $8,237,271 ====================================================================================================================================
See accompanying notes to financial statements. 52 Statement of CHANGES IN NET ASSETS
NEW JERSEY INVESTMENT NEW JERSEY PREMIUM NEW JERSEY DIVIDEND QUALITY (NQJ) INCOME (NNJ) ADVANTAGE (NXJ) ----------------------------- ------------------------------ --------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 6/30/03 6/30/02 6/30/03 6/30/02 6/30/03 6/30/02 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 21,238,667 $ 22,266,375 $ 12,482,999 $ 12,692,718 $ 6,802,978 $ 6,785,279 Net realized gain (loss) from investments 1,346,875 2,008,530 1,350,825 1,446,786 (1,018,294) (285,894) Change in net unrealized appreciation (depreciation) of investments 10,671,351 (2,377,570) 6,255,134 1,407,496 6,715,619 (122,252) Distributions to Preferred Shareholders: From net investment income (1,419,468) (2,560,820) (886,855) (1,417,848) (452,229) (855,272) From accumulated net realized gains from investments (169,479) -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 31,667,946 19,336,515 19,202,103 14,129,152 12,048,074 5,521,861 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (18,736,412) (18,508,380) (11,026,672) (10,187,469) (5,713,922) (5,578,064) From accumulated net realized gains from investments (1,345,170) -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (20,081,582) (18,508,380) (11,026,672) (10,187,469) (5,713,922) (5,578,064) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- -- -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 575,330 2,194,939 -- -- -- -- Preferred shares offering costs -- -- -- -- 37,290 -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions 575,330 2,194,939 -- -- 37,290 -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 12,161,694 3,023,074 8,175,431 3,941,683 6,371,442 (56,203) Net assets applicable to Common shares at the beginning of period 304,807,893 301,784,819 187,392,592 183,450,909 94,130,300 94,186,503 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of period $316,969,587 $304,807,893 $195,568,023 $187,392,592 $100,501,742 $94,130,300 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of period $ 2,854,424 $ 1,768,070 $ 2,138,313 $ 1,610,542 $ 831,478 $ 184,283 ==================================================================================================================================== See accompanying notes to financial statements. 53
Statement of CHANGES IN NET ASSETS (continued)
NEW JERSEY PENNSYLVANIA PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NUJ) INVESTMENT QUALITY (NQP) PREMIUM INCOME 2 (NPY) ----------------------------- ----------------------------- --------------------------- FOR THE PERIOD 3/26/02 (COMMENCEMENT YEAR ENDED OF OPERATIONS) YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 6/30/03 THROUGH 6/30/02 6/30/03 6/30/02 6/30/03 6/30/02 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 4,719,256 $ 698,933 $ 16,535,941 $ 17,648,265 $ 16,321,628 $ 16,894,284 Net realized gain (loss) from investments 345,915 (213) 1,884,672 2,590,369 1,698,255 1,191,174 Change in net unrealized appreciation (depreciation) of investments 4,054,385 1,230,987 17,527,987 (1,250,135) 10,810,137 3,570,190 Distributions to Preferred Shareholders: From net investment income (345,886) (52,247) (1,392,205) (2,216,547) (1,223,173) (1,898,830) From accumulated net realized gains from investments (20,192) -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 8,753,478 1,877,460 34,556,395 16,771,952 27,606,847 19,756,818 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (4,137,816) (689,572) (14,842,385) (14,777,891) (14,623,151) (13,598,132) From accumulated net realized gains from investments (143,736) -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (4,281,552) (689,572) (14,842,385) (14,777,891) (14,623,151) (13,598,132) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- 64,327,500 -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 7,924 122 283,963 1,744,182 84,070 -- Preferred shares offering costs (17,393) (462,374) -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions (9,469) 63,865,248 283,963 1,744,182 84,070 -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 4,462,457 65,053,136 19,997,973 3,738,243 13,067,766 6,158,686 Net assets applicable to Common shares at the beginning of period 65,153,411 100,275 238,926,191 235,187,948 233,535,911 227,377,225 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of period $69,615,868 $65,153,411 $258,924,164 $238,926,191 $246,603,677 $233,535,911 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of period $ 193,421 $ (42,886) $ 1,125,245 $ 847,477 $ 2,790,848 $ 2,445,025 ==================================================================================================================================== See accompanying notes to financial statements. 54
PENNSYLVANIA PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) DIVIDEND ADVANTAGE 2 (NVY) ------------------------------ ---------------------------- FOR THE PERIOD 3/25/02 (COMMENCEMENT YEAR ENDED YEAR ENDED YEAR ENDED OF OPERATIONS) 6/30/03 6/30/02 6/30/03 THROUGH 6/30/02 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 3,553,126 $ 3,696,942 $ 3,732,725 $ 568,127 Net realized gain (loss) from investments 685,967 226,686 618,914 85,308 Change in net unrealized appreciation (depreciation) of investments 3,644,254 1,011,994 4,220,745 1,639,929 Distributions to Preferred Shareholders: From net investment income (246,805) (436,152) (317,893) (51,479) From accumulated net realized gains from investments (47,322) (9,362) (17,220) -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 7,589,220 4,490,108 8,237,271 2,241,885 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (3,033,667) (2,880,695) (3,418,107) (569,467) From accumulated net realized gains from investments (322,656) (41,536) (109,844) -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (3,356,323) (2,922,231) (3,527,951) (569,467) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- -- -- 53,105,925 Net proceeds from shares issued to shareholders due to reinvestment of distributions -- 15,496 25,883 198 Preferred shares offering costs 51,983 -- (13,359) (398,222) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions 51,983 15,496 12,524 52,707,901 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 4,284,880 1,583,373 4,721,844 54,380,319 Net assets applicable to Common shares at the beginning of period 49,306,481 47,723,108 54,480,594 100,275 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of period $53,591,361 $49,306,481 $59,202,438 $54,480,594 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of period $ 513,680 $ 272,643 $ (55,552) $ (52,819) ====================================================================================================================================
See accompanying notes to financial statements. 55 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 New Jersey Investment Quality Municipal Fund, Inc. (NQJ), Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ), Nuveen New Jersey Dividend Advantage Municipal Fund (NXJ), Nuveen New Jersey Dividend Advantage Municipal Fund 2 (NUJ), Nuveen Pennsylvania Investment Quality Municipal Fund (NQP), Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY), Nuveen Pennsylvania Dividend Advantage Municipal Fund (NXM) and Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 (NVY). New Jersey Investment Quality (NQJ), New Jersey Premium Income (NNJ), Pennsylvania Investment Quality (NQP) and Pennsylvania Premium Income 2 (NPY) are traded on the New York Stock Exchange while New Jersey Dividend Advantage (NXJ), New Jersey Dividend Advantage 2 (NUJ), Pennsylvania Dividend Advantage (NXM) and Pennsylvania Dividend Advantage 2 (NVY) 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 New Jersey Dividend Advantage 2 (NUJ) and Pennsylvania Dividend Advantage 2 (NVY), 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 organization 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 Directors/Trustees. When price quotes are not readily available (which is usually the case for municipal securities), the pricing service establishes fair market value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers and general market conditions. If it is determined that market prices for a security are unavailable or inappropriate, the Board of Directors/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 June 30, 2003, New Jersey Investment Quality (NQJ), New Jersey Premium Income (NNJ), New Jersey Dividend Advantage (NXJ), New Jersey Dividend Advantage 2 (NUJ), Pennsylvania Investment Quality (NQP), Pennsylvania Premium Income 2 (NPY), Pennsylvania Dividend Advantage (NXM) and Pennsylvania Dividend Advantage 2 (NVY) had an outstanding when-issued purchase commitments of $10,258,860, $6,209,310, $3,239,640, $2,159,760, $2,429,025, $2,331,864, $582,966, and $582,966, respectively. Investment Income Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. 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 applicable state and local 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 June 30, 2003, have been designated Exempt Interest Dividends. 56 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 such 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 Fund is as follows: NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) - -------------------------------------------------------------------------------- Number of shares: Series M 3,200 -- -- -- Series T -- 624 1,920 -- Series W -- 1,440 -- 1,380 Series TH 2,000 1,600 -- -- Series F 1,280 -- -- -- - -------------------------------------------------------------------------------- Total 6,480 3,664 1,920 1,380 ================================================================================ PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - -------------------------------------------------------------------------------- Number of shares: Series M -- 844 -- 1,140 Series T 880 -- 1,000 -- Series W 2,400 -- -- -- Series TH 2,000 2,080 -- -- Series F -- 1,800 -- -- - -------------------------------------------------------------------------------- Total 5,280 4,724 1,000 1,140 ================================================================================ 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 June 30, 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 New Jersey Dividend Advantage 2 (NUJ) and Pennsylvania Dividend Advantage 2 (NVY). New Jersey Dividend Advantage 2's (NUJ) and Pennsylvania Dividend Advantage 2's (NVY) share of Common share offering costs ($135,000 and $111,450, respectively) were recorded as a reduction of the proceeds from the sale of Common shares. Costs incurred by New Jersey Dividend Advantage 2 (NUJ) and Pennsylvania Dividend Advantage 2 (NVY) in connection with their offering of Preferred shares ($479,767 and $411,581, respectively) were recorded as a reduction to paid-in surplus. 57 Notes to FINANCIAL STATEMENTS (continued) 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:
NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT QUALITY (NQJ) PREMIUM INCOME (NNJ) DIVIDEND ADVANTAGE (NXJ) ------------------------ ----------------------- ------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 6/30/03 6/30/02 6/30/03 6/30/02 6/30/03 6/30/02 - -------------------------------------------------------------------------------------------------------- Common shares: Shares sold -- -- -- -- -- -- Shares issued to shareholders due to reinvestment of distributions 37,370 141,510 -- -- -- -- - -------------------------------------------------------------------------------------------------------- 37,370 141,510 -- -- -- -- ======================================================================================================== Preferred shares sold -- -- -- -- -- -- ======================================================================================================== NEW JERSEY PENNSYLVANIA PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NUJ) INVESTMENT QUALITY (NQP) PREMIUM INCOME 2 (NPY) -------------------------- ------------------------ ------------------------- FOR THE PERIOD 3/26/02 (COMMENCEMENT OF OPERATIONS) YEAR ENDED THROUGH YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 6/30/03 6/30/02 6/30/03 6/30/02 6/30/03 6/30/02 - --------------------------------------------------------------------------------------------------------- Common shares: Shares sold -- 4,500,000 -- -- -- -- Shares issued to shareholders due to reinvestment of distributions 526 8 18,725 115,618 5,597 -- - --------------------------------------------------------------------------------------------------------- 526 4,500,008 18,725 115,618 5,597 -- ========================================================================================================= Preferred shares sold -- 1,380 -- -- -- -- =========================================================================================================
58
PENNSYLVANIA PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) DIVIDEND ADVANTAGE 2 (NVY) ------------------------ --------------------------- FOR THE PERIOD 3/25/02 (COMMENCEMENT OF OPERATIONS) YEAR ENDED YEAR ENDED YEAR ENDED THROUGH 6/30/03 6/30/02 6/30/03 6/30/02 - ---------------------------------------------------------------------------------------------------------- Common shares: Shares sold -- -- -- 3,715,000 Shares issued to shareholders due to reinvestment of distributions -- 1,057 1,709 13 - ---------------------------------------------------------------------------------------------------------- -- 1,057 1,709 3,715,013 ========================================================================================================== Preferred shares sold -- -- -- 1,140 ==========================================================================================================
3. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in long-term municipal securities during the fiscal year ended June 30, 2003, were as follows: NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) - -------------------------------------------------------------------------------- Purchases $59,641,989 $38,214,481 $14,781,056 $14,433,798 Sales and maturities 56,551,685 37,450,009 11,768,310 11,847,470 ================================================================================ PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - -------------------------------------------------------------------------------- Purchases $39,970,806 $64,424,788 $ 9,668,549 $11,297,284 Sales and maturities 43,707,376 74,516,537 16,069,723 14,069,969 ================================================================================ 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 June 30, 2003, the cost of investments were as follows: NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) - -------------------------------------------------------------------------------- Cost of investments $448,166,377 $262,554,955 $140,825,794 $100,619,805 ================================================================================ PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - -------------------------------------------------------------------------------- Cost of investments $357,136,594 $323,314,583 $69,669,261 $78,545,240 ================================================================================ 59 Notes to FINANCIAL STATEMENTS (continued) Gross unrealized appreciation and gross unrealized depreciation of investments at June 30, 2003, were as follows:
NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) - ---------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $30,573,696 $23,175,410 $8,936,212 $5,883,414 Depreciation (3,350,732) (791,172) (922,441) (589,915) - ---------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments $27,222,964 $22,384,238 $8,013,771 $5,293,499 ========================================================================================================== PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - ---------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $28,868,204 $28,816,102 $6,014,057 $5,865,302 Depreciation (404,353) (1,315,958) (194,660) -- - ---------------------------------------------------------------------------------------------------------- Net unrealized appreciation on investments $28,463,851 $27,500,144 $5,819,397 $5,865,302 ==========================================================================================================
The tax components of undistributed net investment income and net realized gains at June 30, 2003, were as follows:
NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) - ---------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income $4,388,218 $2,935,001 $1,314,052 $532,021 Undistributed net ordinary income * 41,048 1,718 72 181,959 Undistributed net long-term capital gains 1,228,997 -- -- -- ========================================================================================================== PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - ---------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income $2,277,915 $3,796,469 $752,413 $228,907 Undistributed net ordinary income * 46,683 23,349 6,531 383,089 Undistributed net long-term capital gains -- 1,005,363 487,758 194,764 ==========================================================================================================
* Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. 60 The tax character of distributions paid during the fiscal years ended June 30, 2003 and June 30, 2002, was designated for purposes of the dividends paid deduction as follows:
NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 2003 (NQJ) (NNJ) (NXJ) (NUJ) - --------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $20,112,448 $11,722,514 $6,130,175 $4,484,545 Distributions from net ordinary income * -- 133,874 -- 163,988 Distributions from net long-term capital gains 1,514,649 -- -- -- ========================================================================================================= PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 2003 (NQP) (NPY) (NXM) (NVY) - --------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $16,232,380 $15,704,179 $3,253,465 $3,737,200 Distributions from net ordinary income * -- 93,494 107,098 127,064 Distributions from net long-term capital gains -- -- 269,069 -- ========================================================================================================= NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 2002 (NQJ) (NNJ) (NXJ) (NUJ) - --------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $21,088,032 $11,570,615 $6,441,891 $393,252 Distributions from net ordinary income * -- -- -- -- Distributions from net long-term capital gains -- -- -- -- ========================================================================================================= PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 2002 (NQP) (NPY) (NXM) (NVY) - --------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $16,999,987 $15,403,533 $3,318,131 $329,421 Distributions from net ordinary income * -- -- 50,898 -- 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 June 30, 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: NEW JERSEY NEW JERSEY PENNSYLVANIA PREMIUM DIVIDEND INVESTMENT INCOME ADVANTAGE QUALITY (NNJ) (NXJ) (NQP) - -------------------------------------------------------------------------------- Expiration year: 2009 $366,812 $ -- $ -- 2010 -- 278,092 1,102,880 - -------------------------------------------------------------------------------- Total $366,812 $278,092 $1,102,880 ================================================================================ New Jersey Dividend Advantage (NXJ) has elected to defer $1,030,383 of net realized losses from investments incurred from November 1, 2002 through June 30, 2003 ("post-October losses") in accordance with Federal income tax regulations. These post-October losses are treated as having arisen in the following fiscal year. 61 Notes to FINANCIAL STATEMENTS (continued) 5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Under New Jersey Investment Quality's (NQJ), New Jersey Premium Income's (NNJ), Pennsylvania Investment Quality's (NQP) and Pennsylvania Premium Income 2's (NPY) 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 New Jersey Dividend Advantage's (NXJ), New Jersey Dividend Advantage 2's (NUJ), Pennsylvania Dividend Advantage's (NXM) and Pennsylvania Dividend Advantage 2's (NVY) 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 New Jersey Dividend Advantage's (NXJ) and Pennsylvania Dividend Advantage's (NXM) 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 MARCH 31, MARCH 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 New Jersey Dividend Advantage (NXJ) and Pennsylvania Dividend Advantage (NXM) for any portion of their fees and expenses beyond March 31, 2011. 62 For the first ten years of New Jersey Dividend Advantage 2's (NUJ) and Pennsylvania Dividend Advantage 2's (NVY) 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 MARCH 31, MARCH 31, - -------------------------------------------------------------------------------- 2002* .30% 2008 .25% 2003 .30 2009 .20 2004 .30 2010 .15 2005 .30 2011 .10 2006 .30 2012 .05 2007 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse New Jersey Dividend Advantage 2 (NUJ) and Pennsylvania Dividend Advantage 2 (NVY) for any portion of their fees and expenses beyond March 31, 2012. 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 Directors/Trustees who are affiliated with the Adviser or to their officers, all of whom receive remuneration for their services to the Funds from the Adviser. 6. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid August 1, 2003, to shareholders of record on July 15, 2003, as follows: NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) - -------------------------------------------------------------------------------- Dividend per share $.0790 $.0780 $.0765 $.0765 ================================================================================ PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - -------------------------------------------------------------------------------- Dividend per share $.0760 $.0790 $.0795 $.0765 ================================================================================ 63 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 ==================================================================================================================================== NEW JERSEY INVESTMENT QUALITY (NQJ) Year Ended 6/30: 2003 $15.07 $1.05 $ .61 $(.07) $(.01) $1.58 $(.93) $(.07) $(1.00) 2002 15.03 1.10 (.01) (.13) -- .96 (.92) -- (.92) 2001 14.45 1.19 .58 (.27) -- 1.50 (.92) -- (.92) 2000 15.14 1.20 (.63) (.29) (.01) .27 (.92) (.04) (.96) 1999 15.65 1.14 (.46) (.20) (.01) .47 (.93) (.03) (.96) NEW JERSEY PREMIUM INCOME (NNJ) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 15.60 1.04 .63 (.07) -- 1.60 (.92) -- (.92) 2002 15.27 1.06 .24 (.12) -- 1.18 (.85) -- (.85) 2001 14.28 1.07 .99 (.25) -- 1.81 (.82) -- (.82) 2000 14.92 1.08 (.62) (.25) -- .21 (.85) -- (.85) 1999 15.34 1.08 (.41) (.22) -- .45 (.87) -- (.87) NEW JERSEY DIVIDEND ADVANTAGE (NXJ) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 14.38 1.04 .86 (.07) -- 1.83 (.87) -- (.87) 2002 14.39 1.04 (.07) (.13) -- .84 (.85) -- (.85) 2001(a) 14.33 .14 .22 (.03) -- .33 (.14) -- (.14) NEW JERSEY DIVIDEND ADVANTAGE 2 (NUJ) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 14.46 1.05 .96 (.08) -- 1.93 (.92) (.03) (.95) 2002(b) 14.33 .16 .27 (.01) -- .42 (.15) -- (.15) ==================================================================================================================================== 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** ==================================================================================== NEW JERSEY INVESTMENT QUALITY (NQJ) Year Ended 6/30: 2003 $-- $15.65 $15.9400 11.68% 10.72% 2002 -- 15.07 15.2200 4.19 6.56 2001 -- 15.03 15.5000 17.13 10.62 2000 -- 14.45 14.0625 (4.94) 1.94 1999 (.02) 15.14 15.8125 (2.33) 2.82 NEW JERSEY PREMIUM INCOME (NNJ) - ------------------------------------------------------------------------------------ Year Ended 6/30: 2003 -- 16.28 16.1000 10.18 10.48 2002 -- 15.60 15.5000 7.88 7.91 2001 -- 15.27 15.1900 20.13 12.90 2000 -- 14.28 13.3750 (9.95) 1.64 1999 -- 14.92 15.8125 7.17 2.87 NEW JERSEY DIVIDEND ADVANTAGE (NXJ) - ------------------------------------------------------------------------------------ Year Ended 6/30: 2003 .01 15.35 15.3000 15.09 13.18 2002 -- 14.38 14.1200 (.17) 6.05 2001(a) (.13) 14.39 14.9900 .87 1.42 NEW JERSEY DIVIDEND ADVANTAGE 2 (NUJ) - ------------------------------------------------------------------------------------ Year Ended 6/30: 2003 -- 15.44 15.4000 9.14 13.74 2002(b) (.14) 14.46 15.0400 1.29 1.98 ==================================================================================== 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 ================================================================================================================ NEW JERSEY INVESTMENT QUALITY (NQJ) Year Ended 6/30: 2003 $316,970 1.22% 6.80% 1.22% 6.81% 12% 2002 304,808 1.25 7.35 1.23 7.36 22 2001 301,785 1.24 7.97 1.23 7.99 16 2000 288,810 1.22 8.27 1.21 8.28 11 1999 301,329 1.13 7.27 1.13 7.27 8 NEW JERSEY PREMIUM INCOME (NNJ) - ---------------------------------------------------------------------------------------------------------------- Year Ended 6/30: 2003 195,568 1.20 6.48 1.20 6.48 13 2002 187,393 1.22 6.85 1.22 6.86 14 2001 183,451 1.25 7.14 1.24 7.15 6 2000 171,496 1.24 7.61 1.23 7.63 10 1999 178,704 1.24 7.00 1.24 7.00 10 NEW JERSEY DIVIDEND ADVANTAGE (NXJ) - ---------------------------------------------------------------------------------------------------------------- Year Ended 6/30: 2003 100,502 1.19 6.56 .74 7.01 8 2002 94,130 1.24 6.76 .75 7.25 7 2001(a) 94,187 1.05* 3.65* .66* 4.03* 1 NEW JERSEY DIVIDEND ADVANTAGE 2 (NUJ) - ---------------------------------------------------------------------------------------------------------------- Year Ended 6/30: 2003 69,616 1.23 6.53 .76 7.00 12 2002(b) 65,153 1.07* 3.86* .67* 4.25* -- ================================================================================================================ Preferred Shares at End of Period --------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ================================================================== NEW JERSEY INVESTMENT QUALITY (NQJ) Year Ended 6/30: 2003 $162,000 $25,000 $73,915 2002 162,000 25,000 72,038 2001 162,000 25,000 71,572 2000 162,000 25,000 69,569 1999 162,000 25,000 71,501 NEW JERSEY PREMIUM INCOME (NNJ) - ------------------------------------------------------------------ Year Ended 6/30: 2003 91,600 25,000 78,376 2002 91,600 25,000 76,144 2001 91,600 25,000 75,068 2000 91,600 25,000 71,806 1999 91,600 25,000 73,773 NEW JERSEY DIVIDEND ADVANTAGE (NXJ) - ------------------------------------------------------------------ Year Ended 6/30: 2003 48,000 25,000 77,345 2002 48,000 25,000 74,026 2001(a) 48,000 25,000 74,055 NEW JERSEY DIVIDEND ADVANTAGE 2 (NUJ) - ------------------------------------------------------------------ Year Ended 6/30: 2003 34,500 25,000 75,446 2002(b) 34,500 25,000 72,213 ================================================================== * 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 March 28, 2001 (commencement of operations) through June 30, 2001. (b) For the period March 26, 2002 (commencement of operations) through June 30, 2002. See accompanying notes to financial statements. 64-65 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 ==================================================================================================================================== PENNSYLVANIA INVESTMENT QUALITY (NQP) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 $14.70 $1.02 $1.19 $(.09) $-- $2.12 $ (.91) $-- $ (.91) 2002 14.57 1.09 .09 (.14) -- 1.04 (.91) -- (.91) 2001 14.39 1.23 .16 (.30) -- 1.09 (.91) -- (.91) 2000 15.33 1.25 (.83) (.29) (.02) .11 (.98) (.07) (1.05) 1999 15.94 1.22 (.59) (.21) -- .42 (1.01) -- (1.01) PENNSYLVANIA PREMIUM INCOME 2 (NPY) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 14.83 1.04 .79 (.08) -- 1.75 (.93) -- (.93) 2002 14.44 1.07 .30 (.12) -- 1.25 (.86) -- (.86) 2001 13.48 1.07 .95 (.27) -- 1.75 (.79) -- (.79) 2000 14.30 1.06 (.78) (.27) -- .01 (.81) (.02) (.83) 1999 14.86 1.04 (.61) (.23) -- .20 (.76) -- (.76) PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 14.96 1.08 1.29 (.07) (.01) 2.29 (.92) (.10) (1.02) 2002 14.48 1.12 .37 (.13) -- 1.36 (.87) (.01) (.88) 2001(a) 14.33 .14 .35 (.03) -- .46 (.15) -- (.15) PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NVY) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 14.64 1.00 1.30 (.09) -- 2.21 (.92) (.03) (.95) 2002(b) 14.33 .15 .46 (.01) -- .60 (.15) -- (.15) ==================================================================================================================================== 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** ======================================================================================= PENNSYLVANIA INVESTMENT QUALITY (NQP) - --------------------------------------------------------------------------------------- Year Ended 6/30: 2003 $-- $15.91 $16.0100 11.98% 14.79% 2002 -- 14.70 15.1800 6.57 7.34 2001 -- 14.57 15.1300 11.99 7.75 2000 -- 14.39 14.3750 (7.39) .94 1999 (.02) 15.33 16.6875 2.56 2.50 PENNSYLVANIA PREMIUM INCOME 2 (NPY) - --------------------------------------------------------------------------------------- Year Ended 6/30: 2003 -- 15.65 16.0000 15.09 12.09 2002 -- 14.83 14.7900 13.25 8.88 2001 -- 14.44 13.8700 19.04 13.25 2000 -- 13.48 12.3750 (3.87) .21 1999 -- 14.30 13.7500 7.98 1.27 PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) - --------------------------------------------------------------------------------------- Year Ended 6/30: 2003 .02 16.25 16.4600 18.13 15.95 2002 -- 14.96 14.8900 9.10 9.67 2001(a) (.16) 14.48 14.4900 (2.45) 2.06 PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NVY) - --------------------------------------------------------------------------------------- Year Ended 6/30: 2003 -- 15.90 15.8400 14.38 15.48 2002(b) (.14) 14.64 14.7400 (.73) 3.24 ======================================================================================= 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 ================================================================================================================== PENNSYLVANIA INVESTMENT QUALITY (NQP) - ------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 $258,924 1.27% 6.59% 1.26% 6.60% 11% 2002 238,926 1.31 7.42 1.30 7.44 34 2001 235,188 1.29 8.40 1.27 8.41 17 2000 231,525 1.26 8.57 1.25 8.59 8 1999 245,468 1.16 7.61 1.16 7.61 16 PENNSYLVANIA PREMIUM INCOME 2 (NPY) - ------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 246,604 1.20 6.76 1.19 6.77 19 2002 233,536 1.24 7.28 1.23 7.29 7 2001 227,377 1.25 7.55 1.24 7.57 10 2000 212,325 1.26 7.88 1.25 7.89 14 1999 225,235 1.24 6.93 1.24 6.93 9 PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) - ------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 53,591 1.23 6.44 .79 6.88 13 2002 49,306 1.29 7.12 .82 7.59 48 2001(a) 47,723 1.26* 3.51* .87* 3.90* -- PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NVY) - ------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2003 59,202 1.25 6.07 .78 6.53 13 2002(b) 54,481 1.09* 3.77* .70* 4.15* 8 ================================================================================================================== Preferred Shares at End of Period --------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ==================================================================== PENNSYLVANIA INVESTMENT QUALITY (NQP) - -------------------------------------------------------------------- Year Ended 6/30: 2003 $132,000 $25,000 $74,039 2002 132,000 25,000 70,251 2001 132,000 25,000 69,543 2000 132,000 25,000 68,849 1999 132,000 25,000 71,490 PENNSYLVANIA PREMIUM INCOME 2 (NPY) - -------------------------------------------------------------------- Year Ended 6/30: 2003 118,100 25,000 77,202 2002 118,100 25,000 74,436 2001 118,100 25,000 73,132 2000 118,100 25,000 69,946 1999 118,100 25,000 72,679 PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) - -------------------------------------------------------------------- Year Ended 6/30: 2003 25,000 25,000 78,591 2002 25,000 25,000 74,306 2001(a) 25,000 25,000 72,723 PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NVY) - -------------------------------------------------------------------- Year Ended 6/30: 2003 28,500 25,000 76,932 2002(b) 28,500 25,000 72,790 ====================================================================
* 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 March 29, 2001 (commencement of operations) through June 30, 2001. (b) For the period March 25, 2002 (commencement of operations) through June 30, 2002. See accompanying notes to financial statements. 66-67 spread Directors/Trustees AND OFFICERS The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board of Directors/ Trustees of the Funds. The number of directors/trustees of the Funds is currently set at eight. None of the directors/trustees who are not "interested" persons of the Funds has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the directors/trustees and officers of the Funds, 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 COMPLEX YEAR FIRST PRINCIPAL OCCUPATION(S) OVERSEEN NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS BY DIRECTOR/ AND ADDRESS WITH THE FUND APPOINTED(2) DURING PAST 5 YEARS TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ DIRECTOR/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 Director/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). DIRECTORS/TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ William E. Bennett Director/Trustee 2001 Private Investor; previously, President and Chief 140 10/16/46 Executive Officer, Draper & Kramer, Inc., a private 333 W. Wacker Drive company that handles mortgage banking, real estate Chicago, IL 60606 development, pension advisory and real estate management (1995-1998). Prior thereto, Executive Vice President and Chief Credit Officer of First Chicago Corporation and its principal subsidiary, The First National Bank of Chicago. - ------------------------------------------------------------------------------------------------------------------------------------ Robert P. Bremner Director/Trustee 1997 Private Investor and Management Consultant. 134 8/22/40 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Lawrence H. Brown Director/Trustee 1993 Retired (since 1989) as Senior Vice President of The 134 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 Director/Trustee 1994 Retired, formerly, Executive Director (since 1998) 134 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 Director/Trustee 1991 Adjunct Professor of Business and Economics, 134 4/3/33 University of Dubuque, Iowa; formerly (1991-2000) 333 W. Wacker Drive Adjunct Professor, Lake Forest Graduate School of Chicago, IL 60606 Management, Lake Forest, 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 Director/Trustee 1997 Senior Partner and Chief Operating Officer, 134 9/24/44 Miller-Valentine Group, Vice President, 333 W. Wacker Drive Miller-Valentine Realty, a development and contract Chicago, IL 60606 company; Chair, 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 Director/Trustee 1997 Executive Director, Gaylord and Dorothy Donnelley 134 12/29/47 Foundation (since 1994); prior thereto, Executive 333 W. Wacker Drive Director, Great Lakes Protection Fund (from 1990 Chicago, IL 60606 to 1994). 68 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, Chicago, IL 60606 LLC; 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 122 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 140 11/28/67 and Treasurer 1999), prior thereto, Assistant Vice President (since 333 W. Wacker Drive 1997); Vice President and Treasurer of Nuveen Chicago, IL 60606 Investments, Inc. (since 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 140 9/24/64 and Secretary Counsel (since 1998); formerly, Assistant Vice 333 W. Wacker Drive President (since 1998) of Nuveen Investments, LLC; Chicago, IL 60606 Vice President (since 2002) and Assistant Secretary (since 1998), formerly Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. 69 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 140 5/31/54 and Controller (since 1998) of Nuveen Investments, LLC and Vice 333 W. Wacker Drive President and Funds Controller (since 1998) of Nuveen Chicago, IL 60606 Investments, Inc.; Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ J. Thomas Futrell Vice President 1988 Vice President of Nuveen Advisory Corp.; 122 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. 122 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. 122 8/21/57 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 140 3/22/63 LLC, previously Assistant Vice President (since 1999); 333 W. Wacker Drive prior thereto, Associate of Nuveen Investments, LLC; Chicago, IL 60606 Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant 140 8/27/61 Vice 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 140 7/27/51 and Assistant General Counsel of Nuveen Investments, LLC; 333 W. Wacker Drive Secretary Vice President and Assistant Secretary of Nuveen Chicago, IL 60606 Advisory Corp. and Nuveen 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). 70 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 122 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 122 7/31/51 Institutional Advisory Corp.; Chartered Financial 333 W. Wacker Drive Analyst. 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 the Adviser. (2) Directors/Trustees serve a one-year term until his/her successor is elected. The year first elected or appointed represents the year in which the Directors/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. 71 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. 72 Fund INFORMATION BOARD OF DIRECTORS/TRUSTEES William E. Bennett 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 Chapman andCutler LLP Chicago, IL 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 June 30, 2003. Any future repurchases will be reported to shareholders in the next annual or semiannual report. 73 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-B-0603D 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 In the rare event that a municipal issuer held by the Fund were to issue a proxy or that the Fund were to receive a proxy issued by a cash management security, Nuveen Advisory Corp. (the "Adviser") would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the Fund's Board of Directors or Trustees or its representative. A member of the Adviser's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 206(4)-6, reports were filed with the SEC on Form N-PX, and the results provided to the Board of Directors or Trustees and made available to shareholders as required by applicable rules. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of these controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 10. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) 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. (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT Attached hereto. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certification required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of he Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. 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 New Jersey Dividend Advantage Municipal Fund 2 ----------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ---------------------------------------------- Jessica R. Droeger Vice President and Secretary Date: September 9, 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: September 9, 2003 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (Principal Financial Officer) Date: September 9, 2003 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 3 file002.txt CERTIFICATIONS N-CSR FORM OF CERTIFICATION I, Gifford R. Zimmerman, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen New Jersey Dividend Advantage Municipal Fund 2; 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; 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-3(c) under the Investment Company Act) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 9, 2003 /s/ Gifford R. Zimmerman ------------------------- -------------------------------- Chief Administrative Officer (principal executive officer) N-CSR FORM OF CERTIFICATION I, Stephen D. Foy, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen New Jersey Dividend Advantage Municipal Fund 2; 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; 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-3(c) under the Investment Company Act) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, 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 and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officers and I have disclosed 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 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: September 9, 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; provided by the Chief Executive Officer based on such officer's knowledge and belief. I, Gifford R. Zimmerman, Chief Administrative Officer of Nuveen New Jersey Dividend Advantage Municipal Fund 2 (the "Fund"), certify that, to the best of my knowledge and belief: 1. The Form N-CSR of the Fund for the period ended June 30, 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. Date: September 9, 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; provided by the Chief Financial Officer based on such officer's knowledge and belief. I, Stephen D. Foy, Vice President and Controller of Nuveen New Jersey Dividend Advantage Municipal Fund 2 (the "Fund"), certify that, to the best of my knowledge and belief: 1. The Form N-CSR of the Fund for the period ended June 30, 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. Date: September 9, 2003 ----------------------- /s/ Stephen D. Foy --------------------- Vice President, Controller (Chief Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----