-----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, IBbExsYgGwZ1LMXoonRdHBs07iz/5xNpzco4u+zi4aLcosVUbkoSLXsSuLnMUpSM I8hSKZfHd8kHOaOxoBy81g== 0000891804-05-002675.txt : 20050907 0000891804-05-002675.hdr.sgml : 20050907 20050907130230 ACCESSION NUMBER: 0000891804-05-002675 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20050630 FILED AS OF DATE: 20050907 DATE AS OF CHANGE: 20050907 EFFECTIVENESS DATE: 20050907 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: 051072276 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 ADVANTAGE 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 ------------------ Date of reporting period: June 30, 2005 ------------------ 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. ANNUAL REPORT June 30, 2005 Nuveen Investments Municipal Closed-End Exchange-Traded Funds 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 NUVEEN PENNSYLVANIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NVY Photo of: Man, woman and child at the beach. Photo of: A child. DEPENDABLE, TAX-FREE INCOME BECAUSE IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) Logo: NUVEEN Investments Photo of: Woman Photo of: Man and child Photo of: Woman NOW YOU CAN RECEIVE YOUR NUVEEN FUND REPORTS FASTER. NO MORE WAITING. SIGN UP TODAY TO RECEIVE NUVEEN FUND INFORMATION BY E-MAIL. It only takes a minute to sign up for E-Reports. Once enrolled, you'll receive an e-mail as soon as your Nuveen Investments Fund information is ready -- no more waiting for delivery by regular mail. Just click on the link within the e-mail to see the report, and save it on your computer if you wish. ------------------ DELIVERY DIRECT TO YOUR E-MAIL INBOX ------------------ IT'S FAST, EASY & FREE: WWW.INVESTORDELIVERY.COM if you get your Nuveen Fund dividends and statements from your financial advisor or brokerage account. OR WWW.NUVEEN.COM/ACCOUNTACCESS if you get your Nuveen Fund dividends and statements directly from Nuveen. (Be sure to have the address sheet that accompanied this report handy. You'll need it to complete the enrollment process.) Logo: NUVEEN Investments Photo of: Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board Chairman's LETTER TO SHAREHOLDERS Once again, I am pleased to report that over the 12-month period covered by this report your Fund continued to provide you with monthly tax-free income and an attractive total return. For more details about the management strategy and performance of your Fund, please see the Portfolio Manager's Comments and Performance Overview sections of this report. As I noted in my last letter to you, many market observers are wondering whether longer-term interest rates will soon begin to rise substantially, mirroring the rise that has taken place over the past year in shorter-term rates. If longer-term rates do begin to rise significantly, some have suggested that this would be a signal to begin adjusting your holdings of fixed-income investments. "IN FACT, A WELL-DIVERSIFIED PORTFOLIO MAY ACTUALLY HELP TO REDUCE YOUR OVERALL INVESTMENT RISK OVER THE LONG TERM." Nobody knows what the market will do in the future. But from our experience, we do know that a well-balanced portfolio, structured and carefully monitored with the help of a trusted investment professional, can be an important component in helping you achieve your long-term financial goals. In fact, a well-diversified portfolio may actually help to reduce your overall investment risk over the long term. That is one reason why we believe that a municipal bond investment like your Nuveen Fund can be an important building block in a comprehensive investment program designed to perform well in a variety of market conditions. As in past reports, I urge you to consider receiving future Fund reports and other Fund information by e-mail and the Internet. Not only will you be able to receive the information faster, but this also may help lower your Fund's expenses. Sign up is quick and easy - see the inside front cover of this report for instructions. Earlier in 2005, The St. Paul Travelers Companies, Inc., which owned 79% of Nuveen Investments, Inc. (the parent of your Fund's investment adviser), sold a substantial portion of its stake in Nuveen. More recently, St. Paul sold the balance of its shares in Nuveen to us or to others. Please be assured that these transactions only affect Nuveen's corporate structure, and they do not have any impact on the investment objectives or management of your Fund. At Nuveen Investments, our mission continues to be to assist you and your financial advisor by offering investment services and products that can help you to secure your financial objectives. We are grateful that you have chosen us as a partner as you pursue your financial goals, and 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, 2005 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 the economic and municipal market environments, key investment strategies and the performance of these Nuveen Funds. Paul, who has 14 years of investment experience, including 8 years with Nuveen, has managed the New Jersey and Pennsylvania Funds since 2003. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE 12-MONTH PERIOD ENDED JUNE 30, 2005? One factor affecting nearly all fixed-income investments over this reporting period was the general flattening of the yield curve. Between June 30, 2004, and June 30, 2005, the Federal Reserve implemented nine quarter-point increases in the fed funds rate, raising this short-term rate benchmark to 3.25% from 1.00% (On August 9, 2005, after the close of this reporting period, the fed funds rate was raised to 3.50%.) These fed funds rate increases led to increases in many shorter-term municipal market rates over the 12-month reporting period. At the same time, longer-term yields declined. The yield on the benchmark 10-year U.S. Treasury note stood at 3.92% on June 30, 2005, compared with 4.59% one year earlier. Longer-term yields in the municipal market followed a similar pattern. The yield of the Bond Buyer 25 Revenue Bond Index, a widely-followed measure of longer-term municipal market rates, declined by approximately 60 basis points during this 12-month reporting period. This rise in shorter-term rates and decline in longer-term rates generally helped the performance of bonds with longer effective maturities and tended to hurt the performance of securities with shorter maturities or short call dates. Despite the increases in shorter-term rates and an upsurge in energy costs, the economic expansion continued through the reporting period. After expanding at an annualized rate of 4.0% in the third quarter of 2004, the U.S. Gross Domestic Product (GDP) grew by an annualized rate of 3.8% in the fourth quarter of 2004 and 3.8% again in the first three months of 2005. (On July 29, 2005, after the close of this reporting period, the Commerce Department said the GDP grew at an annualized rate of 3.4% in the second quarter of the year.) 4 The year-over-year increase in the Consumer Price Index (CPI) as of June 30, 2005, was a relatively mild 2.5%. The national unemployment rate dropped to 5.0% in June 2005, its lowest level since September 2001. Over the 12-month period, municipal new issue supply nationwide remained strong, as $377.1 billion in new securities came to market. The flattening yield curve increased the attractiveness of refundings, which were 57% higher during January-June 2005 than in the same six-month period of 2004. HOW ABOUT ECONOMIC AND MARKET CONDITIONS IN NEW JERSEY AND PENNSYLVANIA? New Jersey continued to benefit from its strong and diverse economic base, led by the pharmaceutical, biotech and finance sectors. Over the 12-month period, the state's economy outperformed the nation as a whole, adding jobs in the financial services, business services and healthcare sectors. In June 2005, the unemployment rate in New Jersey was 4.0%, down from 4.8% in June 2004. Despite structural imbalances and legal challenges, preliminary numbers indicated that New Jersey ended fiscal 2005, with a surplus of $1.2 billion to $1.5 billion, due largely to tax revenues that exceeded expectations. As of June 30, 2005, New Jersey's general obligation debt carried Aa3/AA- ratings with stable outlooks from Moody's and Standard & Poor's, respectively, reflecting downgrades from Aa2 and AA, respectively in July 2004. (On July 19, 2005, after the close of this reporting period, S&P returned New Jersey to an AA rating, citing the fiscal 2006 budget that "makes significant strides toward structural balance.") During the 12-month period ended June 30, 2005, the issuers in the state offered $18.9 billion of new municipal debt, an increase of 47% from the previous 12-month period, making New Jersey the fourth largest state issuer in the country. Over this period, Pennsylvania's mature economy exhibited modest but steady recovery, led by the education, healthcare, manufacturing and retail trade sectors. Business services and construction also were strong, although the old-line manufacturing sector, 5 while somewhat improved, continued to lag. Despite the healthier economy, steel production, which is important in western Pennsylvania, remained flat. In June 2005, Pennsylvania's unemployment rate was 5.0%, down from 5.5% in June 2004. As of June 30, 2005, Moody's and S&P rated Pennsylvania's general obligation debt at Aa2/AA, respectively, with stable outlooks. During this 12-month reporting period, municipal issuance in Pennsylvania jumped $16.9 billion, an increase of 24% from the previous 12-month period, ranking the commonwealth as the sixth largest issuer in the nation. WHAT KEY STRATEGIES WERE USED TO MANAGE THE NEW JERSEY AND PENNSYLVANIA FUNDS DURING THE 12 MONTHS ENDED JUNE 30, 2005? With many market participants anticipating higher interest rates, our focus in the New Jersey and Pennsylvania Funds throughout this period centered on finding bonds that we believed would add immediate value to the Funds' portfolios and that, in our judgment, also had the potential to perform well under a variety of future market scenarios, regardless of economic or interest rate trends. In general, our purchase activity in these Funds emphasized bonds in the intermediate part of the yield curve - that is, bonds that mature in 10 to 20 years. In our opinion, this part of the curve generally offered more attractive opportunities and the best values during this period. For most of the Funds, these purchases resulted in relatively small changes in their overall yield curve positioning. In NNJ and NPY, which were more heavily weighted in bonds with shorter effective maturities than the other Funds, we sold some of these short maturity bonds and reinvested the proceeds in longer-term bonds (i.e., 20 years or longer) to bring the overall yield curve exposures of these two Funds more closely in line with our desired positioning. Conversely, NQP had a relatively heavy exposure to the longest part of the curve, and we sold some of the longer maturity bonds from this Fund's portfolio and replaced them with intermediate maturity securities. 6 For all of the Funds in this report, we continued to place an emphasis on purchasing premium bonds - those with prices above par and coupons above current market rates. These bonds have been in great demand recently, since historically they have held their value better than current coupon bonds when long-term interest rates rise. Both NUJ and NXM had several concentrated positions in relatively lower-rated holdings, and we worked during this period to reduce the overall risk of these Funds by trimming these concentrated positions and adding more diversification by purchasing other lower-rated securities. On the other hand, NNJ and NVY began the period with relatively small positions in bonds rated BBB or lower, and we watched the market for suitable opportunities to add lower-rated bonds to their portfolios. These efforts in the Pennsylvania Funds were aided by an increased number of smaller lower-rated and non-rated offerings in the commonwealth. As a result, for several of the Funds we were able to purchase B+ rated bonds issued by the Pennsylvania Economic Development Financing Authority (EDFA) for Reliant Energy, non-rated bonds issued by Allegheny County for the Pittsburgh Mills shopping mall, and non-rated bonds issued by Lebanon County for Pleasant View Retirement Community. NXJ also had a very large concentrated position in A rated bonds issued for Robert Wood Johnson University Hospital, which we cut by more than 60% over this period. Although this holding had performed well for the Fund, we believed it was prudent to trim our exposure and increase diversification within the Fund by redeploying some of these assets among other lower-rated credits. As discussed in our last shareholder report, in late 2004 we began using forward interest rate swaps, a type of derivative financial instrument, in an attempt to hedge some of the interest rate risk in NXJ, NUJ, NXM and NVY. It is important to note that the hedges were not used in an attempt to profit from correctly predicting the timing and direction of interest rate movements. Instead, our sole objective was to reduce the durations of these four Funds (and therefore their price sensitivity to interest rate changes) without having a negative impact on the Funds' income streams or common share dividends over the short term. The gain or loss from each Fund's hedging activity 7 was reflected as an addition or subtraction to the Fund's net asset value (NAV) as the market value of each hedge fluctuated. The hedges were effective in achieving their intended goal of helping to reduce the NAV volatility of these Funds. However, they did have negative impacts on each Fund's total return during this period because declining long-term interest rates caused the value of the hedges to decline as the value of each Fund's portfolio rose. All of the hedges for these Funds were removed before the end of the reporting period because their interest rate risk exposures and durations had achieved our desired levels. HOW DID THE FUNDS PERFORM? Individual results for these Funds, as well as for comparative indexes and averages, are presented in the accompanying table. TOTAL RETURNS ON NET ASSET VALUE For periods ended 6/30/05 1-YEAR 5-YEAR 10-YEAR - -------------------------------------------------------------------------------- New Jersey Funds - -------------------------------------------------------------------------------- NQJ 13.81% 8.50% 7.03% NNJ 12.31% 8.80% 7.58% NXJ 13.80% NA NA NUJ 15.00% NA NA - -------------------------------------------------------------------------------- Lipper New Jersey Municipal Debt Funds Average2 14.41% 9.44% 7.15% - -------------------------------------------------------------------------------- Pennsylvania Funds - -------------------------------------------------------------------------------- NQP 12.67% 8.30% 6.57% NPY 11.80% 9.30% 7.67% NXM 13.02% NA NA NVY 13.37% NA NA - -------------------------------------------------------------------------------- Lipper Pennsylvania Municipal Debt Funds Average2 12.24% 9.08% 7.30% - -------------------------------------------------------------------------------- Lehman Brothers Municipal Bond Index1 8.24% 6.88% 6.38% - -------------------------------------------------------------------------------- Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares. For additional information, see the individual Performance Overview for your Fund in this report. 1 The Lehman Brothers Municipal Bond Index is 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 Lipper New Jersey Municipal Debt Funds category average is calculated using the returns of all closed-end exchange-traded funds in this category for each period as follows: 1 year, 13 funds; 5 years, 8 funds; and 10 years, 6 funds. The Lipper Pennsylvania Municipal Debt Funds category average is calculated using the returns of all closed-end exchange-traded funds for each period as follows: 1 year, 12 funds; 5 years, 9 funds; and 10 years, 7 funds. Fund and Lipper returns assume reinvestment of dividends. 8 For the 12 months ended June 30, 2005, the total returns on NAV for all eight of these Funds outperformed the return on the Lehman Brothers Municipal Bond Index. NUJ also outperformed the average return for the Lipper New Jersey peer group, and NQP, NXM and NVY beat their Lipper Pennsylvania group average. NQJ, NNJ, NXJ and NPY trailed their respective Lipper group averages. One of the primary factors benefiting the 12-month performance of these Funds relative to that of the unleveraged Lehman Brothers index was the Funds' use of financial leverage. While leveraging can add volatility to the Funds' NAVs and share prices, especially during periods when interest rates rise, this strategy can also provide opportunities for additional income and total returns for common shareholders when short-term interest rates remain relatively low and long-term rates fall or remain fairly constant. As noted earlier, yields fell - and therefore prices rose - for many longer-term bonds over the course of this reporting period. Quite often, these longer-term bonds had longer durations, which meant they had relatively more price volatility as interest rates changed. More exposure to bonds with longer durations helped the performances of NXJ, NUJ, NXM and NVY. To a lesser extent, this also helped the return of NQJ over this period. While we made strides in increasing the average durations of NNJ and NPY, their relatively greater exposure to bonds with shorter effective maturities or short embedded call option provisions over this period hampered their performances when compared with the other Funds in this report. All of the Funds benefited from their allocations of lower quality bonds during this period, since bonds rated BBB and lower generally outperformed higher credit quality sectors as the economy improved and demand for these bonds increased. Among the sectors making positive contributions to the Funds' 12-month returns were several that tended to have a greater number of lower-quality bonds, such as healthcare (including hospitals), industrial development and resource recovery. Bonds backed by the 1998 master tobacco settlement agreement also produced solid performance during this period, as the litigation environment improved and supply/demand dynamics drove tobacco bond prices higher. As 9 of June 30, 2005, the New Jersey Funds held between 3% and 4% of their portfolios in unenhanced and uninsured New Jersey tobacco bonds. (The Pennsylvania Funds did not hold any tobacco credits.) In addition to the tobacco bonds, the New Jersey Funds benefited from their holdings of BBB rated cigarette tax bonds issued by the state and backed by excise taxes on cigarettes purchased in New Jersey. NXJ and NUJ also held small positions in B rated bonds issued by the New Jersey Economic Development Authority for Continental Airlines, which had double-digit returns during this 12-month period. As mentioned earlier, refinancings rose during this period, and the performances of these Funds were boosted by several advance refundings of their holdings, which resulted in price appreciation as well as enhanced credit quality. In New Jersey, major refunding transactions involved bonds issued by the New Jersey Turnpike Authority, the New Jersey Transportation Trust Fund Authority, and the Delaware River and Bay Authority. Each of the New Jersey Funds held one or more of these pre-refunded issues. In Pennsylvania, in addition to large refundings by the commonwealth (Pennsylvania general obligation debt) and by Allegheny County, a number of smaller issuers engaged in pre-refunding transactions that benefited the Pennsylvania Funds to varying degrees. At the same time, however, the Funds' holdings of older pre-refunded bonds tended to underperform the general municipal market, due primarily to the shorter effective maturities of these bonds. This was especially true in NPY. Housing was another sector that lagged the market during this period, largely as the result of the increased risk of prepayments and bond calls in the current interest rate environment. HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF JUNE 30, 2005? Given the current geopolitical and economic environment, we continued to believe that maintaining strong credit quality was an important requirement. As of June 30, 2005, all eight of these Funds continued to offer excellent credit quality, with allocations of bonds 10 rated AAA/U.S. Guaranteed and AA ranging from 68% in NUJ to 73% in NXM, 78% in NXJ, 82% in NQJ and NVY, 83% in NPY, 84% in NNJ and 87% in NQP. As of June 30, 2005, potential call exposure for the period July 2005 through the end of 2006 ranged from 1% in NVY to 3% in NNJ and NXJ, 4% in NUJ, NQP and NXM, 6% in NQJ and 8% in NPY. The number of actual bond calls in all of these Funds depends largely on future market interest rates. 11 Dividend and Share Price INFORMATION All eight of these Funds use leverage to provide opportunities for additional income for common shareholders. The extent of this benefit is tied in part to the short-term rates the Funds pay their MuniPreferred(R) shareholders. During periods of low short-term rates, leveraged Funds generally pay lower dividends to MuniPreferred shareholders, which can leave more earnings to support common share dividends. However, when short-term interest rates rise, as they did during this reporting period, the Funds' borrowing costs also rise. While leveraging can still provide benefits for common shareholders as short-term rates rise, the extent of the benefit may be less. Over the 12-month period ended June 30, 2005, NXM experienced one dividend cut, while the dividends of NQJ, NNJ, NXJ, NQP and NPY were cut twice and NVY had three reductions in its dividend. The dividend of NUJ remained unchanged during this period. In addition, due to normal portfolio management activity, common shareholders of the following Funds received capital gains and/or net ordinary income distributions at the end of December 2004 as follows: LONG-TERM CAPITAL GAINS ORDINARY INCOME (PER SHARE) (PER SHARE) - -------------------------------------------------------------------------------- NQJ $0.1097 -- - -------------------------------------------------------------------------------- NNJ $0.2176 $0.0003 - -------------------------------------------------------------------------------- NUJ $0.0526 -- - -------------------------------------------------------------------------------- NQP $0.1412 $0.0010 - -------------------------------------------------------------------------------- NPY $0.1791 $0.0055 - -------------------------------------------------------------------------------- NXM $0.3631 $0.0060 - -------------------------------------------------------------------------------- NVY $0.0429 -- - -------------------------------------------------------------------------------- The relatively large distributions from several of these Funds represented important parts of the Funds' total returns for this period. Generally, these distributions were generated by bond calls or by sales of appreciated securities that occurred in the course of normal portfolio management activities. The proceeds of these calls or sales then were reinvested in bonds paying lower, current interest rates. On balance, this had a slight negative impact on these Funds' earning power per share and was a minor factor in the dividend reductions noted above. All of the Funds in this report seek to pay stable dividends at rates that reflect each Fund's past results and projected future performance. During certain periods, each Fund 12 may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it holds the excess in reserve as undistributed net investment income (UNII) as part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of its earnings, the excess constitutes negative UNII that is likewise reflected in the Fund's NAV. Each Fund will, over time, pay all of its net investment income as dividends to shareholders. As of June 30, 2005, NQJ, NNJ, NXJ, NUJ, NPY and NXM all had positive UNII balances for both financial statement and income tax purposes. NQP and NVY had negative UNII balances for financial statement purposes and positive UNII balances for income tax purposes. At the end of the reporting period, the Funds' shares were trading at premiums or discounts to their NAVs as shown in the accompanying chart: 6/30/05 12-MONTH AVERAGE PREMIUM/DISCOUNT DISCOUNT - -------------------------------------------------------------------------------- NQJ -2.31% -0.53% NNJ -1.81% -2.79% NXJ -1.60% -2.44% NUJ +0.70% -2.71% NQP -3.62% -4.05% NPY -1.04% -0.29% NXM +1.32% -0.92% NVY -6.23% -5.30% - -------------------------------------------------------------------------------- 13 Nuveen New Jersey Investment Quality Municipal Fund, Inc. NQJ Performance OVERVIEW As of June 30, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 77% AA 5% A 4% BBB 11% BB or Lower 2% NR 1% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.08 Aug 0.08 Sep 0.08 Oct 0.08 Nov 0.08 Dec 0.08 Jan 0.08 Feb 0.08 Mar 0.077 Apr 0.077 May 0.077 Jun 0.073 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/04 14.31 14.45 14.62 14.64 14.65 14.74 14.98 14.84 14.85 14.8 14.91 15.04 15.04 14.91 14.92 14.98 14.76 14.71 14.73 14.68 14.75 14.75 14.74 14.77 14.9 14.9 14.96 15.12 15.03 14.92 14.84 14.87 14.97 15 15.01 15.06 15.15 15.07 15.08 15.25 15.24 15.42 15.32 15.45 15.49 15.38 15.4 15.39 15.38 15.37 15.43 15.44 15.4 15.43 15.55 15.56 15.6 15.73 15.81 15.8 15.85 15.84 15.8 15.55 15.5 15.41 15.4 15.36 15.46 15.39 15.38 15.6 15.47 15.41 15.45 15.4 15.33 15.32 15.38 15.47 15.41 15.41 15.47 15.45 15.47 15.46 15.46 15.48 15.48 15.43 15.27 15.15 15.27 15.08 15.24 15.39 15.32 15.33 15.27 15.3 15.38 15.3 15.26 15.29 15.28 15.18 15.21 15.2 15.2 15.36 15.35 15.18 15.35 15.24 15.26 15.16 15.03 15.13 15.15 15.26 15.26 15.08 15.09 15.05 15.03 15 15.03 15.17 15.26 15.37 15.33 15.46 15.44 15.52 15.6 15.52 15.51 15.4 15.37 15.46 15.45 15.51 15.38 15.44 15.4 15.4 15.37 15.66 15.73 15.95 15.99 15.78 15.83 15.8 15.95 15.9 15.93 15.86 15.83 15.7 15.63 15.51 15.43 15.6 15.64 15.5 15.63 15.5 15.55 15.6 15.64 15.72 15.75 15.75 15.49 15.39 15.29 15.32 15.1 15.13 15.04 15.05 14.97 14.92 14.64 14.69 14.58 14.54 14.69 14.75 14.82 14.77 14.72 14.75 14.84 14.88 14.9 14.92 14.8 14.82 14.75 14.92 14.88 14.79 14.73 14.81 14.8 14.85 14.98 15.06 14.96 14.96 14.96 14.98 15.08 15.08 15 14.98 15.01 14.91 14.95 15 15.09 15.05 15.09 15.11 15.05 15.06 15.08 15.07 15.07 15.15 15.4 15.38 15.4 15.35 15.27 15.25 15.25 15.21 15.17 15.01 15.09 15.09 15.14 15.21 15.16 15.18 15.22 15.24 15.2 15.27 15.26 15.31 6/30/05 15.25 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.25 - ------------------------------------ Common Share Net Asset Value $15.61 - ------------------------------------ Premium/(Discount) to NAV -2.31% - ------------------------------------ Market Yield 5.74% - ------------------------------------ Taxable-Equivalent Yield1 8.50% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $319,083 - ------------------------------------ Average Effective Maturity on Securities (Years) 16.72 - ------------------------------------ Leverage-Adjusted Duration 8.01 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 2/21/91) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 15.13% 13.81% - ------------------------------------ 5-Year 8.52% 8.50% - ------------------------------------ 10-Year 6.96% 7.03% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ Tax Obligation/Limited 17.2% - ------------------------------------ U.S. Guaranteed 16.5% - ------------------------------------ Transportation 15.6% - ------------------------------------ Education and Civic Organizations 12.2% - ------------------------------------ Healthcare 12.0% - ------------------------------------ Tax Obligation/General 7.7% - ------------------------------------ Consumer Staples 3.8% - ------------------------------------ Water and Sewer 3.7% - ------------------------------------ Other 11.3% - ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32.5%. When comparing this Fund to investments that generate qualified dividend income, the taxable-equivalent yield is lower. 2 The Fund also paid shareholders a capital gains distribution in December 2004 of $0.1097 per share. 14 Nuveen New Jersey Premium Income Municipal Fund, Inc. NNJ Performance OVERVIEW As of June 30, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 79% AA 5% A 5% BBB 9% NR 2% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.078 Aug 0.078 Sep 0.078 Oct 0.078 Nov 0.078 Dec 0.078 Jan 0.078 Feb 0.078 Mar 0.075 Apr 0.075 May 0.075 Jun 0.071 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/04 14.31 14.43 14.71 14.7 14.72 14.85 14.92 14.87 14.77 14.8 14.85 14.91 14.86 14.71 14.63 14.84 15.02 15.01 14.95 14.98 15.05 15.05 15.18 14.99 15.02 15.08 15.2 15.17 15.22 14.97 14.97 15.09 15.12 15.2 15.42 15.41 15.36 15.54 15.57 15.39 15.33 15.39 15.55 15.59 15.7 15.65 15.7 15.6 15.55 15.51 15.68 15.55 15.62 15.41 15.57 15.69 15.64 15.52 15.73 15.75 15.68 15.66 15.83 15.7 15.55 15.59 15.54 15.53 15.47 15.51 15.52 15.6 15.65 15.64 15.61 15.77 15.74 15.71 15.94 15.94 15.86 15.9 16 15.85 15.87 15.9 15.84 15.77 15.69 15.7 15.52 15.27 15.32 15.15 15.23 15.34 15.41 15.32 15.31 15.33 15.2 15.21 15.18 15.26 15.23 15.17 15.12 15.08 15 15.22 15.29 15.44 15.33 15.25 15.44 15.13 15.21 15.2 15.15 15.14 15.25 15.09 15.04 15.09 15.08 15.11 15.32 15.6 15.82 15.8 15.7 15.64 15.59 15.54 15.67 15.74 15.73 15.71 15.71 15.68 15.85 15.87 15.88 15.81 15.92 15.93 15.86 15.84 15.85 15.99 16.1 16.04 16.14 16.06 16.12 16.13 16.25 15.77 15.81 15.67 15.6 15.55 15.48 15.45 15.51 15.79 15.75 15.7 15.68 15.71 15.7 15.69 15.66 15.7 15.57 15.42 15.35 15.4 15.21 15.2 15.39 15.24 15.21 14.91 14.85 14.96 14.86 14.85 14.72 14.96 15.19 15.1 15.05 15 14.99 14.9 14.92 15.12 14.98 15.04 14.96 15.03 15.1 15.07 15.07 15.08 15.28 15.3 15.49 15.54 15.55 15.55 15.55 15.67 15.51 15.52 15.34 15.4 15.41 15.36 15.39 15.38 15.39 15.39 15.54 15.58 15.5 15.52 15.45 15.44 15.48 15.56 15.71 15.81 15.7 15.71 15.67 15.64 15.58 15.62 15.62 15.56 15.52 15.51 15.53 15.54 15.48 15.5 15.59 15.6 15.62 15.59 15.52 15.51 6/30/05 15.76 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.76 - ------------------------------------ Common Share Net Asset Value $16.05 - ------------------------------------ Premium/(Discount) to NAV -1.81% - ------------------------------------ Market Yield 5.41% - ------------------------------------ Taxable-Equivalent Yield1 8.01% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $193,182 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.71 - ------------------------------------ Leverage-Adjusted Duration 8.43 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 12/17/92) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 19.43% 12.31% - ------------------------------------ 5-Year 9.97% 8.80% - ------------------------------------ 10-Year 8.07% 7.58% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ Tax Obligation/Limited 22.4% - ------------------------------------ Transportation 16.2% - ------------------------------------ U.S. Guaranteed 12.1% - ------------------------------------ Education and Civic Organizations 11.6% - ------------------------------------ Tax Obligation/General 10.7% - ------------------------------------ Healthcare 9.2% - ------------------------------------ Water and Sewer 7.1% - ------------------------------------ Other 10.7% - ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32.5%. When comparing this Fund to investments that generate qualified dividend income, the taxable-equivalent yield is lower. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2004 of $0.2179 per share. 15 Nuveen New Jersey Dividend Advantage Municipal Fund NXJ Performance OVERVIEW As of June 30, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 76% AA 2% A 8% BBB 10% BB or Lower 3% NR 1% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE Jul 0.0785 Aug 0.0785 Sep 0.0785 Oct 0.0785 Nov 0.0785 Dec 0.0785 Jan 0.0785 Feb 0.0785 Mar 0.0755 Apr 0.0755 May 0.0755 Jun 0.0715 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/04 13.92 14.2 14.2 14.2 14.22 14.22 14.49 14.51 14.51 14.3 14.55 14.4 14.37 14.22 14.07 14.13 14.15 14.17 14.11 14.15 14.29 14.29 14.4 14.42 14.44 14.42 14.49 14.57 14.51 14.27 14.31 14.35 14.34 14.49 14.59 14.61 14.66 14.64 14.54 14.56 14.67 14.68 14.76 14.81 14.89 14.9 14.77 14.96 14.95 14.91 14.91 14.9 14.85 14.92 15.08 15.15 15.13 15.4 15.27 15.39 15.3 15.14 15.15 15.13 15.04 14.94 14.71 14.63 14.65 14.51 14.62 14.64 14.69 14.6 14.69 14.85 14.79 15 15.03 14.9 14.96 15 15.05 15.04 15.14 15.08 15.2 15.07 15.17 15.34 15.24 15.07 15.2 15.01 15.2 15.23 15.07 15.33 15.37 15.22 15.05 15.06 15.07 15.03 15.05 14.95 15.06 14.8 14.77 14.92 14.93 14.9 14.92 15.01 15.18 15.17 14.98 15.04 15.25 15.15 15.23 15.13 14.96 14.9 14.93 14.87 15.24 15.28 15.16 15.14 15.23 15.15 15.05 15.23 15.22 15.03 15.09 15.35 15.35 15.23 15.09 15.23 15.43 15.54 15.55 15.58 15.55 15.6 15.55 15.9 15.61 15.43 15.62 15.77 15.75 15.8 15.88 15.69 15.7 15.74 15.68 15.41 15.11 15 15.17 15.21 15.4 15.12 15.23 15.26 15.46 15.5 15.54 15.27 15.08 15 14.91 15.08 14.7 14.77 14.8 14.83 14.91 14.9 14.1 14.2 13.85 13.75 13.96 14.09 14.15 14.17 14.32 14.42 14.4 14.31 14.36 14.37 14.3 14.36 14.36 14.43 14.52 14.44 14.34 14.38 14.43 14.82 14.7 14.86 14.96 14.96 14.63 14.65 14.65 14.76 14.7 15 14.94 14.75 14.92 14.92 15.06 14.96 14.85 14.98 14.9 14.99 14.93 15.01 15.25 15.3 15.3 15.25 15.15 15.16 15.05 15.22 15.12 14.87 14.9 14.82 14.84 15 14.94 14.82 15.14 15.06 15.33 15.1 15.07 15.23 15.13 15.12 6/30/05 15.38 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.38 - ------------------------------------ Common Share Net Asset Value $15.63 - ------------------------------------ Premium/(Discount) to NAV -1.60% - ------------------------------------ Market Yield 5.58% - ------------------------------------ Taxable-Equivalent Yield1 8.27% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $102,502 - ------------------------------------ Average Effective Maturity on Securities (Years) 17.56 - ------------------------------------ Leverage-Adjusted Duration 8.16 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 19.97% 13.80% - ------------------------------------ Since Inception 6.71% 8.25% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ U.S. Guaranteed 17.7% - ------------------------------------ Transportation 16.4% - ------------------------------------ Tax Obligation/Limited 15.3% - ------------------------------------ Water and Sewer 15.0% - ------------------------------------ Education and Civic Organizations 12.6% - ------------------------------------ Healthcare 11.0% - ------------------------------------ Other 12.0% - ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32.5%. When comparing this Fund to investments that generate qualified dividend income, the taxable-equivalent yield is lower. 16 Nuveen New Jersey Dividend Advantage Municipal Fund 2 NUJ Performance OVERVIEW As of June 30, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 66% AA 2% A 12% BBB 15% BB or Lower 3% NR 2% Bar Chart: 2004-2005 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. 7/1/04 13.9 13.96 14.05 14.46 14.5 14.5 14.49 14.3 14.26 14.1 14.17 14.33 14.37 14.35 14.28 14.28 14.45 14.45 14.27 14.4 14.43 14.43 14.5 14.41 14.35 14.42 14.4 14.43 14.39 14.45 14.4 14.3 14.34 14.28 14.42 14.46 14.53 14.53 14.65 14.5 14.55 14.51 14.71 14.75 15 14.81 14.76 14.87 14.87 14.87 14.88 14.88 14.76 14.75 14.76 15 15.07 15 14.93 14.81 14.9 15.12 15 15.18 15.05 14.98 15.11 15.15 15.1 14.98 15 14.91 14.9 14.92 14.92 14.83 14.95 15.08 14.98 15.05 15.2 15.25 15.1 15.17 15.2 15.24 15.02 15.01 15.18 15.09 15.08 14.96 15 15.11 15.17 15.33 15.3 15.3 15.5 15.4 15.14 15.02 15.22 15.22 15.22 15.24 15.13 14.95 14.92 14.96 15.16 15.05 15.1 14.96 15.05 15.06 14.94 15.03 15.05 14.99 14.96 15.01 14.9 14.92 15.15 14.95 14.95 15.02 14.98 15.2 15.04 15.1 15.1 15.08 15.13 15.24 15.15 15 14.99 14.95 15.21 15.12 15 15 14.93 15 14.95 15.21 15.46 15.73 15.65 15.69 15.56 15.53 15.57 15.75 15.87 15.8 15.95 15.91 15.7 15.39 14.97 14.91 15.03 15.2 15.46 15.31 15.3 15.45 15.5 15.57 15.65 15.61 15.52 15.41 15.29 15.29 14.9 14.86 14.82 14.75 14.46 14.36 13.89 14.05 14.08 14.05 14.18 14.22 14.29 14.29 14.18 14.11 14.23 14.26 14.34 14.52 14.5 14.57 14.62 14.67 14.9 14.74 14.55 14.6 14.47 14.44 14.55 14.7 14.74 14.74 14.82 15.18 15.1 15.3 15.09 15.13 15.12 15.08 14.99 14.96 15.21 15.06 14.96 14.93 15.03 15.09 15.02 15.04 15.14 15.47 15.78 15.8 15.7 15.57 15.58 15.66 15.79 15.59 15.77 15.79 15.79 15.9 15.83 15.65 15.65 15.8 15.76 15.62 15.64 15.61 15.61 15.47 6/30/05 15.9 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.90 - ------------------------------------ Common Share Net Asset Value $15.79 - ------------------------------------ Premium/(Discount) to NAV 0.70% - ------------------------------------ Market Yield 5.77% - ------------------------------------ Taxable-Equivalent Yield1 8.55% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $71,231 - ------------------------------------ Average Effective Maturity on Securities (Years) 18.11 - ------------------------------------ Leverage-Adjusted Duration 8.24 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 23.39% 15.00% - ------------------------------------ Since Inception 8.31% 9.56% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ Healthcare 16.2% - ------------------------------------ Tax Obligation/Limited 15.9% - ------------------------------------ U.S. Guaranteed 15.2% - ------------------------------------ Transportation 14.8% - ------------------------------------ Education and Civic Organizations 10.2% - ------------------------------------ Utilities 7.3% - ------------------------------------ Long-Term Care 5.2% - ------------------------------------ Consumer Staples 4.0% - ------------------------------------ Other 11.2% - ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 32.5%. When comparing this Fund to investments that generate qualified dividend income, the taxable-equivalent yield is lower. 2 The Fund also paid shareholders a capital gains distribution in December 2004 of $0.0526 per share. 17 Nuveen Pennsylvania Investment Quality Municipal Fund NQP Performance OVERVIEW As of June 30, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 72% AA 15% A 7% BBB 5% NR 1% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.076 Aug 0.076 Sep 0.076 Oct 0.076 Nov 0.076 Dec 0.076 Jan 0.076 Feb 0.076 Mar 0.072 Apr 0.072 May 0.072 Jun 0.067 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/04 13.6 13.7 13.69 13.8 13.86 13.85 13.93 13.88 13.83 13.96 14.02 14.02 13.87 13.84 13.83 13.85 13.84 13.82 13.74 13.93 14.1 14.1 14.1 14.14 14.17 14.17 14.32 14.25 14.24 14.21 14.18 14.34 14.47 14.45 14.46 14.42 14.5 14.5 14.53 14.59 14.62 14.62 14.68 14.81 14.88 14.9 14.89 14.81 14.73 14.81 14.98 14.98 15 14.98 15 15.04 15.07 14.81 14.8 14.82 14.82 14.84 14.95 14.84 14.8 14.91 14.95 15.14 15.3 15.2 15.36 15.18 15.36 15.29 15.3 15.2 15.19 15.19 15.19 15.26 15.26 15.44 15.3 15.34 15.43 15.39 15.4 15.41 15.4 15.46 15.08 14.99 14.91 14.99 15 15.03 15.03 15.1 15.18 15.14 15.08 15.16 15.2 15.05 15.1 15.03 15.1 15.01 14.87 15.03 15.04 15.06 15.19 15.1 15.16 14.91 14.93 14.92 14.95 14.95 15.09 15.22 15.27 15.3 15.25 15.24 15.39 15.25 15.33 15.32 15.38 15.47 15.46 15.47 15.51 15.55 15.51 15.47 15.62 15.5 15.58 15.54 15.45 15.43 15.42 15.48 15.42 15.44 15.47 15.5 15.49 15.55 15.58 15.56 15.68 15.92 15.78 15.57 15.72 15.5 15.51 15.47 15.51 15.25 15.24 15.33 15.36 15.41 15.6 15.55 15.58 15.76 15.8 15.7 15.49 15.55 15.29 15.01 14.85 14.8 14.75 14.7 14.64 14.19 13.86 14.15 13.9 13.91 14.02 14.16 14.27 14.45 14.28 14.26 14.27 14.32 14.34 14.38 14.24 14.28 14.3 14.36 14.44 14.42 14.28 14.36 14.5 14.41 14.42 14.49 14.53 14.53 14.48 14.5 14.57 14.67 14.67 14.78 14.83 14.79 14.82 14.78 14.76 14.82 14.88 14.92 14.93 14.87 14.95 14.89 14.97 14.98 15.13 15.16 15.12 15.04 15 15 15.02 14.85 14.86 14.92 14.72 14.7 14.71 14.8 14.69 14.7 14.74 14.81 14.84 14.89 14.91 14.91 6/30/05 15.16 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.16 - ------------------------------------ Common Share Net Asset Value $15.73 - ------------------------------------ Premium/(Discount) to NAV -3.62% - ------------------------------------ Market Yield 5.30% - ------------------------------------ Taxable-Equivalent Yield1 7.57% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $256,365 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.82 - ------------------------------------ Leverage-Adjusted Duration 8.27 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 2/21/91) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 19.53% 12.67% - ------------------------------------ 5-Year 7.59% 8.30% - ------------------------------------ 10-Year 6.31% 6.57% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ Tax Obligation/General 17.0% - ------------------------------------ Education and Civic Organizations 16.3% - ------------------------------------ Tax Obligation/Limited 15.4% - ------------------------------------ U.S. Guaranteed 12.2% - ------------------------------------ Water and Sewer 11.6% - ------------------------------------ Utilities 7.3% - ------------------------------------ Healthcare 6.5% - ------------------------------------ Transportation 5.7% - ------------------------------------ Other 8.0% - ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 30%. When comparing this Fund to investments that generate qualified dividend income, the taxable-equivalent yield is lower. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2004 of $0.1422 per share. 18 Nuveen Pennsylvania Premium Income Municipal Fund 2 NPY Performance OVERVIEW As of June 30, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 78% AA 5% A 5% BBB 9% BB or Lower 1% NR 2% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.079 Aug 0.079 Sep 0.079 Oct 0.079 Nov 0.079 Dec 0.079 Jan 0.079 Feb 0.079 Mar 0.075 Apr 0.075 May 0.075 Jun 0.071 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/04 13.87 13.9 13.97 14.07 14.09 14.08 14.17 14.13 14.13 14.13 14.18 14.22 14.1 14 13.94 13.99 13.91 13.9 13.92 13.95 14.09 14.09 14.13 14.18 14.21 14.27 14.46 14.46 14.48 14.39 14.38 14.48 14.54 14.67 14.74 14.71 14.9 14.86 14.75 14.87 15.01 15.01 15.2 15.08 15.15 15.18 15.11 15.15 15.15 15.19 15.17 15.19 15.15 15.15 15.15 15.15 15.02 15.05 15.13 15.1 15.14 15.23 15.23 15.18 15.12 15.02 15.15 15.25 15.2 15.17 15.37 15.5 15.49 15.35 15.38 15.41 15.24 15.2 15.22 15.22 15.23 15.21 15.4 15.31 15.5 15.44 15.48 15.45 15.38 15.37 15.3 15.21 15.17 15.1 15.25 15.24 15.16 15.21 15.36 15.41 15.38 15.29 15.21 15.31 15.3 15.26 15.24 15.16 15.18 15.13 15.3 15.51 15.43 15.44 15.49 15.3 15.45 15.4 15.34 15.54 15.44 15.55 15.59 15.44 15.43 15.55 15.52 15.63 15.56 15.54 15.37 15.28 15.44 15.4 15.36 15.38 15.46 15.48 15.66 15.46 15.48 15.56 15.6 15.78 15.85 15.85 15.76 15.83 15.69 15.77 15.67 15.8 15.84 15.9 15.83 15.89 15.82 15.76 15.7 15.56 15.68 15.66 15.62 15.47 15.7 15.81 15.79 15.85 15.95 15.9 16 16.02 15.92 15.71 15.65 15.48 15.52 15.45 15.14 15.22 15.34 15.26 15.2 15.19 15.11 15.3 14.93 14.9 15 14.8 14.9 14.87 14.83 14.84 14.83 14.9 15.13 15.06 15.06 15 14.96 14.86 14.86 14.88 14.87 14.92 14.88 14.85 14.94 15.21 15.05 15.05 15.05 15 14.95 15.01 15.06 15.1 15.21 15.08 15.16 15.12 15.1 15.09 15.07 15.13 15.14 15.12 15.16 15.19 15.24 15.22 15.33 15.37 15.54 15.48 15.4 15.35 15.38 15.39 15.32 15.3 15.2 15.2 15.3 15.25 15.15 15.02 15.15 15.22 15.21 15.13 15.16 15.19 6/30/05 15.16 FUND SNAPSHOT - ------------------------------------ Common Share Price $15.16 - ------------------------------------ Common Share Net Asset Value $15.32 - ------------------------------------ Premium/(Discount) to NAV -1.04% - ------------------------------------ Market Yield 5.62% - ------------------------------------ Taxable-Equivalent Yield1 8.03% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $242,373 - ------------------------------------ Average Effective Maturity on Securities (Years) 17.23 - ------------------------------------ Leverage-Adjusted Duration 7.90 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 17.79% 11.80% - ------------------------------------ 5-Year 11.13% 9.30% - ------------------------------------ 10-Year 8.17% 7.67% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ Tax Obligation/General 21.4% - ------------------------------------ Healthcare 13.1% - ------------------------------------ Education and Civic Organizations 11.6% - ------------------------------------ Transportation 10.6% - ------------------------------------ Utilities 10.6% - ------------------------------------ Water and Sewer 10.0% - ------------------------------------ Tax Obligation/Limited 7.1% - ------------------------------------ U.S. Guaranteed 5.1% - ------------------------------------ Other 10.5% - ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 30%. When comparing this Fund to investments that generate qualified dividend income, the taxable-equivalent yield is lower. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2004 of $0.1846 per share. 19 Nuveen Pennsylvania Dividend Advantage Municipal Fund NXM Performance OVERVIEW As of June 30, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 58% AA 15% A 14% BBB 7% BB or Lower 1% NR 5% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.0805 Aug 0.0805 Sep 0.0805 Oct 0.0805 Nov 0.0805 Dec 0.0805 Jan 0.0805 Feb 0.0805 Mar 0.0775 Apr 0.0775 May 0.0775 Jun 0.0775 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/04 14.48 15 14.81 14.85 14.8 14.85 14.95 14.96 14.99 15 15.1 15.15 15 14.9 14.72 14.64 14.74 14.5 14.49 14.55 14.61 14.61 14.73 14.85 14.89 14.8 14.88 14.91 14.91 14.98 14.91 14.95 14.9 14.8 14.87 14.9 15 14.95 14.9 15 15.01 14.97 15.21 15.07 15.11 15.15 15.11 15.11 15.15 15.33 15.35 15.4 15.4 15.41 15.5 15.5 15.41 15.5 15.48 15.5 15.43 15.35 15.45 15.45 15.5 15.22 15.29 15.4 15.45 15.54 15.8 15.94 15.94 15.82 15.68 15.68 15.63 15.79 15.78 15.8 15.94 16.03 16.1 16.19 15.94 16.05 15.99 15.93 15.99 15.94 15.7 15.72 15.5 15.4 15.52 15.5 15.58 15.79 15.9 15.9 15.81 15.97 15.85 15.8 15.9 16.1 16.08 15.9 15.79 15.92 15.98 15.9 16.25 16.1 16.1 15.7 15.73 15.73 15.88 15.88 15.78 15.82 15.67 15.67 15.65 15.57 15.78 16.1 16.14 16.06 16.06 16.38 16.38 16.38 16.13 15.97 15.94 15.92 16.36 16.5 16.42 16.32 16.15 16.15 16.1 16.2 16.14 16.14 16.46 16.27 16.3 16.4 16.5 16.5 16.6 16.75 16.67 16.67 16.35 16.18 16.06 16.08 16.08 15.84 15.76 15.78 15.79 15.78 16.18 16.19 16.24 16.36 16.35 16.28 16.21 16.43 16.2 16.08 16.01 15.82 15.51 15.5 15.53 15.5 15.44 14.89 14.88 14.78 14.78 15.02 14.97 14.9 15.25 15.36 15.15 15.16 15.13 15.13 15.08 15.2 15.46 15.66 15.56 15.49 15.41 15.45 15.32 15.33 15.65 15.83 15.87 15.87 16.55 16.38 16.32 16.06 16.38 16.3 16.33 16.3 16.3 16.29 16.12 15.75 15.72 15.72 15.7 15.74 15.67 15.69 15.61 15.69 15.73 16.2 16.25 16.25 16.17 16.19 16.14 16.12 16.19 16.18 16.18 16.12 16.15 15.86 15.99 15.99 15.99 15.99 16.1 16.18 16.12 16.02 6/30/05 16.14 FUND SNAPSHOT - ------------------------------------ Common Share Price $16.14 - ------------------------------------ Common Share Net Asset Value $15.93 - ------------------------------------ Premium/(Discount) to NAV 1.32% - ------------------------------------ Market Yield 5.76% - ------------------------------------ Taxable-Equivalent Yield1 8.23% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $52,712 - ------------------------------------ Average Effective Maturity on Securities (Years) 16.76 - ------------------------------------ Leverage-Adjusted Duration 8.45 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 21.84% 13.02% - ------------------------------------ Since Inception 8.94% 9.72% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ Education and Civic Organizations 19.9% - ------------------------------------ Tax Obligation/General 19.5% - ------------------------------------ Healthcare 12.2% - ------------------------------------ Long-Term Care 9.0% - ------------------------------------ Utilities 8.8% - ------------------------------------ Transportation 7.0% - ------------------------------------ Tax Obligation/Limited 6.8% - ------------------------------------ Industrials 4.6% - ------------------------------------ Other 12.2% - ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 30%. When comparing this Fund to investments that generate qualified dividend income, the taxable-equivalent yield is lower. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2004 of $0.3691 per share. 20 Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 NVY Performance OVERVIEW As of June 30, 2005 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 60% AA 22% A 4% BBB 8% BB or Lower 1% NR 5% Bar Chart: 2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Jul 0.0765 Aug 0.0765 Sep 0.0765 Oct 0.0765 Nov 0.0765 Dec 0.0735 Jan 0.0735 Feb 0.0735 Mar 0.0705 Apr 0.0705 May 0.0705 Jun 0.067 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 7/1/04 13.6 13.68 13.78 13.9 13.85 13.99 14.15 14.1 14.08 14.17 14.16 14.2 14.25 14.15 13.94 13.97 13.9 14.07 14 13.92 14.04 14.04 14.18 14.37 14.37 14.37 14.35 14.62 14.55 14.38 14.43 14.43 14.39 14.4 14.45 14.5 14.55 14.35 14.45 14.5 14.41 14.65 14.6 14.95 14.89 14.89 14.78 14.7 14.71 15.01 14.79 14.9 14.7 14.65 14.71 14.76 14.8 14.76 14.96 14.9 14.88 14.85 14.91 14.9 14.7 14.65 14.65 14.68 14.66 14.7 14.75 14.88 15 15 14.81 14.94 15.05 15 14.9 14.95 14.9 14.9 14.81 14.8 14.93 14.99 15.11 15.25 15.25 15.17 15.1 14.91 14.85 14.72 14.73 14.68 14.77 14.85 14.87 15.28 15.21 15.02 15.05 14.91 15 14.89 14.89 15.04 14.98 15.1 15.25 15.25 15.5 15.55 15.5 15.41 15.25 14.94 14.89 14.88 14.7 14.67 14.59 14.68 14.66 14.58 14.65 14.72 14.77 14.79 14.9 14.87 14.92 14.92 15.01 15.13 15.05 15.19 15.18 15.28 15.6 15.53 15.43 15.63 15.5 15.43 15.4 15.32 15.4 15.56 15.73 16.2 16.11 16.1 15.9 15.82 15.64 15.58 15.58 15.63 15.53 15.41 15.3 15.06 15.06 15.16 15.16 14.9 14.91 14.91 14.98 15.1 15.28 15.35 15.21 15.21 14.9 14.64 14.65 14.45 14.4 14.34 14.1 14.06 13.73 13.7 13.67 13.71 13.8 14.05 14.1 13.97 13.99 14.11 14.17 14.17 14.14 14.1 14.07 14.17 14.21 14.23 14.46 14.4 14.25 14.45 14.41 14.42 14.47 14.53 14.67 14.67 14.67 14.68 14.7 14.72 14.79 14.75 14.64 14.71 14.64 14.68 14.77 14.8 14.75 14.75 14.83 14.74 14.86 14.93 14.9 14.9 15 15.15 15.2 14.88 14.92 14.9 14.84 14.84 14.78 14.8 14.68 14.66 14.7 14.67 14.74 14.7 14.73 14.75 14.98 14.85 14.78 14.76 6/30/05 14.9 FUND SNAPSHOT - ------------------------------------ Common Share Price $14.90 - ------------------------------------ Common Share Net Asset Value $15.89 - ------------------------------------ Premium/(Discount) to NAV -6.23% - ------------------------------------ Market Yield 5.40% - ------------------------------------ Taxable-Equivalent Yield1 7.71% - ------------------------------------ Net Assets Applicable to Common Shares ($000) $59,174 - ------------------------------------ Average Effective Maturity on Securities (Years) 15.88 - ------------------------------------ Leverage-Adjusted Duration 8.50 - ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02) - ------------------------------------ ON SHARE PRICE ON NAV - ------------------------------------ 1-Year 17.63% 13.37% - ------------------------------------ Since Inception 6.30% 9.75% - ------------------------------------ SECTORS (as a % of total investments) - ------------------------------------ Tax Obligation/Limited 25.5% - ------------------------------------ Education and Civic Organizations 15.5% - ------------------------------------ U.S. Guaranteed 13.5% - ------------------------------------ Tax Obligation General 11.4% - ------------------------------------ Healthcare 8.8% - ------------------------------------ Utilities 6.5% - ------------------------------------ Water and Sewer 6.4% - ------------------------------------ Other 12.4% - ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 30%. When comparing this Fund to investments that generate qualified dividend income, the taxable-equivalent yield is lower. 2 The Fund also paid shareholders a capital gains distribution in December 2004 of $0.0429 per share. 21 Report of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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, 2005, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, 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 the standards of the Public Company Accounting Oversight Board (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. We were not engaged to perform an audit of the Funds' internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds' internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of June 30, 2005, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. 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, 2005, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and their financial highlights for the periods indicated therein in conformity with U.S. generally accepted accounting principles. Ernst & Young LLP Chicago, Illinois August 12, 2005 22 Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ) Portfolio of INVESTMENTS June 30, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 0.3% (0.1% OF TOTAL INVESTMENTS) Middlesex County Improvement Authority, New Jersey, Senior Revenue Bonds, Heldrich Center Hotel/Conference Center Project, Series 2005A: $ 400 5.000%, 1/01/32 1/15 at 100.00 Baa3 $ 402,104 400 5.125%, 1/01/37 1/15 at 100.00 Baa3 403,596 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 5.7% (3.8% OF TOTAL INVESTMENTS) Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: 8,450 5.750%, 6/01/32 6/12 at 100.00 BBB 8,791,465 3,000 6.000%, 6/01/37 6/12 at 100.00 BBB 3,144,930 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 BBB 3,426,400 2,625 6.375%, 6/01/32 6/13 at 100.00 BBB 2,831,824 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 18.3% (12.2% OF TOTAL INVESTMENTS) 2,500 Bergen County Improvement Authority, New Jersey, Revenue 9/12 at 101.00 N/R 2,667,975 Bonds, Yeshiva Ktana of Passaic Project, Series 2002, 6.000%, 9/15/27 3,010 New Jersey Higher Education Assistance Authority, Student 6/10 at 101.00 AAA 3,094,912 Loan Revenue Bonds, Series 2000A, 6.125%, 6/01/17 (Alternative Minimum Tax) - MBIA Insured 1,000 New Jersey Economic Development Authority, Revenue Bonds, 6/15 at 100.00 AAA 1,076,520 The Seeing Eye Inc., Series 2005, 5.000%, 12/01/24 - AMBAC Insured New Jersey Educational Facilities Authority, Revenue Bonds, St. Peter's College, Series 1998B: 1,000 5.375%, 7/01/18 7/08 at 102.00 BB+ 1,003,910 1,750 5.500%, 7/01/27 7/08 at 102.00 BB+ 1,735,668 1,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/11 at 100.00 AAA 1,048,270 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 1,085,550 1,945 5.250%, 7/01/21 - MBIA Insured 7/11 at 100.00 AAA 2,111,395 1,050 New Jersey Educational Facilities Authority, Revenue 7/12 at 100.00 AA 1,116,549 Refunding Bonds, Rider University, Series 2002A, 5.000%, 7/01/17 - RAAI Insured 2,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/12 at 100.00 AAA 2,109,860 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 2,066,340 Fairleigh Dickinson University, Series 2002D, 5.250%, 7/01/32 - ACA Insured 1,500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/13 at 100.00 AAA 1,663,065 Kean University, Series 2003D, 5.250%, 7/01/20 - FGIC Insured 1,300 New Jersey Educational Facilities Authority, Revenue Bonds, 7/13 at 100.00 AAA 1,425,424 Rowan University, Series 2003I, 5.125%, 7/01/21 - FGIC Insured 1,500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 1,633,035 Montclair State University, Series 2004L, 5.125%, 7/01/22 - MBIA Insured 1,495 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 1,646,877 Ramapo College, Series 2004H, 5.000%, 7/01/16 - FGIC Insured 23 Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS (continued) New Jersey Educational Facilities Authority, Revenue Bonds, New Jersey Institute of Technology, Series 2004B: $ 2,285 5.000%, 7/01/18 - AMBAC Insured 1/14 at 100.00 AAA $ 2,490,444 1,260 5.000%, 7/01/19 - AMBAC Insured 1/14 at 100.00 AAA 1,368,511 2,510 4.750%, 7/01/20 - AMBAC Insured 1/14 at 100.00 AAA 2,647,322 2,060 4.250%, 7/01/24 - AMBAC Insured 1/14 at 100.00 AAA 2,066,571 610 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 AA 668,456 Rider University, Series 2004A, 5.500%, 7/01/23 - RAAI Insured 500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 N/R 530,405 Fairleigh Dickinson University, Series 2004C, 5.500%, 7/01/23 New Jersey Educational Facilities Authority, Revenue Bonds, Rowan University, Series 2004C: 1,000 5.000%, 7/01/15 - MBIA Insured 7/14 at 100.00 AAA 1,107,250 1,195 5.000%, 7/01/20 - MBIA Insured 7/14 at 100.00 AAA 1,298,248 1,875 5.000%, 7/01/24 - MBIA Insured 7/14 at 100.00 AAA 2,011,913 3,905 New Jersey Higher Education Assistance Authority, Student 6/07 at 102.00 AAA 4,035,388 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 4,396,099 Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, University of the Sacred Heart, Series 2001, 5.250%, 9/01/21 University of Medicine and Dentistry of New Jersey, Certificates of Participation, Child Health Institute, LLC, Series 2003: 1,945 5.000%, 4/15/20 - AMBAC Insured 4/13 at 100.00 AAA 2,111,959 1,370 5.000%, 4/15/22 - AMBAC Insured 4/13 at 100.00 AAA 1,487,409 University of Medicine and Dentistry of New Jersey, Revenue Bonds, Series 2002A: 2,100 5.000%, 12/01/24 - AMBAC Insured 12/12 at 100.00 AAA 2,243,325 4,000 5.500%, 12/01/27 - AMBAC Insured 12/12 at 100.00 AAA 4,466,600 - ------------------------------------------------------------------------------------------------------------------------------------ FINANCIALS - 1.7% (1.1% OF TOTAL INVESTMENTS) 5,000 New Jersey Economic Development Authority, Revenue No Opt. Call Baa3 5,519,450 Refunding Bonds, Kapkowski Road Landfill Project, Series 2002, 5.750%, 10/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 18.1% (12.0% OF TOTAL INVESTMENTS) 1,000 Camden County Improvement Authority, New Jersey, 8/14 at 100.00 BBB 1,072,910 Revenue Bonds, Cooper Health System, Series 2004A, 5.750%, 2/15/34 1,500 New Jersey Health Care Facilities Financing Authority, 7/07 at 102.00 BBB- 1,571,400 Revenue Refunding Bonds, St. Elizabeth Hospital Obligated Group, Series 1997, 6.000%, 7/01/27 5,750 New Jersey Health Care Facilities Financing Authority, 8/11 at 100.00 AAA 5,994,605 FHA-Insured Mortgage Revenue Bonds, Jersey City Medical Center, Series 2001, 5.000%, 8/01/41 - AMBAC Insured 3,000 New Jersey Health Care Facilities Financing Authority, 7/11 at 100.00 A2 3,199,290 Revenue Bonds, Kennedy Health System Obligated Group, Series 2001, 5.500%, 7/01/21 3,135 New Jersey Health Care Facilities Financing Authority, 1/12 at 100.00 AA 3,283,975 Revenue Refunding Bonds, Bayshore Community Hospital, Series 2002, 5.125%, 7/01/32 - RAAI Insured 7,860 New Jersey Health Care Facilities Financing Authority, 7/12 at 100.00 Baa1 8,567,007 Revenue 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 Baa3 3,104,940 Revenue Bonds, Somerset Medical Center, Series 2003, 5.500%, 7/01/33 New Jersey Health Care 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 4,188,223 2,000 5.750%, 7/01/31 7/10 at 100.00 A 2,175,700 4,320 New Jersey Health Care Facilities Financing Authority, 7/08 at 101.00 Aaa 4,469,429 Revenue Refunding Bonds, St. Barnabas Healthcare System - West Hudson Hospital Obligated Group, Series 1998A, 5.000%, 7/01/23 - MBIA Insured 24 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) $ 5,040 New Jersey Health Care Facilities Financing Authority, 7/10 at 100.00 AAA $ 5,460,638 Revenue Bonds, Society of the Valley Hospital Obligated Group, Series 2000, 5.375%, 7/01/31 - AMBAC Insured 2,000 New Jersey Health Care Facilities Financing Authority, 7/10 at 100.00 BBB+ 2,250,660 Revenue Bonds, St. 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 3,771,530 Revenue Bonds, Meridian Health System Obligated Group, Series 1999, 5.250%, 7/01/29 - FSA Insured 1,690 New Jersey Health Care Facilities Financing Authority, 7/14 at 100.00 AA 1,819,268 Revenue Bonds, St. Clare's Hospital, Series 2004A, 5.250%, 7/01/20 - RAAI Insured 2,600 New Jersey Health Care Facilities Financing Authority, 7/15 at 100.00 AA 2,715,726 Revenue Bonds, RWJ Health Care Corporation, Series 2005B, 5.000%, 7/01/35 (WI, settling 7/14/05) - RAAI Insured 3,860 Newark, New Jersey, GNMA Collateralized Healthcare 6/12 at 102.00 Aaa 4,169,032 Facility Revenue Bonds, New Community Urban Renewal Corporation, Series 2001A, 5.200%, 6/01/30 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 2.7% (1.8% OF TOTAL INVESTMENTS) 995 Long Branch Housing Finance Corporation New Jersey, 10/05 at 100.00 N/R 1,000,811 Housing Revenue Bonds, Washington Manor Associates Ltd. Section 8 Assisted Elderly Project, Series 1980, 10.000%, 10/01/11 4,500 New Jersey Housing and Mortgage Finance Agency, 5/06 at 102.00 AAA 4,643,325 Multifamily 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 2,937,873 Housing Revenue Bonds, Fairview Apartments Project, Series 2000A, 6.400%, 10/20/34 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 3.9% (2.6% OF TOTAL INVESTMENTS) 3,545 New Jersey Housing and Mortgage Finance Agency, 10/07 at 101.50 AAA 3,678,540 Home Buyer Program Revenue Bonds, Series 1997U, 5.850%, 4/01/29 (Alternative Minimum Tax) - MBIA Insured 3,280 New Jersey Housing and Mortgage Finance Agency, 10/10 at 100.00 AAA 3,303,911 Home Buyer Program Revenue Bonds, Series 2000CC, 5.875%, 10/01/31 (Alternative Minimum Tax) - MBIA Insured 2,680 Puerto Rico Housing Finance Corporation, Mortgage-Backed 6/11 at 100.00 AAA 2,777,284 Securities Home Mortgage Revenue Bonds, Series 2001A, 5.200%, 12/01/33 2,675 Puerto Rico Housing Finance Corporation, Mortgage-Backed 6/11 at 100.00 AAA 2,775,607 Securities Home Mortgage Revenue Bonds, Series 2001B, 5.300%, 12/01/28 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 2.2% (1.5% OF TOTAL INVESTMENTS) 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 1,050,080 1,500 5.200%, 7/01/31 - RAAI Insured 7/11 at 100.00 AA 1,576,905 2,910 New Jersey Economic Development Authority, GNMA 12/11 at 103.00 Aaa 3,147,747 Collateralized Mortgage Revenue Bonds, Victoria Health Corporation, Series 2001A, 5.200%, 12/20/36 1,125 New Jersey Economic Development Authority, First Mortgage 11/14 at 100.00 N/R 1,203,266 Revenue Bonds, Winchester Gardens at Wards Homestead, Series 2004A, 5.750%, 11/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 2.0% (1.3% OF TOTAL INVESTMENTS) 6,250 Salem County Pollution Control Financing Authority, 11/05 at 100.00 AA- 6,354,688 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 - 11.1% (7.4% OF TOTAL INVESTMENTS) Clifton, New Jersey, General Obligation Bonds, Series 2002: 1,700 5.000%, 1/15/21 - FGIC Insured 1/11 at 100.00 AAA 1,809,786 1,625 5.000%, 1/15/22 - FGIC Insured 1/11 at 100.00 AAA 1,729,943 1,000 Essex County, New Jersey, General Obligation Refunding 11/07 at 101.00 Aaa 1,056,930 Bonds, Series 1996A-1, 5.000%, 11/15/11 - FGIC Insured 1,735 Jersey City, New Jersey, General Obligation Public 9/11 at 102.00 AAA 1,889,606 Improvement Bonds, Series 2003B, 5.000%, 9/01/20 - FSA Insured 25 Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 3,000 Jersey City, New Jersey, General Obligation Improvement No Opt. Call AAA $ 3,366,390 Bonds, Series 2002A, 5.250%, 3/01/13 - AMBAC Insured 1,420 Lenape Regional High School District, Burlington County, No Opt. Call Aaa 1,578,756 New Jersey, General Obligation Bonds, Series 2004, 5.000%, 4/01/14 - FGIC Insured Middletown Township Board of Education, Monmouth County, New Jersey, Refunding School Bonds, Series 2001: 4,725 5.000%, 8/01/22 - FSA Insured 8/10 at 100.00 AAA 5,038,835 1,500 5.000%, 8/01/27 - FSA Insured 8/10 at 100.00 AAA 1,590,315 5,000 New Jersey, General Obligation Bonds, Series 1992D, No Opt. Call AA- 5,698,150 6.000%, 2/15/11 1,200 New Jersey, General Obligation Bonds, Series 2005L, No Opt. Call AAA 1,371,420 5.250%, 7/15/16 - AMBAC 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 1,567,726 1,545 5.000%, 3/01/25 - FGIC Insured 3/12 at 100.00 AAA 1,646,398 1,285 Tinton Falls Board of Education, Monmouth County, 10/14 at 100.00 Aaa 1,430,552 New Jersey, General Obligation Bonds, Series 2004, 5.000%, 10/15/15 - FSA Insured 1,745 Washington Township Board of Education, Mercer County, 1/16 at 100.00 Aaa 1,916,219 New Jersey, General Obligation Bonds, Series 2005, 5.000%, 1/01/19 - FSA Insured West Deptford Township, New Jersey, General Obligation Bonds, Series 2004: 1,690 5.000%, 9/01/16 - AMBAC Insured 9/14 at 100.00 Aaa 1,871,219 1,865 4.750%, 9/01/18 - AMBAC Insured 9/14 at 100.00 Aaa 2,000,250 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 26.0% (17.2% OF TOTAL INVESTMENTS) 3,320 Atlantic County Improvement Authority, New Jersey, 11/10 at 100.00 Aaa 3,618,368 Egg Harbor Township Guaranteed Revenue Bonds, Egg Harbor Township Golf Corporation, Series 2000, 5.400%, 11/01/30 - AMBAC Insured Bergen County Improvement Authority, New Jersey, Guaranteed Lease Revenue Bonds, County Administration Complex Project, Series 2003: 1,510 4.500%, 11/15/12 No Opt. Call Aaa 1,631,298 1,795 5.000%, 11/15/17 11/13 at 100.00 Aaa 1,992,630 2,000 5.000%, 11/15/18 11/13 at 100.00 Aaa 2,211,820 2,225 Essex County Improvement Authority, New Jersey, 10/13 at 100.00 Aaa 2,366,265 General Obligation Lease Revenue Bonds, Correctional Facilities Project, Series 2003A, 5.000%, 10/01/28 - FGIC Insured 10,000 Essex County Improvement Authority, New Jersey, Lease No Opt. Call Aaa 11,044,700 Revenue Bonds, Series 2003, 5.000%, 12/15/12 - FSA 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 2,222,040 3,000 5.000%, 11/01/20 - FSA Insured 11/13 at 100.00 AAA 3,272,910 3,365 11/01/21 - FSA Insured 11/13 at 100.00 AAA 3,671,114 Hudson County Improvement Authority, New Jersey, County Secured Lease Revenue Bonds, County Services Building Project, Series 2005: 1,090 5.000%, 4/01/25 - AMBAC Insured 4/15 at 100.00 AAA 1,169,505 2,525 5.000%, 4/01/35 - AMBAC Insured 4/15 at 100.00 AAA 2,696,599 Lacey Municipal Utilities Authority, Ocean County, New Jersey, Water Revenue Bonds, Series 2003B: 1,750 5.000%, 12/01/17 - FGIC Insured 12/13 at 100.00 Aaa 1,914,570 1,835 5.000%, 12/01/18 - FGIC Insured 12/13 at 100.00 Aaa 2,004,774 1,000 5.000%, 12/01/19 - FGIC Insured 12/13 at 100.00 Aaa 1,091,770 1,445 Lower Township Municipal Utilities Authority, Cape May No Opt. Call Aaa 1,588,561 County, New Jersey, Revenue Bonds, Series 2003D, 5.000%, 12/01/16 - FGIC Insured Middlesex County Improvement Authority, New Jersey, County Guaranteed Open Space Trust Fund Revenue Bonds, Series 2003: 1,000 5.250%, 9/15/16 9/13 at 100.00 AAA 1,119,320 2,000 5.250%, 9/15/18 9/13 at 100.00 AAA 2,232,620 1,000 5.250%, 9/15/21 9/13 at 100.00 AAA 1,114,050 26 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 2,500 New Jersey Health Care Facilities Financing Authority, 9/13 at 100.00 A+ $ 2,631,275 Lease Revenue Bonds, Department of Human Services - Greystone Park Psychiatric Hospital, Series 2003, 5.000%, 9/15/25 1,925 New Jersey Economic Development Authority, School Facilities 9/15 at 100.00 AAA 2,129,377 Construction Bonds, Series 2005N-1, 5.000%, 9/01/17 - AMBAC Insured 7,000 New Jersey Economic Development Authority, Revenue 7/14 at 100.00 AAA 7,872,830 Bonds, Motor Vehicle Surcharge, Series 2004A, 5.250%, 7/01/15 - MBIA Insured 4,000 New Jersey Economic Development Authority, Cigarette 6/14 at 100.00 BBB 4,308,680 Tax Revenue Bonds, Series 2004, 5.750%, 6/15/34 4,815 New Jersey Economic Development Authority, School Facility No Opt. Call AAA 5,462,329 Construction Bonds, Series 2005K, 5.250%, 12/15/14 - FGIC Insured 2,000 New Jersey Educational Facilities Authority, Revenue Bonds, 9/12 at 100.00 AAA 2,215,460 Higher Education Capital Improvement Bonds, Fund Issue, Series 2002A, 5.250%, 9/01/19 - AMBAC Insured 3,350 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 3,767,611 Transportation System Bonds, Series 2004B, 5.250%, 12/15/13 - FGIC Insured 5,275 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 5,932,581 Transportation System Bonds, Series 2005B, 5.250%, 12/15/13 - MBIA Insured 1,250 Ocean County Utilities Authority, New Jersey, Wastewater 1/11 at 101.00 Aa1 1,355,338 Revenue Refunding Bonds, Series 2000, 5.000%, 1/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 23.4% (15.6% OF TOTAL INVESTMENTS) 2,250 Casino Reinvestment Development Authority, New Jersey, 6/15 at 100.00 AAA 2,479,320 Parking Revenue Bonds, Series 2005A, 5.250%, 6/01/20 - MBIA Insured Delaware River and Bay Authority, Delaware and New Jersey, Revenue Bonds, Series 2005: 2,000 5.000%, 1/01/25 - MBIA Insured 1/15 at 100.00 AAA 2,162,580 1,300 5.000%, 1/01/26 - MBIA Insured 1/15 at 100.00 AAA 1,403,532 2,960 Delaware River Port Authority, Pennsylvania and New Jersey, 1/12 at 100.00 AAA 3,154,472 Revenue Refunding Bonds, Port District Project, Series 2001A, 5.200%, 1/01/27 - FSA Insured 3,500 Delaware River Port Authority, New Jersey and Pennsylvania, 1/10 at 100.00 AAA 3,846,850 Revenue Bonds, Series 1999, 5.750%, 1/01/22 - FSA Insured 3,000 New Jersey Economic Development Authority, Revenue 11/05 at 100.00 CCC 2,482,830 Bonds, American Airlines Inc., Series 1991, 7.100%, 11/01/31 (Alternative Minimum Tax) 4,660 New Jersey Turnpike Authority, Revenue Bonds, 1/15 at 100.00 AAA 4,989,229 Series 2005C, 5.000%, 1/01/35 - FSA Insured 9,500 New Jersey Turnpike Authority, Revenue Bonds, 7/13 at 100.00 AAA 10,334,955 Series 2003A, 5.000%, 1/01/19 - FGIC Insured New Jersey Turnpike Authority, Revenue Bonds, Series 1991C: 665 6.500%, 1/01/16 No Opt. Call A 802,243 215 6.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 262,257 1,250 Newark Housing Authority, New Jersey, Port Authority 1/14 at 100.00 AAA 1,369,700 Terminal Revenue Bonds, Series 2004, 5.250%, 1/01/21 - MBIA Insured 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 2,421,223 5,000 5.000%, 4/15/32 - FSA Insured 4/12 at 101.00 AAA 5,299,600 Port Authority of New York and New Jersey, Special Project Bonds, JFK International Air Terminal LLC, Sixth Series 1997: 3,500 7.000%, 12/01/12 (Alternative Minimum Tax) - MBIA Insured No Opt. Call AAA 4,198,530 6,605 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 12/07 at 102.00 AAA 7,115,434 12,130 5.750%, 12/01/25 (Alternative Minimum Tax) - MBIA Insured 12/07 at 100.00 AAA 12,842,880 7,000 Port Authority of New York and New Jersey, Consolidated 6/15 at 101.00 AAA 7,540,960 Revenue Bonds, One Hundred Fortieth Series 2005, 5.000%, 12/01/28 (DD, settling 7/1/05) - XLCA Insured 2,000 South Jersey Port Corporation, New Jersey, Marine Terminal 1/13 at 100.00 A- 2,103,780 Revenue Refunding Bonds, Series 2002K, 5.100%, 1/01/33 27 Nuveen New Jersey Investment Quality Municipal Fund, Inc. (NQJ) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** - 24.9% (16.5% OF TOTAL INVESTMENTS) $ 4,105 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA $ 4,359,920 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded to 7/01/10) 3,275 Delaware River and Bay Authority, Delaware and 1/10 at 101.00 AAA 3,679,594 New Jersey, Revenue Bonds, Series 2000A, 5.750%, 1/01/29 (Pre-refunded to 1/01/10) - AMBAC Insured 10,000 Essex County Improvement Authority, New Jersey, General 10/10 at 100.00 Aaa 11,429,100 Obligation Guaranteed Lease Revenue Bonds, County Correctional Facility Project, Series 2000, 6.000%, 10/01/25 (Pre-refunded to 10/01/10) - FGIC Insured New Jersey Economic Development Authority, School Facilities Construction Bonds, Series 2002C: 4,000 5.000%, 6/15/15 (Pre-refunded to 6/15/12) - MBIA Insured 6/12 at 100.00 AAA 4,443,000 5,000 5.000%, 6/15/20 (Pre-refunded to 6/15/12) - MBIA Insured 6/12 at 100.00 AAA 5,553,750 3,000 New Jersey Economic Development Authority, School 6/13 at 100.00 AAA 3,395,040 Facilities Construction Bonds, Series 2003F, 5.250%, 6/15/21 (Pre-refunded to 6/15/13) - FGIC Insured 3,600 New Jersey Economic Development Authority, School 9/13 at 100.00 AAA 4,014,504 Facilities Construction Bonds, Series 2004G, 5.000%, 9/01/17 (Pre-refunded to 9/01/13) - MBIA Insured New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2003C: 3,000 5.500%, 6/15/17 (Pre-refunded to 6/15/13) 6/13 at 100.00 AAA 3,447,030 3,000 5.500%, 6/15/18 (Pre-refunded to 6/15/13) 6/13 at 100.00 AAA 3,447,030 5,670 New Jersey Transportation Trust Fund Authority, Transportation 12/11 at 100.00 AAA 6,264,273 System Bonds, Series 2001B, 5.000%, 12/15/21 (Pre-refunded to 12/15/11) - MBIA Insured New Jersey Turnpike Authority, Revenue Bonds, Series 2000A: 10,000 5.500%, 1/01/27 (Pre-refunded to 1/01/10) 1/10 at 100.00 A*** 11,030,100 2,000 5.500%, 1/01/30 (Pre-refunded to 1/01/10) - MBIA Insured 1/10 at 100.00 AAA 2,210,460 New Jersey Turnpike Authority, Revenue Bonds, Series 1991C: 2,505 6.500%, 1/01/16 No Opt. Call AAA 3,025,339 760 6.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 917,867 1,230 Puerto Rico, General Obligation and Public Improvement 7/11 at 100.00 AAA 1,363,701 Bonds, Series 2001, 5.125%, 7/01/30 (Pre-refunded to 7/01/11) - FSA Insured 7,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 8,308,500 Obligation Bonds, Series 2000A, 5.500%, 10/01/34 2,000 West Orange Board of Education, Essex County, 10/09 at 101.00 Aaa 2,258,400 New Jersey, Certificates of Participation, Series 1999, 6.000%, 10/01/24 (Pre-refunded to 10/01/09) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 4.4% (2.9% OF TOTAL INVESTMENTS) 2,205 Camden County Pollution Control Financing Authority, 12/05 at 100.00 B2 2,216,223 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, 12/05 at 100.00 B2 3,517,815 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991A, 7.500%, 12/01/10 (Alternative Minimum Tax) 2,055 Mercer County Improvement Authority, New Jersey, 12/13 at 100.00 AAA 2,265,843 Solid Waste Revenue Bonds, Regional Sludge Project, Series 2003, 5.000%, 12/15/14 - FGIC Insured 400 New Jersey Economic Development Authority, Pollution 7/05 at 101.00 Baa3 413,320 Control Revenue Bonds, Jersey Central Power and Light Company, Series 1985, 7.100%, 7/01/15 2,500 Salem County Pollution Control Financing Authority, 4/12 at 101.00 Baa1 2,670,250 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 3,083,850 Facility Senior Lien Revenue Bonds, Ogden Martin Systems of Union Inc., Series 1998A, 5.000%, 6/01/23 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 5.5% (3.7% OF TOTAL INVESTMENTS) 3,000 Jersey City Municipal Utilities Authority, Hudson County, 7/08 at 102.00 AAA 3,174,900 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 7,816,423 Facilities Revenue Bonds, American Water Company, Series 1996, 6.000%, 5/01/36 (Alternative Minimum Tax) - FGIC Insured 28 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER (continued) North Hudson Sewerage Authority, New Jersey, Sewerage Revenue Refunding Bonds, Series 2002A: $ 3,000 5.250%, 8/01/16 - FGIC Insured 8/12 at 100.00 Aaa $ 3,323,880 3,000 5.250%, 8/01/18 - FGIC Insured 8/12 at 100.00 Aaa 3,319,920 - ------------------------------------------------------------------------------------------------------------------------------------ $ 443,383 Total Long-Term Investments (cost $452,829,495) - 150.2% 479,160,686 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.5% (0.3% OF TOTAL INVESTMENTS) 1,600 Puerto Rico Government Development Bank, Adjustable A-1 1,600,000 Refunding Bonds, Variable Rate Demand Obligations, Series 1985, 2.140%, 12/01/15 - MBIA Insured+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,600 Total Short-Term Investments (cost $1,600,000) 1,600,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $454,429,495) - 150.7% 480,760,686 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 0.1% 321,942 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.8)% (162,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 319,082,628 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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 registered public accounting firm): 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. (DD) Security purchased on a delayed delivery basis. (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 in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 29 Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ) Portfolio of INVESTMENTS June 30, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 0.3% (0.3% OF TOTAL INVESTMENTS) Middlesex County Improvement Authority, New Jersey, Senior Revenue Bonds, Heldrich Center Hotel/Conference Center Project, Series 2005A: $ 240 5.000%, 1/01/32 1/15 at 100.00 Baa3 $ 241,262 240 5.125%, 1/01/37 1/15 at 100.00 Baa3 242,158 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 5.0% (3.4% OF TOTAL INVESTMENTS) 3,240 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 3,370,928 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 BBB 3,769,040 2,250 6.375%, 6/01/32 6/13 at 100.00 BBB 2,427,278 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 17.0% (11.6% OF TOTAL INVESTMENTS) New Jersey Higher Education Assistance Authority, Student Loan Revenue Bonds, Series 2000A: 2,190 5.700%, 6/01/08 (Alternative Minimum Tax) - MBIA Insured No Opt. Call AAA 2,242,232 1,455 6.000%, 6/01/15 (Alternative Minimum Tax) - MBIA Insured 6/10 at 101.00 AAA 1,494,430 1,125 New Jersey Economic Development Authority, Revenue Bonds, 6/15 at 100.00 AAA 1,211,085 The Seeing Eye Inc., Series 2005, 5.000%, 12/01/24 - AMBAC Insured 2,960 New Jersey Economic Development Authority, Revenue No Opt. Call N/R 3,539,509 Bonds, Yeshiva Ktana of Passaic, Series 1993, 8.000%, 9/15/18 330 New Jersey Educational Facilities Authority, Revenue Bonds, 7/05 at 100.00 A- 331,059 Trenton State College Issue, Series 1976D, 6.750%, 7/01/08 500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/13 at 100.00 A 516,585 Fairleigh Dickinson University, Series 2002D, 5.250%, 7/01/32 - ACA Insured 1,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/13 at 100.00 AAA 1,096,480 Rowan University, Series 2003I, 5.125%, 7/01/21 - FGIC Insured 1,245 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 1,370,284 Montclair State University, Series 2004L, 5.125%, 7/01/19 - MBIA Insured New Jersey Educational Facilities Authority, Revenue Bonds, Ramapo College, Series 2004H: 1,640 5.000%, 7/01/18 - FGIC Insured 7/14 at 100.00 AAA 1,794,750 1,040 5.000%, 7/01/23 - FGIC Insured 7/14 at 100.00 AAA 1,118,385 New Jersey Educational Facilities Authority, Revenue Bonds, New Jersey Institute of Technology, Series 2004B: 1,375 5.000%, 7/01/18 - AMBAC Insured 1/14 at 100.00 AAA 1,498,626 725 5.000%, 7/01/19 - AMBAC Insured 1/14 at 100.00 AAA 787,437 1,530 4.750%, 7/01/20 - AMBAC Insured 1/14 at 100.00 AAA 1,613,706 1,125 4.250%, 7/01/24 - AMBAC Insured 1/14 at 100.00 AAA 1,128,589 300 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 AA 328,749 Rider University, Series 2004A, 5.500%, 7/01/23 - RAAI Insured 300 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 N/R 318,243 Fairleigh Dickinson University, Series 2004C, 5.500%, 7/01/23 New Jersey Educational Facilities Authority, Revenue Bonds, Rowan University, Series 2004C: 905 5.000%, 7/01/15 - MBIA Insured 7/14 at 100.00 AAA 1,002,061 400 5.000%, 7/01/20 - MBIA Insured 7/14 at 100.00 AAA 434,560 275 New Jersey Higher Education Assistance Authority, Student 7/05 at 100.00 A+ 275,726 Loan Revenue Bonds, New Jersey Class Loan Program, Series 1992A, 6.125%, 7/01/09 (Alternative Minimum Tax) 30 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS (continued) $ 2,410 New Jersey Higher Education Assistance Authority, Student 6/09 at 101.00 AAA $ 2,506,954 Loan Revenue Bonds, Series 1999A, 5.250%, 6/01/18 (Alternative Minimum Tax) - MBIA Insured 2,000 Rutgers State University, New Jersey, Revenue Bonds, 5/14 at 100.00 AAA 2,132,960 Series 2004E, 5.000%, 5/01/34 - FGIC Insured 2,025 University of Medicine and Dentistry of New Jersey, 4/13 at 100.00 AAA 2,198,826 Certificates of Participation, Child Health Institute, LLC, Series 2003, 5.000%, 4/15/21 - AMBAC Insured 1,000 University of Medicine and Dentistry of New Jersey, 6/14 at 100.00 AAA 1,063,420 Certificates of Participation, University Housing Associates, LLC, Series 2004, 5.000%, 6/15/29 - MBIA Insured 2,750 University of Medicine and Dentistry of New Jersey, 12/12 at 100.00 AAA 2,909,583 Revenue Bonds, Series 2002A, 5.000%, 12/01/31 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FINANCIALS - 0.9% (0.6% OF TOTAL INVESTMENTS) 1,500 New Jersey Economic Development Authority, Revenue No Opt. Call Baa3 1,655,835 Refunding Bonds, Kapkowski Road Landfill Project, Series 2002, 5.750%, 10/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 13.6% (9.2% OF TOTAL INVESTMENTS) 620 Camden County Improvement Authority, New Jersey, 8/14 at 100.00 BBB 665,204 Revenue Bonds, Cooper Health System, Series 2004A, 5.750%, 2/15/34 3,500 New Jersey Health Care Facilities Financing Authority, 7/11 at 100.00 A2 3,761,240 Revenue Bonds, Kennedy Health System Obligated Group, Series 2001, 5.625%, 7/01/31 1,710 New Jersey Health Care Facilities Financing Authority, 1/12 at 100.00 AA 1,785,650 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 1,231,384 Revenue Refunding Bonds, Atlantic City Medical Center, Series 2002, 5.750%, 7/01/25 3,000 New Jersey Health Care Facilities Financing Authority, 7/12 at 100.00 Baa1 3,269,850 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 Baa3 1,940,588 Revenue Bonds, Somerset Medical Center, Series 2003, 5.500%, 7/01/33 545 New Jersey Health Care Facilities Financing Authority, 7/10 at 101.00 BBB- 619,125 Revenue Bonds, Trinitas Hospital Obligated Group, Series 2000, 7.500%, 7/01/30 2,900 New Jersey Health Care Facilities Financing Authority, 1/10 at 101.00 A2 3,131,855 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 2,215,040 Revenue Bonds, Society of the Valley Hospital Obligated Group, Series 2000, 5.750%, 7/01/15 - AMBAC Insured 1,800 New Jersey Health Care Facilities Financing Authority, 7/09 at 101.00 AAA 1,973,286 Revenue Bonds, Meridian Health System Obligated Group, Series 1999, 5.625%, 7/01/12 - FSA Insured 1,270 New Jersey Health Care Facilities Financing Authority, 7/14 at 100.00 AA 1,367,142 Revenue Bonds, St. Clare's Hospital, Series 2004A, 5.250%, 7/01/20 - RAAI Insured 1,500 New Jersey Health Care Facilities Financing Authority, 7/15 at 100.00 AA 1,566,765 Revenue Bonds, RWJ Health Care Corporation, Series 2005B, 5.000%, 7/01/35 (WI, settling 7/14/05) - RAAI Insured 2,650 Puerto Rico Industrial, Tourist, Educational, Medical 12/05 at 102.00 Baa1 2,720,941 and Environmental Control Facilities Financing Authority, Adjustable Rate Industrial Revenue Bonds, American Home Products Corporation, Series 1983A, 5.100%, 12/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 4.3% (2.9% OF TOTAL INVESTMENTS) 340 Essex County Improvement Authority, New Jersey, FNMA 11/12 at 100.00 Aaa 345,987 Enhanced Multifamily Revenue Bonds, Mount Carmel Towers, Series 2002, 4.750%, 11/01/22 (Alternative Minimum Tax) 595 Long Branch Housing Finance Corporation New Jersey, 10/05 at 100.00 N/R 598,475 Housing Revenue Bonds, Washington Manor Associates Ltd. Section 8 Assisted Elderly Project, Series 1980, 10.000%, 10/01/11 7,000 New Jersey Housing and Mortgage Finance Agency, 11/07 at 101.50 AAA 7,418,110 Multifamily Housing Revenue Bonds, Series 1997A, 5.550%, 5/01/27 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 1.6% (1.1% OF TOTAL INVESTMENTS) 35 New Jersey Housing and Mortgage Finance Agency, 10/05 at 101.50 AAA 35,438 Home Buyer Program Revenue Bonds, Series 1995O, 6.300%, 10/01/23 (Alternative Minimum Tax) - MBIA Insured 31 Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY (continued) New Jersey Housing and Mortgage Finance Agency, Home Buyer Program Revenue Bonds, Series 1997U: $ 1,965 5.700%, 10/01/14 (Alternative Minimum Tax) - MBIA Insured 10/07 at 101.50 AAA $ 2,043,855 535 5.850%, 4/01/29 (Alternative Minimum Tax) - MBIA Insured 10/07 at 101.50 AAA 555,153 500 New Jersey Housing and Mortgage Finance Agency, No Opt. Call AAA 513,450 Home Buyer Program Revenue Bonds, Series 2000CC, 4.600%, 10/01/09 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 0.4% (0.3% OF TOTAL INVESTMENTS) 750 New Jersey Economic Development Authority, 11/14 at 100.00 N/R 796,050 First Mortgage Revenue Bonds, Winchester Gardens at Wards Homestead, Series 2004A, 5.800%, 11/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 15.0% (10.2% OF TOTAL INVESTMENTS) 2,075 Egg Harbor Township School District, Atlantic County, 4/15 at 100.00 Aaa 2,229,795 New Jersey, General Obligation Bonds, Series 2005, 5.000%, 4/01/27 - MBIA Insured 2,460 Freehold Regional High School District, Monmouth No Opt. Call AAA 2,791,952 County Board of Education, New Jersey, School District Refunding Bonds, Series 2001, 5.000%, 3/01/17 - FGIC Insured 1,500 Jersey City, New Jersey, General Obligation Public 9/11 at 102.00 AAA 1,633,665 Improvement Bonds, Series 2003B, 5.000%, 9/01/20 - FSA Insured 1,170 Jersey City, New Jersey, General Obligation Improvement No Opt. Call AAA 1,312,892 Bonds, Series 2002A, 5.250%, 3/01/13 - AMBAC Insured 2,000 Manalapan-Englishtown Regional Board of Education, 10/13 at 100.00 AAA 2,137,100 New Jersey, General Obligation Bonds, Series 2003, 5.000%, 10/01/27 - MBIA Insured New Jersey, General Obligation Bonds, Series 1992D: 2,580 6.000%, 2/15/11 No Opt. Call AA- 2,940,245 1,560 6.000%, 2/15/13 No Opt. Call AA- 1,819,865 720 New Jersey, General Obligation Bonds, Series 2005L, No Opt. Call AAA 822,852 5.250%, 7/15/16 - AMBAC Insured 4,000 Passaic County, New Jersey, General Improvement Refunding No Opt. Call AAA 4,462,760 Bonds, Series 1993, 5.125%, 9/01/12 - FGIC Insured Stafford Township Board of Education, Ocean County, New Jersey, General Obligation Bonds, Series 2003: 1,350 5.250%, 1/15/18 - FSA Insured 1/12 at 100.00 Aaa 1,484,150 1,100 5.250%, 1/15/19 - FSA Insured 1/12 at 100.00 Aaa 1,209,307 2,085 Washington Township Board of Education, Gloucester County, 2/13 at 100.00 Aaa 2,285,911 New Jersey, General Obligation Bonds, Series 2004, 5.000%, 2/01/15 - MBIA Insured 1,780 West Deptford Township, New Jersey, General Obligation 9/14 at 100.00 Aaa 1,920,531 Bonds, Series 2004, 4.750%, 9/01/17 - AMBAC Insured 1,800 Woodbridge Township, Middlesex County, New Jersey, 7/09 at 102.00 Aaa 1,955,466 Sewer Utility Bonds, Series 1999, 5.300%, 7/01/20 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 32.9% (22.4% OF TOTAL INVESTMENTS) Bergen County Improvement Authority, New Jersey, Guaranteed Lease Revenue Bonds, County Administration Complex Project, Series 2003: 1,000 4.500%, 11/15/12 No Opt. Call Aaa 1,080,330 1,200 5.000%, 11/15/17 11/13 at 100.00 Aaa 1,332,120 1,145 5.000%, 11/15/18 11/13 at 100.00 Aaa 1,266,267 1,155 Ocean County, New Jersey, Brick Township Municipal 12/12 at 100.00 Aaa 1,283,251 Utilities Authority, Revenue Bonds, Series 2002, 5.250%, 12/01/18 - FGIC Insured 2,225 Essex County Improvement Authority, New Jersey, 10/13 at 100.00 Aaa 2,366,265 General Obligation Lease Revenue Bonds, Correctional Facilities Project, Series 2003A, 5.000%, 10/01/28 - FGIC Insured 5,515 Essex County Improvement Authority, New Jersey, Lease 12/13 at 100.00 Aaa 6,072,787 Revenue Bonds, Series 2003, 5.125%, 12/15/19 - FSA 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 1,333,224 1,750 5.000%, 11/01/20 - FSA Insured 11/13 at 100.00 AAA 1,909,197 1,965 5.000%, 11/01/21 - FSA Insured 11/13 at 100.00 AAA 2,143,756 32 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) Hudson County Improvement Authority, New Jersey, County Secured Lease Revenue Bonds, County Services Building Project, Series 2005: $ 1,185 5.000%, 4/01/25 - AMBAC Insured 4/15 at 100.00 AAA $ 1,271,434 2,755 5.000%, 4/01/35 - AMBAC Insured 4/15 at 100.00 AAA 2,942,230 1,000 Hudson County Improvement Authority, New Jersey, 1/08 at 101.50 AAA 1,064,920 Utility System Revenue Bonds, Harrison Franchise Acquisition Project, Series 1997, 5.350%, 1/01/27 - FSA Insured Middlesex County Improvement Authority, New Jersey, County Guaranteed Open Space Trust Fund Revenue Bonds, Series 2003: 1,000 5.250%, 9/15/16 9/13 at 100.00 AAA 1,119,320 1,705 5.250%, 9/15/17 9/13 at 100.00 AAA 1,903,309 1,000 5.250%, 9/15/21 9/13 at 100.00 AAA 1,114,050 2,720 New Jersey Health Care Facilities Financing Authority, 9/13 at 100.00 A+ 2,862,827 Lease Revenue Bonds, Department of Human Services - Greystone Park Psychiatric Hospital, Series 2003, 5.000%, 9/15/25 4,200 New Jersey Economic Development Authority, Revenue 7/14 at 100.00 AAA 4,723,698 Bonds, Motor Vehicle Surcharge, Series 2004A, 5.250%, 7/01/15 - MBIA Insured 2,540 New Jersey Economic Development Authority, Cigarette 6/14 at 100.00 BBB 2,736,012 Tax Revenue Bonds, Series 2004, 5.750%, 6/15/34 2,925 New Jersey Economic Development Authority, School No Opt. Call AAA 3,318,237 Facility Construction Bonds, Series 2005K, 5.250%, 12/15/14 - FGIC Insured 1,500 New Jersey Sports and Exposition Authority, Convention No Opt. Call AAA 1,770,735 Center Luxury Tax Bonds, Series 2004, 5.500%, 3/01/22 - MBIA Insured 1,000 New Jersey Educational Facilities Authority, Revenue Bonds, 9/12 at 100.00 AAA 1,107,730 Higher Education Capital Improvement Bonds, Fund Issue, Series 2002A, 5.250%, 9/01/19 - AMBAC Insured 3,000 New Jersey Transit Corporation, Certificates of No Opt. Call AAA 3,432,330 Participation, Federal Transit Administration Grants, Series 2002A, 5.500%, 9/15/14 - AMBAC Insured 2,200 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 2,474,252 Transportation System Bonds, Series 2004B, 5.250%, 12/15/13 - FGIC Insured 2,000 New Jersey Transportation Trust Fund Authority, 12/15 at 100.00 AAA 2,251,080 Transportation System Bonds, Series 2005B, 5.250%, 12/15/18 - FGIC Insured 2,500 Puerto Rico Municipal Finance Agency, Series 1999A, 8/09 at 101.00 AAA 2,745,025 5.500%, 8/01/17 - FSA Insured 1,000 Stony Brook Regional Sewer Authority, Princeton, No Opt. Call Aa2 1,135,650 New Jersey, Revenue Refunding Bonds, Series 1993B, 5.450%, 12/01/12 1,200 Trenton Parking Authority, Mercer County, New Jersey, 10/13 at 100.00 Aaa 1,292,928 Guaranteed Parking System Revenue Bonds, Series 2003, 5.000%, 10/01/24 - FGIC Insured 2,745 Union County Improvement Authority, New Jersey, 3/13 at 100.00 Aaa 2,906,955 General Obligation Lease Revenue Bonds, Plainfield Park Madison Redevelopment Project, Series 2003, 5.000%, 3/01/34 - FSA Insured 2,445 Union County Improvement Authority, New Jersey, General 6/13 at 100.00 Aa1 2,645,001 Obligation Lease Revenue Bonds, Series 2003, 5.000%, 6/15/23 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 23.9% (16.2% OF TOTAL INVESTMENTS) 2,750 Casino Reinvestment Development Authority, New Jersey, 6/15 at 100.00 AAA 3,030,280 Parking Revenue Bonds, Series 2005A, 5.250%, 6/01/20 - MBIA Insured Delaware River and Bay Authority, Delaware and New Jersey, Revenue Bonds, Series 2005: 2,500 5.000%, 1/01/27 - MBIA Insured 1/15 at 100.00 AAA 2,697,050 2,500 5.000%, 1/01/28 - MBIA Insured 1/15 at 100.00 AAA 2,697,050 5,000 Delaware River Port Authority, Pennsylvania and 1/08 at 101.00 AAA 5,261,600 New Jersey, Revenue Bonds, Port District Project, Series 1998B, 5.000%, 1/01/19 - MBIA Insured 1,995 New Jersey Turnpike Authority, Revenue Bonds, Series 2005C, 1/15 at 100.00 AAA 2,135,947 5.000%, 1/01/35 - FSA Insured 5,750 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 6,255,368 5.000%, 1/01/19 - FGIC Insured New Jersey Turnpike Authority, Revenue Bonds, Series 1991C: 1,830 6.500%, 1/01/16 No Opt. Call A 2,207,675 465 6.500%, 1/01/16 - AMBAC Insured No Opt. Call AAA 564,078 760 6.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 927,048 33 Nuveen New Jersey Premium Income Municipal Fund, Inc. (NNJ) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION (continued) $ 750 Newark Housing Authority, New Jersey, Port Authority 1/14 at 100.00 AAA $ 821,820 Terminal Revenue Bonds, Series 2004, 5.250%, 1/01/21 - MBIA Insured 2,750 Passaic County Improvement Authority, New Jersey, 4/15 at 100.00 Aaa 2,926,110 Revenue Bonds, Paterson Parking Deck Facility, Series 2005, 5.000%, 4/15/35 - FSA Insured 2,000 Port Authority of New York and New Jersey, Consolidated 4/12 at 101.00 AAA 2,119,840 Revenue Bonds, One Hundred Twenty-Fifth Series 2002, 5.000%, 4/15/32 - FSA Insured 8,000 Port Authority of New York and New Jersey, Special Project 12/07 at 102.00 AAA 8,618,240 Bonds, JFK International Air Terminal LLC, Sixth Series 1997, 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 4,000 Port Authority of New York and New Jersey, Consolidated 6/15 at 101.00 AAA 4,309,120 Revenue Bonds, One Hundred Fortieth Series 2005, 5.000%, 12/01/28 (DD, settling 7/1/05) - XLCA Insured 1,435 South Jersey Transportation Authority New Jersey, 11/09 at 101.00 AAA 1,542,740 Transportation System Revenue Bonds, Series 1999, 5.125%, 11/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** - 17.8% (12.1% OF TOTAL INVESTMENTS) 4,105 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 4,359,920 Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20 (Pre-refunded to 7/01/10) New Jersey Economic Development Authority, School Facilities Construction Bonds, Series 2002C: 3,000 5.000%, 6/15/15 (Pre-refunded to 6/15/12) - MBIA Insured 6/12 at 100.00 AAA 3,332,250 2,000 5.000%, 6/15/20 (Pre-refunded to 6/15/12) - MBIA Insured 6/12 at 100.00 AAA 2,221,500 3,425 New Jersey Economic Development Authority, School Facilities 6/13 at 100.00 AAA 3,876,004 Construction Bonds, Series 2003F, 5.250%, 6/15/21 (Pre-refunded to 6/15/13) - FGIC Insured 2,250 New Jersey Economic Development Authority, School Facilities 9/13 at 100.00 AAA 2,509,065 Construction Bonds, Series 2004G, 5.000%, 9/01/17 (Pre-refunded to 9/01/13) - MBIA Insured 2,000 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA 2,298,020 System Bonds, Series 2003C, 5.500%, 6/15/18 (Pre-refunded to 6/15/13) 2,025 New Jersey Transportation Trust Fund Authority, Transportation 12/11 at 100.00 AAA 2,354,589 System Bonds, Series 2001B, 6.000%, 12/15/19 (Pre-refunded to 12/15/11) - MBIA Insured New Jersey Turnpike Authority, Revenue Bonds, Series 1991C: 6,590 6.500%, 1/01/16 No Opt. Call AAA 7,958,875 1,760 6.500%, 1/01/16 - AMBAC Insured No Opt. Call AAA 2,125,587 2,745 6.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 3,315,191 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 3.1% (2.1% OF TOTAL INVESTMENTS) 1,285 Camden County Pollution Control Financing Authority, 12/05 at 100.00 B2 1,291,554 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991D, 7.250%, 12/01/10 1,250 New Jersey Economic Development Authority, Pollution No Opt. Call Baa1 1,334,238 Control Revenue Refunding Bonds, Public Service Electric and Gas Company, Series 2001A, 5.000%, 3/01/12 3,125 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/15 at 100.00 AAA 3,376,531 Series 2005RR, 5.000%, 7/01/35 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 10.4% (7.1% OF TOTAL INVESTMENTS) Bayonne Municipal Utilities Authority, New Jersey, Water System Revenue Refunding Bonds, Series 2003A: 1,450 5.000%, 4/01/19 - XLCA Insured 4/13 at 100.00 Aaa 1,559,258 1,250 5.000%, 4/01/24 - XLCA Insured 4/13 at 100.00 Aaa 1,325,275 1,000 Jersey City Sewer Authority, Hudson County, New Jersey, No Opt. Call AAA 1,197,080 Sewer Revenue Refunding Bonds, Series 1993, 6.250%, 1/01/14 - AMBAC Insured 3,100 New Jersey Economic Development Authority, Water 9/05 at 101.00 AAA 3,135,867 Facilities Revenue Refunding Bonds, Hackensack Water Company, Series 1994B, 5.900%, 3/01/24 (Alternative Minimum Tax) - MBIA Insured 6,950 New Jersey Environmental Infrastructure Trust, Environmental 9/11 at 101.00 AAA 7,304,103 Infrastructure Bonds, Series 2001A, 4.750%, 9/01/20 3,500 North Hudson Sewerage Authority, New Jersey, Sewerage 8/12 at 100.00 Aaa 3,873,240 Revenue Refunding Bonds, Series 2002A, 5.250%, 8/01/19 - FGIC Insured 34 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER (continued) $ 1,500 Wanaque Valley Regional Sewer Authority, Passaic County, No Opt. Call AAA $ 1,760,550 New Jersey, Sewer Revenue Refunding Bonds, Series 1993B, 5.750%, 9/01/18 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 258,565 Total Long-Term Investments (cost $265,745,699) - 146.2% 282,409,402 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.8% (0.5% OF TOTAL INVESTMENTS) 1,500 Puerto Rico Government Development Bank, Adjustable A-1 1,500,000 Refunding Bonds, Variable Rate Demand Obligations, Series 1985, 2.140%, 12/01/15 - MBIA Insured+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,500 Total Short-Term Investments (cost $1,500,000) 1,500,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $267,245,699) - 147.0% 283,909,402 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 0.4% 872,908 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (47.4)% (91,600,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 193,182,310 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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 registered public accounting firm): 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. N/R Investment is not rated. (DD) Security purchased on a delayed delivery basis. (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 in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 35 Nuveen New Jersey Dividend Advantage Municipal Fund (NXJ) Portfolio of INVESTMENTS June 30, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 0.3% (0.1% OF TOTAL INVESTMENTS) Middlesex County Improvement Authority, New Jersey, Senior Revenue Bonds, Heldrich Center Hotel/Conference Center Project, Series 2005A: $ 130 5.000%, 1/01/32 1/15 at 100.00 Baa3 $ 130,684 130 5.125%, 1/01/37 1/15 at 100.00 Baa3 131,169 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 4.5% (3.1% OF TOTAL INVESTMENTS) 925 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 962,379 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 BBB 2,398,480 1,125 6.375%, 6/01/32 6/13 at 100.00 BBB 1,213,639 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 18.4% (12.6% OF TOTAL INVESTMENTS) 1,500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/11 at 101.00 AAA 1,582,860 Rowan College, Series 2001C, 5.000%, 7/01/31 - FGIC Insured 200 New Jersey Educational Facilities Authority, Revenue 7/11 at 100.00 AAA 219,766 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 3,989,570 1,600 5.000%, 7/01/26 - AMBAC Insured 7/11 at 100.00 AAA 1,679,840 1,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/11 at 100.00 AAA 1,097,700 New Jersey Institute of Technology, Series 2001G, 5.250%, 7/01/18 - MBIA Insured 300 New Jersey Educational Facilities Authority, Revenue 7/12 at 100.00 AA 319,014 Refunding Bonds, Rider University, Series 2002A, 5.000%, 7/01/17 - RAAI Insured 750 New Jersey Educational Facilities Authority, Revenue 7/14 at 100.00 AAA 819,488 Bonds, Montclair State University, Series 2004L, 5.125%, 7/01/21 - MBIA Insured 630 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 693,397 William Paterson University, Series 2004A, 5.125%, 7/01/19 - FGIC Insured 1,000 New Jersey Educational Facilities Authority, Revenue Bonds, 1/14 at 100.00 AAA 1,077,830 New Jersey Institute of Technology, Series 2004B, 5.000%, 7/01/21 - AMBAC Insured 250 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 N/R 265,203 Fairleigh Dickinson University, Series 2004C, 5.500%, 7/01/23 New Jersey Educational Facilities Authority, Revenue Bonds, Rowan University, Series 2004C: 1,255 5.000%, 7/01/12 - MBIA Insured No Opt. Call AAA 1,384,541 625 5.000%, 7/01/24 - MBIA Insured 7/14 at 100.00 AAA 670,638 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, University of the Sacred Heart, Series 2001: 2,000 5.250%, 9/01/21 9/11 at 100.00 BBB 2,076,080 500 5.250%, 9/01/31 9/11 at 100.00 BBB 514,140 500 Puerto Rico Industrial, Tourist, Educational, Medical 12/12 at 101.00 BBB 536,780 and Environmental Control Facilities Financing Authority, Higher Education Revenue Refunding Bonds, Ana G. Mendez University System, Series 2002, 5.500%, 12/01/31 1,905 University of Puerto Rico, University System Revenue Bonds, 12/05 at 101.50 AAA 1,936,794 Series 1995M, 5.250%, 6/01/25 - MBIA Insured 36 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ENERGY - 1.1% (0.8% OF TOTAL INVESTMENTS) $ 1,000 Virgin Islands Government Refinery Facilities, Senior 1/13 at 100.00 BBB $ 1,144,640 Secured Revenue Bonds, Hovensa LLC Coker Project, Series 2002, 6.500%, 7/01/21 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ FINANCIALS - 1.9% (1.3% OF TOTAL INVESTMENTS) 850 New Jersey Economic Development Authority, Economic 11/08 at 101.00 N/R 868,564 Development Revenue Bonds, Glimcher Properties Limited Partnership Project, Series 1998, 6.000%, 11/01/28 (Alternative Minimum Tax) 750 New Jersey Economic Development Authority, Revenue No Opt. Call Baa3 827,918 Refunding Bonds, Kapkowski Road Landfill Project, Series 2002, 5.750%, 10/01/21 250 New Jersey Economic Development Authority, Industrial 4/06 at 102.00 Ba3 260,208 Development Revenue Refunding Bonds, Newark Airport Marriott Hotel, Series 1996, 7.000%, 10/01/14 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 16.0% (11.0% OF TOTAL INVESTMENTS) 310 Camden County Improvement Authority, New Jersey, Revenue 8/14 at 100.00 BBB 332,602 Bonds, Cooper Health System, Series 2004A, 5.750%, 2/15/34 3,500 New Jersey Health Care Facilities Financing Authority, 7/11 at 100.00 A2 3,761,240 Revenue Bonds, Kennedy Health System Obligated Group, Series 2001, 5.625%, 7/01/31 1,350 New Jersey Health Care Facilities Financing Authority, 7/12 at 100.00 Baa1 1,471,433 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 Baa3 1,034,980 Revenue Bonds, Somerset Medical Center, Series 2003, 5.500%, 7/01/33 500 New Jersey Health Care Facilities Financing Authority, 7/10 at 101.00 BBB- 568,005 Revenue Bonds, Trinitas Hospital Obligated Group, Series 2000, 7.500%, 7/01/30 New Jersey Health Care Facilities Financing Authority, Revenue Bonds, Robert Wood Johnson University Hospital, Series 2000: 750 5.750%, 7/01/25 7/10 at 100.00 A 815,888 3,000 5.750%, 7/01/31 7/10 at 100.00 A 3,263,550 1,500 New Jersey Health Care Facilities Financing Authority, 1/09 at 101.00 AAA 1,616,880 Revenue Bonds, Virtua Health System, Series 1998, 5.250%, 7/01/10 - FSA Insured 2,500 New Jersey Health Care Facilities Financing Authority, 7/09 at 101.00 A2 2,619,525 Revenue Refunding Bonds, Burdette Tomlin Memorial Hospital, Series 1999, 5.500%, 7/01/29 845 New Jersey Health Care Facilities Financing Authority, 7/14 at 100.00 AA 909,634 Revenue Bonds, St. Clare's Hospital, Series 2004A, 5.250%, 7/01/20 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 1.7% (1.2% OF TOTAL INVESTMENTS) New Jersey Economic Development Authority, Revenue Bonds, Masonic Charity Foundation of New Jersey, Series 2001: 1,000 6.000%, 6/01/25 6/11 at 102.00 A+ 1,124,510 335 5.500%, 6/01/31 6/11 at 102.00 A+ 362,822 250 New Jersey Economic Development Authority, First 11/14 at 100.00 N/R 265,350 Mortgage Revenue Bonds, Winchester Gardens at Wards Homestead, Series 2004A, 5.800%, 11/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 5.4% (3.7% OF TOTAL INVESTMENTS) 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 1,949,123 1,630 4.750%, 8/15/19 - FSA Insured 8/10 at 100.00 AAA 1,717,335 360 New Jersey, General Obligation Bonds, Series 2005L, No Opt. Call AAA 411,426 5.250%, 7/15/16 - AMBAC Insured 1,350 Puerto Rico, General Obligation and Public Improvement 7/11 at 100.00 AAA 1,461,713 Bonds, Series 2001, 5.250%, 7/01/27 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 22.3% (15.3% OF TOTAL INVESTMENTS) 1,745 Burlington County Bridge Commission, New Jersey, 12/13 at 100.00 AAA 1,906,447 Guaranteed Pooled Loan Bonds, Series 2003, 5.000%, 12/01/18 - MBIA Insured 1,500 Camden County Improvement Authority, New Jersey, 9/15 at 100.00 AAA 1,661,925 Guaranteed Lease Revenue Bonds, Series 2005A, 5.000%, 9/01/16 - FSA Insured 37 Nuveen New Jersey Dividend Advantage Municipal Fund (NXJ) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 1,100 Casino Reinvestment Development Authority, New Jersey, 1/15 at 102.00 AAA $ 1,232,517 Hotel Room Fee Revenue Bonds, Series 2004, 5.250%, 1/01/16 - AMBAC Insured 2,000 Essex County Improvement Authority, New Jersey, Lease No Opt. Call Aaa 2,208,940 Revenue Bonds, Series 2003, 5.000%, 12/15/12 - FSA Insured 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 611,061 900 5.000%, 11/01/20 - FSA Insured 11/13 at 100.00 AAA 981,873 1,015 5.000%, 11/01/21 - FSA Insured 11/13 at 100.00 AAA 1,107,335 525 New Jersey Economic Development Authority, School 9/15 at 100.00 AAA 580,739 Facilities Construction Bonds, Series 2005N-1, 5.000%, 9/01/17 - AMBAC Insured 2,200 New Jersey Economic Development Authority, Revenue 7/14 at 100.00 AAA 2,474,318 Bonds, Motor Vehicle Surcharge, Series 2004A, 5.250%, 7/01/15 - MBIA Insured 1,200 New Jersey Economic Development Authority, Cigarette Tax 6/14 at 100.00 BBB 1,292,604 Revenue Bonds, Series 2004, 5.750%, 6/15/34 1,550 New Jersey Economic Development Authority, School No Opt. Call AAA 1,758,382 Facility Construction Bonds, Series 2005K, 5.250%, 12/15/14 - FGIC Insured 1,000 New Jersey Educational Facilities Authority, Revenue 9/12 at 100.00 AAA 1,107,730 Bonds, Higher Education Capital Improvement Bonds, Fund Issue, Series 2002A, 5.250%, 9/01/19 - AMBAC Insured 1,000 New Jersey Transit Corporation, Certificates of No Opt. Call AAA 1,144,110 Participation, Federal Transit Administration Grants, Series 2002A, 5.500%, 9/15/14 - AMBAC Insured 1,200 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 1,349,592 System Bonds, Series 2004B, 5.250%, 12/15/13 - FGIC Insured 1,635 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 1,838,819 System Bonds, Series 2005B, 5.250%, 12/15/13 - MBIA Insured 1,500 Virgin Islands Public Finance Authority, Senior Lien Revenue 10/08 at 101.00 AA 1,595,490 Refunding Bonds, Matching Fund Loan Note, Series 1998A, 5.500%, 10/01/18 - RAAI Insured - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 23.9% (16.4% OF TOTAL INVESTMENTS) 1,000 Delaware River and Bay Authority, Delaware and 1/15 at 100.00 AAA 1,081,290 New Jersey, Revenue Bonds, Series 2005, 5.000%, 1/01/25 - MBIA Insured 1,800 New Jersey Economic Development Authority, Special 11/10 at 101.00 B 1,675,278 Facilities Revenue Bonds, Continental Airlines Inc., Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax) 1,195 New Jersey Turnpike Authority, Revenue Bonds, Series 2005C, 1/15 at 100.00 AAA 1,279,427 5.000%, 1/01/35 - FSA Insured 3,000 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 3,263,670 5.000%, 1/01/19 - FGIC Insured New Jersey Turnpike Authority, Revenue Bonds, Series 1991C: 175 6.500%, 1/01/16 No Opt. Call A 211,117 70 6.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 85,386 375 Newark Housing Authority, New Jersey, Port Authority 1/14 at 100.00 AAA 410,910 Terminal Revenue Bonds, Series 2004, 5.250%, 1/01/21 - MBIA Insured 3,000 Port Authority of New York and New Jersey, Consolidated 1/07 at 101.00 AAA 3,138,420 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 3,692,535 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 Project 12/07 at 102.00 AAA 5,386,400 Bonds, JFK International Air Terminal LLC, Sixth Series 1997, 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 4,000 South Jersey Transportation Authority New Jersey, 11/09 at 101.00 AAA 4,300,320 Transportation System Revenue Bonds, Series 1999, 5.125%, 11/01/22 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** - 25.7% (17.7% OF TOTAL INVESTMENTS) 5,215 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 5,904,423 Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26 (Pre-refunded to 7/01/10) 38 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** (continued) $ 1,000 Delaware River and Bay Authority, Delaware and 1/13 at 100.00 AAA $ 1,124,780 New Jersey, Revenue Bonds, Series 2003, 5.250%, 1/01/18 (Pre-refunded to 1/01/13) - MBIA Insured 50 Essex County Improvement Authority, New Jersey, General 10/10 at 100.00 Aaa 57,146 Obligation Guaranteed Lease Revenue Bonds, County Correctional Facility Project, Series 2000, 6.000%, 10/01/25 (Pre-refunded to 10/01/10) - FGIC Insured 2,400 New Jersey Economic Development Authority, School 6/11 at 100.00 AAA 2,642,064 Facilities Construction Bonds, Series 2001A, 5.000%, 6/15/21 (Pre-refunded to 6/15/11) - AMBAC Insured 1,500 New Jersey Economic Development Authority, School 6/12 at 100.00 AAA 1,666,125 Facilities Construction Bonds, Series 2002C, 5.000%, 6/15/15 (Pre-refunded to 6/15/12) - MBIA Insured 1,000 New Jersey Economic Development Authority, School 6/13 at 100.00 AAA 1,131,680 Facilities Construction Bonds, Series 2003F, 5.250%, 6/15/21 (Pre-refunded to 6/15/13) - FGIC Insured 900 New Jersey Economic Development Authority, School 9/13 at 100.00 AAA 1,003,626 Facilities Construction Bonds, Series 2004G, 5.000%, 9/01/17 (Pre-refunded to 9/01/13) - MBIA Insured 1,565 New Jersey Educational Facilities Authority, Revenue Bonds, 7/10 at 100.00 AAA 1,727,071 Princeton University, Series 2000E, 5.250%, 7/01/16 (Pre-refunded to 7/01/10) New Jersey Transportation Trust Fund Authority, Transportation System Bonds, Series 2003C: 1,000 5.500%, 6/15/17 (Pre-refunded to 6/15/13) 6/13 at 100.00 AAA 1,149,010 1,000 5.500%, 6/15/18 (Pre-refunded to 6/15/13) 6/13 at 100.00 AAA 1,149,010 550 New Jersey Turnpike Authority, Revenue Bonds, Series 1991C, No Opt. Call AAA 664,246 6.500%, 1/01/16 Puerto Rico, General Obligation and Public Improvement Bonds, Series 2001: 2,150 5.250%, 7/01/27 (Pre-refunded to 7/01/11) - FSA Insured 7/11 at 100.00 AAA 2,398,304 1,230 5.125%, 7/01/30 (Pre-refunded to 7/01/11) - FSA Insured 7/11 at 100.00 AAA 1,363,701 4,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 4,421,040 Obligation Bonds, Series 2000A, 5.500%, 10/01/40 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 2.6% (1.8% OF TOTAL INVESTMENTS) 1,815 Camden County Pollution Control Financing Authority, 12/05 at 100.00 B2 1,824,238 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991B, 7.500%, 12/01/09 (Alternative Minimum Tax) 750 New Jersey Economic Development Authority, Pollution No Opt. Call Baa1 800,543 Control Revenue Refunding Bonds, Public Service Electric and Gas Company, Series 2001A, 5.000%, 3/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 21.8% (15.0% OF TOTAL INVESTMENTS) 4,635 New Jersey Economic Development Authority, Water 5/08 at 102.00 Aaa 4,914,537 Facilities Revenue Bonds, American Water Company, 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 7,319,200 Facilities Revenue Bonds, Middlesex Water Company, Series 1998, 5.350%, 2/01/38 (Alternative Minimum Tax) - MBIA Insured 2,775 New Jersey Environmental Infrastructure Trust, Environmental 9/08 at 101.00 AAA 2,852,362 Infrastructure Bonds, Series 1998A, 4.500%, 9/01/18 15,840 North Hudson Sewerage Authority, New Jersey, Sewerage No Opt. Call Aaa 7,220,822 Revenue Refunding Bonds, Series 2001A, 0.000%, 8/01/23 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 147,375 Total Long-Term Investments (cost $140,527,062) - 145.6% 149,197,901 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.2% 1,303,776 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (46.8)% (48,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 102,501,677 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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 registered public accounting firm): 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. N/R Investment is not rated. See accompanying notes to financial statements. 39 Nuveen New Jersey Dividend Advantage Municipal Fund 2 (NUJ) Portfolio of INVESTMENTS June 30, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER DISCRETIONARY - 0.3% (0.2% OF TOTAL INVESTMENTS) Middlesex County Improvement Authority, New Jersey, Senior Revenue Bonds, Heldrich Center Hotel/Conference Center Project, Series 2005A: $ 90 5.000%, 1/01/32 1/15 at 100.00 Baa3 $ 90,473 90 5.125%, 1/01/37 1/15 at 100.00 Baa3 90,809 - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 5.8% (4.0% OF TOTAL INVESTMENTS) 1,040 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 1,082,026 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: 1,600 6.125%, 6/01/24 6/13 at 100.00 BBB 1,713,200 1,250 6.375%, 6/01/32 6/13 at 100.00 BBB 1,348,488 - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 15.0% (10.2% OF TOTAL INVESTMENTS) 1,000 Bergen County Improvement Authority, New Jersey, 9/12 at 101.00 N/R 1,067,190 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 1,159,084 Refunding Bonds, Rider University, Series 2002A, 5.000%, 7/01/17 - RAAI Insured 3,000 New Jersey Educational Facilities Authority, Revenue Bonds, 7/12 at 100.00 AAA 3,150,270 College of New Jersey Project, Series 2002C, 4.750%, 7/01/19 - FGIC Insured 500 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 AAA 550,315 William Paterson University, Series 2004A, 5.125%, 7/01/19 - FGIC Insured 575 New Jersey Educational Facilities Authority, Revenue Bonds, 1/14 at 100.00 AAA 619,752 New Jersey Institute of Technology, Series 2004B, 5.000%, 7/01/21 - AMBAC Insured 200 New Jersey Educational Facilities Authority, Revenue Bonds, 7/14 at 100.00 N/R 212,162 Fairleigh Dickinson University, Series 2004C, 5.500%, 7/01/23 875 New Jersey Educational Facilities Authority, Revenue Bonds, No Opt. Call AAA 965,318 Rowan University, Series 2004C, 5.000%, 7/01/12 - MBIA Insured 1,000 Puerto Rico Industrial, Tourist, Educational, Medical and 2/09 at 101.00 BBB 1,039,860 Environmental Control Facilities Financing Authority, Higher Education Revenue Bonds, Ana G. Mendez University System, Series 1999, 5.375%, 2/01/19 1,790 University of Medicine and Dentistry of New Jersey, Revenue 12/12 at 100.00 AAA 1,893,874 Bonds, Series 2002A, 5.000%, 12/01/31 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ENERGY - 1.6% (1.1% OF TOTAL INVESTMENTS) 1,000 Virgin Islands Government Refinery Facilities, Senior Secured 1/13 at 100.00 BBB 1,144,640 Revenue Bonds, Hovensa LLC Coker Project, Series 2002, 6.500%, 7/01/21 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ FINANCIALS - 4.9% (3.4% OF TOTAL INVESTMENTS) 600 New Jersey Economic Development Authority, Economic 11/08 at 101.00 N/R 613,104 Development Revenue Bonds, Glimcher Properties Limited Partnership Project, Series 1998, 6.000%, 11/01/28 (Alternative Minimum Tax) 1,450 New Jersey Economic Development Authority, Revenue No Opt. Call Baa3 1,600,641 Refunding Bonds, Kapkowski Road Landfill Project, Series 2002, 5.750%, 10/01/21 1,250 New Jersey Economic Development Authority, Industrial 4/06 at 102.00 Ba3 1,301,038 Development Revenue Refunding Bonds, Newark Airport Marriott Hotel, Series 1996, 7.000%, 10/01/14 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 23.7% (16.2% OF TOTAL INVESTMENTS) 220 Camden County Improvement Authority, New Jersey, Revenue 8/14 at 100.00 BBB 236,040 Bonds, Cooper Health System, Series 2004A, 5.750%, 2/15/34 40 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) $ 1,500 New Jersey Health Care Facilities Financing Authority, 7/07 at 102.00 BBB- $ 1,571,400 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, Series 2001: 500 5.000%, 8/01/31 - AMBAC Insured 8/11 at 100.00 AAA 532,760 1,925 5.000%, 8/01/41 - AMBAC Insured 8/11 at 100.00 AAA 2,006,890 140 New Jersey Health Care Facilities Financing Authority, 7/11 at 100.00 A2 150,450 Revenue Bonds, Kennedy Health System Obligated Group, Series 2001, 5.625%, 7/01/31 1,150 New Jersey Health Care Facilities Financing Authority, 1/12 at 100.00 AA 1,204,648 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- 1,108,340 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 2,724,300 Revenue Refunding Bonds, Atlantic City Medical Center, Series 2002, 5.750%, 7/01/25 1,250 New Jersey Health Care Facilities Financing Authority, 7/12 at 100.00 Baa1 1,362,438 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 Baa3 517,490 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 3,807,475 Revenue Bonds, Robert Wood Johnson University Hospital, Series 2000, 5.750%, 7/01/31 510 New Jersey Health Care Facilities Financing Authority, 7/09 at 101.00 AAA 549,566 Revenue Bonds, Meridian Health System Obligated Group, Series 1999, 5.250%, 7/01/29 - FSA Insured 1,100 Puerto Rico Industrial, Tourist, Educational, Medical and 12/05 at 102.00 Baa1 1,129,447 Environmental Control Facilities Financing Authority, Adjustable Rate Industrial Revenue Bonds, American Home Products Corporation, Series 1983A, 5.100%, 12/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 3.4% (2.3% OF TOTAL INVESTMENTS) 2,250 New Jersey Housing and Mortgage Finance Agency, 11/07 at 101.50 AAA 2,388,353 Multifamily Housing Revenue Bonds, Series 1997A, 5.650%, 5/01/40 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 7.6% (5.2% OF TOTAL INVESTMENTS) New Jersey Economic Development Authority, Revenue Bonds, Masonic Charity Foundation of New Jersey, Series 2001: 1,000 5.500%, 6/01/21 6/11 at 102.00 A+ 1,091,100 4,000 5.500%, 6/01/31 6/11 at 102.00 A+ 4,332,200 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 5.5% (3.7% OF TOTAL INVESTMENTS) 3,000 Jackson Township School District, Ocean County, 4/12 at 100.00 AAA 3,211,710 New Jersey, General Obligation Bonds, Series 2002, 5.000%, 4/15/21 - FGIC Insured 240 New Jersey, General Obligation Bonds, Series 2005L, No Opt. Call AAA 274,284 5.250%, 7/15/16 - AMBAC Insured 385 Puerto Rico, General Obligation and Public Improvement 7/11 at 100.00 AAA 416,012 Bonds, Series 2001, 5.125%, 7/01/23 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 23.3% (15.9% OF TOTAL INVESTMENTS) 3,000 Ocean County, New Jersey, Brick Township Municipal 12/12 at 100.00 Aaa 3,206,940 Utilities Authority, Revenue Bonds, Series 2002, 5.000%, 12/01/25 - FGIC Insured 1,000 Burlington County Bridge Commission, New Jersey, 12/13 at 100.00 AAA 1,092,520 Guaranteed Pooled Loan Bonds, Series 2003, 5.000%, 12/01/18 - MBIA Insured 750 Casino Reinvestment Development Authority, New Jersey, 1/15 at 102.00 AAA 840,353 Hotel Room Fee Revenue Bonds, Series 2004, 5.250%, 1/01/16 - AMBAC Insured 1,000 Essex County Improvement Authority, New Jersey, Lease No Opt. Call Aaa 1,104,470 Revenue Bonds, Series 2003, 5.000%, 12/15/12 - FSA Insured 41 Nuveen New Jersey Dividend Advantage Municipal Fund 2 (NUJ) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) 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 $ 555,510 625 5.000%, 11/01/20 - FSA Insured 11/13 at 100.00 AAA 681,856 700 5.000%, 11/01/21 - FSA Insured 11/13 at 100.00 AAA 763,679 535 Mansfield Township Board of Education, Warren County, 3/06 at 102.00 AAA 556,571 New Jersey, Certificates of Participation, Series 1995, 5.900%, 3/01/15 - MBIA Insured 350 New Jersey Economic Development Authority, School 9/15 at 100.00 AAA 387,160 Facilities Construction Bonds, Series 2005N-1, 5.000%, 9/01/17 - AMBAC Insured 1,500 New Jersey Economic Development Authority, Revenue Bonds, 7/14 at 100.00 AAA 1,687,035 Motor Vehicle Surcharge, Series 2004A, 5.250%, 7/01/15 - MBIA Insured 700 New Jersey Economic Development Authority, Cigarette 6/14 at 100.00 BBB 754,019 Tax Revenue Bonds, Series 2004, 5.750%, 6/15/34 1,010 New Jersey Economic Development Authority, School No Opt. Call AAA 1,145,784 Facility Construction Bonds, Series 2005K, 5.250%, 12/15/14 - FGIC Insured 1,000 New Jersey Transit Corporation, Certificates of No Opt. Call AAA 1,144,110 Participation, Federal Transit Administration Grants, Series 2002A, 5.500%, 9/15/14 - AMBAC Insured 700 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 787,262 Transportation System Bonds, Series 2004B, 5.250%, 12/15/13 - FGIC Insured 1,180 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 1,327,099 Transportation System Bonds, Series 2005B, 5.250%, 12/15/13 - MBIA Insured 505 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB- 544,824 Appropriation Bonds, Series 2002E, 5.500%, 8/01/29 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 21.6% (14.8% OF TOTAL INVESTMENTS) 1,200 New Jersey Economic Development Authority, 11/10 at 101.00 B 1,116,852 Special Facilities Revenue Bonds, Continental Airlines Inc., Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax) 820 New Jersey Turnpike Authority, Revenue Bonds, Series 2005C, 1/15 at 100.00 AAA 877,933 5.000%, 1/01/35 - FSA Insured 2,000 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 2,175,780 5.000%, 1/01/19 - FGIC Insured 675 New Jersey Turnpike Authority, Revenue Bonds, Series 1991C, No Opt. Call A 814,307 6.500%, 1/01/16 250 Newark Housing Authority, New Jersey, Port Authority 1/14 at 100.00 AAA 273,940 Terminal Revenue Bonds, Series 2004, 5.250%, 1/01/21 - MBIA Insured 2,000 Port Authority of New York and New Jersey, Consolidated 6/14 at 100.00 AAA 2,119,980 Revenue Bonds, One Hundred Twenty-Seventh Series 2002, 5.125%, 6/15/37 (Alternative Minimum Tax) - AMBAC Insured 3,000 Port Authority of New York and New Jersey, Consolidated 4/12 at 101.00 AAA 3,185,820 Revenue Bonds, One Hundred Twenty-Fifth Series 2002, 5.000%, 10/15/26 - FSA Insured Port Authority of New York and New Jersey, Special Project Bonds, JFK International Air Terminal LLC, Sixth Series 1997: 4,000 7.000%, 12/01/12 (Alternative Minimum Tax) - MBIA Insured No Opt. Call AAA 4,798,320 50 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 12/07 at 102.00 AAA 53,864 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** - 22.2% (15.2% OF TOTAL INVESTMENTS) 3,000 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 3,396,600 Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26 (Pre-refunded to 7/01/10) 770 Delaware River and Bay Authority, Delaware and New Jersey, 1/13 at 100.00 AAA 866,081 Revenue Bonds, Series 2003, 5.250%, 1/01/18 (Pre-refunded to 1/01/13) - MBIA Insured 160 Essex County Improvement Authority, New Jersey, General 10/10 at 100.00 Aaa 182,866 Obligation Guaranteed Lease Revenue Bonds, County Correctional Facility Project, Series 2000, 6.000%, 10/01/25 (Pre-refunded to 10/01/10) - FGIC Insured 1,000 New Jersey Economic Development Authority, School Facilities 6/12 at 100.00 AAA 1,110,750 Construction Bonds, Series 2002C, 5.000%, 6/15/20 (Pre-refunded to 6/15/12) - MBIA Insured 900 New Jersey Economic Development Authority, School 9/13 at 100.00 AAA 1,003,626 Facilities Construction Bonds, Series 2004G, 5.000%, 9/01/17 (Pre-refunded to 9/01/13) - MBIA Insured 42 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** (continued) $ 1,000 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA $ 1,149,010 System Bonds, Series 2003C, 5.500%, 6/15/18 (Pre-refunded to 6/15/13) 680 New Jersey Transportation Trust Fund Authority, Transportation 12/11 at 100.00 AAA 751,271 System Bonds, Series 2001B, 5.000%, 12/15/21 (Pre-refunded to 12/15/11) - MBIA Insured 2,430 New Jersey Turnpike Authority, Revenue Bonds, No Opt. Call AAA 2,934,760 Series 1991C, 6.500%, 1/01/16 2,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 2,763,150 Obligation Bonds, Series 2000A, 5.500%, 10/01/40 1,495 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 Aaa 1,684,641 Appropriation Bonds, Series 2002E, 5.500%, 8/01/29 (Pre-refunded to 2/01/12) - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 10.6% (7.3% OF TOTAL INVESTMENTS) 825 Camden County Pollution Control Financing Authority, 12/05 at 100.00 B2 829,199 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 2,696,522 5.250%, 10/01/34 - MBIA Insured 750 New Jersey Economic Development Authority, Pollution No Opt. Call Baa1 800,540 Control Revenue Refunding Bonds, Public Service Electric and Gas Company, Series 2001A, 5.000%, 3/01/12 3,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/12 at 101.00 AAA 3,243,720 Series 2002II, 5.125%, 7/01/26 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 0.8% (0.5% OF TOTAL INVESTMENTS) 500 North Hudson Sewerage Authority, New Jersey, Sewerage 8/12 at 100.00 Aaa 553,320 Revenue Refunding Bonds, Series 2002A, 5.250%, 8/01/19 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 95,630 Total Long-Term Investments (cost $97,580,078) - 146.3% 104,219,191 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.1% 1,511,933 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.4)% (34,500,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 71,231,124 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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 registered public accounting firm): 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. N/R Investment is not rated. See accompanying notes to financial statements. 43 Nuveen Pennsylvania Investment Quality Municipal Fund (NQP) Portfolio of INVESTMENTS June 30, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 0.4% (0.2% OF TOTAL INVESTMENTS) $ 1,000 Pennsylvania Economic Development Financing Authority, No Opt. Call AA- $ 1,138,140 Solid Waste Disposal Revenue Bonds, Procter & Gamble Paper Project, Series 2001, 5.375%, 3/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 24.3% (16.3% OF TOTAL INVESTMENTS) 3,000 Allegheny County Higher Education Building Authority, 3/12 at 100.00 AA- 3,173,910 Pennsylvania, Revenue Bonds, Carnegie Mellon University, Series 2002, 5.125%, 3/01/32 975 Allegheny County Higher Education Building Authority, 2/06 at 102.00 Baa3 1,010,129 Pennsylvania, College Revenue Bonds, Robert Morris College, Series 1996A, 6.250%, 2/15/26 200 Allegheny County Higher Education Building Authority, No Opt. Call Baa3 226,590 Pennsylvania, College Revenue Refunding Bonds, Robert Morris College, Series 1998A, 6.000%, 5/01/28 2,000 Allegheny County Higher Education Building Authority, 9/08 at 102.00 BBB 2,069,300 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 2,104,740 Pennsylvania, Educational Facilities Revenue Bonds, Westtown School, Series 2002, 5.000%, 1/01/26 - AMBAC Insured 3,000 Delaware County Authority, Pennsylvania, Revenue Bonds, 11/10 at 101.00 AA 3,338,850 Haverford College, Series 2000, 5.750%, 11/15/29 1,315 Delaware County Authority, Pennsylvania, Revenue Refunding 8/13 at 100.00 AAA 1,460,163 Bonds, Villanova University, Series 2003, 5.250%, 8/01/18 - FGIC Insured Delaware County Authority, Pennsylvania, Revenue Bonds, Villanova University, Series 2005: 1,000 5.000%, 8/01/12 - MBIA Insured No Opt. Call AAA 1,101,830 1,240 5.000%, 8/01/13 - MBIA Insured No Opt. Call AAA 1,372,730 1,305 5.000%, 8/01/16 - MBIA Insured 8/15 at 100.00 AAA 1,448,433 1,000 Harveys Lake General Municipal Authority, Pennsylvania, 11/09 at 100.00 A 1,077,390 College Revenue Bonds, College of Misericordia Project, Series 1999, 6.000%, 5/01/19 - ACA Insured Indiana County Industrial Development Authority, Pennsylvania, Revenue Bonds, 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 539,579 815 0.000%, 11/01/16 - AMBAC Insured No Opt. Call AAA 513,882 815 0.000%, 11/01/17 - AMBAC Insured No Opt. Call AAA 488,650 815 0.000%, 11/01/18 - AMBAC Insured No Opt. Call AAA 464,534 815 0.000%, 11/01/19 - AMBAC Insured No Opt. Call AAA 441,624 8,000 Pennsylvania Higher Education Assistance Agency, Capital 11/11 at 100.00 Aaa 8,395,440 Acquisition Revenue Refunding Bonds, Series 2001, 5.000%, 12/15/30 - MBIA Insured 3,450 Pennsylvania Higher Educational Facilities Authority, No Opt. Call AA 3,855,065 Revenue Bonds, University of Pennsylvania, Series 2005A, 5.000%, 9/01/14 5,000 Pennsylvania Higher Educational Facilities Authority, 6/12 at 100.00 Aaa 5,448,300 General Revenue Bonds, State System of Higher Education, Series 2002W, 5.000%, 6/15/19 - AMBAC Insured 1,000 Pennsylvania Higher Educational Facilities Authority, Revenue 1/13 at 100.00 A1 1,058,280 Bonds, Thomas Jefferson University, Series 2002, 5.000%, 1/01/20 2,945 Pennsylvania Higher Educational Facilities Authority, Revenue 7/13 at 100.00 AA 3,188,522 Bonds, Ursinus College, Series 2003, 5.375%, 1/01/20 - RAAI Insured 5,000 Pennsylvania Higher Educational Facilities Authority, Revenue 7/11 at 100.00 AA 5,281,700 Bonds, Moravian College, Series 2001, 5.375%, 7/01/31 - RAAI Insured 2,000 Pennsylvania State University, General Obligation Refunding No Opt. Call AA 2,242,380 Bonds, Series 2002, 5.250%, 8/15/12 Pennsylvania State University, General Revenue Bonds, Series 2005: 1,040 5.000%, 9/01/14 No Opt. Call AA 1,162,106 1,560 5.000%, 9/01/15 No Opt. Call AA 1,748,495 44 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS (continued) $ 6,000 Swarthmore Borough Authority, Pennsylvania, Swarthmore 9/08 at 100.00 AA+ $ 6,155,880 College Revenue Bonds, Series 1998, 5.000%, 9/15/28 Union County, Higher Education Facilities Financing Authority, Pennsylvania, Revenue Bonds, Bucknell University, Series 2002A: 1,665 5.250%, 4/01/18 4/13 at 100.00 Aa3 1,827,471 1,000 5.250%, 4/01/20 4/13 at 100.00 Aa3 1,105,710 105 Wilkes-Barre General Municipal Authority, Pennsylvania, 12/05 at 100.00 N/R 105,362 College Revenue Refunding Bonds, College of Misericordia, Series 1992B, 7.750%, 12/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 9.8% (6.5% OF TOTAL INVESTMENTS) 1,555 Allegheny County Hospital Development Authority, 4/15 at 100.00 Baa2 1,602,676 Pennsylvania, Revenue Bonds, Ohio Valley General Hospital, Series 2005A, 5.125%, 4/01/35 1,115 Erie County Hospital Authority, Pennsylvania, Revenue Bonds, 11/12 at 100.00 AAA 1,221,862 Hamot Health Foundation, Series 2002, 5.250%, 11/01/15 - AMBAC Insured 1,250 Lehigh County General Purpose Authority, Pennsylvania, 11/14 at 100.00 A 1,335,013 Revenue Bonds, Good Shepherd Group, Series 2004A, 5.500%, 11/01/24 2,500 Lehigh County General Purpose Authority, Pennsylvania, 8/13 at 100.00 BBB 2,609,300 Hospital Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 9,000 Pennsylvania Higher Educational Facilities Authority, Revenue 1/11 at 101.00 A+ 10,013,400 Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31 2,360 Pennsylvania Higher Educational Facilities Authority, 8/15 at 100.00 AAA 2,618,090 Revenue Bonds, University of Pennsylvania Health Services, Series 2005B, 5.000%, 8/15/16 - FGIC Insured 1,225 Philadelphia Hospitals and Higher Education Facilities 11/05 at 100.00 BBB 1,248,030 Authority, Pennsylvania, Hospital Revenue Bonds, Temple University Hospital, Series 1993A, 6.625%, 11/15/23 1,615 Sayre Health Care Facility Authority, Pennsylvania, Revenue 7/12 at 100.00 AAA 1,781,797 Bonds, Latrobe Area Hospital, Series 2002A, 5.250%, 7/01/13 - AMBAC Insured 960 St. Mary Hospital Authority, Pennsylvania, Health System 11/14 at 100.00 A1 1,019,693 Revenue Bonds, Catholic Health East, Series 2004B, 5.375%, 11/15/34 1,500 West Shore Area Hospital Authority, Cumberland County, 1/12 at 100.00 BBB+ 1,642,590 Pennsylvania, Hospital Revenue Bonds, Holy Spirit Hospital of the Sisters of Christian Charity Project, Series 2001, 6.250%, 1/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 0.7% (0.5% OF TOTAL INVESTMENTS) 800 Philadelphia Authority for Industrial Development, 5/15 at 102.00 Baa2 808,672 Pennsylvania, Multifamily Housing Revenue Bonds, Presbyterian Homes Germantown - Morrisville Project, Series 2005A, 5.625%, 7/01/35 960 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 8/05 at 100.00 A2 961,258 Mortgage Revenue Bonds, Series 1992C, 7.125%, 8/01/13 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 3.3% (2.2% OF TOTAL INVESTMENTS) 5,000 Pennsylvania Housing Finance Agency, Single Family 10/07 at 101.50 AA+ 5,185,200 Mortgage Revenue Bonds, Series 1997-59A, 5.750%, 10/01/23 (Alternative Minimum Tax) 2,140 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 10/11 at 100.00 AAA 2,224,402 Mortgage Revenue Bonds, Series 2001B, 5.450%, 10/01/32 (Alternative Minimum Tax) 960 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 4/07 at 102.00 AAA 978,576 Mortgage Revenue Bonds, Series 1997A, 6.250%, 10/01/28 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 4.3% (2.9% OF TOTAL INVESTMENTS) 5,000 Pennsylvania Economic Development Financing Authority, 5/11 at 101.00 A3 5,336,900 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 5,657,750 Development Revenue Bonds, Series 2002, 5.500%, 7/01/12 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 2.6% (1.7% OF TOTAL INVESTMENTS) 1,500 Cumberland County Municipal Authority, Pennsylvania, 12/12 at 100.00 AA 1,550,640 Revenue Bonds, Presbyterian Homes Inc., Series 2003A, 5.000%, 12/01/26 - RAAI Insured 45 Nuveen Pennsylvania Investment Quality Municipal Fund (NQP) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE (continued) $ 3,225 Montgomery County Higher Education and Health Authority, 1/06 at 101.00 BBB $ 3,277,793 Pennsylvania, Mortgage Revenue Bonds, Waverly Heights Ltd., Series 1996, 6.375%, 1/01/26 1,500 Philadelphia Authority for Industrial Development, 7/11 at 101.00 AAA 1,608,525 Pennsylvania, Revenue Bonds, Philadelphia Corporation for the Aging Project, Series 2001B, 5.250%, 7/01/26 - AMBAC Insured 230 Philadelphia Authority for Industrial Development, 5/08 at 102.00 N/R 233,333 Pennsylvania, Health Care Facilities Revenue Bonds, Paul's Run, Series 1998A, 5.875%, 5/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 0.7% (0.5% OF TOTAL INVESTMENTS) 1,750 Pennsylvania Economic Development Financing Authority, 11/08 at 102.00 N/R 1,874,058 Exempt Facilities Revenue Bonds, National Gypsum Company, Series 1997B, 6.125%, 11/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 25.5% (17.0% OF TOTAL INVESTMENTS) 4,000 Allegheny County, Pennsylvania, General Obligation Bonds, No Opt. Call AAA 4,522,200 Series 2005C-57, 5.250%, 11/01/13 - FGIC Insured 1,800 Allegheny County, Pennsylvania, General Obligation Bonds, 5/11 at 100.00 AAA 1,950,066 Series 2000C-53, 5.250%, 11/01/20 - FGIC Insured 1,640 Bensalem Township, Pennsylvania, General Obligation Bonds, No Opt. Call Aaa 1,825,599 Series 2004, 5.000%, 12/01/13 - FGIC Insured 1,200 Butler County, Pennsylvania, General Obligation Bonds, 7/14 at 100.00 AAA 1,328,172 Series 2004, 5.000%, 7/15/16 - FGIC Insured 2,200 Central Bucks County School District, Pennsylvania, 5/13 at 100.00 Aaa 2,379,366 General Obligation Bonds, Series 2003, 5.000%, 5/15/23 - MBIA Insured 1,000 Delaware County, Pennsylvania, General Obligation Bonds, 10/09 at 100.00 AA 1,075,300 Series 1999, 5.125%, 10/01/19 1,500 Lehigh County, Pennsylvania, General Obligation Bonds, No Opt. Call AAA 1,641,840 Series 2004, 5.000%, 11/15/10 - MBIA Insured 7,500 Montgomery County, Pennsylvania General Obligation Bonds, 7/09 at 100.00 Aaa 7,929,150 Series 1999, 5.000%, 7/15/24 925 Moon Area School District, Allegheny County, Pennsylvania, No Opt. Call AAA 1,040,579 General Obligation Bonds, Series 2004, 5.250%, 11/15/12 - FSA Insured 1,000 New Castle Area School District, Lawrence County, 3/10 at 100.00 AAA 1,092,120 Pennsylvania, General Obligation Bonds, Series 2000, 5.600%, 3/01/25 - MBIA Insured 1,025 Norristown Area School District, Montgomery County, 3/13 at 100.00 Aaa 1,111,797 Pennsylvania, General Obligation Bonds, Series 2003, 5.000%, 9/01/19 - FGIC Insured 2,000 Pennsylvania, General Obligation Bonds, No Opt. Call AAA 2,191,420 First Series 2004, 5.250%, 2/01/10 - MBIA Insured 4,000 Pennsylvania, General Obligation Bonds, No Opt. Call AA 4,431,080 Third Series 2004, 5.000%, 9/01/12 Pennsylvania, General Obligation Refunding Bonds, Second Series 2002: 4,000 5.000%, 10/01/11 - FGIC Insured No Opt. Call AAA 4,413,240 1,620 5.250%, 10/01/14 - FGIC Insured No Opt. Call AAA 1,849,910 Philadelphia, Pennsylvania, General Obligation Bonds, Series 2003A: 1,000 5.000%, 2/15/12 - XLCA Insured No Opt. Call AAA 1,091,560 2,585 5.250%, 2/15/13 - XLCA Insured No Opt. Call AAA 2,877,674 2,725 Pittsburgh, Pennsylvania, General Obligation Bonds, No Opt. Call AAA 2,969,323 Series 2005A, 5.000%, 9/01/11 - MBIA Insured 3,000 Pittsburgh School District, Allegheny County, Pennsylvania, No Opt. Call AAA 3,270,960 General Obligation Bonds, Series 2005A, 5.000%, 9/01/10 - FGIC Insured 3,000 Pittsburgh School District, Allegheny County, Pennsylvania, No Opt. Call AAA 3,486,660 General Obligation Refunding Bonds, Series 2002A, 5.500%, 9/01/15 - FSA Insured 3,390 Pocono Mountain School District, Monroe County, 2/13 at 100.00 Aaa 3,718,084 Pennsylvania, General Obligation Bonds, Series 2003, 5.000%, 2/15/15 - FGIC Insured 1,590 Red Lion Area School District, York County, Pennsylvania, 10/11 at 100.00 Aaa 1,704,989 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 1,366,555 School Revenue Bonds, Conneaut School District, Series 2003, 5.250%, 11/01/21 - FGIC Insured 1,465 Stroudsburg Area School District, Monroe County, 4/12 at 100.00 AAA 1,592,851 Pennsylvania, General Obligation Bonds, Series 2001A, 5.000%, 4/01/18 - FSA Insured 46 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 4,020 Upper Merion Area School District, Montgomery County, 2/13 at 100.00 Aa2 $ 4,438,964 Pennsylvania, General Obligation Bonds, Series 2003, 5.250%, 2/15/19 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 23.0% (15.4% OF TOTAL INVESTMENTS) 5,000 Allegheny County Industrial Development Authority, 11/12 at 100.00 AAA 5,377,450 Pennsylvania, Revenue Bonds, Guaranteed County Building Project, Series 2002A, 5.000%, 11/01/22 - MBIA Insured Port Authority of Allegheny County, Pennsylvania, Special Transportation Revenue Bonds, Series 2001: 1,000 5.500%, 3/01/17 - FGIC Insured 3/11 at 101.00 AAA 1,113,750 3,500 5.000%, 3/01/29 - FGIC Insured 3/11 at 101.00 AAA 3,680,950 6,000 Delaware Valley Regional Finance Authority, Pennsylvania, No Opt. Call Aa3 7,015,020 Local Government Revenue Bonds, Series 2002, 5.750%, 7/01/17 8,725 Pennsylvania Intergovernmental Cooperative Authority, 6/09 at 100.00 AAA 9,008,999 Special Tax Revenue Refunding Bonds, Philadelphia Funding Program, Series 1999, 4.750%, 6/15/23 - FGIC Insured Pennsylvania Turnpike Commission, Oil Franchise Tax Senior Lien Revenue Bonds, Series 2003A: 1,500 5.250%, 12/01/15 - MBIA Insured 12/13 at 100.00 AAA 1,685,295 2,600 5.250%, 12/01/17 - MBIA Insured 12/13 at 100.00 AAA 2,897,154 2,125 5.250%, 12/01/18 - MBIA Insured 12/13 at 100.00 AAA 2,367,866 3,650 Pennsylvania Turnpike Commission, Registration Fee Revenue 7/11 at 101.00 AAA 3,827,719 Bonds, Series 2001, 5.000%, 7/15/41 - AMBAC Insured 10,935 Philadelphia Authority for Industrial Development, 10/11 at 101.00 AAA 11,741,019 Pennsylvania, Lease Revenue Bonds, Series 2001B, 5.250%, 10/01/30 - FSA Insured 2,700 Philadelphia Municipal Authority, Pennsylvania, Lease 11/13 at 100.00 AAA 2,979,477 Revenue Bonds, Series 2003B, 5.250%, 11/15/17 - FSA Insured 4,000 Pittsburgh and Allegheny Counties Public Auditorium 8/09 at 101.00 AAA 4,219,840 Authority, Pennsylvania, Sales Tax Revenue Bonds, Regional Asset District, Series 1999, 5.000%, 2/01/29 - AMBAC Insured 1,090 Pittsburgh Urban Redevelopment Authority, Pennsylvania, 5/09 at 100.00 A2 1,172,110 Tax Increment Financing District Bonds, Center Triangle Project, Series 1999A, 6.100%, 5/01/19 1,800 Southeastern Transportation Authority, Pennsylvania, Special 3/09 at 101.00 AAA 1,943,064 Revenue Bonds, Series 1999A, 5.250%, 3/01/16 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 8.6% (5.7% OF TOTAL INVESTMENTS) 630 Delaware River Joint Toll Bridge Commission, Pennsylvania 7/13 at 100.00 A2 691,614 and New Jersey, Revenue Bonds, Series 2003, 5.250%, 7/01/17 2,035 Lehigh-Northampton Airport Authority, Pennsylvania, 5/10 at 100.00 Aaa 2,239,558 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 5,872,338 Revenue Bonds, Amtrak 30th Street Station Parking Garage, Series 2002, 5.800%, 6/01/23 (Alternative Minimum Tax) - ACA Insured 2,200 Pennsylvania Turnpike Commission, Turnpike Revenue 12/11 at 101.00 AAA 2,330,834 Bonds, Series 2001R, 5.000%, 12/01/30 - AMBAC Insured 5,000 Philadelphia Airport System, Pennsylvania, Revenue Bonds, 6/11 at 101.00 AAA 5,275,250 Series 2001B, 5.250%, 6/15/31 (Alternative Minimum Tax) - FGIC Insured 3,250 Philadelphia Parking Authority, Pennsylvania, Airport 9/09 at 101.00 AAA 3,496,838 Parking Revenue Bonds, Series 1999, 5.250%, 9/01/29 - FSA Insured 1,885 Pittsburgh Public Parking Authority, Pennsylvania, Parking No Opt. Call AAA 2,088,033 System Revenue Refunding Bonds, Series 2002, 5.000%, 12/01/12 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** - 18.2% (12.2% OF TOTAL INVESTMENTS) 3,550 Allegheny County, Pennsylvania, General Obligation Bonds, 5/11 at 100.00 AAA 3,944,050 Series 2000C-52, 5.250%, 11/01/23 (Pre-refunded to 5/01/11) - FGIC Insured 1,320 Allegheny County, Pennsylvania, General Obligation 5/11 at 100.00 AAA 1,466,520 Refunding Bonds, Series 2000C-53, 5.250%, 11/01/20 (Pre-refunded to 5/01/11) - FGIC Insured 1,355 Bucks County, Pennsylvania, Bensalem Township School 7/06 at 100.00 AAA 1,400,365 District, General Obligation Bonds, Series 1996, 5.850%, 7/15/12 (Pre-refunded to 7/15/06) - FGIC Insured 47 Nuveen Pennsylvania Investment Quality Municipal Fund (NQP) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** (continued) $ 830 Delaware River Joint Toll Bridge Commission, Pennsylvania 7/13 at 100.00 A2*** $ 933,393 and New Jersey, Revenue Bonds, Series 2003, 5.250%, 7/01/17 (Pre-refunded to 7/01/13) 6,275 Hempfield Area School District, Westmoreland County, 2/12 at 100.00 AAA 7,063,767 Pennsylvania, General Obligation Bonds, Series 2002, 5.375%, 2/15/18 (Pre-refunded to 2/15/12) - FGIC Insured 1,450 Indiana County Industrial Development Authority, 11/06 at 100.00 AAA 1,511,031 Pennsylvania, Revenue Bonds, Student Cooperative Association Inc./Indiana University of Pennsylvania - Student Union Project, Series 1999A, 5.875%, 11/01/29 (Pre-refunded to 11/01/06) - AMBAC Insured 1,000 Pennsylvania, General Obligation Bonds, Second Series 2001, 9/11 at 101.00 AA*** 1,108,910 5.000%, 9/15/15 (Pre-refunded to 9/15/11) 760 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, No Opt. Call AAA 942,256 Twelfth Series 1990B, 7.000%, 5/15/20 - MBIA Insured 3,400 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA 3,898,508 Bonds, Series 2002B, 5.625%, 8/01/18 (Pre-refunded to 8/01/12) - FGIC Insured 6,100 Plum Borough School District, Allegheny County, 9/11 at 100.00 AAA 6,752,395 Pennsylvania, General Obligation Bonds, Series 2001, 5.250%, 9/15/30 (Pre-refunded to 9/15/11) - FGIC Insured 2,000 Sto Rox School District, Allegheny County, Pennsylvania, 12/10 at 100.00 AAA 2,272,340 General Obligation Bonds, Series 2000, 5.800%, 6/15/30 (Pre-refunded to 12/15/10) - MBIA Insured 3,000 Warrington Township Municipal Authority, Bucks County, 11/15 at 100.00 AAA 3,793,740 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 7,250,735 Pennsylvania, Special Obligation Bonds, Series 1985A, 9.500%, 11/15/14 Wilkes-Barre Area School District, Luzerne County, Pennsylvania, General Obligation Bonds, Series 2003A: 1,700 5.250%, 4/01/19 (Pre-refunded to 4/01/14) - MBIA Insured 4/14 at 100.00 AAA 1,927,324 2,050 5.250%, 4/01/20 (Pre-refunded to 4/01/14) -MBIA Insured 4/14 at 100.00 AAA 2,324,126 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 10.9% (7.3% OF TOTAL INVESTMENTS) 1,250 Allegheny County Industrial Development Authority, No Opt. Call AAA 1,310,587 Pennsylvania, Pollution Control Revenue Refunding Bonds, Duquesne Light Company Project, Series 1999A, 4.350%, 12/01/13 - AMBAC Insured 1,820 Beaver Falls Municipal Authority, Pennsylvania, Water No Opt. Call AAA 2,008,770 and Hydroelectric Revenue Bonds, Series 2002A, 5.000%, 6/01/12 - AMBAC Insured 2,320 Carbon County Industrial Development Authority, No Opt. Call BBB- 2,527,408 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 4,092,320 Pennsylvania, Pollution Control Revenue Refunding Bonds, Pennsylvania Power and Light Company, Series 1995A, 6.150%, 8/01/29 (Pre-refunded to 8/01/05) - MBIA Insured (a) 2,430 Lehigh County Industrial Development Authority, 2/15 at 100.00 AAA 2,514,370 Pennsylvania, Pollution Control Revenue Bonds, Pennsylvania Power and Light Company, Series 2005, 4.750%, 2/15/27 - FGIC Insured (a) 3,500 Montgomery County Industrial Development Authority, No Opt. Call AAA 3,929,940 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Montgomery County Montenay Project, Series 2002A, 5.250%, 11/01/13 - MBIA Insured 2,000 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 7/13 at 100.00 AAA 2,210,520 General Ordinance, Seventeenth Series 2003, 5.375%, 7/01/19 - FSA Insured 700 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 9/14 at 100.00 AAA 741,937 General Ordinance, Fifth Series 2004A-1, 5.000%, 9/01/26 - FSA Insured 680 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, No Opt. Call AAA 742,764 Eighteenth Series 2004, 5.000%, 8/01/13 - AGC Insured 3,500 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 7/09 at 101.00 AAA 3,833,095 General Ordinance, Sixteenth Series 1999, 5.500%, 7/01/13 - FSA Insured 3,700 York County Industrial Development Authority, Pennsylvania, 3/12 at 101.00 Baa1 3,932,915 Pollution Control Revenue Refunding Bonds, PSEG Power Project, Series 2001A, 5.500%, 9/01/20 48 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 17.3% (11.6% OF TOTAL INVESTMENTS) $ 2,205 Bethlehem Authority, Northhampton and Lehigh Counties, 11/14 at 100.00 AAA $ 2,403,781 Pennsylvania, Guaranteed Water Revenue Bonds, Series 2004, 5.000%, 11/15/20 - FSA Insured 1,000 Bucks County Water and Sewerage Authority, Pennsylvania, 12/06 at 100.00 AAA 1,036,300 Collection System Revenue Bonds, Series 1996, 5.550%, 12/01/17 - FGIC Insured Bucks County Water and Sewerage Authority, Pennsylvania, Sewerage System Revenue Bonds, Neshaminy Interceptor Project, Series 2004: 655 5.250%, 6/01/14 - FSA Insured No Opt. Call AAA 743,117 530 5.250%, 6/01/15 - FSA Insured No Opt. Call AAA 604,195 5,000 Delaware County Industrial Development Authority, 10/12 at 100.00 AAA 5,310,350 Pennsylvania, Water Facilities Revenue Bonds, Philadelphia Water Company, Series 2001, 5.350%, 10/01/31 (Alternative Minimum Tax) - AMBAC Insured Delaware County Regional Water Quality Control Authority, Pennsylvania, Sewerage Revenue Bonds, Series 2001A: 5,325 5.100%, 5/01/20 - FGIC Insured 11/11 at 100.00 AAA 5,747,379 1,465 5.100%, 5/01/21 - FGIC Insured 11/11 at 100.00 AAA 1,581,204 1,400 Delaware County Regional Water Quality Control Authority, 5/14 at 100.00 Aaa 1,551,634 Pennsylvania, Sewerage Revenue Bonds, Series 2004, 5.250%, 5/01/20 - MBIA Insured 5,000 Erie, Pennsylvania, Water Authority, Water Revenue Bonds, 12/11 at 100.00 AAA 5,362,000 Series 2001A, 5.200%, 12/01/30 - MBIA Insured 2,000 Harrisburg Authority, Dauphin County, Pennsylvania, 7/14 at 100.00 AAA 2,151,240 Water Revenue Refunding Bonds, Series 2004, 5.000%, 7/15/22 - FSA Insured 1,540 Hempfield Township Municipal Authority, Westmoreland No Opt. Call Aaa 1,726,078 County, Pennsylvania, Guaranteed Sewerage Revenue Bonds, Series 2005, 5.000%, 9/01/15 - FSA Insured 1,250 Lancaster Area Sewer Authority, Pennsylvania, Sewer 4/14 at 100.00 AAA 1,355,400 Revenue Bonds, Series 2004, 5.000%, 4/01/20 - MBIA Insured 1,000 Lower Bucks County Joint Municipal Authority, Pennsylvania, 11/08 at 100.00 Aaa 1,058,590 Water and Sewerage Revenue Bonds, Series 1998, 5.000%, 11/15/15 - FSA 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 6,110,811 5,000 5.000%, 11/01/31 - FGIC Insured 11/12 at 100.00 AAA 5,271,000 2,150 Philadelphia, Pennsylvania, Water and Wastewater Revenue 7/15 at 100.00 AAA 2,321,204 Bonds, Series 2005A, 5.000%, 7/01/23 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 353,645 Total Long-Term Investments (cost $359,713,911) - 149.6% 383,426,749 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.9% 4,938,096 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.5)% (132,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 256,364,845 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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 registered public accounting firm): 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. (a) The issuer has received a preliminary adverse determination from the Internal Revenue Service (the "IRS") regarding the tax-exempt status of the bonds' coupon payments. The Fund will continue to treat coupon payments as tax-exempt income until such time that it is formally determined that the interest on the bonds should be treated as taxable. See accompanying notes to financial statements. 49 Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY) Portfolio of INVESTMENTS June 30, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 17.4% (11.6% OF TOTAL INVESTMENTS) $ 1,245 Allegheny County Higher Education Building Authority, 3/14 at 100.00 AAA $ 1,354,884 Pennsylvania, Revenue Bonds, Duquesne University, Series 2004A, 5.000%, 3/01/19 - FGIC Insured 900 Allegheny County Higher Education Building Authority, 2/06 at 102.00 Baa3 932,427 Pennsylvania, College Revenue Bonds, Robert Morris College, Series 1996A, 6.250%, 2/15/26 200 Allegheny County Higher Education Building Authority, No Opt. Call Baa3 226,590 Pennsylvania, College Revenue Refunding Bonds, Robert Morris College, Series 1998A, 6.000%, 5/01/28 1,045 Allegheny County Higher Education Building Authority, 5/09 at 102.00 A 1,079,704 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- 3,082,470 Pennsylvania, College Revenue Bonds, Immaculata College, Series 1998, 5.625%, 10/15/27 Delaware County Authority, Pennsylvania, Revenue Refunding Bonds, Villanova University, Series 2003: 1,705 5.250%, 8/01/19 - FGIC Insured 8/13 at 100.00 AAA 1,889,447 1,350 5.250%, 8/01/20 - FGIC Insured 8/13 at 100.00 AAA 1,496,043 1,000 5.250%, 8/01/21 - FGIC Insured 8/13 at 100.00 AAA 1,108,180 3,060 Indiana County Industrial Development Authority, 11/14 at 100.00 AAA 3,285,185 Pennsylvania, Revenue Bonds, Student Cooperative Association Inc./Indiana University of Pennsylvania - Student Union Project, Series 2004, 5.000%, 11/01/24 - AMBAC Insured 2,500 Montgomery County Industrial Development Authority, 8/15 at 100.00 Aaa 2,696,625 Pennsylvania, Revenue Bonds, Hill School, Series 2005, 5.000%, 8/15/25 - MBIA Insured 1,000 Pennsylvania Higher Educational Facilities Authority, 5/08 at 101.00 Aaa 1,059,770 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 2,308,908 Revenue Bonds, Philadelphia University, Series 2000, 6.000%, 6/01/29 - RAAI Insured 1,500 Pennsylvania Higher Educational Facilities Authority, 7/11 at 101.00 AAA 1,579,470 Revenue Bonds, Temple University, Series 2001, 5.000%, 7/15/31 - MBIA Insured 4,085 Pennsylvania Higher Educational Facilities Authority, 6/12 at 100.00 Aaa 4,451,261 General Revenue Bonds, State System of Higher Education, Series 2002W, 5.000%, 6/15/19 - AMBAC Insured 5,750 Pennsylvania Higher Educational Facilities Authority, Revenue 1/13 at 100.00 A1 6,020,825 Bonds, Thomas Jefferson University, Series 2002, 5.000%, 1/01/32 1,000 Pennsylvania Higher Educational Facilities Authority, 5/15 at 100.00 AAA 1,023,230 Revenue Bonds, University of Pennsylvania Sciences, Series 2005A, 4.750%, 11/01/33 - XLCA Insured 1,310 Pennsylvania Higher Educational Facilities Authority, 7/13 at 100.00 AA 1,421,953 Revenue Bonds, Ursinus College, Series 2003, 5.500%, 1/01/24 - RAAI Insured State Public School Building Authority, Pennsylvania, College Revenue Bonds, Montgomery County Community College Project, Series 2005: 1,545 5.000%, 5/01/18 - AMBAC Insured 5/15 at 100.00 Aaa 1,691,250 1,625 5.000%, 5/01/19 - AMBAC Insured 11/05 at 100.00 Aaa 1,770,470 750 Union County, Higher Education Facilities Financing 4/13 at 100.00 Aa3 829,283 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+ 2,680,475 College Revenue Bonds, Elizabethtown College Project, Series 2001, 5.900%, 12/15/18 270 Wilkes-Barre General Municipal Authority, Pennsylvania, 12/05 at 100.00 N/R 270,932 College Revenue Refunding Bonds, College of Misericordia, Series 1992B, 7.750%, 12/01/12 50 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 19.0% (12.6% OF TOTAL INVESTMENTS) $ 1,455 Allegheny County Hospital Development Authority, 4/15 at 100.00 Baa2 $ 1,499,610 Pennsylvania, Revenue Bonds, Ohio Valley General Hospital, Series 2005A, 5.125%, 4/01/35 8,500 Allegheny County Hospital Development Authority, 5/06 at 102.00 AAA 8,853,430 Pennsylvania, 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 14,832,860 Pennsylvania, 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 1,344,009 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+ 5,433,850 Revenue Bonds, Good Samaritan Hospital Project, Series 2002, 5.900%, 11/15/28 1,250 Lehigh County General Purpose Authority, Pennsylvania, 11/14 at 100.00 A 1,335,013 Revenue Bonds, Good Shepherd Group, Series 2004A, 5.500%, 11/01/24 2,400 Lehigh County General Purpose Authority, Pennsylvania, 8/13 at 100.00 BBB 2,504,928 Hospital Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 1,765 Pennsylvania Higher Educational Facilities Authority, 8/15 at 100.00 AAA 1,958,020 Revenue Bonds, University of Pennsylvania Health Services, Series 2005B, 5.000%, 8/15/16 - FGIC Insured 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- 1,990,820 2,000 5.625%, 7/01/24 7/08 at 100.00 BBB- 1,953,260 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 1,867,841 1,200 5.250%, 7/01/15 - AMBAC Insured 7/12 at 100.00 AAA 1,311,504 1,015 St. Mary Hospital Authority, Pennsylvania, Health System 11/14 at 100.00 A1 1,078,113 Revenue Bonds, Catholic Health East, Series 2004B, 5.375%, 11/15/34 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 3.0% (2.0% OF TOTAL INVESTMENTS) 4,345 Bucks County Redevelopment Authority, Pennsylvania, 8/05 at 100.00 Baa2 4,350,344 Section 8 Assisted Second Lien Multifamily Mortgage Revenue Bonds, Country Commons Apartments, Series 1993A, 6.200%, 8/01/14 (Alternative Minimum Tax) 2,000 Delaware County Industrial Development Authority, 4/12 at 100.00 AAA 2,101,540 Pennsylvania, Multifamily Housing Revenue Bonds, Darby Townhouses Project, Series 2002A, 5.500%, 4/01/32 (Alternative Minimum Tax) (Mandatory put 4/01/22) 740 Philadelphia Authority for Industrial Development, 5/15 at 102.00 Baa2 748,022 Pennsylvania, Multifamily Housing Revenue Bonds, Presbyterian Homes Germantown - Morrisville Project, Series 2005A, 5.625%, 7/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 3.2% (2.1% OF TOTAL INVESTMENTS) 1,230 Allegheny County Residential Finance Authority, 11/10 at 100.00 Aaa 1,296,076 Pennsylvania, GNMA Mortgage-Backed Securities Program Single Family Mortgage Revenue Bonds, Series 2000II-2, 5.900%, 11/01/32 (Alternative Minimum Tax) 1,120 Pennsylvania Housing Finance Agency, Single Family No Opt. Call AA+ 1,149,714 Mortgage Revenue Bonds, Series 1996-47, 6.750%, 10/01/06 (Alternative Minimum Tax) 1,365 Pennsylvania Housing Finance Agency, Single Family 4/07 at 101.50 AA+ 1,408,857 Mortgage 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+ 1,655,923 Mortgage Revenue Bonds, Series 1997-59A, 5.700%, 4/01/17 (Alternative Minimum Tax) 555 Pennsylvania Housing Finance Agency, Single Family 6/08 at 101.50 AA+ 577,744 Mortgage Revenue Bonds, Series 1998-62A, 5.500%, 10/01/22 (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 870,282 765 6.200%, 10/01/21 (Alternative Minimum Tax) 4/07 at 102.00 AAA 798,247 51 Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 3.0% (2.0% OF TOTAL INVESTMENTS) $ 2,000 New Morgan Industrial Development Authority, Pennsylvania, 10/05 at 101.00 BB- $ 2,000,920 Solid Waste Disposal Revenue Bonds, New Morgan Landfill Company Inc., Series 1994, 6.500%, 4/01/19 (Alternative Minimum Tax) 2,000 Pennsylvania Economic Development Financing Authority, 5/11 at 101.00 A3 2,133,120 Exempt Facilities Revenue Bonds, Amtrak Project, Series 2001A, 6.250%, 11/01/31 (Alternative Minimum Tax) 2,750 Pennsylvania Industrial Development Authority, Economic 7/12 at 101.00 AAA 3,104,145 Development Revenue Bonds, Series 2002, 5.500%, 7/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 4.3% (2.8% OF TOTAL INVESTMENTS) 1,000 Cumberland County Municipal Authority, Pennsylvania, 12/12 at 100.00 AA 1,040,160 Revenue Bonds, Presbyterian Homes Inc., Series 2003A, 5.000%, 12/01/22 - RAAI Insured 1,835 Dormitory Authority of the State of New York, Insured 7/15 at 100.00 AAA 1,968,625 Revenue Bonds, NYSARC Inc., Series 2005A, 5.000%, 7/01/34 (DD, settling 7/1/05) - FSA Insured 1,230 Pennsylvania Economic Development Financing Authority, 6/08 at 100.00 BB+ 1,057,123 Revenue Bonds, Northwestern Human Services Inc., 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 8/05 at 100.00 AA 1,002,370 2,000 5.900%, 12/01/30 - RAAI Insured 12/10 at 100.00 AA 2,199,260 Philadelphia Authority for Industrial Development, Pennsylvania, Health Care Facilities Revenue Bonds, Paul's Run, Series 1998A: 1,350 5.750%, 5/15/18 5/08 at 102.00 N/R 1,367,037 1,650 5.875%, 5/15/28 5/08 at 102.00 N/R 1,673,909 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 2.2% (1.6% OF TOTAL INVESTMENTS) 500 Erie County Industrial Development Authority, Pennsylvania, 9/10 at 101.00 BBB 536,630 Environmental Improvement Revenue Refunding Bonds, Series 2000B, 6.000%, 9/01/16 (Alternative Minimum Tax) 4,500 Pennsylvania Economic Development Financing Authority, 11/08 at 102.00 N/R 4,819,005 Exempt Facilities Revenue Bonds, National Gypsum Company, Series 1997B, 6.125%, 11/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 32.1% (21.4% OF TOTAL INVESTMENTS) 3,695 Allegheny County, Pennsylvania, General Obligation Bonds, No Opt. Call AAA 4,177,382 Series 2005C-57, 5.250%, 11/01/13 - FGIC Insured 1,200 Butler County, Pennsylvania, General Obligation Bonds, 7/14 at 100.00 AAA 1,328,172 Series 2004, 5.000%, 7/15/16 - FGIC Insured 2,120 Central Bucks County School District, Pennsylvania, General 5/13 at 100.00 Aaa 2,292,844 Obligation Bonds, Series 2003, 5.000%, 5/15/23 - MBIA Insured 3,325 Cumberland Valley School District, Cumberland County, 11/15 at 100.00 Aaa 3,714,225 Pennsylvania, General Obligation Bonds, Series 2005, 5.000%, 11/15/16 (WI, settling 7/15/05) - FSA Insured 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 810,390 2,750 0.000%, 11/01/22 - FSA Insured 5/16 at 73.64 AAA 1,241,020 2,750 0.000%, 5/01/23 - FSA Insured 5/16 at 71.71 AAA 1,200,925 1,500 Lehigh County, Pennsylvania, General Obligation Bonds, No Opt. Call AAA 1,641,840 Series 2004, 5.000%, 11/15/10 - MBIA Insured 2,080 Meadville, Crawford County, Pennsylvania, General Obligation 10/15 at 100.00 Aaa 2,230,779 Bonds, Series 2005, 5.000%, 10/01/25 - XLCA Insured 985 Moon Area School District, Allegheny County, Pennsylvania, No Opt. Call AAA 1,108,076 General Obligation Bonds, Series 2004, 5.250%, 11/15/12 - FSA Insured 1,000 New Castle Area School District, Lawrence County, 3/10 at 100.00 AAA 1,092,120 Pennsylvania, General Obligation Bonds, Series 2000, 5.600%, 3/01/25 - MBIA Insured 52 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 $ 1,084,680 1,000 5.000%, 9/01/20 - FGIC Insured 3/13 at 100.00 Aaa 1,084,680 1,735 5.000%, 9/01/21 - FGIC Insured 3/13 at 100.00 Aaa 1,881,920 2,000 5.000%, 9/01/22 - FGIC Insured 3/13 at 100.00 Aaa 2,169,360 2,270 5.000%, 9/01/23 - FGIC Insured 3/13 at 100.00 Aaa 2,457,025 2,600 5.000%, 9/01/24 - FGIC Insured 3/13 at 100.00 Aaa 2,800,564 3,500 Pennsylvania, General Obligation Refunding Bonds, Second No Opt. Call AAA 3,852,625 Series 2003, 5.000%, 7/01/11 - MBIA Insured 4,250 Pennsylvania, General Obligation Bonds, Third Series 2004, No Opt. Call AA 4,708,023 5.000%, 9/01/12 Pennsylvania, General Obligation Refunding Bonds, Second Series 2002: 3,500 5.000%, 10/01/11 - FGIC Insured No Opt. Call AAA 3,861,585 1,600 5.250%, 10/01/14 - FGIC Insured No Opt. Call AAA 1,827,072 Philadelphia, Pennsylvania, General Obligation Bonds, Series 2003A: 1,000 5.000%, 2/15/12 - XLCA Insured No Opt. Call AAA 1,091,560 2,000 5.250%, 2/15/13 - XLCA Insured No Opt. Call AAA 2,226,440 2,000 Philadelphia School District, Pennsylvania, General Obligation No Opt. Call AAA 2,247,440 Refunding Bonds, Series 1995A, 6.250%, 9/01/09 - AMBAC Insured 3,045 Pittsburgh School District, Allegheny County, Pennsylvania, No Opt. Call AAA 3,320,024 General Obligation Bonds, Series 2005A, 5.000%, 9/01/10 - FGIC Insured 1,000 Pittsburgh School District, Allegheny County, Pennsylvania, No Opt. Call AAA 1,150,420 General Obligation Refunding Bonds, Series 2002A, 5.500%, 9/01/14 - FSA Insured 3,300 Pocono Mountain School District, Monroe County, 2/13 at 100.00 Aaa 3,619,374 Pennsylvania, General Obligation Bonds, Series 2003, 5.000%, 2/15/15 - FGIC Insured State Public School Building Authority, Berkes County, Pennsylvania, School Revenue Bonds, Brandywine Heights Area School District, Series 2003: 2,930 5.000%, 2/01/20 - FGIC Insured 2/13 at 100.00 Aaa 3,175,827 1,955 5.000%, 2/01/21 - FGIC Insured 2/13 at 100.00 Aaa 2,119,025 State Public School Building Authority, Pennsylvania, School Revenue Bonds, Conneaut School District, Series 2003: 1,000 5.250%, 11/01/21 - FGIC Insured 11/13 at 100.00 AAA 1,111,020 490 5.250%, 11/01/22 - FGIC Insured 11/13 at 100.00 AAA 544,400 2,550 State Public School Building Authority, Pennsylvania, 5/13 at 100.00 Aaa 2,530,671 School Revenue Bonds, York City School District, Series 2003, 4.000%, 5/01/21 - FSA Insured 4,050 State Public School Building Authority, Pennsylvania, 6/13 at 100.00 AAA 4,278,785 Lease Revenue Bonds, Philadelphia School District Project, Series 2003, 5.000%, 6/01/33 - FSA Insured 1,535 Stroudsburg Area School District, Monroe County, 4/12 at 100.00 AAA 1,668,959 Pennsylvania, General Obligation Bonds, Series 2001A, 5.000%, 4/01/19 - FSA Insured 2,005 Woodland Hills School District, Allegheny County, No Opt. Call AAA 2,247,264 Pennsylvania, General Obligation Bonds, Series 2005C, 5.000%, 9/01/15 (WI, settling 7/20/05) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 10.6% (7.1% OF TOTAL INVESTMENTS) 4,060 Delaware Valley Regional Finance Authority, Pennsylvania, 4/06 at 100.00 AAA 4,155,004 Local Government Revenue Bonds, Series 1996A, 6.000%, 4/15/26 - AMBAC Insured 1,500 Erie County Convention Center Authority, Pennsylvania, 1/15 at 100.00 AAA 1,597,770 Convention Center Revenue Bonds, Series 2005, 5.000%, 1/15/36 - FGIC Insured Pennsylvania Turnpike Commission, Oil Franchise Tax Senior Lien Revenue Bonds, Series 2003A: 1,000 5.250%, 12/01/15 - MBIA Insured 12/13 at 100.00 AAA 1,123,530 2,400 5.250%, 12/01/17 - MBIA Insured 12/13 at 100.00 AAA 2,674,296 2,000 5.250%, 12/01/18 - MBIA Insured 12/13 at 100.00 AAA 2,228,580 7,015 Philadelphia Municipal Authority, Pennsylvania, Lease 11/13 at 100.00 AAA 7,741,123 Revenue Bonds, Series 2003B, 5.250%, 11/15/17 - FSA Insured 53 Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED (continued) $ 2,405 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA $ 2,861,685 Transportation Authority, Series 2003AA, 5.500%, 7/01/19 - MBIA Insured 1,000 Southeastern Transportation Authority, Pennsylvania, 3/09 at 101.00 AAA 1,079,480 Special Revenue Bonds, Series 1999A, 5.250%, 3/01/16 - 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 1,108,950 1,000 5.500%, 2/15/22 - FGIC Insured 2/13 at 100.00 Aaa 1,122,120 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 15.9% (10.6% OF TOTAL INVESTMENTS) 2,300 Allegheny County, Pennsylvania, Airport Revenue Refunding 1/08 at 101.00 AAA 2,405,179 Bonds, Pittsburgh International Airport, Series 1997A, 5.250%, 1/01/16 (Alternative Minimum Tax) - MBIA Insured 650 Delaware River Joint Toll Bridge Commission, Pennsylvania 7/13 at 100.00 A2 713,570 and New Jersey, Revenue Bonds, Series 2003, 5.250%, 7/01/17 4,600 Pennsylvania Economic Development Financing Authority, 6/12 at 102.00 A 4,979,776 Revenue Bonds, Amtrak 30th Street Station Parking Garage, Series 2002, 5.875%, 6/01/33 (Alternative Minimum Tax) - ACA Insured 3,575 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/11 at 101.00 AAA 3,787,605 Series 2001R, 5.000%, 12/01/30 - AMBAC Insured 10,000 Philadelphia Authority for Industrial Development, 7/11 at 101.00 AAA 10,452,300 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 6,724,404 Authority, Pennsylvania, Parking Revenue Bonds, Series 2001A, 5.350%, 12/01/26 - AMBAC Insured 2,355 Scranton Parking Authority, Pennsylvania, Guaranteed 9/13 at 100.00 AAA 2,497,101 Parking Revenue Bonds, Series 2004, 5.000%, 9/15/33 - FGIC Insured 6,700 Susquehanna Area Regional Airport Authority, Pennsylvania, 1/13 at 100.00 Aaa 7,052,889 Airport System Revenue Bonds, Series 2003B, 5.000%, 1/01/33 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** - 7.6% (5.1% OF TOTAL INVESTMENTS) Butler County, Pennsylvania, General Obligation Bonds, Series 2003: 1,000 5.250%, 7/15/19 (Pre-refunded to 7/15/13) - FGIC Insured 7/13 at 100.00 AAA 1,128,600 1,000 5.250%, 7/15/21 (Pre-refunded to 7/15/13) - FGIC Insured 7/13 at 100.00 AAA 1,128,600 1,200 5.250%, 7/15/23 (Pre-refunded to 7/15/13) - FGIC Insured 7/13 at 100.00 AAA 1,354,320 850 Delaware River Joint Toll Bridge Commission, Pennsylvania 7/13 at 100.00 A2*** 955,884 and New Jersey, Revenue Bonds, Series 2003, 5.250%, 7/01/17 (Pre-refunded to 7/01/13) 2,110 Fayette County, Pennsylvania, General Obligation Bonds, 11/10 at 100.00 AAA 2,375,733 Series 2000, 5.625%, 11/15/28 (Pre-refunded to 11/15/10) - AMBAC Insured 1,225 Pennsylvania Higher Educational Facilities Authority, No Opt. Call Aaa 1,456,317 College Revenue Bonds, Ninth Series 1976, 7.625%, 7/01/15 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 No Opt. Call AAA 1,136,930 3,740 6.650%, 12/01/19 No Opt. Call AAA 4,673,803 865 State Public School Building Authority, Pennsylvania, 11/13 at 100.00 AAA 961,032 School Revenue Bonds, Conneaut School District, Series 2003, 5.250%, 11/01/22 (Pre-refunded to 11/01/13) - FGIC Insured 1,650 West View Borough Municipal Authority, Allegheny No Opt. Call AAA 2,195,177 County, Pennsylvania, Special Obligation Bonds, Series 1985A, 9.500%, 11/15/14 1,000 Wilkes-Barre Area School District, Luzerne County, 4/14 at 100.00 AAA 1,133,720 Pennsylvania, General Obligation Bonds, Series 2003A, 5.250%, 4/01/19 (Pre-refunded to 4/01/14) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 15.9% (10.6% OF TOTAL INVESTMENTS) 1,125 Allegheny County Industrial Development Authority, No Opt. Call AAA 1,179,529 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 8,490,880 Pennsylvania, Exempt Facilities Revenue Bonds, Shippingport Project, Series 1998A, 5.375%, 6/01/28 (Alternative Minimum Tax) - AMBAC Insured 54 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES (continued) $ 3,150 Carbon County Industrial Development Authority, No Opt. Call BBB- $ 3,431,610 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, Pennsylvania, 5/07 at 102.00 AAA 8,087,373 Pollution Control Revenue Bonds, Metropolitan Edison Company, 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 2,113,000 Pennsylvania, Pollution Control Revenue Refunding Bonds, PSEG Power LLC, Series 2001A, 5.850%, 6/01/27 (Alternative Minimum Tax) 2,150 Lehigh County Industrial Development Authority, 2/15 at 100.00 AAA 2,224,648 Pennsylvania, Pollution Control Revenue Bonds, Pennsylvania Power and Light Company, Series 2005, 4.750%, 2/15/27 - FGIC Insured (a) 1,530 Montgomery County Industrial Development Authority, No Opt. Call AAA 1,717,945 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Montgomery County Montenay Project, Series 2002A, 5.250%, 11/01/13 - MBIA Insured 5,750 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 7/09 at 101.00 AAA 6,069,240 General Ordinance, Second Series 1999, 5.000%, 7/01/29 - FSA Insured 1,000 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 7/13 at 100.00 AAA 1,105,260 General Ordinance, Seventeenth Series 2003, 5.375%, 7/01/19 - FSA Insured 700 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 9/14 at 100.00 AAA 741,937 General Ordinance, Fifth Series 2004A-1, 5.000%, 9/01/26 - FSA Insured 745 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, No Opt. Call AAA 813,764 Eighteenth Series 2004, 5.000%, 8/01/13 - AGC Insured 2,240 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 7/09 at 101.00 AAA 2,453,181 General Ordinance, Sixteenth Series 1999, 5.500%, 7/01/13 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 15.0% (10.0% OF TOTAL INVESTMENTS) 2,000 Allegheny County Sanitary Authority, Pennsylvania, 12/10 at 101.00 AAA 2,251,540 Sewerage Revenue Bonds, Series 2000, 5.500%, 12/01/30 - MBIA Insured 1,000 Allegheny County Sanitary Authority, Pennsylvania, 12/11 at 101.00 AAA 1,124,830 Sewerage Revenue Refunding Bonds, Series 2001, 5.375%, 12/01/13 - MBIA Insured 2,500 Bethlehem Authority, Northhampton and Lehigh Counties, 11/14 at 100.00 AAA 2,725,375 Pennsylvania, Guaranteed Water Revenue Bonds, Series 2004, 5.000%, 11/15/20 - FSA Insured 4,000 Bucks County Industrial Development Authority, 3/12 at 100.00 AAA 4,307,400 Pennsylvania, Water Facility Revenue Bonds, Pennsylvania Suburban Water Company Project, Series 2002, 5.550%, 9/01/32 (Alternative Minimum Tax) - FGIC Insured Bucks County Water and Sewerage Authority, Pennsylvania, Sewerage System Revenue Bonds, Neshaminy Interceptor Project, Series 2004: 605 5.250%, 6/01/14 - FSA Insured No Opt. Call AAA 686,391 485 5.250%, 6/01/15 - FSA Insured No Opt. Call AAA 1,615 Delaware County Regional Water Quality Control Authority, 5/14 at 100.00 Aaa 1,774,659 Pennsylvania, Sewerage Revenue Bonds, Series 2004, 5.250%, 5/01/23 - MBIA Insured 2,000 Harrisburg Authority, Dauphin County, Pennsylvania, Water 7/14 at 100.00 AAA 2,151,240 Revenue Refunding Bonds, Series 2004, 5.000%, 7/15/22 - FSA Insured 1,315 Lancaster Area Sewer Authority, Pennsylvania, Sewer 4/14 at 100.00 AAA 1,419,792 Revenue Bonds, Series 2004, 5.000%, 4/01/21 - MBIA Insured 3,870 Lancaster Area Sewer Authority, Pennsylvania, Sewer 4/15 at 100.00 Aaa 4,286,876 Revenue Bonds, Series 2005, 5.000%, 4/01/17 - FGIC Insured 3,360 Mercer County Industrial Development Authority, 7/10 at 100.00 AAA 3,712,430 Pennsylvania, Water Facility Revenue Bonds, Consumers Water Company, Shenango Valley Division Project, Series 2000, 6.000%, 7/01/30 (Alternative Minimum Tax) - MBIA Insured Norristown Municipal Waste Authority, Pennsylvania, Sewer Revenue Bonds, Series 2003: 1,140 5.125%, 11/15/22 - FGIC Insured 11/13 at 100.00 Aaa 1,230,208 2,535 5.125%, 11/15/23 - FGIC Insured 11/13 at 100.00 Aaa 2,729,967 2,730 Philadelphia, Pennsylvania, Water and Wastewater Revenue No Opt. Call AAA 3,127,540 Bonds, Series 1995, 6.250%, 8/01/10 - MBIA Insured 55 Nuveen Pennsylvania Premium Income Municipal Fund 2 (NPY) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER (continued) $ 2,000 Philadelphia, Pennsylvania, Water and Wastewater Revenue 7/15 at 100.00 AAA $ 2,159,260 Bonds, Series 2005A, 5.000%, 7/01/23 - FSA Insured 2,000 Unity Township Municipal Authority, Pennsylvania, 12/14 at 100.00 AAA 2,135,380 Sewerage Revenue Bonds, Series 2004, 5.000%, 12/01/34 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 339,710 Total Long-Term Investments (cost $340,216,802) - 149.2% 361,587,837 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.7% (0.5% OF TOTAL INVESTMENTS) 400 Lehigh County General Purpose Authority, Pennsylvania, AAA 400,000 Hospital Revenue Bonds, Lehigh Valley Health Network, Variable Rate Demand Obligations, Series 1999B, 2.260%, 7/01/29 - MBIA Insured+ 1,370 South Fork Municipal Authority, Pennsylvania, Hospital AAA 1,370,000 Revenue Bonds, Conemaugh Health System South Fork Hospital, Variable Rate Demand Obligations, Series 1998A, 2.260%, 7/01/28 - MBIA Insured+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,770 Total Short-Term Investments (cost $1,770,000) 1,770,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $341,986,802) - 149.9% 363,357,837 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - (1.2)% (2,884,684) -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.7)% (118,100,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 242,373,153 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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 registered public accounting firm): 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. (a) The issuer has received a preliminary adverse determination from the Internal Revenue Service (the "IRS") regarding the tax-exempt status of the bonds' coupon payments. The Fund will continue to treat coupon payments as tax-exempt income until such time that it is formally determined that the interest on the bonds should be treated as taxable. (DD) Security purchased on a delayed delivery basis. (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 in effect at the end of the reporting period. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 56 Nuveen Pennsylvania Dividend Advantage Municipal Fund (NXM) Portfolio of INVESTMENTS June 30, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONSUMER STAPLES - 2.2% (1.5% OF TOTAL INVESTMENTS) $ 1,000 Pennsylvania Economic Development Financing Authority, No Opt. Call AA- $ 1,138,140 Solid Waste Disposal Revenue Bonds, Procter & Gamble Paper Project, Series 2001, 5.375%, 3/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 29.0% (19.9% OF TOTAL INVESTMENTS) 125 Allegheny County Higher Education Building Authority, 2/06 at 102.00 Baa3 129,504 Pennsylvania, College Revenue Bonds, Robert Morris College, Series 1996A, 6.250%, 2/15/26 100 Allegheny County Higher Education Building Authority, No Opt. Call Baa3 113,295 Pennsylvania, College Revenue Refunding Bonds, Robert Morris College, Series 1998A, 6.000%, 5/01/28 2,250 Bucks County Industrial Development Authority, 9/11 at 100.00 Aaa 2,376,270 Pennsylvania, Revenue Bonds, George School Project, Series 2001, 5.125%, 9/15/31 - AMBAC Insured 700 Chester County Health and Education Facilities Authority, 10/15 at 102.00 N/R 689,423 Pennsylvania, Revenue Bonds, Immaculata University, Series 2005, 5.500%, 10/15/25 1,000 Delaware County Authority, Pennsylvania, College Revenue 10/11 at 100.00 BBB- 1,058,320 Refunding Bonds, Neumann College, Series 2001, 6.000%, 10/01/31 1,310 Delaware County Authority, Pennsylvania, Revenue Refunding 8/13 at 100.00 AAA 1,458,488 Bonds, Villanova University, Series 2003, 5.250%, 8/01/16 - FGIC Insured 1,000 Montgomery County Industrial Development Authority, 8/15 at 100.00 Aaa 1,078,650 Pennsylvania, Revenue Bonds, Hill School, Series 2005, 5.000%, 8/15/27 - MBIA Insured 1,000 Pennsylvania Higher Educational Facilities Authority, 6/12 at 100.00 Aaa 1,089,660 General Revenue Bonds, State System of Higher Education, Series 2002W, 5.000%, 6/15/19 - AMBAC Insured 1,090 Pennsylvania Higher Educational Facilities Authority, 1/13 at 100.00 A1 1,205,486 Revenue Bonds, Thomas Jefferson University, Series 2002, 5.500%, 1/01/16 1,500 Pennsylvania Higher Educational Facilities Authority, 7/11 at 100.00 AA 1,584,510 Revenue Bonds, Moravian College, Series 2001, 5.375%, 7/01/31 - RAAI Insured 3,000 Pennsylvania State University, General Obligation No Opt. Call AA 3,409,470 Refunding Bonds, Series 2002, 5.250%, 8/15/14 1,000 West Cornwall Township Municipal Authority, Pennsylvania, 12/11 at 100.00 BBB+ 1,060,530 College Revenue Bonds, Elizabethtown College Project, Series 2001, 6.000%, 12/15/27 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 17.6% (12.2% OF TOTAL INVESTMENTS) 260 Allegheny County Hospital Development Authority, 4/15 at 100.00 Baa2 267,972 Pennsylvania, Revenue Bonds, Ohio Valley General Hospital, Series 2005A, 5.125%, 4/01/35 400 Allegheny County Hospital Development Authority, 11/10 at 102.00 B1 481,548 Pennsylvania, Revenue Bonds, West Penn Allegheny Health System, Series 2000B, 9.250%, 11/15/30 2,500 Chester County Health and Educational Facilities Authority, 5/08 at 101.00 AA- 2,620,575 Pennsylvania, Health System Revenue Bonds, Jefferson Health System, Series 1997B, 5.375%, 5/15/27 250 Lehigh County General Purpose Authority, Pennsylvania, 11/14 at 100.00 A 267,003 Revenue Bonds, Good Shepherd Group, Series 2004A, 5.500%, 11/01/24 600 Lehigh County General Purpose Authority, Pennsylvania, 8/13 at 100.00 BBB 626,232 Hospital Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 2,150 Pennsylvania Higher Educational Facilities Authority, 1/11 at 101.00 A+ 2,392,090 Revenue Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31 465 Pennsylvania Higher Educational Facilities Authority, 8/15 at 100.00 AAA 515,852 Revenue Bonds, University of Pennsylvania Health Services, Series 2005B, 5.000%, 8/15/16 - FGIC Insured 40 Philadelphia Hospitals and Higher Education Facilities 11/05 at 100.00 BBB 40,752 Authority, Pennsylvania, Hospital Revenue Bonds, Temple University Hospital, Series 1993A, 6.625%, 11/15/23 170 St. Mary Hospital Authority, Pennsylvania, Health System 11/14 at 100.00 A1 180,571 Revenue Bonds, Catholic Health East, Series 2004B, 5.375%, 11/15/34 57 Nuveen Pennsylvania Dividend Advantage Municipal Fund (NXM) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE (continued) $ 1,000 Washington County Hospital Authority, Pennsylvania, 6/12 at 101.00 A3 $ 1,083,010 Revenue Bonds, Monongahela Valley Hospital Project, Series 2002, 5.500%, 6/01/17 750 West Shore Area Hospital Authority, Cumberland County, 1/12 at 100.00 BBB+ 821,295 Pennsylvania, Hospital Revenue Bonds, Holy Spirit Hospital of the Sisters of Christian Charity Project, Series 2001, 6.250%, 1/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 0.2% (0.2% OF TOTAL INVESTMENTS) 100 Philadelphia Authority for Industrial Development, 5/15 at 102.00 Baa2 101,084 Pennsylvania, Multifamily Housing Revenue Bonds, Presbyterian Homes Germantown - Morrisville Project, Series 2005A, 5.625%, 7/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 3.5% (2.4% OF TOTAL INVESTMENTS) 1,795 Allegheny County Residential Finance Authority, 11/08 at 102.00 Aaa 1,856,048 Pennsylvania, GNMA Mortgage-Backed Securities Program Single Family Mortgage Revenue Bonds, Series 1998DD-2, 5.400%, 11/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 6.7% (4.6% OF TOTAL INVESTMENTS) 2,000 Pennsylvania Economic Development Financing Authority, 5/11 at 101.00 A3 2,133,120 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 1,410,975 Development Revenue Bonds, Series 2002, 5.500%, 7/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 13.1% (9.0% OF TOTAL INVESTMENTS) 1,000 Cumberland County Municipal Authority, Pennsylvania, 1/13 at 101.00 N/R 1,092,190 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- 2,242,590 Center Revenue Bonds, Willow Valley Retirement Communities Project, Series 2001, 5.875%, 6/01/31 285 Lebanon County Health Facilities Authority, Pennsylvania, 12/14 at 100.00 N/R 293,040 Health Center Revenue Bonds, Pleasant View Retirement Community, Series 2005A, 5.300%, 12/15/26 240 Pennsylvania Economic Development Financing Authority, 6/08 at 100.00 BB+ 235,241 Revenue Bonds, Northwestern Human Services Inc., Series 1998A, 5.250%, 6/01/14 2,875 Philadelphia Authority for Industrial Development, 7/11 at 101.00 AAA 3,057,678 Pennsylvania, Revenue Bonds, Philadelphia Corporation for the Aging Project, Series 2001B, 5.250%, 7/01/31 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 3.1% (2.1% OF TOTAL INVESTMENTS) 750 Bucks County Industrial Development Authority, Pennsylvania, No Opt. Call BBB+ 820,508 Environmental Improvement Revenue Bonds, USX Corporation Project, Series 1995, 5.400%, 11/01/17 (Mandatory put 11/01/11) 750 Pennsylvania Economic Development Financing Authority, 11/08 at 102.00 N/R 803,168 Exempt Facilities Revenue Bonds, National Gypsum Company, Series 1997B, 6.125%, 11/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 28.3% (19.5% OF TOTAL INVESTMENTS) 1,000 Allegheny County, Pennsylvania, General Obligation Bonds, No Opt. Call AAA 1,130,550 Series 2005C-57, 5.250%, 11/01/13 - FGIC Insured 2,415 Bucks County, Pennsylvania, Central Bucks School District, 5/12 at 100.00 Aaa 2,702,288 General Obligation Bonds, Series 2002, 5.500%, 5/15/18 - FGIC Insured 250 Duquesne School District, Allegheny County, Pennsylvania, 10/05 at 100.00 AAA 251,293 General Obligation Bonds, Series 1998, 5.000%, 10/01/18 - AMBAC Insured 595 Lehigh County, Pennsylvania, General Obligation Bonds, No Opt. Call AAA 651,263 Series 2004, 5.000%, 11/15/10 - MBIA Insured 750 Luzerne County, Pennsylvania, General Obligation Bonds, 5/13 at 100.00 Aaa 833,085 Series 2003A, 5.250%, 11/15/16 - MBIA Insured 250 Moon Area School District, Allegheny County, Pennsylvania, No Opt. Call AAA 282,868 General Obligation Bonds, Series 2004, 5.250%, 11/15/13 - FSA Insured 1,105 Oxford Area School District, Chester County, Pennsylvania, 2/12 at 100.00 AAA 1,232,208 General Obligation Bonds, Series 2001A, 5.500%, 2/15/17 - FGIC Insured 750 Pennsylvania, General Obligation Bonds, Third No Opt. Call AA 830,828 Series 2004, 5.000%, 9/01/12 2,000 Pennsylvania, General Obligation Bonds, Second 9/11 at 101.00 AA 2,204,020 Series 2001, 5.000%, 9/15/13 58 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL (continued) $ 3,000 Pittsburgh School District, Allegheny County, Pennsylvania, No Opt. Call AAA $ 3,451,260 General Obligation Refunding Bonds, Series 2002A, 5.500%, 9/01/14 - FSA Insured 1,230 Stroudsburg Area School District, Monroe County, 4/12 at 100.00 AAA 1,340,429 Pennsylvania, General Obligation Bonds, Series 2001A, 5.000%, 4/01/15 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 9.9% (6.8% OF TOTAL INVESTMENTS) 1,000 Allegheny County Redevelopment Authority, Pennsylvania, No Opt. Call N/R 1,054,030 Redevelopment Bonds, Pittsburg Mills Project, Series 2004, 5.600%, 7/01/23 1,000 Pennsylvania Turnpike Commission, Oil Franchise Tax 12/13 at 100.00 AAA 1,123,530 Senior Lien Revenue Bonds, Series 2003A, 5.250%, 12/01/15 - MBIA Insured 1,500 Philadelphia Redevelopment Authority, Pennsylvania, 4/12 at 100.00 AAA 1,670,760 Revenue Bonds, Philadelphia Neighborhood Transformation Initiative, Series 2002A, 5.500%, 4/15/19 - FGIC Insured 1,000 Philadelphia Municipal Authority, Pennsylvania, Lease 11/13 at 100.00 AAA 1,103,510 Revenue Bonds, Series 2003B, 5.250%, 11/15/17 - FSA Insured 250 Southeastern Transportation Authority, Pennsylvania, 3/09 at 101.00 AAA 269,870 Special Revenue Bonds, Series 1999A, 5.250%, 3/01/16 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 10.1% (7.0% OF TOTAL INVESTMENTS) 130 Delaware River Joint Toll Bridge Commission, Pennsylvania 7/13 at 100.00 A2 142,714 and New Jersey, Revenue Bonds, Series 2003, 5.250%, 7/01/17 1,000 Pennsylvania Economic Development Financing Authority, 6/12 at 102.00 A 1,082,560 Revenue Bonds, Amtrak 30th Street Station Parking Garage, Series 2002, 5.875%, 6/01/33 (Alternative Minimum Tax) - ACA Insured 1,750 Philadelphia Authority for Industrial Development, 7/11 at 101.00 AAA 1,829,153 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 2,278,289 Authority, Pennsylvania, Parking Revenue Bonds, Series 2001A, 5.375%, 12/01/30 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** - 6.4% (4.4% OF TOTAL INVESTMENTS) 170 Delaware River Joint Toll Bridge Commission, Pennsylvania 7/13 at 100.00 A2*** 191,177 and New Jersey, Revenue Bonds, Series 2003, 5.250%, 7/01/17 (Pre-refunded to 7/01/13) 185 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, No Opt. Call AAA 229,365 Twelfth Series 1990B, 7.000%, 5/15/20 - MBIA Insured 2,500 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA 2,866,550 Bonds, Series 2002B, 5.625%, 8/01/18 (Pre-refunded to 8/01/12) - FGIC Insured 100 Philadelphia Hospitals and Higher Education Facilities 7/07 at 102.00 AAA 107,953 Authority, Pennsylvania, Hospital Revenue Refunding Bonds, Jeanes Hospital, Series 1997, 5.875%, 7/01/17 (Pre-refunded to 7/01/07) - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 12.7% (8.8% OF TOTAL INVESTMENTS) 500 Allegheny County Industrial Development Authority, No Opt. Call AAA 524,235 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 3,372,397 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Montgomery County Montenay Project, Series 2002A, 5.000%, 11/01/10 - MBIA Insured 285 Pennsylvania Economic Development Financing Authority, 12/09 at 103.00 B+ 307,980 Exempt Facilities Revenue Bonds, Reliant Energy Inc., Series 2003A, 6.750%, 12/01/36 (Alternative Minimum Tax) Philadelphia Gas Works, Pennsylvania, Revenue Bonds, General Ordinance, Fourth Series 1998: 1,000 5.250%, 8/01/18 - FSA Insured 8/13 at 100.00 AAA 1,101,200 1,000 5.250%, 8/01/19 - FSA Insured 8/13 at 100.00 AAA 1,096,820 140 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 9/14 at 100.00 AAA 148,387 General Ordinance, Fifth Series 2004A-1, 5.000%, 9/01/26 - FSA Insured 135 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, No Opt. Call AAA 147,461 Eighteenth Series 2004, 5.000%, 8/01/13 - AGC Insured 59 Nuveen Pennsylvania Dividend Advantage Municipal Fund (NXM) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 2.3% (1.6% OF TOTAL INVESTMENTS) $ 500 Bethlehem Authority, Northhampton and Lehigh Counties, 11/14 at 100.00 AAA $ 545,070 Pennsylvania, Guaranteed Water Revenue Bonds, Series 2004, 5.000%, 11/15/20 - FSA Insured 600 Harrisburg Authority, Dauphin County, Pennsylvania, 7/14 at 100.00 AAA 645,372 Water Revenue Refunding Bonds, Series 2004, 5.000%, 7/15/22 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 70,205 Total Long-Term Investments (cost $71,402,402) - 145.1% 76,482,763 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.3% 1,228,954 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (47.4)% (25,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 52,711,717 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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 registered public accounting firm): 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. See accompanying notes to financial statements. 60 Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 (NVY) Portfolio of INVESTMENTS June 30, 2005
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 22.6% (15.5% OF TOTAL INVESTMENTS) $ 700 Allegheny County Higher Education Building Authority, No Opt. Call AA- $ 702,548 Pennsylvania, Revenue Bonds, Carnegie Mellon University, Series 2002, 5.450%, 3/01/27 1,000 Allegheny County Higher Education Building Authority, No Opt. Call Baa3 1,132,950 Pennsylvania, College Revenue Refunding Bonds, Robert Morris College, Series 1998A, 6.000%, 5/01/28 800 Chester County Health and Education Facilities Authority, 10/15 at 102.00 N/R 787,912 Pennsylvania, Revenue Bonds, Immaculata University, Series 2005, 5.500%, 10/15/25 (DD, settling 7/1/05) 325 Delaware County Authority, Pennsylvania, College Revenue 10/11 at 100.00 BBB- 343,954 Refunding Bonds, Neumann College, Series 2001, 6.000%, 10/01/31 1,435 Delaware County Authority, Pennsylvania, Revenue Refunding 8/13 at 100.00 AAA 1,593,410 Bonds, Villanova University, Series 2003, 5.250%, 8/01/17 - FGIC Insured 2,000 Pennsylvania Higher Educational Facilities Authority, 7/11 at 101.00 AAA 2,105,960 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 5,605,950 Bonds, Series 2002, 5.250%, 8/15/12 1,000 Union County, Higher Education Facilities Financing Authority, 4/13 at 100.00 Aa3 1,105,710 Pennsylvania, Revenue Bonds, Bucknell University, Series 2002A, 5.250%, 4/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTHCARE - 12.8% (8.8% OF TOTAL INVESTMENTS) 295 Allegheny County Hospital Development Authority, 4/15 at 100.00 Baa2 304,045 Pennsylvania, Revenue Bonds, Ohio Valley General Hospital, Series 2005A, 5.125%, 4/01/35 Allegheny County Hospital Development Authority, Pennsylvania, Revenue Bonds, West Penn Allegheny Health System, Series 2000B: 100 9.250%, 11/15/22 11/10 at 102.00 B1 120,854 300 9.250%, 11/15/30 11/10 at 102.00 B1 361,161 2,000 Chester County Health and Educational Facilities Authority, 5/08 at 101.00 AA- 2,096,460 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 626,232 Hospital Revenue Bonds, St. Luke's Hospital of Bethlehem, Series 2003, 5.375%, 8/15/33 20 Pennsylvania Higher Educational Facilities Authority, 1/11 at 101.00 A+ 22,252 Revenue Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31 465 Pennsylvania Higher Educational Facilities Authority, 8/15 at 100.00 AAA 515,852 Revenue Bonds, University of Pennsylvania Health Services, Series 2005B, 5.000%, 8/15/16 - FGIC Insured 1,000 Philadelphia Hospitals and Higher Education Facilities 11/05 at 100.00 BBB 1,018,800 Authority, Pennsylvania, Hospital Revenue Bonds, Temple University Hospital, Series 1993A, 6.625%, 11/15/23 225 St. Mary Hospital Authority, Pennsylvania, Health System 11/14 at 100.00 A1 238,991 Revenue Bonds, Catholic Health East, Series 2004B, 5.375%, 11/15/34 1,450 Washington County Hospital Authority, Pennsylvania, 6/12 at 101.00 A3 1,615,068 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+ 657,036 Pennsylvania, Hospital Revenue Bonds, Holy Spirit Hospital of the Sisters of Christian Charity Project, Series 2001, 6.250%, 1/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 0.2% (0.2% OF TOTAL INVESTMENTS) 120 Philadelphia Authority for Industrial Development, 5/15 at 102.00 Baa2 121,301 Pennsylvania, Multifamily Housing Revenue Bonds, Presbyterian Homes Germantown - Morrisville Project, Series 2005A, 5.625%, 7/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ INDUSTRIALS - 5.7% (3.9% OF TOTAL INVESTMENTS) 3,000 Pennsylvania Industrial Development Authority, Economic 7/12 at 101.00 AAA 3,386,340 Development Revenue Bonds, Series 2002, 5.500%, 7/01/19 - AMBAC Insured 61 Nuveen Pennsylvania Dividend Advantage Municipal Fund 2 (NVY) (continued) Portfolio of INVESTMENTS June 30, 2005 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LONG-TERM CARE - 4.9% (3.3% OF TOTAL INVESTMENTS) $ 1,155 Bucks County Industrial Development Authority, Pennsylvania, 10/12 at 101.00 BBB+ $ 1,242,214 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 1,092,190 Retirement Community Revenue Bonds, Wesley Affiliated Services Inc., Series 2002A, 7.125%, 1/01/25 285 Lebanon County Health Facilities Authority, Pennsylvania, 12/14 at 100.00 N/R 293,040 Health Center Revenue Bonds, Pleasant View Retirement Community, Series 2005A, 5.300%, 12/15/26 260 Pennsylvania Economic Development Financing Authority, 6/08 at 100.00 BB+ 254,844 Revenue Bonds, Northwestern Human Services Inc., Series 1998A, 5.250%, 6/01/14 - ------------------------------------------------------------------------------------------------------------------------------------ MATERIALS - 3.2% (2.3% OF TOTAL INVESTMENTS) 1,000 Bucks County Industrial Development Authority, Pennsylvania, No Opt. Call BBB+ 1,094,010 Environmental Improvement Revenue Bonds, USX Corporation Project, Series 1995, 5.400%, 11/01/17 (Mandatory put 11/01/11) 750 Pennsylvania Economic Development Financing Authority, 11/08 at 102.00 N/R 803,168 Exempt Facilities Revenue Bonds, National Gypsum Company, Series 1997B, 6.125%, 11/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 16.7% (11.4% OF TOTAL INVESTMENTS) 500 Allegheny County, Pennsylvania, General Obligation Bonds, No Opt. Call AAA 565,275 Series 2005C-57, 5.250%, 11/01/13 - FGIC Insured 1,740 Butler County, Pennsylvania, Butler Area School District, 10/12 at 100.00 AAA 1,911,042 General Obligation Bonds, Series 2002A, 5.375%, 10/01/26 - FGIC Insured Greensburg Salem School District, Westmoreland County, Pennsylvania, General Obligation Refunding Bonds, Series 2002: 725 5.375%, 9/15/15 - FGIC Insured 9/12 at 100.00 AAA 811,152 1,000 5.375%, 9/15/16 - FGIC Insured 9/12 at 100.00 AAA 1,117,480 4,280 Lehigh County, Pennsylvania, General Obligation Bonds, 11/11 at 100.00 Aa3 4,670,636 Series 2001, 5.000%, 11/15/15 1,100 Luzerne County, Pennsylvania, General Obligation Bonds, 11/12 at 57.97 Aaa 475,838 Series 2002B, 0.000%, 11/15/21 - MBIA Insured 275 Moon Area School District, Allegheny County, Pennsylvania, No Opt. Call AAA 311,154 General Obligation Bonds, Series 2004, 5.250%, 11/15/13 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 37.2% (25.5% OF TOTAL INVESTMENTS) 1,000 Allegheny County Redevelopment Authority, Pennsylvania, No Opt. Call N/R 1,054,030 Redevelopment Bonds, Pittsburg Mills Project, Series 2004, 5.600%, 7/01/23 4,000 Delaware Valley Regional Finance Authority, Pennsylvania, No Opt. Call Aa3 4,676,680 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 2,147,840 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 4,284,280 Revenue Refunding Bonds, Series 2001J, 5.000%, 9/01/22 - MBIA Insured 1,000 Pennsylvania Turnpike Commission, Oil Franchise Tax Senior 12/13 at 100.00 AAA 1,123,530 Lien Revenue Bonds, Series 2003A, 5.250%, 12/01/15 - MBIA Insured 2,945 Pennsylvania Turnpike Commission, Registration Fee Revenue 7/11 at 101.00 AAA 3,258,260 Bonds, Series 2001, 5.500%, 7/15/33 - AMBAC Insured 2,000 Philadelphia Authority for Industrial Development, 10/11 at 101.00 AAA 2,149,100 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 1,113,840 1,750 5.500%, 4/15/22 - FGIC Insured 4/12 at 100.00 AAA 1,937,548 250 Southeastern Transportation Authority, Pennsylvania, 3/09 at 101.00 AAA 269,870 Special Revenue Bonds, Series 1999A, 5.250%, 3/01/16 - FGIC Insured 62 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 3.8% (2.7% OF TOTAL INVESTMENTS) $ 130 Delaware River Joint Toll Bridge Commission, Pennsylvania 7/13 at 100.00 A2 $ 142,714 and New Jersey, Revenue Bonds, Series 2003, 5.250%, 7/01/17 1,000 Pennsylvania Economic Development Financing Authority, 6/12 at 102.00 A 1,082,560 Revenue Bonds, Amtrak 30th Street Station Parking Garage, Series 2002, 5.875%, 6/01/33 (Alternative Minimum Tax) - ACA Insured 1,000 Susquehanna Area Regional Airport Authority, Pennsylvania, 1/13 at 100.00 Aaa 1,040,260 Airport System Revenue Bonds, Series 2003A, 5.000%, 1/01/28 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED *** - 19.7% (13.5% OF TOTAL INVESTMENTS) 2,000 Adams County, Pennsylvania, General Obligation Bonds, 5/11 at 100.00 AAA 2,249,640 Series 2001, 5.500%, 11/15/26 (Pre-refunded to 5/15/11) - FGIC Insured 170 Delaware River Joint Toll Bridge Commission, Pennsylvania 7/13 at 100.00 A2*** 191,177 and New Jersey, Revenue Bonds, Series 2003, 5.250%, 7/01/17 (Pre-refunded to 7/01/13) 3,000 Pennsylvania, General Obligation Bonds, Second Series 9/11 at 101.00 AA*** 3,326,730 2001, 5.000%, 9/15/15 (Pre-refunded to 9/15/11) 2,000 Philadelphia School District, Pennsylvania, General 2/12 at 100.00 AAA 2,265,060 Obligation Bonds, Series 2002A, 5.500%, 2/01/31 (Pre-refunded to 2/01/12) - FSA Insured 3,170 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 AAA 3,634,785 Obligation Bonds, Series 2002B, 5.625%, 8/01/18 (Pre-refunded to 8/01/12) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 9.5% (6.5% OF TOTAL INVESTMENTS) 2,135 Montgomery County Industrial Development Authority, No Opt. Call AAA 2,322,602 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Montgomery County Montenay Project, Series 2002A, 5.000%, 11/01/10 - MBIA Insured 315 Pennsylvania Economic Development Financing Authority, 12/09 at 103.00 B+ 340,398 Exempt Facilities Revenue Bonds, Reliant Energy Inc., Series 2003A, 6.750%, 12/01/36 (Alternative Minimum Tax) 2,420 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 8/13 at 100.00 AAA 2,650,771 General Ordinance, Fourth Series 1998, 5.250%, 8/01/20 - FSA Insured 145 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, 9/14 at 100.00 AAA 153,687 General Ordinance, Fifth Series 2004A-1, 5.000%, 9/01/26 - FSA Insured 160 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, No Opt. Call AAA 174,768 Eighteenth Series 2004, 5.000%, 8/01/13 - AGC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 9.3% (6.4% OF TOTAL INVESTMENTS) 4,500 Bucks County Industrial Development Authority, 3/12 at 100.00 AAA 4,845,825 Pennsylvania, Water Facility Revenue Bonds, Pennsylvania Suburban Water Company Project, Series 2002, 5.550%, 9/01/32 (Alternative Minimum Tax) - FGIC Insured 600 Harrisburg Authority, Dauphin County, Pennsylvania, 7/14 at 100.00 AAA 645,371 Water Revenue Refunding Bonds, Series 2004, 5.000%, 7/15/22 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ $ 79,195 Total Long-Term Investments (cost $79,891,662) - 145.6% 86,186,155 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.6% 1,487,650 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.2)% (28,500,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 59,173,805 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): 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 registered public accounting firm): 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. (DD) Security purchased on a delayed delivery basis. See accompanying notes to financial statements. 63 Statement of ASSETS AND LIABILITIES June 30, 2005
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 $454,429,495, $267,245,699, $140,527,062, and $97,580,078, respectively) $480,760,686 $283,909,402 $149,197,901 $104,219,191 Cash 5,762,596 2,305,185 -- -- Receivables: Interest 6,622,804 4,083,333 2,247,668 1,561,421 Investments sold 550,000 640,000 -- -- Other assets 26,111 17,650 8,651 8,580 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 493,722,197 290,955,570 151,454,220 105,789,192 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft -- -- 881,757 7,243 Payables: Investments purchased 12,241,171 5,912,620 -- -- Forward swaps closed -- -- -- -- Accrued expenses: Management fees 246,504 147,572 41,737 29,506 Other 112,357 94,996 24,315 18,861 Preferred share dividends payable 39,537 18,072 4,734 2,458 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 12,639,569 6,173,260 952,543 58,068 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 162,000,000 91,600,000 48,000,000 34,500,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $319,082,628 $193,182,310 $102,501,677 $71,231,124 ==================================================================================================================================== Common shares outstanding 20,444,580 12,039,329 6,556,261 4,509,839 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.61 $ 16.05 $ 15.63 $ 15.79 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 204,446 $ 120,393 $ 65,563 $ 45,098 Paid-in surplus 288,419,461 171,866,559 93,069,298 63,945,160 Undistributed (Over-distribution of) net investment income 934,719 1,224,771 568,730 337,234 Accumulated net realized gain from investments and forward swaps 3,192,811 3,306,884 127,247 264,519 Net unrealized appreciation of investments 26,331,191 16,663,703 8,670,839 6,639,113 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $319,082,628 $193,182,310 $102,501,677 $71,231,124 ==================================================================================================================================== 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. 64 PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at market value (cost $359,713,911, $341,986,802, $71,402,402, and $79,891,662, respectively) $383,426,749 $363,357,837 $76,482,763 $86,186,155 Cash 243,440 716,267 251,539 1,124,909 Receivables: Interest 4,997,397 4,495,996 1,053,071 1,320,254 Investments sold -- 80,000 -- -- Other assets 27,930 23,437 8,492 8,512 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 388,695,516 368,673,537 77,795,865 88,639,830 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft -- -- -- -- Payables: Investments purchased -- 7,853,181 -- 785,411 Forward swaps closed -- -- 44,375 133,125 Accrued expenses: Management fees 199,913 185,693 21,694 24,473 Other 98,826 124,042 14,996 17,509 Preferred share dividends payable 31,932 37,468 3,083 5,507 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 330,671 8,200,384 84,148 966,025 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 132,000,000 118,100,000 25,000,000 28,500,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $256,364,845 $242,373,153 $52,711,717 $59,173,805 ==================================================================================================================================== Common shares outstanding 16,301,498 15,817,596 3,308,738 3,724,790 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.73 $ 15.32 $ 15.93 $ 15.89 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 163,015 $ 158,176 $ 33,087 $ 37,248 Paid-in surplus 230,742,390 216,385,838 46,949,541 52,797,234 Undistributed (Over-distribution of) net investment income (246,293) 759,544 367,990 (92,744) Accumulated net realized gain from investments and forward swaps 1,992,895 3,698,560 280,738 137,574 Net unrealized appreciation of investments 23,712,838 21,371,035 5,080,361 6,294,493 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $256,364,845 $242,373,153 $52,711,717 $59,173,805 ==================================================================================================================================== Authorized shares: Common Unlimited Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited Unlimited ====================================================================================================================================
See accompanying notes to financial statements. 65 Statement of OPERATIONS Year Ended June 30, 2005
NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 (NQJ) (NNJ) (NXJ) (NUJ) - ------------------------------------------------------------------------------------------------------------------------------------ - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $23,224,883 $13,549,712 $ 7,136,990 $5,074,838 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 2,979,532 1,792,913 949,314 667,852 Preferred shares - auction fees 405,000 229,000 120,000 86,250 Preferred shares - dividend disbursing agent fees 30,000 30,000 10,000 10,000 Shareholders' servicing agent fees and expenses 49,438 29,524 2,210 1,951 Custodian's fees and expenses 102,615 65,715 37,347 29,010 Directors'/Trustees' fees and expenses 10,360 6,113 3,145 2,235 Professional fees 27,321 19,596 14,423 12,754 Shareholders' reports - printing and mailing expenses 46,491 23,240 15,405 13,955 Stock exchange listing fees 11,035 10,689 558 384 Investor relations expense 62,948 32,537 19,810 14,718 Other expenses 41,897 18,896 15,057 12,793 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 3,766,637 2,258,223 1,187,269 851,902 Custodian fee credit (22,991) (14,923) (7,030) (4,760) Expense reimbursement -- -- (444,164) (311,530) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 3,743,646 2,243,300 736,075 535,612 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 19,481,237 11,306,412 6,400,915 4,539,226 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain from investments 3,339,508 4,268,639 1,221,262 545,334 Net realized gain (loss) from forward swaps -- -- (201,571) (143,801) Change in net unrealized appreciation (depreciation) of investments 19,532,836 7,825,789 6,136,129 5,262,530 - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain 22,872,344 12,094,428 7,155,820 5,664,063 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (2,081,219) (1,150,783) (658,577) (500,033) From accumulated net realized gains from investments (107,515) (121,121) -- (13,577) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (2,188,734) (1,271,904) (658,577) (513,610) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $40,164,847 $22,128,936 $12,898,158 $9,689,679 ====================================================================================================================================
See accompanying notes to financial statements. 66
PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $18,163,976 $17,483,668 $3,682,320 $4,078,638 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 2,423,772 2,258,985 496,304 556,336 Preferred shares - auction fees 330,000 295,250 62,500 71,250 Preferred shares - dividend disbursing agent fees 30,000 30,000 10,000 10,000 Shareholders' servicing agent fees and expenses 55,323 45,430 2,765 2,601 Custodian's fees and expenses 87,305 85,176 22,381 22,319 Directors'/Trustees' fees and expenses 8,351 7,673 1,683 1,818 Professional fees 23,641 22,274 11,693 11,949 Shareholders' reports - printing and mailing expenses 44,935 32,432 11,273 13,786 Stock exchange listing fees 10,689 10,690 281 317 Investor relations expense 53,017 49,271 10,719 12,388 Other expenses 28,381 28,214 13,225 12,953 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 3,095,414 2,865,395 642,824 715,717 Custodian fee credit (12,471) (10,866) (4,262) (3,900) Expense reimbursement -- -- (231,502) (259,509) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 3,082,943 2,854,529 407,060 452,308 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 15,081,033 14,629,139 3,275,260 3,626,330 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) Net realized gain from investments 3,033,351 5,554,834 1,620,266 320,219 Net realized gain (loss) from forward swaps -- -- (232,654) (164,341) Change in net unrealized appreciation (depreciation) of investments 13,962,464 8,419,347 2,111,728 3,889,901 - ------------------------------------------------------------------------------------------------------------------------------------ Net realized and unrealized gain 16,995,815 13,974,181 3,499,340 4,045,779 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (2,017,435) (1,647,195) (327,355) (416,243) From accumulated net realized gains from investments (138,958) (131,391) (58,447) (9,192) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (2,156,393) (1,778,586) (385,802) (425,435) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $29,920,455 $26,824,734 $6,388,798 $7,246,674 ====================================================================================================================================
See accompanying notes to financial statements. 67 Statement of CHANGES IN NET ASSETS
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 6/30/05 6/30/04 6/30/05 6/30/04 6/30/05 6/30/04 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 19,481,237 $ 20,558,464 $ 11,306,412 $ 11,904,836 $ 6,400,915 $ 6,578,953 Net realized gain from investments 3,339,508 5,219,194 4,268,639 3,841,083 1,221,262 406,876 Net realized gain (loss) from forward swaps -- -- -- -- (201,571) -- Change in net unrealized appreciation (depreciation) of investments 19,532,836 (20,391,457) 7,825,789 (13,401,493) 6,136,129 (5,455,331) Distributions to Preferred Shareholders: From net investment income (2,081,219) (1,019,897) (1,150,783) (596,849) (658,577) (359,649) From accumulated net realized gains from investments (107,515) (272,572) (121,121) (114,819) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 40,164,847 4,093,732 22,128,936 1,632,758 12,898,158 1,170,849 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (19,283,118) (19,523,339) (11,079,485) (11,259,998) (6,070,304) (6,144,941) From accumulated net realized gains from investments (2,241,452) (4,021,804) (2,620,075) (1,617,686) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (21,524,570) (23,545,143) (13,699,560) (12,877,684) (6,070,304) (6,144,941) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- -- -- -- -- 1,664 Net proceeds from shares issued to shareholders due to reinvestment of distributions 770,952 2,153,223 -- 429,837 22,984 121,525 Preferred shares offering costs -- -- -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 770,952 2,153,223 -- 429,837 22,984 123,189 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 19,411,229 (17,298,188) 8,429,376 (10,815,089) 6,850,838 (4,850,903) Net assets applicable to Common shares at the beginning of year 299,671,399 316,969,587 184,752,934 195,568,023 95,650,839 100,501,742 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $319,082,628 $299,671,399 $193,182,310 $184,752,934 $102,501,677 $ 95,650,839 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ 934,719 $ 2,868,612 $ 1,224,771 $ 2,164,292 $ 568,730 $ 899,542 ====================================================================================================================================
See accompanying notes to financial statements. 68
NEW JERSEY PENNSYLVANIA PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NUJ) INVESTMENT QUALITY (NQP) PREMIUM INCOME 2 (NPY) ---------------------------- ------------------------------ ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 6/30/05 6/30/04 6/30/05 6/30/04 6/30/05 6/30/04 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 4,539,226 $ 4,644,299 $ 15,081,033 $ 15,999,329 $ 14,629,139 $ 15,541,734 Net realized gain from investments 545,334 184,368 3,033,351 2,709,764 5,554,834 1,921,255 Net realized gain (loss) from forward swaps (143,801) -- -- -- -- -- Change in net unrealized appreciation (depreciation) of investments 5,262,530 (3,908,064) 13,962,464 (18,659,657) 8,419,347 (14,322,786) Distributions to Preferred Shareholders: From net investment income (500,033) (250,791) (2,017,435) (958,666) (1,647,195) (799,594) From accumulated net realized gains from investments (13,577) (18,535) (138,958) (18,006) (131,391) (131,627) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 9,689,679 651,277 29,920,455 (927,236) 26,824,734 2,208,982 - ------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (4,140,074) (4,138,773) (14,534,163) (14,918,893) (14,724,745) (14,966,175) From accumulated net realized gains from investments (237,176) (243,881) (2,308,550) (204,569) (2,842,911) (1,741,706) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (4,377,250) (4,382,654) (16,842,713) (15,123,462) (17,567,656) (16,707,881) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- -- -- -- -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions -- 36,511 -- 413,637 661,012 350,285 Preferred shares offering costs -- (2,307) -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions -- 34,204 -- 413,637 661,012 350,285 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 5,312,429 (3,697,173) 13,077,742 (15,637,061) 9,918,090 (14,148,614) Net assets applicable to Common shares at the beginning of year 65,918,695 69,615,868 243,287,103 258,924,164 232,455,063 246,603,677 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $71,231,124 $65,918,695 $256,364,845 $243,287,103 $242,373,153 $232,455,063 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ 337,234 $ 445,202 $ (246,293) $ 1,231,310 $ 759,544 $ 2,530,339 ====================================================================================================================================
See accompanying notes to financial statements. 69 Statement of CHANGES IN NET ASSETS (continued)
PENNSYLVANIA PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) DIVIDEND ADVANTAGE 2 (NVY) ----------------------------- ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 6/30/05 6/30/04 6/30/05 6/30/04 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 3,275,260 $ 3,431,079 $ 3,626,330 $ 3,654,980 Net realized gain from investments 1,620,266 265,020 320,219 201,991 Net realized gain (loss) from forward swaps (232,654) -- (164,341) -- Change in net unrealized appreciation (depreciation) of investments 2,111,728 (2,825,573) 3,889,901 (3,455,178) Distributions to Preferred Shareholders: From net investment income (327,355) (168,884) (416,243) (199,429) From accumulated net realized gains from investments (58,447) (40,997) (9,192) (49,773) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from operations 6,388,798 660,645 7,246,674 152,591 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (3,171,680) (3,180,784) (3,283,404) (3,419,014) From accumulated net realized gains from investments (1,198,780) (570,305) (159,790) (579,472) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (4,370,460) (3,751,089) (3,443,194) (3,998,486) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Common shares: Net proceeds from sale of shares -- 1,664 -- -- Net proceeds from shares issued to shareholders due to reinvestment of distributions 144,217 46,581 -- 17,176 Preferred shares offering costs -- -- -- (3,394) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from capital share transactions 144,217 48,245 -- 13,782 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 2,162,555 (3,042,199) 3,803,480 (3,832,113) Net assets applicable to Common shares at the beginning of year 50,549,162 53,591,361 55,370,325 59,202,438 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $52,711,717 $50,549,162 $59,173,805 $55,370,325 ==================================================================================================================================== Undistributed (Over-distribution of) net investment income at the end of year $ 367,990 $ 593,042 $ (92,744) $ (19,053) ====================================================================================================================================
See accompanying notes to financial statements. 70 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). Common shares of 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 Common shares of 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. Each Fund seeks to provide current income exempt from both regular federal and applicable state income taxes by investing primarily in a diversified portfolio of municipal obligations issued by state and local government authorities within a single state. Effective January 1, 2005, Nuveen Advisory Corp. ("NAC"), the Funds' previous Adviser, and its affiliate, Nuveen Institutional Advisory Corp. ("NIAC"), were merged into Nuveen Asset Management ("NAM"), each wholly owned subsidiaries of Nuveen Investments, Inc. ("Nuveen"). As a result of the merger, NAM is now the Adviser to all funds previously advised by either NAC or NIAC. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles. Investment 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, evaluations of anticipated cash flows or collateral and general market conditions. Prices of derivative investments are also provided by an independent pricing service approved by each Fund's Board of Directors/Trustees. If the pricing service is unable to supply a price for a derivative investment each Fund may use a market quote provided by a major broker/dealer in such investments. If it is determined that market prices for an investment are unavailable or inappropriate, the Board of Directors/Trustees of the Funds, or its designee, may establish a fair value for the investment. 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 transactions are determined on the specific identification method. Securities purchased on a when-issued or delayed delivery basis may have extended settlement periods. Any 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, 2005, New Jersey Investment Quality (NQJ), New Jersey Premium Income (NNJ), Pennsylvania Premium Income 2 (NPY), and Pennsylvania Dividend Advantage 2 (NVY) had outstanding when-issued and/or delayed delivery purchase commitments of $10,321,025, $5,912,620, $7,853,181, and $785,411, respectively. There were no such outstanding purchase commitments in any of the other funds. 71 Notes to FINANCIAL STATEMENTS (continued) Investment Income Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Investment income also includes paydown gains and losses, if any. Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. 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 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, 2005, have been designated Exempt Interest Dividends. Net realized capital gains and ordinary income distributions paid by the Funds are subject to federal taxation. Dividends and Distributions to Common Shareholders Dividends from tax-exempt net investment income are declared monthly. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. Preferred Shares The Funds have issued and outstanding Preferred shares, $25,000 stated value per share, as a means of effecting financial leverage. Each Fund's Preferred shares are issued in one or more Series. The dividend rate on each Series is determined every seven days, pursuant to a dutch auction process overseen by the auction agent, and is payable weekly at 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 ===============================================================================================================
72 Forward Swap Transactions The Funds may invest in certain derivative financial instruments. The Funds' use of forward interest rate swap transactions is intended to mitigate the negative impact that an increase in long-term interest rates could have on Common share net asset value. Forward interest rate swap transactions involve each Fund's agreement with the counterparty to pay, in the future, a fixed rate payment in exchange for the counterparty paying the Fund a variable rate payment. The amount of the payment obligation is based on the notional amount of the forward swap contract, and would increase (or decrease) in value based primarily on the extent to which long-term interest rates for bonds having a maturity of the swaps' termination date were to increase (or decrease). The Funds may close out a contract prior to the effective date at which point a realized gain or loss would be recognized. When a forward swap is terminated, it does not involve the delivery of securities or other underlying assets or principal, but rather is settled in cash on a net basis. Each Fund intends, but is not obligated to, terminate its forward swaps before the effective date. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the credit risk associated with a counterparty failing to honor its commitment to pay any realized gain to the Fund upon termination. To minimize such credit risk, all counterparties are required to pledge collateral daily (based on the daily valuation of each swap) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when any of the Funds have an unrealized loss on a swap contract, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the swap valuations fluctuate, either up or down, by at least the predetermined threshold amount. At June 30, 2005, the Funds did not have any forward swap contracts outstanding. 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. Indemnifications Under the Funds' organizational documents, its Officers and Directors/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES Transactions in Common 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 6/30/05 6/30/04 6/30/05 6/30/04 6/30/05 6/30/04 - --------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions 49,812 136,119 -- 26,399 1,445 7,816 ========================================================================================================= NEW JERSEY PENNSYLVANIA PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NUJ) INVESTMENT QUALITY (NQP) PREMIUM INCOME 2 (NPY) -------------------------- ------------------------ ------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 6/30/05 6/30/04 6/30/05 6/30/04 6/30/05 6/30/04 - --------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions -- 2,305 -- 26,180 42,619 21,918 ========================================================================================================= PENNSYLVANIA PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) DIVIDEND ADVANTAGE 2 (NVY) ------------------------ -------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 6/30/05 6/30/04 6/30/05 6/30/04 - --------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions 8,948 2,833 -- 1,068 =========================================================================================================
73 Notes to FINANCIAL STATEMENTS (continued) 3. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in long-term municipal securities during the fiscal year ended June 30, 2005, 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 $73,834,890 $59,823,825 $24,210,835 $11,024,984 Sales and maturities 69,102,963 61,246,019 25,271,967 11,450,188 =============================================================================================================== PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - --------------------------------------------------------------------------------------------------------------- Purchases $69,344,822 $79,998,320 $10,033,879 $7,209,414 Sales and maturities 70,770,703 79,402,858 11,333,717 6,641,405 ===============================================================================================================
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 the treatment of paydown gains and losses on investments, timing differences in recognizing income on taxable market discount securities and timing differences in recognizing certain gains and losses on investment transactions. At June 30, 2005, the cost of investments was 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 $454,418,037 $267,114,148 $140,646,590 $97,646,286 =============================================================================================================== PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - --------------------------------------------------------------------------------------------------------------- Cost of investments $359,704,963 $341,856,383 $71,478,721 $80,025,867 ===============================================================================================================
74 Gross unrealized appreciation and gross unrealized depreciation of investments at June 30, 2005, 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 $26,956,819 $16,850,974 $8,857,010 $6,710,804 Depreciation (614,170) (55,720) (305,699) (137,899) - --------------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments $26,342,649 $16,795,254 $8,551,311 $6,572,905 =============================================================================================================== PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - --------------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $23,829,272 $21,685,840 $5,100,743 $6,310,737 Depreciation (107,486) (184,386) (96,701) (150,449) - --------------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments $23,721,786 $21,501,454 $5,004,042 $6,160,288 ===============================================================================================================
The tax components of undistributed net investment income and net realized gains at June 30, 2005, 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 * $2,455,252 $1,957,962 $1,005,406 $666,880 Undistributed net ordinary income ** -- 8,126 -- 124 Undistributed net long-term capital gains 3,192,811 3,306,884 283,535 348,418 =============================================================================================================== PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - --------------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income * $ 868,902 $1,756,762 $608,163 $146,085 Undistributed net ordinary income ** 8,580 41,520 -- -- Undistributed net long-term capital gains 1,984,315 3,689,922 376,400 288,023 ===============================================================================================================
* Undistributed net tax exempt income (on a tax basis) has not been reduced for the dividend declared on June 1, 2005, paid on July 1, 2005. ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. 75 Notes to FINANCIAL STATEMENTS (continued) The tax character of distributions paid during the fiscal years ended June 30, 2005, and June 30, 2004, 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 2005 (NQJ) (NNJ) (NXJ) (NUJ) - --------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $21,476,819 $12,307,476 $6,771,438 $4,644,877 Distributions from net ordinary income ** -- 3,453 -- 44 Distributions from net long-term capital gains 2,348,967 2,741,196 -- 250,753 =============================================================================================================== PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 2005 (NQP) (NPY) (NXM) (NVY) - --------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $16,672,670 $16,397,456 $3,485,060 $3,731,320 Distributions from net ordinary income ** 17,181 90,448 20,509 -- Distributions from net long-term capital gains 2,440,428 2,957,194 1,257,227 168,982 ===============================================================================================================
NEW JERSEY NEW JERSEY NEW JERSEY NEW JERSEY INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME ADVANTAGE ADVANTAGE 2 2004 (NQJ) (NNJ) (NXJ) (NUJ) - --------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $20,469,088 $11,842,477 $6,494,901 $4,384,953 Distributions from net ordinary income ** 41,049 4,078 -- 181,959 Distributions from net long-term capital gains 4,294,376 1,732,505 -- 80,457 =============================================================================================================== PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 2004 (NQP) (NPY) (NXM) (NVY) - --------------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $15,807,419 $15,737,685 $3,347,542 $3,621,688 Distributions from net ordinary income ** 67,996 23,349 6,531 383,089 Distributions from net long-term capital gains 222,575 1,873,333 605,751 246,490 ===============================================================================================================
** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. 76 5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES As approved by the Board of Directors/Trustees, effective August 1, 2004, a complex-wide management fee structure was adopted for all funds sponsored by the Adviser, or its predecessor and its affiliates. This fee structure separates each fund's management fee into two components - a complex-level component, based on the aggregate amount of all fund assets managed by the Adviser, and a specific fund-level component, based only on the amount of assets within each individual fund. This pricing structure enables Nuveen fund shareholders to benefit from growth in the assets within each individual fund as well as from growth in the amount of complex-wide assets managed by the Adviser. Under no circumstances will this pricing structure result in a fund paying management fees at a rate higher than would otherwise have been applicable had the complex-wide management fee structure not been implemented. As of July 31, 2005, the complex-level fee rate was .1899%; that is, the funds' effective management fees were reduced by approximately .0101%. Effective August 1, 2004, the annual fund-level fee, payable monthly, for each of the Funds is based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: NEW JERSEY INVESTMENT QUALITY (NQJ) NEW JERSEY PREMIUM INCOME (NNJ) AVERAGE DAILY NET ASSETS PENNSYLVANIA INVESTMENT QUALITY (NQP) (INCLUDING NET ASSETS PENNSYLVANIA PREMIUM INCOME 2 (NPY) ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE - -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For the next $3 billion .3875 For net assets over $5 billion .3750 ================================================================================ NEW JERSEY DIVIDEND ADVANTAGE (NXJ) NEW JERSEY DIVIDEND ADVANTAGE 2 (NUJ) AVERAGE DAILY NET ASSETS PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) (INCLUDING NET ASSETS PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NVY) ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE - -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For net assets over $2 billion .3750 ================================================================================ 77 Notes to FINANCIAL STATEMENTS (continued) Effective August 1, 2004, the annual complex-level fee, payable monthly, which is additive to the fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the aggregate amount of total fund assets managed as follows: COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE - -------------------------------------------------------------------------------- For the first $55 billion .2000% For the next $1 billion .1800 For the next $1 billion .1600 For the next $3 billion .1425 For the next $3 billion .1325 For the next $3 billion .1250 For the next $5 billion .1200 For the next $5 billion .1175 For the next $15 billion .1150 For Managed Assets over $91 billion (2) .1400 ================================================================================ (1) The complex-level fee component of the management fee for the funds is calculated based upon the aggregate Managed Assets ("Managed Assets" means the average daily net assets of each fund including assets attributable to all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds in the U.S. (2) With respect to the complex-wide Managed Assets over $91 billion, the fee rate or rates that will apply to such assets will be determined at a later date. In the unlikely event that complex-wide Managed Assets reach $91 billion prior to a determination of the complex-level fee rate or rates to be applied to Managed Assets in excess of $91 billion, the complex-level fee rate for such complex-wide Managed Assets shall be .1400% until such time as a different rate or rates is determined. Each Fund paid through July 31, 2004, an annual management fee, payable monthly, at the rates set forth below, which were based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: NEW JERSEY INVESTMENT QUALITY (NQJ) NEW JERSEY PREMIUM INCOME (NNJ) AVERAGE DAILY NET ASSETS PENNSYLVANIA INVESTMENT QUALITY (NQP) (INCLUDING NET ASSETS PENNSYLVANIA PREMIUM INCOME 2 (NPY) ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE RATE - -------------------------------------------------------------------------------- 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 ================================================================================ NEW JERSEY DIVIDEND ADVANTAGE (NXJ) NEW JERSEY DIVIDEND ADVANTAGE 2 (NUJ) AVERAGE DAILY NET ASSETS PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) (INCLUDING NET ASSETS PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NVY) ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE RATE - -------------------------------------------------------------------------------- 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 ================================================================================ 78 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 or its affiliates. The Board of Directors/Trustees has adopted a deferred compensation plan for independent Directors/Trustees that enables Directors/Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised Funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised Funds. 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. 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. 6. ANNOUNCEMENT REGARDING PARENT COMPANY OF ADVISER In early April, 2005, The St. Paul Travelers Companies, Inc. ("St. Paul Travelers"), which owned 79% of Nuveen, (A) completed a public offering of a substantial portion of its equity stake in Nuveen, (B) sold Nuveen $200 million of its Nuveen shares, (C) entered into an agreement with Nuveen to sell an additional $400 million of its Nuveen shares on a "forward" basis with payment for and settlement of these shares delayed for several months, and (D) entered into agreements with two unaffiliated investment banking firms to sell an amount equal to most or all of its remaining Nuveen shares for current payment but for future settlement. Transactions (C) and (D) above were settled in late July, which effectively reduced St. Paul Travelers' controlling stake in Nuveen and was deemed an "assignment" (as defined in the 1940 Act) of the investment management agreements between the Funds and the Adviser, which resulted in the automatic termination of each agreement under the 1940 Act. In anticipation of such deemed assignment, the Board of Directors/Trustees had approved new ongoing investment management agreements for each Fund and the submission of those agreements for approval by each respective Fund's shareholders, which shareholder approval was received prior to the settlement of transactions (C) and (D). The new ongoing management agreements took effect upon such settlement. 79 Notes to FINANCIAL STATEMENTS (continued) 7. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on August 1, 2005, to shareholders of record on July 15, 2005, 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 $.0730 $.0710 $.0715 $.0765 =============================================================================================================== PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA PENNSYLVANIA INVESTMENT PREMIUM DIVIDEND DIVIDEND QUALITY INCOME 2 ADVANTAGE ADVANTAGE 2 (NQP) (NPY) (NXM) (NVY) - --------------------------------------------------------------------------------------------------------------- Dividend per share $.0670 $.0710 $.0775 $.0670 ===============================================================================================================
80 Financial HIGHLIGHTS 81 Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions --------------------------------------------------------------- -------------------------------- Distributions Distributions from Net from Net Beginning Investment Capital Investment Capital Common Net Income to Gains to Income to Gains to Share Net Realized/ Preferred Preferred Common Common Net Asset Investment Unrealized Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ==================================================================================================================================== NEW JERSEY INVESTMENT QUALITY (NQJ) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2005 $14.69 $ .95 $1.13 $(.10) $(.01) $1.97 $(.94) $(.11) $(1.05) 2004 15.65 1.01 (.75) (.05) (.01) .20 (.96) (.20) (1.16) 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) NEW JERSEY PREMIUM INCOME (NNJ) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2005 15.35 .94 1.01 (.10) (.01) 1.84 (.92) (.22) (1.14) 2004 16.28 .99 (.79) (.05) (.01) .14 (.94) (.13) (1.07) 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) NEW JERSEY DIVIDEND ADVANTAGE (NXJ) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2005 14.59 .98 1.09 (.10) -- 1.97 (.93) -- (.93) 2004 15.35 1.00 (.77) (.05) -- .18 (.94) -- (.94) 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: 2005 14.62 1.00 1.25 (.11) -- 2.14 (.92) (.05) (.97) 2004 15.44 1.03 (.82) (.06) -- .15 (.92) (.05) (.97) 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: 2005 $-- $15.61 $15.25 15.13% 13.81% 2004 -- 14.69 14.19 (4.09) 1.26 2003 -- 15.65 15.94 11.68 10.72 2002 -- 15.07 15.22 4.19 6.56 2001 -- 15.03 15.50 17.13 10.62 NEW JERSEY PREMIUM INCOME (NNJ) - ------------------------------------------------------------------------------------------- Year Ended 6/30: 2005 -- 16.05 15.76 19.43 12.31 2004 -- 15.35 14.19 (5.65) .85 2003 -- 16.28 16.10 10.18 10.48 2002 -- 15.60 15.50 7.88 7.91 2001 -- 15.27 15.19 20.13 12.90 NEW JERSEY DIVIDEND ADVANTAGE (NXJ) - ------------------------------------------------------------------------------------------- Year Ended 6/30: 2005 -- 15.63 15.38 19.97 13.80 2004 -- 14.59 13.63 (5.13) 1.20 2003 .01 15.35 15.30 15.09 13.18 2002 -- 14.38 14.12 (.17) 6.05 2001(a) (.13) 14.39 14.99 .87 1.42 NEW JERSEY DIVIDEND ADVANTAGE 2 (NUJ) - ------------------------------------------------------------------------------------------- Year Ended 6/30: 2005 -- 15.79 15.90 23.39 15.00 2004 -- 14.62 13.74 (4.81) 1.02 2003 -- 15.44 15.40 9.14 13.74 2002(b) (.14) 14.46 15.04 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: 2005 $319,083 1.21% 6.22% 1.20% 6.23% 15% 2004 299,671 1.21 6.64 1.21 6.64 19 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 NEW JERSEY PREMIUM INCOME (NNJ) - -------------------------------------------------------------------------------------------------------------------------- Year Ended 6/30: 2005 193,182 1.18 5.91 1.17 5.92 21 2004 184,753 1.18 6.23 1.18 6.23 23 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 NEW JERSEY DIVIDEND ADVANTAGE (NXJ) - -------------------------------------------------------------------------------------------------------------------------- Year Ended 6/30: 2005 102,502 1.19 5.94 .74 6.39 17 2004 95,651 1.20 6.26 .74 6.71 11 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: 2005 71,231 1.23 6.09 .77 6.54 11 2004 65,919 1.25 6.41 .79 6.87 11 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: 2005 $162,000 $25,000 $74,241 2004 162,000 25,000 71,246 2003 162,000 25,000 73,915 2002 162,000 25,000 72,038 2001 162,000 25,000 71,572 NEW JERSEY PREMIUM INCOME (NNJ) - --------------------------------------------------------------------------- Year Ended 6/30: 2005 91,600 25,000 77,724 2004 91,600 25,000 75,424 2003 91,600 25,000 78,376 2002 91,600 25,000 76,144 2001 91,600 25,000 75,068 NEW JERSEY DIVIDEND ADVANTAGE (NXJ) - --------------------------------------------------------------------------- Year Ended 6/30: 2005 48,000 25,000 78,386 2004 48,000 25,000 74,818 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: 2005 34,500 25,000 76,617 2004 34,500 25,000 72,767 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 changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. Total Return on Common Share Net Asset Value is the combination of changes in Common Share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. 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 27, 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. 82-83 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 Investment Capital Investment Capital Common Net Income to Gains to Income to Gains to Share Net Realized/ Preferred Preferred Common Common Net Asset Investment Unrealized Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ==================================================================================================================================== PENNSYLVANIA INVESTMENT QUALITY (NQP) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2005 $14.92 $ .92 $1.05 $(.12) $(.01) $1.84 $(.89) $(.14) $(1.03) 2004 15.91 .98 (.98) (.06) -- (.06) (.92) (.01) (.93) 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) PENNSYLVANIA PREMIUM INCOME 2 (NPY) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2005 14.74 .92 .88 (.10) (.01) 1.69 (.93) (.18) (1.11) 2004 15.65 .98 (.77) (.05) (.01) .15 (.95) (.11) (1.06) 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) PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 6/30: 2005 15.32 .99 1.06 (.10) (.02) 1.93 (.96) (.36) (1.32) 2004 16.25 1.04 (.78) (.05) (.01) .20 (.96) (.17) (1.13) 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: 2005 14.87 .97 1.08 (.11) -- 1.94 (.88) (.04) (.92) 2004 15.90 .98 (.87) (.05) (.01) .05 (.92) (.16) (1.08) 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: 2005 $ -- $15.73 $15.16 19.53% 12.67% 2004 -- 14.92 13.58 (9.73) (.38) 2003 -- 15.91 16.01 11.98 14.79 2002 -- 14.70 15.18 6.57 7.34 2001 -- 14.57 15.13 11.99 7.75 PENNSYLVANIA PREMIUM INCOME 2 (NPY) - ------------------------------------------------------------------------------------------- Year Ended 6/30: 2005 -- 15.32 15.16 17.79 11.80 2004 -- 14.74 13.84 (7.22) .94 2003 -- 15.65 16.00 15.09 12.09 2002 -- 14.83 14.79 13.25 8.88 2001 -- 14.44 13.87 19.04 13.25 PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) - ------------------------------------------------------------------------------------------- Year Ended 6/30: 2005 -- 15.93 16.14 21.84 13.02 2004 -- 15.32 14.39 (5.95) 1.30 2003 .02 16.25 16.46 18.13 15.95 2002 -- 14.96 14.89 9.10 9.67 2001(a) (.16) 14.48 14.49 (2.45) 2.06 PENNSYLVANIA DIVIDEND ADVANTAGE 2 (NVY) - ------------------------------------------------------------------------------------------- Year Ended 6/30: 2005 -- 15.89 14.90 17.63 13.37 2004 -- 14.87 13.48 (8.58) .29 2003 -- 15.90 15.84 14.38 15.48 2002(b) (.14) 14.64 14.74 (.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: 2005 $256,365 1.23% 5.96% 1.22% 5.97% 18% 2004 243,287 1.23 6.38 1.22 6.39 17 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 PENNSYLVANIA PREMIUM INCOME 2 (NPY) - ---------------------------------------------------------------------------------------------------------------------------- Year Ended 6/30: 2005 242,373 1.19 6.09 1.19 6.10 22 2004 232,455 1.18 6.45 1.17 6.46 16 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 PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) - ---------------------------------------------------------------------------------------------------------------------------- Year Ended 6/30: 2005 52,712 1.23 5.82 .78 6.28 13 2004 50,549 1.21 6.15 .76 6.60 10 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: 2005 59,174 1.23 5.80 .78 6.25 8 2004 55,370 1.24 5.95 .78 6.40 4 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: 2005 $132,000 $25,000 $73,554 2004 132,000 25,000 71,077 2003 132,000 25,000 74,039 2002 132,000 25,000 70,251 2001 132,000 25,000 69,543 PENNSYLVANIA PREMIUM INCOME 2 (NPY) - -------------------------------------------------------------------------- Year Ended 6/30: 2005 118,100 25,000 76,307 2004 118,100 25,000 74,207 2003 118,100 25,000 77,202 2002 118,100 25,000 74,436 2001 118,100 25,000 73,132 PENNSYLVANIA DIVIDEND ADVANTAGE (NXM) - -------------------------------------------------------------------------- Year Ended 6/30: 2005 25,000 25,000 77,712 2004 25,000 25,000 75,549 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: 2005 28,500 25,000 76,907 2004 28,500 25,000 73,570 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 changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. Total Return on Common Share Net Asset Value is the combination of changes in Common Share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. 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 27, 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. 84-85 SPREAD Board Members AND OFFICERS The management of the Fund, including general supervision of the duties performed for the Fund by the Adviser, is the responsibility of the Board Members of the Fund. The number of board members of the Fund is currently set at nine. None of the board members who are not "interested" persons of the Fund has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the board members and officers of the Fund, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below.
NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUND APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER - ------------------------------------------------------------------------------------------------------------------------------------ BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUND: - ------------------------------------------------------------------------------------------------------------------------------------ Timothy R. Schwertfeger(1) Chairman of 1994 Chairman and Director (since 1996) of Nuveen Investments, 155 3/28/49 the Board Inc. and Nuveen Investments, LLC; Director (since 1992) and 333 W. Wacker Drive and Trustee Chairman (since 1996) of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp.(3); Chairman and Director (since 1997) of Nuveen Asset Management; 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). BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUND: - ------------------------------------------------------------------------------------------------------------------------------------ Robert P. Bremner Board member 1997 Private Investor and Management Consultant. 155 8/22/40 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Lawrence H. Brown Board member 1993 Retired (1989) as Senior Vice President of The Northern 155 7/29/34 Trust Company; Director, Community Advisory Board for 333 W. Wacker Drive Highland Park and Highwood, United Way of the North Chicago, IL 60606 Shore (since 2002). - ------------------------------------------------------------------------------------------------------------------------------------ Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 155 10/22/48 corporation (since 1996); Director and Vice Chairman, United 333 W. Wacker Drive Fire Group, a publicly held company; Adjunct Faculty Member, Chicago, IL 60606 University of Iowa; Director, Gazette Companies; Life Trustee of Coe College; Director, Iowa College Foundation; formerly, Director, Alliant Energy; formerly, Director, Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. - ------------------------------------------------------------------------------------------------------------------------------------ William C. Hunter Board member 2004 Dean and Distinguished Professor of Finance, School of 155 3/6/48 Business at the University of Connecticut (since 2003); 333 W. Wacker Drive previously, Senior Vice President and Director of Research Chicago, IL 60606 at the Federal Reserve Bank of Chicago (1995-2003); Director (since 1997), Credit Research Center at Georgetown University; Director of Xerox Corporation (since 2004). - ------------------------------------------------------------------------------------------------------------------------------------ David J. Kundert Board member 2005 Retired (2004) as Chairman, JPMorgan Asset Management, 153 10/28/42 President and CEO, Banc One Investment Advisors Corporation, 333 W. Wacker Drive and President, One Group Mutual Funds; prior thereto, Chicago, IL 60606 Executive Vice President, Banc One Corporation and Chairman and CEO, Banc One Investment Management Group; Board of Regents, Luther College; currently a member of the American and Wisconsin Bar Associations. 86 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUND APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER - ------------------------------------------------------------------------------------------------------------------------------------ BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUND (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ William J. Schneider Board member 1997 Chairman, formerly, Senior Partner and Chief Operating 155 9/24/44 Officer, Miller-Valentine Partners Ltd., a real estate 333 W. Wacker Drive investment company; formerly, Vice President, Miller-Valentine Chicago, IL 60606 Realty, a construction company; Board Member and Chair of the Finance Committee, member of the Audit Committee of Premier Health Partners, the not-for-profit company of Miami Valley Hospital; Board Member, formerly Chair, Dayton Development Coalition; President, Dayton Philharmonic Orchestra Association; formerly, Member, Community Advisory Board, National City Bank, Dayton, Ohio and Business Advisory Council, Cleveland Federal Reserve Bank. - ------------------------------------------------------------------------------------------------------------------------------------ Judith M. Stockdale Board member 1997 Executive Director, Gaylord and Dorothy Donnelley 155 12/29/47 Foundation (since 1994); prior thereto, Executive Director, 333 W. Wacker Drive Great Lakes Protection Fund (from 1990 to 1994). Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Eugene S. Sunshine Board member 2005 Senior Vice President for Business and Finance (since 1997), 155 1/22/50 Northwestern University; Director (since 2003), Chicago 333 W. Wacker Drive Board of Options Exchange; Director (since 2003), National Chicago, IL 60606 Mentor Holdings, a privately-held, national provider of home and community-based services; Chairman (since 1997), Board of Directors, Rubicon, an insurance company owned by Northwestern University; Director (since 1997), Evanston of Commerce and Evanston Inventure, a business development organization. NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUND: - ------------------------------------------------------------------------------------------------------------------------------------ Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 155 9/9/56 Administrative Associate General Counsel, formerly, Vice President and 333 W. Wacker Drive Officer Assistant General Counsel of Nuveen Investments, LLC; Chicago, IL 60606 Managing Director (since 2002), General Counsel and Assistant Secretary, formerly, Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2002), Assistant Secretary and Associate General Counsel, formerly, Vice President (since 2000), of Nuveen Asset Management; Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments, Inc.; 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 2003); Chartered Financial Analyst. 87 Board Members AND OFFICERS (CONTINUED) NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUND (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Julia L. Antonatos Vice President 2004 Managing Director (since 2005), previously, Vice President 155 9/22/63 (since 2002), formerly, Assistant Vice President (since 1999) 333 W. Wacker Drive of Nuveen Investments, LLC; Chartered Financial Analyst. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 155 2/3/66 and Assistant President (since 2000) of Nuveen Investments, LLC. 333 W. Wacker Drive Secretary Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999); 155 11/28/67 and Treasurer Vice President and Treasurer of Nuveen Investments, Inc. 333 W. Wacker Drive (since 1999); Vice President and Treasurer of Nuveen Advisory Chicago, IL 60606 Corp. and Nuveen Institutional Advisory Corp (since 1999)(3); Vice President and Treasurer of Nuveen Asset Management (since 2002) and of Nuveen Investments Advisers Inc.; Assistant Treasurer of NWQ Investment Management Company, LLC (since 2002); Vice President and Treasurer of Nuveen Rittenhouse Asset Management, Inc. (since 2003); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Jessica R. Droeger Vice President 1998 Vice President (since 2002) and Assistant General Counsel 155 9/24/64 and Secretary (since 1998), formerly, Assistant Vice President (since 1998) 333 W. Wacker Drive of Nuveen Investments, LLC; Vice President (since 2002) Chicago, IL 60606 and Assistant Secretary (since 1998), formerly Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.(3); and (since 2005) Nuveen Asset Management. - ------------------------------------------------------------------------------------------------------------------------------------ Lorna C. Ferguson Vice President 1998 Managing Director (since 2004) formerly, Vice President of 155 10/24/45 Nuveen Investments, LLC; Managing Director (since 2004) 333 W. Wacker Drive formerly, Vice President (since 1998) of Nuveen Advisory Corp. Chicago, IL 60606 and Nuveen Institutional Advisory Corp.(3); Managing Director (since 2005) of Nuveen Asset Management. - ------------------------------------------------------------------------------------------------------------------------------------ William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 155 3/2/64 LLC; Managing Director (since 2001), formerly, Vice President 333 W. Wacker Drive (since 1995) of Nuveen Advisory Corp. and Nuveen Institutional Chicago, IL 60606 Advisory Corp.(3); Managing Director (since 2001) of Nuveen Asset Management; Vice President (since 2002) of Nuveen Investment Advisers Inc.; Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 1998) 155 5/31/54 and Controller of Nuveen Investments, LLC; formerly, Vice President and 333 W. Wacker Drive Funds Controller (1998-2004) of Nuveen Investments, Inc.; Chicago, IL 60606 Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ James D. Grassi Vice President 2004 Vice President and Deputy Director of Compliance (since 2004) 155 4/13/56 and Chief of Nuveen Investments, LLC, Nuveen Investments Advisers Inc., 333 W. Wacker Drive Compliance Nuveen Asset Management and Rittenhouse Asset Management, Chicago, IL 60606 Officer Inc.; previously, Vice President and Deputy Director of Compliance (2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. (3); formerly, Senior Attorney (1994 to 2004), The Northern Trust Company. 88 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUND (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 155 3/22/63 LLC; Certified Public Accountant. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Lazar Vice President 2002 Vice President (since 1999) of Nuveen Investments, LLC. 155 8/27/61 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 155 7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and 333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp.(3); Vice President (since 2005) and Assistant Secretary of Nuveen Investments, Inc. and of Nuveen Asset Management; Vice President (since 2000), Assistant Secretary and Assistant General Counsel (since 1998) of Rittenhouse Asset Management; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002).
(1) Mr. Schwertfeger is an "interested person" of the Fund, as defined in the Investment Company Act of 1940, because he is an officer and board member of the Adviser. (2) Board members serve an indefinite term until his/her successor is elected. The year first elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex. (3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were reorganized into Nuveen Asset Management, effective January 1, 2005. (4) Officers serve one year terms 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. 89 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS At a meeting held on May 10-12, 2005, the Board of Trustees of each Fund, including the independent Trustees, unanimously approved the Investment Management Agreement between each Fund and NAM. APPROVAL PROCESS To assist the Board in its evaluation of an advisory contract with NAM, the independent Trustees received a report in adequate time in advance of their meeting which outlined, among other things, the services provided by NAM; the organization of NAM, including the responsibilities of various departments and key personnel; the Fund's past performance as well as the Fund's performance compared to funds of similar investment objectives compiled by an independent third party (a "Peer Group") and if available, with recognized or, in certain cases, customized benchmarks; the profitability of NAM and certain industry profitability analyses for advisers to unaffiliated investment companies; the expenses of NAM in providing the various services; the advisory fees of NAM, including comparisons of such fees with the management fees of comparable funds in its Peer Group as well as comparisons of NAM's management fees with the fees NAM assesses to other types of investment products or accounts, if any; the soft dollar practices of NAM; and the expenses of each Fund, including comparisons of the Fund's expense ratios (after any fee waivers) with the expense ratios of its Peer Group. This information supplements that received by the Board throughout the year regarding Fund performance, expense ratios, portfolio composition, trade execution and sales activity. In addition to the foregoing materials, independent legal counsel to the independent Trustees provided, in advance of the meeting, a legal memorandum outlining, among other things, the duties of the Trustees under the 1940 Act as well as the general principles of relevant state law in reviewing and approving advisory contracts; the requirements of the 1940 Act in such matters; an adviser's fiduciary duty with respect to advisory agreements and compensation; the standards used by courts in determining whether investment company boards of directors have fulfilled their duties and factors to be considered by the board in voting on advisory agreements. At the Board meeting, NAM made a presentation to and responded to questions from the Board. After the presentations and after reviewing the written materials, the independent Trustees met privately with their legal counsel to review the Board's duties in reviewing advisory contracts and consider the renewal of the advisory contract. It is with this background that the Trustees considered each Investment Management Agreement with NAM. The independent Trustees, in consultation with independent counsel, reviewed the factors set out in judicial decisions and SEC directives relating to the renewal of advisory contracts. As outlined in more detail below, the Trustees considered all factors they believed relevant with respect to each Fund, including the following: (a) the nature, extent and quality of the services to be provided by NAM; (b) the investment performance of the Fund and NAM; (c) the costs of the services to be provided and profits to be realized by NAM and its affiliates from the relationship with the Fund; (d) the extent to which economies of scale would be realized as the Fund grows; and (e) whether fee levels reflect these economies of scale for the benefit of Fund investors. A. NATURE, EXTENT AND QUALITY OF SERVICES In evaluating the nature, extent and quality of NAM's services, the Trustees reviewed information concerning the types of services that NAM or its affiliates provide and are expected to provide to the Nuveen Funds; narrative and statistical information concerning the Fund's performance record and how such performance compares to the Fund's Peer Group and, if available, recognized benchmarks or, in certain cases, customized benchmarks (as described in further detail in Section B below); information describing NAM's organization and its various departments, the experience and responsibilities of key personnel, and available resources. In the discussion of key personnel, the Trustees received materials regarding the changes or additions in personnel of NAM. The Trustees further noted the willingness of the personnel of NAM to engage in open, candid discussions with the Board. The Trustees further considered the quality of NAM's investment process in making portfolio management decisions, including any refinements or improvements to the portfolio management processes, enhancements to technology and systems that are available to portfolio managers, and any additions of new personnel which may strengthen or expand the research and investment capabilities of NAM. In their review of advisory contracts for the fixed income funds, the Trustees also noted that Nuveen won the Lipper Award for Best Fund Family: Fixed Income-Large Asset Class, for 2004. Given the Trustees' experience with the Funds, other Nuveen funds and NAM, the Trustees noted that they were familiar with and continue to have a good understanding of the organization, operations and personnel of NAM. In addition to advisory services, the independent Trustees considered the quality of the administrative or non-advisory services provided. In this regard, NAM provides the Fund with such administrative and other services (exclusive of, and in addition to, any such services provided by others for the Funds) and officers and other personnel as are necessary for the operations of the respective Fund. In addition to investment management services, NAM and its affiliates provide each Fund with a wide range of services, including: preparing shareholder reports; providing daily accounting; providing quarterly financial statements; overseeing and coordinating the 90 activities of other service providers; administering and organizing Board meetings and preparing the Board materials for such meetings; providing legal support (such as helping to prepare registration statements, amendments thereto and proxy statements and responding to regulatory inquiries); and performing other Fund administrative tasks necessary for the operation of the respective Fund (such as tax reporting and fulfilling regulatory filing requirements). In addition, in evaluating the administrative services, the Trustees considered, in particular, NAM's policies and procedures for assuring compliance with applicable laws and regulations in light of the new SEC regulations governing compliance. The Trustees noted NAM's focus on compliance and its compliance systems. In their review, the Trustees considered, among other things, the additions of experienced personnel to NAM's compliance group and modifications and other enhancements to NAM's computer systems. In addition to the foregoing, the Trustees also noted that NAM outsources certain services that cannot be replicated without significant costs or at the same level of expertise. Such outsourcing has been a beneficial and efficient use of resources by keeping expenses low while obtaining quality services. In addition to the above, in reviewing the variety of additional services that NAM or its affiliates must provide to closed-end funds, such as the Funds, the independent Trustees determined that Nuveen's commitment to supporting the secondary market for the common shares of its closed-end funds is particularly noteworthy. In this regard, the Trustees noted Nuveen's efforts to sponsor numerous forums for analysts and specialists regarding the various Nuveen closed-end funds, its creation of a new senior position dedicated to providing secondary market support services and enhancing communications with investors and analysts, and its advertising and media relations efforts designed to raise investor and analyst awareness of the closed-end funds. With respect to services provided to municipal funds, such as the Funds, the Trustees also noted, among other things, the enhancements NAM implemented to its municipal portfolio management processes (e.g., the increased use of benchmarks to guide and assess the performance of its portfolio managers); the implementation of a risk management program; and the various initiatives being undertaken to enhance or modify NAM's computer systems as necessary to support the innovations of the municipal investment team (such as, the ability to assess certain historical data in order to create customized benchmarks, perform attribution analysis and facilitate the use of derivatives as hedging instruments). With respect to certain of the Funds with a less seasoned portfolio, the Trustees also noted the hedging program implemented for such Funds and the team responsible for developing, implementing and monitoring the hedging procedures. The hedging program was designed to help maintain the applicable Fund's duration within certain benchmarks. Based on their review, the Trustees found that, overall, the nature, extent and quality of services provided (and expected to be provided) to the Funds under the Investment Management Agreements were of a high level and were quite satisfactory. B. THE INVESTMENT PERFORMANCE OF THE FUND AND ADVISER As previously noted, the Board received a myriad of performance information regarding each Fund and its Peer Group, if available. Among other things, the Board received materials reflecting a Fund's historic performance, the Fund's performance compared to its Peer Group and, if available, its performance compared to recognized and, in certain cases, customized benchmarks. Further, in evaluating the performance information, in certain limited instances, the Trustees noted that the closest Peer Group for a Fund still would not adequately reflect such Fund's investment objectives and strategies, thereby limiting the usefulness of the comparisons of such Fund's performance with that of the Peer Group. For state municipal funds, such as the Funds, the performance data included, among other things, the respective Fund's performance relative to its peers. More specifically, a Fund's one, three and five year total returns (as available) for the periods ending December 31, 2004 were evaluated relative to the unaffiliated funds in its respective Peer Group (including the returns of individual peers as well as the Peer Group average) as well as additional performance information with respect to all the funds in the Peer Group, subject to the following. Certain state municipal Funds do not have a corresponding Peer Group in which case their performance is measured against a state-specific municipal index compiled by an independent third party. Such indices measure bond performance rather than fund performance. The closed-end Funds that utilize such indices are from Connecticut, Georgia, Maryland, Missouri, North Carolina, Texas and Virginia. Based on their review, the Trustees determined that each Fund's absolute and relative investment performance over time had been satisfactory. C. FEES, EXPENSES AND PROFITABILITY 1. FEES AND EXPENSES In evaluating the management fees and expenses that a Fund is expected to bear, the Trustees considered the Fund's current management fee structure and the Fund's expected expense ratios in absolute terms as well as compared with the fees and expense ratios of the unaffiliated funds in its Peer Group. The Trustees reviewed the financial information of NAM, including its respective revenues, expenses and profitability. In reviewing fees, the Trustees, among other things, reviewed comparisons of the Fund's gross management fees (fees after fund-level and complex-wide level breakpoints but before reimbursement and fee waivers), net management fees (after breakpoints and reimbursements and fee waivers) and total expense ratios (before and after waivers) with those of the unaffiliated funds in the Peer Group and peer averages. In this regard, the Trustees noted that the relative ranking of the Nuveen Funds on fees and expenses was aided by the significant level of fee reductions provided by the fund-level and complex-wide breakpoint schedules, and the fee waivers and reimbursements provided by Nuveen for certain Funds launched since 1999. The complex-wide breakpoint schedule was instituted in 2004 and is described in further detail below in Section D entitled "Economies of Scale." In their review of the fee and expense information provided, including, in particular, the expense ratios of the unaffiliated funds in the respective Peer Group, the Trustees determined that each Fund's net total expense ratio was within an acceptable range compared to such peers. 2. COMPARISONS WITH THE FEES OF OTHER CLIENTS The Trustees further compared the fees of NAM to the fees NAM assessed for other types of clients investing in municipal funds (such as municipal managed accounts). With respect to such separately managed accounts, the advisory fees for such accounts 91 ANNUAL INVESTMENT MANAGEMENT AGREEMENT APPROVAL PROCESS (continued) are generally lower than those charged to the comparable Fund. The Trustees noted, however, the additional services that are provided and the costs incurred by Nuveen in managing and operating registered investment companies, such as the Funds, compared to individually managed separate accounts. For instance, as described above, NAM and its affiliates provide numerous services to the Funds including, but not limited to, preparing shareholder reports; providing daily accounting; preparing quarterly financial statements; overseeing and coordinating the activities of other service providers; administering and organizing Board meetings and preparing the Board materials for such meetings; providing legal support; and administering all other aspects of the Fund's operations. Further, the Trustees noted the increased compliance requirements for funds in light of new SEC regulations and other legislation. These services are generally not required to the same extent, if at all, for separate accounts. In addition to the differences in services, the Trustees also considered, among other things, the differences in product distribution, investment policies, investor profiles and account sizes. Accordingly, the Trustees believe that the nature and number of services provided to operate a Fund merit the higher fees than those to separate managed accounts. 3. PROFITABILITY OF ADVISER In conjunction with its review of fees, the Trustees also considered NAM's profitability. The Trustees reviewed NAM's revenues, expenses and profitability margins (on both a pre-tax and after-tax basis). In reviewing profitability, the Trustees recognized that one of the most difficult issues in determining profitability is establishing a method of allocating expenses. Accordingly, the Trustees reviewed NAM's assumptions and methodology of allocating expenses. In this regard, the methods of allocation used appeared reasonable but the Board noted the inherent limitations in allocating costs among various advisory products. The Trustees also recognized that individual fund or product line profitability of other advisers is generally not publicly available. Further, profitability may be affected by numerous factors including the types of funds managed, expense allocations, business mix, etc. and therefore comparability of profitability is somewhat limited. Nevertheless, to the extent available, the Trustees considered NAM's profit margin compared to the profitability of various publicly-traded investment management companies and/or investment management companies that publicly disclose some or all of their financial results compiled by three independent third-party service providers. The Trustees also reviewed the revenues, expenses and profit margins of various unaffiliated advisory firms with similar amounts of assets under management for the last year prepared by NAM. Based on their review, the Trustees were satisfied that NAM's level of profitability from its relationship with each Fund was reasonable in light of the services provided. In evaluating the reasonableness of the compensation, the Trustees also considered any other revenues paid to NAM as well as any indirect benefits (such as soft dollar arrangements, if any) NAM and its affiliates are expected to receive that are directly attributable to their management of the Funds, if any. See Section E below for additional information. Based on their review of the overall fee arrangements of the applicable Fund, the Trustees determined that the advisory fees and expenses of the respective Fund were reasonable. D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE In reviewing the compensation, the Trustees have long understood the benefits of economies of scale as the assets of a fund grows and have sought to ensure that shareholders share in these benefits. One method for shareholders to share in economies of scale is to include breakpoints in the advisory fee schedules that reduce fees as fund assets grow. Accordingly, the Trustees received and reviewed the schedules of advisory fees for each Fund, including fund-level breakpoints thereto. In addition, after lengthy negotiations with management, the Board in May, 2004 approved a complex-wide fee arrangement pursuant to which fees of the funds in the Nuveen complex, including the Funds, are reduced as the assets in the fund complex reach certain levels. The complex-wide fee arrangement was introduced on August 1, 2004 and the Trustees reviewed data regarding the reductions of fees for the Funds for the period of August 1, 2004 to December 31, 2004. In evaluating the complex-wide fee arrangement, the Trustees considered, among other things, the historic and expected fee savings to shareholders as assets grow, the amount of fee reductions at various asset levels, and that the arrangement would extend to all Funds in the Nuveen complex. The Trustees also considered the impact, if any, the complex-wide fee arrangement may have on the level of services provided. Based on their review, the Trustees concluded that the breakpoint schedule and complex-wide fee arrangement currently was acceptable and desirable in providing benefits from economies of scale to shareholders. E. INDIRECT BENEFITS In evaluating fees, the Trustees also considered any indirect benefits or profits NAM or its affiliates may receive as a result of its relationship with each Fund. In this regard, the Trustees considered any benefits from soft dollar arrangements. The Trustees noted that although NAM manages a large amount of assets, it has very little, if any, brokerage to allocate. This is due to the fact that NAM 92 typically manages the portfolios of the municipal funds in the Nuveen complex and municipal bonds generally trade on a principal basis. Accordingly, NAM does not currently have any soft dollar arrangements and does not pay excess brokerage commissions (or spreads on principal transactions) in order to receive research services. In addition to soft dollar arrangements, the Trustees also considered any other revenues, if any, received by NAM or its affiliates. With respect to Funds with outstanding preferred shares and new Funds, the Trustees considered revenues received by Nuveen for serving as agent for broker-dealers at its preferred trading desk and for acting as co-manager in the initial public offering of new closed-end exchange-traded funds. F. OTHER CONSIDERATIONS Nuveen, until recently, was a majority-owned subsidiary of St. Paul Travelers. As noted, St. Paul earlier this year announced its intention to divest its equity stake in Nuveen. Nuveen is the parent of NAM. Pursuant to a series of transactions, St. Paul has begun to reduce its interest in Nuveen which will ultimately result in a change of control of Nuveen and therefore NAM. As mandated by the 1940 Act, such a change in control would result in an assignment of the advisory agreement with NAM and the automatic termination of such agreement. Accordingly, the Board also considered for each Fund the approval of a New Investment Management Agreement with each Fund in light of, and which would take effect upon, the anticipated change of control. More specifically, the Board considered for each Fund a New Investment Management Agreement on substantially identical terms to the existing Investment Management Agreement, to take effect after the change of control has occurred and the contract has been approved by Fund shareholders. In its review, the Board considered whether the various transactions necessary to divest St. Paul's interest will have an impact on the various factors they considered in approving NAM, such as the scope and quality of services to be provided following the change of control. In reviewing the St. Paul transactions, the Board considered, among other things, the impact, if any, on the operations and organizational structure of NAM; the possible benefits and costs of the transactions to the respective Fund; the potential implications of any arrangements used by Nuveen to finance certain of the transactions; the ability of NAM to perform its duties after the transactions; whether a Fund's fee structure or expense ratio would change; any changes to the current practices of the respective Fund; any changes to the terms of the advisory agreement; and any anticipated changes to the operations of NAM. Based on its review, the Board determined that St. Paul's divestiture would not affect the nature and quality of services provided by NAM, the terms of the Investment Management Agreement, including the fees thereunder, and would not materially affect the organization or operations of NAM. Accordingly, the Board determined that their analysis of the various factors regarding their approval of NAM would continue to apply after the change of control. G. APPROVAL The Trustees did not identify any single factor discussed previously as all-important or controlling. The Trustees, including a majority of independent Trustees, concluded that the terms of the Investment Management Agreements were fair and reasonable, that the respective Fund Adviser's fees are reasonable in light of the services provided to each Fund, that the renewal of the NAM Investment Management Agreements should be approved, and that the new, post-change of control NAM Investment Management Agreements be approved and recommended to shareholders. 93 Reinvest Automatically EASILY AND CONVENIENTLY 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 the 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. FLEXIBLE 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. CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS 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. 94 Other Useful INFORMATION In April, 2005, The St. Paul Travelers Companies, Inc. ("St. Paul Travelers") sold the majority of its controlling equity interest in Nuveen Investments, Inc. ("Nuveen") to the general public. Nuveen is the parent of Nuveen Asset Management ("NAM"), which is each Fund's investment manager. This sale was deemed to be an "assignment" of the investment management agreement between each Fund and NAM and, if applicable, of the sub-advisory agreement between NAM and the Fund's sub-adviser. As required by law, the shareholders of each Fund were asked to approve a new investment management agreement and, if applicable, a new subadvisory agreement that reflected this change in ownership. The shareholders of each Fund voted this approval at a Shareholders' Meeting on July 26. 2005. There were no changes to the investment objectives or management of any Fund as a result of these actions. QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION Each Fund's (i) quarterly portfolio of investments, (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the 12-month period ended June 30, 2005, and (iii) a description of the policies and procedures that the Funds used to determine how to vote proxies relating to portfolio securities are available without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at www.nuveen.com. You may also obtain this and other Fund information directly from the Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public References Section at 450 Fifth Street NW, Washington, D.C. 20549. CEO CERTIFICATION DISCLOSURE Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual. Each Fund has filed with the Securities and Exchange Commission the certification of its Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act. 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 that would have been necessary each year to equal the investment's actual cumulative performance (including change in NAV or market price and reinvested dividends and capital gains distributions, if any) 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 the expected period over which a bond's principal and interest will be paid, and consequently is a measure of the sensitivity of a bond's or bond Fund's value to changes when market interest rates change. Generally, the longer a bond's 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 longer than the duration of the Fund's portfolio of bonds. 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 common share NAV per share is calculated by subtracting the liabilities of the Fund (including any MuniPreferred shares issued in order to leverage 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. BOARD OF DIRECTORS/TRUSTEES Robert P. Bremner Lawrence H. Brown Jack B. Evans William C. Hunter David J. Kundert William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale Eugene S. Sunshine FUND MANAGER Nuveen Asset Management 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 and Cutler LLP Chicago, IL INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Chicago, IL 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 covered by this report. Any future repurchases will be reported to shareholders in the next annual or semiannual report. 95 Nuveen Investments: SERVING Investors For GENERATIONS Photo of: 2 women looking at a photo album. 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. WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS. Managing more than $120 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 fixed-income 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. FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS. To learn more about the products and services Nuveen Investments offers, talk to your financial advisor, or call us at (800) 257-8787. Please read the information provided carefully before you invest. Be sure to obtain a prospectus, where applicable. Investors should consider the investment objective and policies, risk considerations, charges and expenses of the Fund carefully before investing. The prospectus contains this and other information relevant to an investment in the Fund. For a prospectus, please contact your securities representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606. Please read the prospectus carefully before you invest or send money. o Share prices o Fund details Learn more o Daily financial news about Nuveen Funds at o Investor education WWW.NUVEEN.COM/ETF o Interactive planning tools Logo: NUVEEN Investments EAN-B-0605D ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. There were no amendments to or waivers from the Code during the period covered by this report. The registrant has posted the code of ethics on its website at www.nuveen.com/etf. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then click on Code of Conduct.) ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's Board of Directors or Trustees determined that the registrant has at least one "audit committee financial expert" (as defined in Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit committee financial expert is Jack B. Evans, Chairman of the Audit Committee, who is "independent" for purposes of Item 3 of Form N-CSR. Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser ("SCI"). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and actively supervised the CFO's preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI's financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Nuveen New Jersey Dividend Advantage Municipal Fund 2 The following tables show the amount of fees that Ernst & Young LLP, the Fund's auditor, billed to the Fund during the Fund's last two full fiscal years. For engagements with Ernst & Young LLP entered into on or after May 6, 2003, the Audit Committee approved in advance all audit services and non-audit services that Ernst & Young LLP provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the audit is completed. The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee). SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES FISCAL YEAR ENDED TO FUND BILLED TO FUND BILLED TO FUND BILLED TO FUND - ------------------------------------------------------------------------------------------------------------------------------------ June 30, 2005 $ 8,105 $ 0 $ 609 $ 2,700 - ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved N/A 0% 0% 0% pursuant to pre-approval exception - ------------------------------------------------------------------------------------------------------------------------------------ June 30, 2004 $ 7,692 $ 0 $ 957 $ 2,500 - ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved N/A 0% 0% 0% pursuant to pre-approval exception - ------------------------------------------------------------------------------------------------------------------------------------
The above "All Other Fees" are fees paid to audit firms to perform agreed upon procedures required by the rating agencies to rate fund preferred shares. The above "Tax Fees" were billed for professional services for tax advice, tax compliance, and tax planning. SERVICES THAT THE FUND'S AUDITOR BILLED TO THE ADVISER AND AFFILIATED FUND SERVICE PROVIDERS The following tables show the amount of fees billed by Ernst & Young LLP to Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling, controlled by or under common control with NAM ("Control Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for engagements directly related to the Fund's operations and financial reporting, during the Fund's last two full fiscal years. The tables also show the percentage of fees subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal year in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the Fund's audit is completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS - --------------------------------------------------------------------------------------------------------------------- June 30, 2005 $ 0 $ 282,575 $ 0 - --------------------------------------------------------------------------------------------------------------------- Percentage approved 0% 0% 0% pursuant to pre-approval exception - --------------------------------------------------------------------------------------------------------------------- June 30, 2004 $ 0 $ 0 $ 0 - --------------------------------------------------------------------------------------------------------------------- Percentage approved N/A N/A N/A pursuant to pre-approval exception - ---------------------------------------------------------------------------------------------------------------------
The above "Tax Fees" are primarily fees billed to the Adviser for Fund tax return preparation. NON-AUDIT SERVICES The following table shows the amount of fees that Ernst & Young LLP billed during the Fund's last two full fiscal years for non-audit services. For engagements entered into on or after May 6, 2003, the Audit Committee is required to pre-approve non-audit services that Ernst & Young LLP provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund's operations and financial reporting (except for those subject to the de minimis exception described above). The Audit Committee requested and received information from Ernst & Young LLP about any non-audit services that Ernst & Young LLP rendered during the Fund's last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating Ernst & Young LLP's independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES BILLED TO ADVISER AND AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL - ------------------------------------------------------------------------------------------------------------------------------------ June 30, 2005 $ 3,309 $ 282,575 $ 0 $ 285,884 June 30, 2004 $ 3,457 $ 0 $ 0 $ 3,457
The above "Non-Audit Fees billed to Adviser" for 2005 include "Tax-Fees" billed to Adviser in the amount of $282,575 from previous table. Audit Committee Pre-Approval Policies and Procedures. Generally, the audit committee must approve (i) all non-audit services to be performed for the Fund by the Fund's independent accountants and (ii) all audit and non-audit services to be performed by the Fund's independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) such engagements will be (i) pre-approved by the audit committee if they are expected to be for amounts greater than $10,000; (ii) reported to the audit committee chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the audit committee at the next audit committee meeting if they are expected to be for an amount under $5,000. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant's Board of Directors or Trustees has a separately designated audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B. Evans, William J. Schneider and Eugene S. Sunshine. ITEM 6. SCHEDULE OF INVESTMENTS. See Portfolio of Investments in Item 1. 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, 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. In the case of a conflict of interest, the proxy would be submitted to the applicable Fund's Board to determine how the proxy should be voted. 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 204-2(c)(2) under the Investment Advisers Act of 1940 (17 CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the results were provided to the Board of Directors or Trustees and made available to shareholders as required by applicable rules. ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable at this time. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's Board implemented after the registrant last provided disclosure in response to this Item. ITEM 11. 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 the 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 Securities Exchange Act of 1934, as amended (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 second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. 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 because the code is posted on registrant's website at www.nuveen.com/etf and there were no amendments during the period covered by this report. (To view the code, click on the Investor Resources drop down menu box, click on Fund Governance and then Code of Conduct.) (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 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT Attached hereto. (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the 1940 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 the 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 7, 2005 ------------------------------------------------------------------- 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 7, 2005 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (principal financial officer) Date: September 7, 2005 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 2 file002.txt CERTIFICATIONS 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) 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) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) 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 (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this 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 officer 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 7, 2005 /s/ Gifford R. Zimmerman ------------------------- -------------------------------- Chief Administrative Officer (principal executive officer) 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 officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) and internal control over financial reporting (as defined in Rule 30a-3(d) under the Investment Company Act of 1940) 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) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; (c) 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 (d) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the second fiscal quarter of the period covered by this 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 officer 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 7, 2005 /s/ Stephen D. Foy ------------------------- -------------------------------- Vice President and Controller (principal financial officer) EX-99.906CERT 3 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 and Chief Financial Officer, based on each such officer's knowledge and belief. The undersigned officers of Nuveen New Jersey Dividend Advantage Municipal Fund 2 (the "Fund"), certify that, to the best of each such officer's knowledge and belief: 1. The Form N-CSR of the Fund for the period ended June 30, 2005 (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 7, 2005 ----------------------- /s/ Gifford R. Zimmerman --------------------- Chief Administrative Officer (principal executive officer) /s/ Stephen D. Foy --------------------- Vice President, Controller (principal financial officer) -----END PRIVACY-ENHANCED MESSAGE-----