-----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, E4vvDaFT91oQM9ve4RUo1A1CcUenzarq6w5aryMv4YYnP16vU2BImiAiWmfcOEVA su0QfmAfB9xy7v/SwU2I8w== 0000891804-98-001547.txt : 19980807 0000891804-98-001547.hdr.sgml : 19980807 ACCESSION NUMBER: 0000891804-98-001547 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980531 FILED AS OF DATE: 19980806 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN MASSACHUSETTS PREMIUM INCOME MUNICIPAL FUND CENTRAL INDEX KEY: 0000897419 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] IRS NUMBER: 367032570 STATE OF INCORPORATION: MA FISCAL YEAR END: 0531 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-07484 FILM NUMBER: 98678416 BUSINESS ADDRESS: STREET 1: 333 WEST WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129178200 MAIL ADDRESS: STREET 1: 333 WEST WACKER DRIVE STREET 2: 333 WEST WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 N-30D 1 NUVEEN MASSACHUSETTS PREM INCOME MUNI FUND(NMT) NUVEEN Exchange-Traded Funds MAY 31, 1998 ANNUAL REPORT DEPENDABLE, TAX-FREE INCOME TO HELP YOU KEEP MORE OF WHAT YOU EARN. NTC Connecticut NMT Massachusetts NOM Missouri NPW Washington Photo of: People reading Highlights As of May 31, 1998 CONTENTS 1 Dear Shareholder 4 NTC Commentary and Overview 6 NMT Commentary and Overview 8 NOM Commentary and Overview 10 NPW Commentary and Overview 12 Report of Independent Auditors 13 Portfolio of Investments 24 Statement of Net Assets 25 Statement of Operations 26 Statement of Changes in Net Assets 27 Notes to Financial Statements 30 Financial Highlights 32 Building Better Portfolios 33 Fund Information ================================================================================ Credit Quality Performance Highlights Nuveen Connecticut Premium Income Municipal Fund (NTC) o Steady dividend for 10 consecutive months o Taxable-equivalent yield of 7.81%* o One-year total return on net asset value of 12.39% Pie Chart: AAA/Pre-refunded 68% AA 18% A 2% BBB/NR 12% Nuveen Massachusetts Premium Income Municipal Fund (NMT) o Steady dividend for 16 consecutive months o Taxable-equivalent yield of 8.45%* o One-year total return on net asset value of 11.91% Pie Chart: AAA/Pre-refunded 57% AA 19% A 20% BBB/NR 4% Nuveen Missouri Premium Income Municipal Fund (NOM) o Steady dividend for 10 consecutive months o Taxable-equivalent yield of 8.07%* o One-year total return on net asset value of 11.31% Pie Chart: AAA/Pre-refunded 78% AA 15% A 2% BBB/NR 5% Nuveen Washington Premium Income Municipal Fund (NPW) o Steady dividend for 19 consecutive months o Taxable-equivalent yield of 8.04%* o One-year total return on net asset value of 12.64% Pie Chart: AAA/Pre-refunded 68% AA 29% A 3% *For investors in the 31% federal and applicable state income tax bracket. See your fund's performance overview for more information. ================================================================================ A New Benefit for Nuveen Exchange-Traded Fund Shareholders The benefits of your Nuveen Exchange-Traded Fund just got better. Now investors with at least $50,000 in Nuveen holdings - including Exchange-Traded Funds - are eligible for a reduction in the sales charge on purchases of Class A shares of any Nuveen Mutual Fund. This program is available for any of Nuveen's collection of Premier Adviser(SM) equity and municipal bond investments. Now you can diversify your portfolio with the quality investments you count on from Nuveen and the benefit of reduced rates. For more information, contact your financial adviser and ask for a prospectus. Or call Nuveen Investor Services at (800) 257-8787. Please read it carefully before you invest. PHOTO OF: TIMOTHY R. SCHWERTFEGER CHAIRMAN OF THE BOARD SIDEBAR TEXT: Wealth takes a lifetime to build. Once achieved, it should be preserved. Graphic of: Bond Buyer 40 chart Dear Shareholder I'm pleased to share with you this performance report for the Nuveen Connecticut, Massachusetts, Missouri and Washington Exchange-Traded Funds. Over the past 12 months, each of these funds continued to perform well and meet their objectives of providing you with attractive tax-free income and strong after-tax total returns. THE ECONOMY IN REVIEW Fixed-income investments enjoyed bullish performance over the past year, as declining interest rates and low inflation spurred a bond market rally. The equity markets also exhibited continued strength despite recent volatility sparked by Asia's financial problems and their possible effects on U.S. corporate earnings. Although interest rates have trended slightly upward in recent months, a year-to-date comparison shows that today's rates are significantly lower than they were one year ago. As shown in the accompanying chart, between the end of May 1997 and May 1998, the yield on the Bond Buyer 40, an unmanaged index of long-term municipal bonds, fell from 5.74% to 5.22%. Much of the decline in interest rates resulted from expectations that the financial problems of Asia would restrain the prices of imported goods and reduce foreign demand for U.S. products and services, thereby keeping inflation at moderate levels. These inflation expectations were largely fulfilled, as the Consumer Price Index rose only 1.5% for the 12 months ended May 1998, remaining at one of its lowest levels in years. The Asian situation also provided additional strength to the bond market rally, as many investors made a "flight to quality" by moving assets into high-quality U.S. bonds in the face of the uncertainty in that region. In coming months, we will continue to watch closely several key factors that are likely to affect the future of the economy, including the demand for goods and services, the availability of qualified employees, the strength of the dollar, and indications from the Federal Reserve. With many investors still waiting for the full impact of Asia's difficulties to show up in U.S. economic statistics, the potential long-term effect of this crisis on American markets continues to cause concern. We expect that the development of these factors will continue to influence the tone of the fixed-income markets during the remainder of the year. MUNICIPAL MARKET REVIEW As interest rates continued to decline over the past year, bond prices rose. This price appreciation for the bonds in our portfolios contributed to strong total returns for the year. Another major factor in bond performance over the last 12 months was the continued strength of the U.S. economy, which helped boost the credit quality of many municipal bonds. With the improvements in the fundamental financial health of many municipalities and revenue projects financed by bonds, major credit rating agencies upgraded the credit quality of thousands of issuers over the past year, while downgrading relatively few. These boosts in credit quality also contributed to the funds' performance as upgraded bonds increased in value. The combination of low interest rates and a strong economy set new issuance on a record pace and stimulated a dramatic increase in the refinancing of existing bonds as issuers sought to lower their interest costs. The first quarter of 1998 saw $68 billion of new municipal issuance, up 70% from the same period in 1997. The flood of new issues continued with May's long-awaited sale of the first segment of Long Island (New York) Power Authority's $7 billion offering, the largest issuance in municipal bond history. Although the nationwide supply of municipal bonds remained heavy, the supply of bonds in each state varied according to local economic conditions. This level of issuance high lights the value of Nuveen's expertise in the municipal market, as our portfolio management teams worked diligently to sift through the available issues to select those undervalued securities that would help the funds achieve their investment objectives. DIVERSIFICATION: THE KEY TO A BETTER PORTFOLIO In view of current market conditions, we believe that investors will find diversification to be an increasingly important investment strategy in the months ahead. An appropriately diversified portfolio - one that balances different types of investments, levels of risk and tax management - can help cushion your portfolio against volatility and enhance your return potential. Many investors select Nuveen's municipal bond funds because their emphasis on dependable tax-free income and attractive after-tax returns makes them ideal for building and sustaining long-term financial security. These funds also work well with other Nuveen investments to create the foundation of a diversified, well-balanced portfolio. In fact, recent studies by Nuveen Research have found that portfolios combining municipal bonds and stocks generated higher after-tax returns with lower levels of risk than similar portfolios combining stocks and Treasury or corporate bonds. We encourage you to talk to your financial adviser about Nuveen's range of equity and balanced funds, including the Nuveen European Value Fund. This new equity mutual fund offers a portfolio of quality European company stocks for investors seeking long-term growth potential and international diversification. The fund is just one of an ever-expanding range of Nuveen products and services designed to help investors achieve diversification while building a tax-efficient, risk-sensitive investment portfolio. If you'd like to learn more about the Nuveen European Value Fund or any of our other investments, contact your financial adviser or call Nuveen Investor Services at (800) 257-8787 for a prospectus. Please read the information carefully before you invest. When seeking quality investment solutions that withstand the test of time, we hope that you continue to think of Nuveen. Today, more than ever, you can count on Nuveen for a wide range of investments that can help you build a well-balanced portfolio designed to achieve your financial goals. We thank you for your continued confidence in us and our family of investments. Sincerely, TIMOTHY R. SCHWERTFEGER Chairman of the Board July 15, 1998 Sidebar text: "Another major factor in bond performance over the last 12 months was the continued strength of the U.S. economy, which helped boost the credit quality of many municipal bonds." Sidebar text: "Today, more than ever, you can count on Nuveen for a wide range of investments that can help you build a well-balanced portfolio designed to achieve your financial goals." Nuveen Connecticut Premium Income Municipal Fund Portfolio Manager's Comments PORTFOLIO MANAGER DAN SOLENDER DISCUSSES FUND PERFORMANCE, THE MUNICIPAL MARKET, AND KEY INVESTMENT STRATEGIES FOR THE CONNECTICUT FUND. CONNECTICUT STATE UPDATE The high credit ratings assigned to Connecticut's long-term general obligation debt by Moody's and Standard & Poor's (Aa3 and AA-, respectively) recognize the state's diverse economic base and solid financial position. Connecticut has recovered from most of its recessionary employment loss, with small businesses fueling growth in the services, wholesale, and retail trade industries. The strong economy continues to generate higher-than-anticipated general fund revenues, enabling the state to reduce its general fund deficit to its lowest level in 10 years. The recovery is also helping to improve financial performance at the local level, with cities and towns showing improved general fund balances. In line with national municipal trends, Connecticut's new issue volume has risen 85% in the first five months of 1998. Much of this new supply has been issued at the state level in the general obligation and housing categories. It is anticipated that the ongoing strength of the national economy will continue to propel Connecticut's tax receipts above budget expectations and maintain state and local government's improved financial positions. FUND PERFORMANCE For the year ended May 31, 1998, the Nuveen Connecticut Premium Income Municipal Fund provided an outstanding total return on net asset value of 12.39%, which is equivalent to a taxable return of 15.49% for investors in the combined 34.1% federal and state income tax bracket. The total return significantly outperformed the unleveraged Lehman Brothers Municipal Bond Index's annual return of 9.38% - a difference of more than 300 basis points. Much of this outperformance can be attributed to the fund's longer leverage-adjusted duration of 10.26 years, compared with the index's 7.11 years. In a year that saw municipal bond yields as measured by the Bond Buyer 40 fall more than 50 basis points, longer duration proved to be beneficial to performance. Duration measures a bond fund's price volatility, or reaction to interest rate movements. The longer the duration, the more sensitive the fund to changes in interest rates. During a period of falling interest rates and market rallies, such as that of the past year, longer duration enables a fund to participate more fully in market gains, but can make the fund more vulnerable to potential price declines when rates rise. In addition, the fund's leveraged structure added significantly to these strong total returns. As a result of good call protection, the fund was able to maintain its dividend as interest rates dropped during the year. In addition, we were able to increase the dividend during the year because of the accumulation of income from bonds purchased over the past several years when interest rates were higher. Since that increase in August 1997, the fund has provided shareholders with 10 consecutive months of steady income. As of May 31, 1998, the fund offered a competitive current market yield of 5.15%, which translates to 7.81% on a taxable-equivalent basis for investors in the combined 34.1% federal and state income tax bracket. KEY STRATEGIES In Connecticut, supply is typically dominated by two key issuers: the state housing authority and the state's general obligation bonds. Over the past year, we took advantage of opportunities to purchase smaller new issues in the health care and education sectors in order to help diversify the fund and boost its income level. As of May 31, 1998, health care and education bonds accounted for almost 40% of the fund's allocations. In addition, a number of pre-refundings, especially in the health care and education sectors, enhanced the portfolio's credit quality and contributed to the fund's price appreciation. In a pre-refunding, a bond is essentially repaid early and becomes secured by U.S. government or agency securities until it can be called by the issuer. As a result, its credit quality typically improves, generally leading to price appreciation. OUTLOOK FOR THE FUTURE Looking ahead, we expect the U.S. economy to remain in its current growth mode, although progress should come at a more modest pace. The Asian financial crisis will continue to impact U.S. growth, and we expect to see a slowdown in corporate earnings, a strengthening dollar, especially versus Asian currencies, and the continuation of benign inflation despite tight labor markets. This should create less impetus for the Federal Reserve, which currently remains in a neutral position, to tighten interest rates in the second half of 1998. We view the economic slowdown and the current direction of the dollar as positive indicators for the fixed-income markets, including municipal bonds, and much of our outlook is contingent upon the further development of these factors. Given the fund's current allocation, we are looking to improve the fund's structure through added diversification, as changes in the market make additional sectors more attractive. We may also extend the duration slightly as opportunities allow. The Connecticut fund currently provides good call protection, and that should continue to provide support for the dividend in coming months. Nuveen Connecticut Premium Income Municipal Fund Performance Overview As of May 31, 1998 NTC PORTFOLIO STATISTICS ================================================== Inception Date 5/93 - -------------------------------------------------- Share Price 15 1/2 - -------------------------------------------------- Net Asset Value Per Share $14.49 - -------------------------------------------------- Current Market Yield 5.15% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Only)(1) 7.46% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State)(1) 7.81% - -------------------------------------------------- Fund Net Assets ($000) $113,384 - -------------------------------------------------- Average Weighted Maturity (Years) 19.82 - -------------------------------------------------- Leverage-Adjusted Duration (Years) 10.26 - -------------------------------------------------- ANNUALIZED TOTAL RETURN ================================================== ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 15.61% 12.39% - -------------------------------------------------- 3-Year 13.06% 9.06% - -------------------------------------------------- 5-Year 6.15% 6.40% - -------------------------------------------------- Since Inception 6.15% 6.26% - -------------------------------------------------- TAXABLE-EQUIVALENT TOTAL RETURN(2) ================================================== ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 18.60% 15.49% - -------------------------------------------------- 3-Year 16.07% 12.11% - -------------------------------------------------- 5-Year 8.96% 9.30% - -------------------------------------------------- Since Inception 8.96% 9.16% - -------------------------------------------------- TOP 5 SECTORS ================================================== Health Care 20% - -------------------------------------------------- Education and Civic Organizations 19% - -------------------------------------------------- Utilities 12% - -------------------------------------------------- Tax Obligation (General) 9% - -------------------------------------------------- Transportation 8% - -------------------------------------------------- 1 Taxable-equivalent yield represents the yield on a taxable investment necessary to equal the yield of the Nuveen fund on an after-tax basis. The federal only rate is based on the current market yield and a federal income tax rate of 31%. The rate shown for federal and state highlights the added value of owning shares that are also exempt from state taxes. It is based on a combined federal and state income tax rate of 34.1%. 2 Taxable-equivalent total return is based on the annualized total return and a combined federal and state income tax rate of 34.1%. It represents the return on a taxable investment necessary to equal the return of the Nuveen fund on an after-tax basis. Bar Chart: 1997-1998 Monthly Tax-Free Dividends Per Share June 97 0.065 July 97 0.065 August 97 0.0665 September 97 0.0665 October 97 0.0665 November 97 0.0665 December 97 0.0665 January 98 0.0665 February 98 0.0665 March 98 0.0665 April 98 0.0665 May 98 0.0665 Nuveen Massachusetts Premium Income Municipal Fund Portfolio Manager's Comments PORTFOLIO MANAGER STEVE PETERSON DISCUSSES FUND PERFORMANCE, THE MUNICIPAL MARKET, AND KEY INVESTMENT STRATEGIES FOR THE MASSACHUSETTS FUND. ON JULY 1, 1998, NUVEEN MADE SEVERAL CHANGES IN THE MANAGEMENT OF ITS FUNDS TO MAKE MORE EFFICIENT USE OF STAFF RESOURCES AND PORTFOLIO MANAGER EXPERTISE. AS A RESULT, TOM FUTRELL ASSUMED MANAGEMENT RESPONSIBILITIES FOR THIS FUND. TOM IS A 15-YEAR VETERAN OF NUVEEN AND AN EXPERIENCED INVESTMENT PROFES SIONAL WHO HAS MANAGED A RANGE OF OTHER MUNICIPAL BOND FUNDS. MASSACHUSETTS STATE UPDATE The high credit ratings assigned to the state's long-term general obligation debt by Moody's and Standard & Poor's (Aa3 and AA-, respectively) recognize the commonwealth's rebounding economy and healthy financial position. Growth has largely been driven by employment gains in health care, construction, research, and computer and business services. In addition, the combination of better-than-expected tax collections and under-budget expenditures has enabled the commonwealth and many of its municipalities to strengthen cash and reserve positions. In line with national municipal trends, new issue volume in Massachusetts through May 1998 rose 233% over the same period last year and was characterized by diversity across sectors. Well-known for its large debt burden, Massachusetts is currently financing the Central Artery/Third Tunnel project in Boston with a combination of state general obligation bonds, federal highway grant anticipation notes, and revenues from both the Massachusetts Turnpike and Port Authorities. FUND PERFORMANCE For the year ended May 31, 1998, the total return on net asset value for the Nuveen Massachusetts Premium Income Municipal Fund was 11.91%, equivalent to a taxable return of 15.90% for investors in the combined 39.3% federal and state income tax bracket. The total return outperformed the unleveraged Lehman Brothers Municipal Bond Index's annual return of 9.38% by more than 250 basis points. Much of this outperformance can be attributed to the fund's longer leverage-adjusted duration of 8.91 years, compared with the index's 7.11 years. In a year that saw municipal bond yields, as measured by the Bond Buyer 40, fall more than 50 basis points, longer duration proved to be beneficial to performance. Duration measures a bond fund's price volatility, or reaction to interest rate movements. The longer the duration, the more sensitive the fund to changes in interest rates. During a period of falling interest rates and market rallies, such as that of the past year, longer duration enables a fund to participate more fully in market gains, but can make the fund more vulnerable to potential price declines when rates rise. In addition, the fund's leveraged structure added significantly to these strong total returns. Despite the low interest rate environment of the past year, good call protection helped to support the dividend of the fund and prevent income from being impacted. The fund has now provided shareholders with 16 consecutive months of steady income. As of May 31, 1998, the fund offered a competitive current market yield of 5.13%, which translates to 8.45% on a taxable-equivalent basis for investors in the combined 39.3% federal and state income tax bracket. KEY STRATEGIES Over the past year, we focused on a number of sectors, including housing bonds, FHA-insured bonds, health care and utilities. We also found value in zero-coupon bonds, which are issued at a significant discount to their par value and generally increase in value incrementally rather than paying a traditional coupon rate. In the health care sector, hospitals offered several attractive opportunities, as industry consolidation resulted in the issuance of new debt as well as debt restructuring. Through fairly active trading, we were able to purchase bonds at lower prices and then sell them as prices appreciated, replacing them with bonds offering better call protection and more attractive coupons. The overall credit quality of the Massachusetts fund remains high due to a number of pre-refundings, which also con tributed to the fund's price appreciation. In a pre-refunding, a bond is essentially repaid early and becomes secured by U.S. government or agency securities until it can be called by the issuer. As a result, its credit quality typically improves, generally leading to price appreciation. OUTLOOK FOR THE FUTURE Looking ahead, we expect the U.S. economy to remain in its current growth mode, although progress should come at a more modest pace. The Asian financial crisis will continue to impact U.S. growth, and we expect to see a slowdown in corporate earnings, a strengthening dollar, especially versus Asian currencies, and the continuation of benign inflation despite tight labor markets. This should create less impetus for the Federal Reserve, which currently remains in a neutral position, to tighten interest rates in the second half of 1998. We view the economic slowdown and the current direction of the dollar as positive indicators for the fixed-income markets, including municipal bonds, and much of our outlook is contingent upon the further development of these factors. The current call protection of the Massachusetts fund averages approximately seven years. In the months ahead, we plan to extend this average by continuing to buy bonds with better call protection. We will also take advantage of opportunities to further upgrade portfolio quality by buying higher-quality bonds since they remain a good value relative to lower-rated bonds. Nuveen Massachusetts Premium Income Municipal Fund Performance Overview As of May 31, 1998 NMT PORTFOLIO STATISTICS ================================================== Inception Date 3/93 - -------------------------------------------------- Share Price 16 1/2 - -------------------------------------------------- Net Asset Value Per Share $14.91 - -------------------------------------------------- Current Market Yield 5.13% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Only)(1) 7.43% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State)(1) 8.45% - -------------------------------------------------- Fund Net Assets ($000) $102,936 - -------------------------------------------------- Average Weighted Maturity (Years) 20.02 - -------------------------------------------------- Leverage-Adjusted Duration (Years) 8.91 - -------------------------------------------------- ANNUALIZED TOTAL RETURN(2) ================================================== ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 18.08% 11.91% - -------------------------------------------------- 3-Year 13.55% 8.87% - -------------------------------------------------- 5-Year 7.58% 7.20% - -------------------------------------------------- Since Inception 7.62% 6.95% - -------------------------------------------------- TAXABLE-EQUIVALENT TOTAL RETURN(2) ================================================== ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 21.89% 15.90% - -------------------------------------------------- 3-Year 17.50% 12.85% - -------------------------------------------------- 5-Year 11.41% 11.08% - -------------------------------------------------- Since Inception 11.30% 10.67% - -------------------------------------------------- TOP 5 SECTORS ================================================== U.S. Guaranteed 23% - -------------------------------------------------- Health Care 20% - -------------------------------------------------- Education and Civic Organizations 18% - -------------------------------------------------- Housing (Multifamily) 9% - -------------------------------------------------- Tax Obligation (General) 9% - -------------------------------------------------- 1 Taxable-equivalent yield represents the yield on a taxable investment necessary to equal the yield of the Nuveen fund on an after-tax basis. The federal only rate is based on the current market yield and a federal income tax rate of 31%. The rate shown for federal and state highlights the added value of owning shares that are also exempt from state taxes. It is based on a combined federal and state income tax rate of 39.3%. 2 Taxable-equivalent total return is based on the annualized total return and a combined federal and state income tax rate of 39.3%. It represents the return on a taxable investment necessary to equal the return of the Nuveen fund on an after-tax basis. Bar Chart: 1997-1997 Monthly Tax-Free Dividends Per Share June 97 0.0705 July 97 0.0705 August 97 0.0705 September 97 0.0705 October 97 0.0705 November 97 0.0705 December 97 0.0705 January 98 0.0705 February 98 0.0705 March 98 0.0705 April 98 0.0705 May 98 0.0705 Nuveen Missouri Premium Income Municipal Fund Portfolio Manager's Comments PORTFOLIO MANAGER JOHN GAMBLA DISCUSSES FUND PERFORMANCE, THE MUNICIPAL MARKET, AND KEY INVESTMENT STRATEGIES FOR THE MISSOURI FUND FOR THE PERIOD COVERED BY THIS REPORT. ON JULY 1, 1998, NUVEEN MADE SEVERAL CHANGES IN THE MANAGEMENT OF ITS FUNDS TO MAKE MORE EFFICIENT USE OF STAFF RESOURCES AND PORTFOLIO MANAGER EXPERTISE. AS A RESULT, MIKE DAVERN ASSUMED MANAGEMENT RESPONSIBILITIES FOR THIS FUND. MIKE IS A 7-YEAR VETERAN OF NUVEEN WITH 16 YEARS OF EXPERIENCE AS AN INVESTMENT PROFESSIONAL. HE HAS MANAGED A RANGE OF OTHER STATE AND NATIONAL MUNICIPAL BOND FUNDS. MISSOURI STATE UPDATE Missouri confirmed its AAA credit quality status as a municipal issuer with another year of sound financial operations and economic growth. The state ended fiscal year 1997 with a budget stabilization fund totaling approximately $370 million, or nearly 4% of general fund revenues. The general fund, fueled by strong individual income tax and sales/use tax revenues, increased 18% to $1.7 billion. High levels of economic growth between 1995 and 1997 and increasing personal incomes resulted in income tax revenues that surpassed the constitutional state limit, and taxpayers were subsequently rewarded with a refund totaling $695 million. Missouri's economy remains diversified, with recent declines in manufacturing employment replaced by job gains in the services sector. Lease revenue debt, which constitutes nearly one-third of total bond issuance, is an important component of financing state capital programs. Missouri debt should continue to attract investor attention, as new issue volume - in line with national municipal trends increased 94% during the first quarter of 1998. FUND PERFORMANCE For the year ended May 31, 1998, the total return on net asset value for the Nuveen Missouri Premium Income Municipal Fund was 11.31%, which is equivalent to a taxable return of 14.31% for investors in the combined 35.1% federal and state income tax bracket. The total return outpaced the unleveraged Lehman Brothers Municipal Bond Index's annual return of 9.38% by almost 200 basis points. Much of this outperformance can be attributed to the fund's longer leverage-adjusted duration of 10.34 years, compared with the index's 7.11 years. In a year that saw municipal bond yields as measured by the Bond Buyer 40 fall more than 50 basis points, longer duration proved to be beneficial to performance. Duration measures a bond fund's price volatility, or reaction to interest rate movements. The longer the duration, the more sensitive the fund to changes in interest rates. During a period of falling interest rates and market rallies, such as that of the past year, longer duration enables a fund to participate more fully in market gains, but can make the fund more vulnerable to potential price declines when rates rise. In addition, the fund's leveraged structure added significantly to these strong total returns. Despite the low interest rate environment of the past year, good call protection helped support the dividend of the fund and prevent income from being impacted. In addition, the accumulation of income from higher-yielding bonds purchased over the past several years allowed us to increase the dividend. Since that increase in August 1997, the fund has provided shareholders with 10 consecutive months of steady income. As of May 31, 1998, the fund offered a competitive current market yield of 5.24%, which translates to 8.07% on a taxable-equivalent basis for investors in the combined 35.1% federal and state income tax bracket. KEY STRATEGIES Over the past year, we focused on the purchase of insured bonds as well as bonds with higher coupons. The majority of the bonds we added offer maturities in the range of 15 to 20 years, which we felt offered the best values compared to their historical levels of volatility. OUTLOOK FOR THE FUTURE Looking ahead, we expect the U.S. economy to remain in its current growth mode, although progress should come at a more modest pace. The Asian financial crisis will continue to impact U.S. growth, and we expect to see a slowdown in corporate earnings, a strengthening dollar, especially versus Asian currencies, and the continuation of benign inflation despite tight labor markets. This should create less impetus for the Federal Reserve, which currently remains in a neutral position, to tighten interest rates in the second half of 1998. We view the economic slowdown and the current direction of the dollar as positive indicators for the fixed-income markets, including municipal bonds, and much of our outlook is contingent upon the further development of these factors. Given the current environment of low interest rates and tight credit spreads, our primary focus in the months ahead will be on preserving shareholder capital. We plan to achieve this by upgrading portfolio quality and taking on additional risk only when strong price appreciation potential or competitive yields compensate the fund for doing so. This approach should help us reduce above-market interest rate exposure where appropriate without eroding the income levels of the fund. Nuveen Missouri Premium Income Municipal Fund Performance Overview As of May 31, 1998 NOM PORTFOLIO STATISTICS ================================================== Inception Date 5/93 - -------------------------------------------------- Share Price 14 3/16 - -------------------------------------------------- Net Asset Value Per Share $14.44 - -------------------------------------------------- Current Market Yield 5.24% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Only)(1) 7.59% - -------------------------------------------------- Taxable-Equivalent Yield (Federal and State)(1) 8.07% - -------------------------------------------------- Fund Net Assets ($000) $46,935 - -------------------------------------------------- Average Weighted Maturity (Years) 17.06 - -------------------------------------------------- Leverage-Adjusted Duration (Years) 10.34 - -------------------------------------------------- ANNUALIZED TOTAL RETURN ================================================== ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 14.53% 11.31% - -------------------------------------------------- 3-Year 11.69% 8.10% - -------------------------------------------------- 5-Year 4.12% 6.11% - -------------------------------------------------- Since Inception 4.29% 5.88% - -------------------------------------------------- TAXABLE-EQUIVALENT TOTAL RETURN(2) ================================================== ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 17.68% 14.31% - -------------------------------------------------- 3-Year 14.85% 11.06% - -------------------------------------------------- 5-Year 7.06% 8.97% - -------------------------------------------------- Since Inception 7.24% 8.73% - -------------------------------------------------- TOP 5 SECTORS ================================================== Tax Obligation (General) 18% - -------------------------------------------------- Tax Obligation (Limited) 17% - -------------------------------------------------- Housing (Multifamily) 14% - -------------------------------------------------- Water and Sewer 11% - -------------------------------------------------- U.S. Guaranteed 10% - -------------------------------------------------- 1 Taxable-equivalent yield represents the yield on a taxable investment necessary to equal the yield of the Nuveen fund on an after-tax basis. The federal only rate is based on the current market yield and a federal income tax rate of 31%. The rate shown for federal and state highlights the added value of owning shares that are also exempt from state taxes. It is based on a combined federal and state income tax rate of 35.1%. 2 Taxable-equivalent total return is based on the annualized total return and a combined federal and state income tax rate of 35.1%. It represents the return on a taxable investment necessary to equal the return of the Nuveen fund on an after-tax basis. 3 The fund also paid shareholders taxable distributions in December of $0.0151 per share. 1997-1998 Monthly Tax-Free Dividends Per Share(3) June 97 0.061 July 97 0.061 August 97 0.062 September 97 0.062 October 97 0.062 November 97 0.062 December 97 0.062 January 98 0.062 February 98 0.062 March 98 0.062 April 98 0.062 May 98 0.062 Nuveen Washington Premium Income Municipal Fund Portfolio Manager's Comments PORTFOLIO MANAGER DAN SOLENDER DISCUSSES FUND PERFORMANCE, THE MUNICIPAL MARKET, AND KEY INVESTMENT STRATEGIES FOR THE WASHINGTON FUND FOR THE PERIOD COVERED BY THIS REPORT. ON JULY 1, 1998, NUVEEN MADE SEVERAL CHANGES IN THE MANAGEMENT OF ITS FUNDS TO MAKE MORE EFFICIENT USE OF STAFF RESOURCES AND PORTFOLIO MANAGER EXPERTISE. AS A RESULT, MIKE DAVERN ASSUMED MANAGEMENT RESPONSIBILITIES FOR THIS FUND. MIKE IS A 7-YEAR VETERAN OF NUVEEN WITH 16 YEARS OF EXPERIENCE AS AN INVESTMENT PROFESSIONAL. HE HAS MANAGED A RANGE OF OTHER STATE AND NATIONAL MUNICIPAL BOND FUNDS. WASHINGTON STATE UPDATE The state of Washington continues to benefit from a growing and increasingly diversified economic base. Employment rose 4.1% in 1997, and the unemployment rate as of April 1998 was 4.2%, slightly below the national rate. Boeing plays an important but declining role in the state's economy, supplanted by Microsoft and other high-tech companies. With the recent addition of $75 million, the state's "rainy day" fund reserves now total almost $380 million. One of the few clouds on the horizon is the potentially dampening effect that the state's ties with Asian trading partners could have on economic growth going forward. In response to the state's broadening economic base and continued solid financial performance, Washington's general obligation debt rating was upgraded during the year. As municipalities throughout the state also benefited from the strengthening economy, Standard & Poor's upgraded 10 issuers, with no downgrades, reflecting similar situations across the country. Contrary to the national trend of heavy supply, bond issuance in the state dropped 13% for the first four months of 1998 compared with the same period in 1997, with most of the new supply issued by school districts. It is anticipated that Washington's future bond supply should be healthy, given the state's heavy infrastructure needs due to high population growth. Recently, the state treasurer announced a new program that could double the annual number of certificate of participation bonds. The program is intended to help local municipalities borrow for equipment and real estate acquisitions at the state's lower interest rates. FUND PERFORMANCE For the year ended May 31, 1998, the Nuveen Washington Premium Income Municipal Fund provided an outstanding total return on net asset value of 12.64%, which is equivalent to a taxable return of 15.11% for investors in the 31% federal income tax bracket. The total return significantly outperformed the unleveraged Lehman Brothers Municipal Bond Index's annual return of 9.38% - a difference of more than 300 basis points. Much of this outperformance can be attributed to the fund's longer leverage-adjusted duration of 9.42 years, compared with the index's 7.11 years. In a year that saw municipal bond yields as measured by the Bond Buyer 40 fall more than 50 basis points, longer duration proved to be beneficial to performance. Duration measures a bond fund's price volatility, or reaction to interest rate movements. The longer the duration, the more sensitive the fund to changes in interest rates. During a period of falling interest rates and market rallies, such as that of the past year, longer duration enables a fund to participate more fully in market gains, but can make the fund more vulnerable to potential price declines when rates rise. In addition, the fund's leveraged structure added significantly to these strong total returns. Despite the low interest rate environment of the past year, good call protection helped support the dividend of the fund and prevent income from being impacted. The fund has now provided shareholders with 19 consecutive months of steady income. As of May 31, 1998, the fund offered a competitive current market yield of 5.55%, which translates to 8.04% on a taxable-equivalent basis for investors in the 31% federal income tax bracket. KEY STRATEGIES Given the duration, diversification, attractive coupons, and excellent level of call protection, the fund was strategically positioned for the market environment of the past year. So, we kept trading to a minimum and made changes only when they would add further to performance. Washington's credit quality is relatively high, with most of the market rated AAA or AA, so the majority of these changes involved the purchase of insured bonds. This included insured health care bonds, which provided the higher yields found in the health care sector as well as AAA ratings. The state's low-cost sources of power also made public power bonds attractive, and we continue to maintain substantial holdings in the Washington Public Power Supply System. OUTLOOK FOR THE FUTURE Looking ahead, we expect the U.S. economy to remain in its current growth mode, although progress should come at a more modest pace. The Asian financial crisis will continue to impact U.S. growth, and we expect to see a slowdown in corporate earnings, a strengthening dollar, especially versus Asian currencies, and the continuation of benign inflation despite tight labor markets. This should create less impetus for the Federal Reserve, which currently remains in a neutral position, to tighten interest rates in the second half of 1998. We view the economic slowdown and the current direction of the dollar as positive indicators for the fixed-income markets, including municipal bonds, and much of our outlook is contingent upon the further development of these factors. Given the Washington fund's current strategic position, we do not anticipate making substantial changes to the portfolio unless market conditions change. Our efforts will be focused on maintaining the fund's duration while continuing to diversify by sector and add lower coupon and discount bonds if priced attractively. Nuveen Washington Premium Income Municipal Fund Performance Overview As of May 31, 1998 NPW PORTFOLIO STATISTICS ================================================== Inception Date 3/93 - -------------------------------------------------- Share Price 13 5/8 - -------------------------------------------------- Net Asset Value Per Share $15.06 - -------------------------------------------------- Current Market Yield 5.55% - -------------------------------------------------- Taxable-Equivalent Yield(1) 8.04% - -------------------------------------------------- Fund Net Assets ($000) $51,948 - -------------------------------------------------- Average Weighted Maturity (Years) 19.70 - -------------------------------------------------- Leverage-Adjusted Duration (Years) 9.42 - -------------------------------------------------- ANNUALIZED TOTAL RETURN ================================================== ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 15.26% 12.64% - -------------------------------------------------- 3-Year 11.83% 8.78% - -------------------------------------------------- 5-Year 3.12% 7.06% - -------------------------------------------------- Since Inception 3.97% 6.83% - -------------------------------------------------- TAXABLE-EQUIVALENT TOTAL RETURN(2) ================================================== ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 18.04% 15.11% - -------------------------------------------------- 3-Year 14.73% 11.30% - -------------------------------------------------- 5-Year 5.87% 9.61% - -------------------------------------------------- Since Inception 6.63% 9.28% - -------------------------------------------------- TOP 5 SECTORS ================================================== Tax Obligation (General) 21% - -------------------------------------------------- Utilities 15% - -------------------------------------------------- Water and Sewer 13% - -------------------------------------------------- U.S. Guaranteed 13% - -------------------------------------------------- Health Care 10% - -------------------------------------------------- 1 Taxable-equivalent yield represents the yield on a taxable investment necessary to equal the yield of the Nuveen fund on an after-tax basis. It is based on the current market yield and a federal income tax rate of 31%. 2 Taxable-equivalent total return is based on the annualized total return and a federal income tax rate of 31%. It represents the return on a taxable investment necessary to equal the return of the Nuveen fund on an after-tax basis. Bar Chart: 1997-1998 Monthly Tax-Free Dividends Per Share June 97 0.063 July 97 0.063 August 97 0.063 September 97 0.063 October 97 0.063 November 97 0.063 December 97 0.063 January 98 0.063 February 98 0.063 March 98 0.063 April 98 0.063 May 98 0.063 REPORT OF INDEPENDENT AUDITORS TO THE BOARD OF TRUSTEES AND SHAREHOLDERS NUVEEN CONNECTICUT PREMIUM INCOME MUNICIPAL FUND NUVEEN MASSACHUSETTS PREMIUM INCOME MUNICIPAL FUND NUVEEN MISSOURI PREMIUM INCOME MUNICIPAL FUND NUVEEN WASHINGTON PREMIUM INCOME MUNICIPAL FUND We have audited the accompanying statements of net assets, including the portfolios of investments, of Nuveen Connecticut Premium Income Municipal Fund, Nuveen Massachusetts Premium Income Municipal Fund, Nuveen Missouri Premium Income Municipal Fund and Nuveen Washington Premium Income Municipal Fund, as of May 31, 1998, and the related statements of operations, changes in net assets and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and the financial highlights based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. Our procedures included confirmation of investments owned as of May 31, 1998, by correspondence with the custodian. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of Nuveen Connecticut Premium Income Municipal Fund, Nuveen Massachusetts Premium Income Municipal Fund, Nuveen Missouri Premium Income Municipal Fund and Nuveen Washington Premium Income Municipal Fund, as of May 31, 1998, the results of their operations, changes in their net assets and financial highlights for the periods indicated therein in conformity with generally accepted accounting principles. Chicago, Illinois July 14, 1998
PORTFOLIO OF INVESTMENTS NUVEEN CONNECTICUT PREMIUM INCOME MUNICIPAL FUND (NTC) May 31, 1998 PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 19.2% Connecticut Higher Education Supplemental Loan Authority, Revenue Bonds (Family Education Loan Program), 1996 Series A: $ 1,580,000 5.800%, 11/15/14 (Alternative Minimum Tax) 11/06 at 102 Aaa $ 1,678,513 1,000,000 5.875%, 11/15/17 (Alternative Minimum Tax) 11/06 at 102 Aaa 1,032,720 4,450,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Quinnipiac College Issue, Series D, 6.000% 7/01/23 7/03 at 102 BBB- 4,555,332 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Sacred Heart University Issue, Series B: 2,600,000 5.700%, 7/01/16 7/03 at 102 BBB- 2,623,972 1,000,000 5.800%, 7/01/23 7/03 at 102 BBB- 1,006,280 2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Trinity College Issue, Series C, 5.875%, 7/01/26 7/06 at 102 Aaa 2,130,700 2,040,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, The Loomis Chaffee School Issue, Series C, 5.500%, 7/01/16 7/06 at 102 Aaa 2,106,892 2,920,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Connecticut College Issue, Series C-1, 5.500%, 7/01/20 7/07 at 102 Aaa 3,030,376 3,810,000 The University of Connecticut, Student Fee Revenue Bonds, 1998 Series A, 4.750%, 11/15/27 11/07 at 101 Aaa 3,585,667 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 19.6% 2,000,000 Connecticut Development Authority, Solid Waste Disposal Facilities Revenue Bonds, Pfizer Inc. Project, 1994 Series, 7.000%, 7/01/25 (Alternative Minimum Tax) 7/05 at 102 Aaa 2,323,040 1,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Newington Children's Hospital, Series A, 6.050%, 7/01/10 7/04 at 102 Aaa 1,091,920 2,725,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Saint Francis Hospital and Medical Center Issue, Series B, 6.200%, 7/01/22 7/02 at 102 Aaa 2,946,870 2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Hospital of Saint Raphael Issue, Series H, 5.200% 7/01/08 No Opt. Call Aaa 2,120,100 1,500,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Lawrence and Memorial Hospital Issue, Series D, 5.000%, 7/01/22 7/03 at 102 Aaa 1,456,980 2,200,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Day Kimball Hospital Issue, Series A, 5.375%, 7/01/26 7/06 at 102 Aaa 2,226,378 4,160,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Kent School Issue, Series B, 5.625%, 7/01/16 7/06 at 102 Aaa 4,350,403 1,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, The William W. Backus Hospital Issue, Series D, 5.750%, 7/01/27 7/07 at 102 Aaa 1,059,700 3,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Middlesex Hospital Issue, Series H, Revenue Bonds, Middlesex Health Services Issue, Series I, 5.125%, 7/01/27 7/07 at 101 Aaa 2,948,640 1,500,000 Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities Financing Authority, Hospital Revenue Refunding Bonds, 1995 Series A, FHA Insured Mortgage-Doctor Pila Hospital Project, 6.125%, 8/01/25 8/05 at 101 1/2 AAA 1,650,660 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 5.9% 3,000,000 Waterbury Housing Authority, Mortgage Revenue Refunding Bonds, Waterbury NSA II - Series 98C FHA/ Section 8, 5.450%, 7/01/23 1/02 at 100 Aaa 2,995,770 1,405,000 Waterbury Nonprofit Housing Corporation, Connecticut Taxable Mortgage Revenue Refunding Bonds, FHA Insured Mortgage Loan-Fairmont Heights Section 8 Assisted Project, Series 1993A, 6.500%, 7/01/07 7/02 at 101 Aaa 1,508,001 PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY (continued) $ 1,930,000 Housing Authority of the City of Willimantic, Multi-Family Housing Revenue Bonds, Series 1995A, GNMA Collateralized Mortgage Loan-Village Heights Apartments Project, 8.000%, 10/20/30 10/05 at 105 AAA $ 2,221,160 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 5.3% 3,175,000 Connecticut Housing Finance Authority, Housing Mortgage Finance Program Bonds, 1993 Series B, 6.200%, 5/15/12 5/03 at 102 Aa 3,380,073 2,490,000 Connecticut Housing FInance Authority, Housing Mortgage Finance Program Bonds, 1996 Subseries E-2, 6.150%, 11/15/27 (Alternative Minimum Tax) 11/06 at 102 AA 2,643,832 - ------------------------------------------------------------------------------------------------------------------------------------ LONG TERM CARE - 6.3% Connecticut Development Authority, Health Facility Refunding Revenue Bonds, Alzheimer's Resource Center of Connecticut, Inc. Project, 1994 Series A: 1,500,000 6.875%, 8/15/04 No Opt. Call N/R 1,603,695 1,000,000 7.000%, 8/15/09 8/04 at 102 N/R 1,083,820 2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Nursing Home Program Issue, Series 1994, AHF/Hartford, Inc. Project, 7.125%, 11/01/24 11/04 at 102 AA- 2,299,380 2,000,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Nursing Home Program Issue, Series 1993, Mansfield Center for Nursing and Rehabilitation Project, 5.875%, 11/01/12 11/03 at 102 Aaa 2,164,360 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 9.1% 2,000,000 State of Connecticut, General Obligation Bonds, 1993 Series E, 6.000%, 3/15/12 No Opt. Call AA- 2,268,120 2,750,000 State of Connecticut, General Obligation Bonds, 1993 Series D, 5.100%, 8/01/11 8/03 at 101 1/2 AA- 2,816,138 1,650,000 State of Connecticut, General Fund Obligation Bonds, 1994 Series A, Issued By Connecticut Development Authority, 6.375%, 10/15/14 10/04 at 102 AA- 1,843,644 3,500,000 Commonwealth of Puerto Rico, Public Improvement Bonds of 1998, 4.875%, 7/01/23 7/08 at 101 Aaa 3,403,575 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 5.8% 1,800,000 State of Connecticut, Special Tax Obligation Bonds, Transportation Infrastructure Purposes, 1991 Series B, 6.500%, 10/01/10 No Opt. Call AA- 2,117,286 1,900,000 Capitol Region Education Council, Revenue Bonds, 6.700%, 10/15/10 10/05 at 102 BBB 2,063,267 2,250,000 City of Waterbury Connecticut, General Obligation Tax Revenue Intercept Refunding Bonds, 1993 Issue, 5.375%, 4/15/08 4/03 at 102 Aaa 2,354,400 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 7.4% 3,000,000 State of Connecticut, Airport Revenue RefundingBonds, Bradley International Airport, Series 1992, 7.650%, 10/01/12 10/04 at 100 Aaa 3,524,910 City of New Haven, Connecticut, Air Rights Parking Facility Revenue Bonds, Series 1991: 3,000,000 6.625%, 12/01/05 12/01 at 102 Aaa 3,289,800 1,500,000 6.500%, 12/01/15 12/01 at 102 Aaa 1,632,165 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 5.7% 2,405,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, University of Hartford Issue, Series C, 8.000%, 7/01/18 (Pre-refunded to 7/01/03) 7/03 at 100 Aaa 2,765,317 2,020,000 State of Connecticut Health and Educational Facilities Authority, Revenue Bonds, Trinity College Issue, Series C, 6.000%, 7/01/22 (Pre-refunded to 7/01/02) 7/02 at 102 Aaa 2,200,062 1,250,000 State of Connecticut, Health and Educational Facilities Authority, Revenue Bonds, Choate Rosemary Hall Issue, Series A, 7.000%, 7/01/25 (Pre-refunded to 7/01/04) 7/04 at 101 Aaa 1,447,062 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 11.7% 1,400,000 Connecticut Development Authority, Water Facilities Revenue Bonds, Bridgeport Hydraulic Company Project, 1993 B Series, 5.500%, 6/01/28 6/03 at 102 Aaa 1,434,300 2,795,000 Connecticut Development Authority, Water Facilities Revenue Bonds, Bridgeport Hydraulic Company Project, 1993 A Series, 5.600%, 6/01/28 (Alternative Minimum Tax) 6/03 at 102 Aaa 2,866,524 3,250,000 Connecticut Municipal Electric Energy Cooperative, Power Supply System Revenue Bonds, 1993 A Series, 5.000%, 1/01/18 1/04 at 102 Aaa 3,209,895 PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES (continued) $ 2,200,000 Connecticut Resources Recovery Authority, Bridgeport Resco Company, L.P. Project Bonds, Series A, Adjustable Convertible Extendable Securities-Aces, 7.625%, 1/01/09 1/03 at 100 A $ 2,279,420 3,235,000 Connecticut Resources Recovery Authority, Resource Recovery Revenue Bonds, American Ref-Fuel, Company of Southeastern Connecticut Project, 1989 Series A, 7.700%, 11/15/11 11/98 at 103 AA- 3,480,892 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 2.8% 1,000,000 State of Connecticut, Clean Water Fund Subordinate Revenue Refunding Bonds, 1996 Series, 5.250%, 7/01/10 1/05 at 101 Aaa 1,044,530 2,000,000 South Central Connecticut Regional Water Authority, Water System Revenue Bonds, Eleventh Series, 5.750%, 8/01/12 8/03 at 102 Aaa 2,130,540 - ------------------------------------------------------------------------------------------------------------------------------------ $ 105,890,000 Total Investments - (cost $106,025,594) - 98.8% 111,997,081 ============= Other Assets Less Liabilities - 1.2% 1,386,991 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $ 113,384,072 ==================================================================================================================== * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. N/R Investment is not rated. See accompanying notes to financial statements.
PORTFOLIO OF INVESTMENTS NUVEEN MASSACHUSETTS PREMIUM INCOME MUNICIPAL FUND (NMT) May 31, 1998
PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATION AND CIVIC ORGANIZATIONS - 17.8% $ 870,000 Massachusetts Educational Financing Authority, Education Loan Revenue Bonds, Issue E, Series 1995, 6.150%, 7/01/10 (Alternative Minimum Tax) 7/04 at 102 Aaa $ 944,951 1,970,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Boston College Issue, Series K, 5.250%, 6/01/23 6/03 at 102 Aaa 1,974,570 1,175,000 Massachusetts Industrial Finance Agency, Revenue Bonds (Brooks School Issue), Series 1993, 5.950%, 7/01/23 7/03 at 102 A3 1,223,810 3,500,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Phillips Academy Issue, Series 1993, 5.375%, 9/01/23 9/08 at 102 Aa1 3,554,705 2,645,000 Massachusetts Industrial Finance Agency, Revenue Bonds (Whitehead Institute for Biomedical Research-1993 Issue), 5.125%, 7/01/26 7/03 at 102 Aa1 2,608,049 1,500,000 Massachusetts Industrial Finance Agency, Revenue Bonds (College of the Holy Cross-1996 Issue), 5.500%, 3/01/20 3/06 at 102 Aaa 1,547,865 1,765,000 The New England Education Loan Marketing Corporation, Student Loan Revenue Bonds, 1992 Subordinated Issue C, 6.750%, 9/01/02 (Alternative Minimum Tax) No Opt. Call A1 1,915,166 4,000,000 The New England Loan Marketing Corporation, Student Loan Revenue Bonds, 1992 Subordinated Issue H, 6.900%, 11/01/09 (Alternative Minimum Tax) No Opt. Call A1 4,509,960 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 19.7% 2,805,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Series 1998A (Caregroup Issue), 5.000%, 7/01/25 7/08 at 102 Aaa 2,715,913 3,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Lahey Clinic Medical Center Issue, Series B, 5.625%, 7/01/15 7/03 at 102 Aaa 3,106,980 1,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Massachusetts General Hospital Issue, Series G, 5.375%, 7/01/11 7/00 at 100 Aaa 1,040,250 4,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, New England Medical Center Hospitals, Series 1993-G1, 5.375%, 7/01/24 7/04 at 102 Aaa 4,032,400 2,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds (Daughters of Charity National Health System-The Carney Hospital), Series D, 6.100%, 7/01/14 7/04 at 102 AA+ 2,159,120 400,000 Massachusetts Health and Educational Facilities Authority, Revenue Refunding Bonds (Cardinal Cushing General Hospital), Series 1989-A, 8.500%, 7/01/00 7/99 at 102 1/2N/R 415,472 Massachusetts Health and Educational Facilities Authority, Revenue Refunding Bonds, Youville Issue (FHA Insured Project), Series B: 2,580,000 6.125%, 2/15/15 2/04 at 102 Aa 2,718,236 1,000,000 6.000%, 2/15/25 2/04 at 102 Aa 1,039,320 3,000,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Harvard Community Health Plan, Inc., Issue 1988 Series B (Refunding Bonds), 8.125%, 10/01/17 10/98 at 102 A- 3,098,880 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 9.2% 3,800,000 Massachusetts Housing FInance Agency, Housing Project Revenue Bonds, 6.300%, 10/01/13 4/03 at 102 A1 4,028,684 1,945,000 Massachusetts Housing Finance Agency, Rental Housing Mortgage Revenue Bonds, 1995 Series A (FHA Insured Mortgage Loans), 7.350%, 1/01/35 (Alternative Minimum Tax) 1/05 at 102 Aaa 2,131,331 3,315,000 Massachusetts Housing Finance Agency, Rental Housing Mortgage Revenue Bonds, 1997 Series C, 5.625%, 7/01/40 (Alternative Minimum Tax) 7/07 at 101 Aaa 3,343,410 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 2.5% 2,450,000 Massachusetts Housing Finance Agency, Single Family Housing Revenue Bonds, Series 9, 8.100%, 12/01/21 (Alternative Minimum Tax) 12/98 at 102 Aa 2,524,407 PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ LONG TERM CARE - 2.7% $ 1,000,000 Massachusetts Health and Educational Facilities Authority, Revenue Refunding Bonds, Youville Hospital Issue (FHA Insured Project), Series A, 6.250%, 2/15/41 2/07 at 102 Aa2 $ 1,070,030 1,125,000 Massachusetts Industrial Financial Agency, Revenue Bonds, Heights Crossing Limited Partnership Issue (FHA Insured Project), Series 1995 6.000%, 2/01/15 (Alternative Minimum Tax) 2/06 at 102 AAA 1,176,964 500,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Briscoe House Assisted Living Issue (FHA Insured Project), 6.050%, 2/01/17 (Alternative Minimum Tax) 8/07 at 105 AAA 543,250 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 8.7% Town of Barnstable, Massachusetts, General Obligation Bonds: 1,020,000 5.750%, 9/15/10 9/04 at 102 Aa3 1,102,804 1,020,000 5.750%, 9/15/11 9/04 at 102 Aa3 1,099,886 965,000 5.750%, 9/15/12 9/04 at 102 Aa3 1,029,086 1,000,000 City of Chelsea, Massachusetts, General Obligation Bonds, School Project Loan, Act of 1948, 7.000%, 6/15/03 No Opt. Call Aaa 1,124,620 4,375,000 City of Lowell, Massachusetts, General Obligation Bonds, State Qualified Bonds, 5.600%, 11/01/1 11/03 at 102 Aaa 4,638,813 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 6.6% 2,500,000 Massachusetts Industrial Finance Agency, Parking Facility Revenue Bonds (Avon Associates Project), Series 1998A, 5.375%, 4/01/20 4/03 at 102 Aaa 2,520,425 4,000,000 Massachusetts Port Authority, Special Facilities Revenue Bonds (U.S. Air Project), Series 1996-A, 5.750%, 9/01/16 (Alternative Minimum Tax) 9/06 at 102 Aaa 4,234,800 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 22.3% 1,250,000 Massachusetts Health and Educational Facilities Authority, Revenue Refunding Bonds, Worcester Polytechnic Institute Issue, Series E, 6.750%, 9/01/11 (Pre-refunded to 9/01/02) 9/02 at 102 Aaa 1,396,738 2,500,000 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, Malden Hospital Issue (FHA Insured Project), Series A, 5.000%, 8/01/16 No Opt. Call AAA 2,519,175 Massachusetts Health and Educational Facilities Authority, Revenue Bonds, New England Deaconess Hospital Issue, Series D: 3,310,000 6.625%, 4/01/12 (Pre-refunded to 4/01/02) 4/02 at 102 AAA 3,658,642 1,000,000 6.875%, 4/01/22 (Pre-refunded to 4/01/02) 4/02 at 102 AAA 1,113,740 2,500,000 Massachusetts Industrial Finance Agency, Revenue Refunding Bonds, College of the Holy Cross-1992 Issue II, 6.375%, 11/01/15 (Pre-refunded to 11/01/02) 11/02 at 102 A1*** 2,764,750 1,355,000 Massachusetts Industrial Finance Agency, Revenue Bonds, Merrimack College Issue, Series 1992, 7.125%, 7/01/12 (Pre-refunded to 7/01/02) 7/02 at 102 AAA 1,530,472 1,000,000 Massachusetts Port Authority, Revenue Bonds, Series 1982, 13.000%, 7/01/13 No Opt. Call Aaa 1,715,830 3,000,000 Massachusetts Water Resources Authority, General Revenue Bonds, 1991 Series A, 5.750%, 12/01/21 (Pre-refunded to 12/01/01) 12/01 at 100 Aaa 3,170,640 1,750,000 Puerto Rico Aqueduct and Sewer Authority, Revenue Bonds, Series 1988A, 7.875%, 7/01/17 (Pre-refunded to 7/01/98) 7/98 at 102 AAA 1,791,055 3,000,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series P, 7.000%, 7/01/21 (Pre-refunded to 7/01/01) 7/01 at 102 Aaa 3,313,410 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 5.6% 3,225,000 Massachusetts Industrial Finance Agency, Resource Recovery Revenue Bonds, Semass Project, Series 1991B, 9.250%, 7/01/15 (Alternative Minimum Tax) 7/01 at 103 N/R 3,620,255 2,000,000 Massachusetts Municipal Wholesale Electric Company, A Public Corporation of The Commonwealth of Massachusetts, Power Supply System Revenue Bonds, 6.000%, 7/01/18 7/02 at 100 Aaa 2,103,960 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 2.8% 3,000,000 Massachusetts Water Resources Authority, General Revenue Refunding Bonds, 1993 Series B, 5.000%, 3/01/22 3/03 at 100 A 2,902,560 - ------------------------------------------------------------------------------------------------------------------------------------ $ 95,115,000 Total Investments - (cost $94,334,218) - 97.9% 100,775,384 ============= PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.3% $ 300,000 Massachusetts Health and Educational Facilities Authority (Capital ============ Asset Program), Variable Rate Demand Bonds, 3.950%, 1/01/35+ VMIG-1 $ 300,000 Other Assets Less Liabilities - 1.8% 1,860,586 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $ 102,935,970 ==================================================================================================================== * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. government or U.S. government agency securities which ensures the timely payment of principal and interest. Securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. + The security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements.
PORTFOLIO OF INVESTMENTS NUVEEN MISSOURI PREMIUM INCOME MUNICIPAL FUND (NOM) May 31, 1998
PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATIONAL AND CIVIC ORGANIZATIONS - 5.7% $ 500,000 The Industrial Development Authority of the City of Kansas City, Missouri (Ewing Marion Kauffman Foundation Project), Fixed Rate Revenue Bonds, Series 1997B, 5.700%, 4/01/27 4/07 at 100 AAA $ 526,545 1,775,000 Northwest Missouri State University, Housing System Revenue Bonds Series 1998, 7.000%, 6/01/11 6/08 at 100 Aaa 2,129,343 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 9.3% 1,000,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Revenue Bonds (BJC Health System), Series 1994A, 6.750%, 5/15/12 No Opt. Call AA 1,188,260 1,000,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Refunding Revenue Bonds (SSM Health Care), Series 1992AA, 6.250% 6/01/07 6/02 at 102 Aaa 1,089,460 1,000,000 Health and Educational Facilities Authority of the State of Missouri, Health Facilities Revenue Bonds (Lake of the Ozarks General Hospital, Inc.), Series 1996, 6.500%, 2/15/21 2/06 at 102 BBB+ 1,088,410 1,000,000 Ray County, Missouri, Hospital Revenue Bonds (Ray County Memorial Hospital), Series 1997, 5.750%, 11/15/12 5/05 at 101 1/2N/R 1,008,230 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 14.0% 1,550,000 Missouri Housing Development Commission, Multifamily Housing Revenue Bonds (Brookstone Village Apartments Project), 1996 Series A, 6.100%, 12/01/21 (Alternative Minimum Tax) 12/06 at 102 Aaa 1,625,981 650,000 The Industrial Development Authority of the City of Kansas City Missouri, Multifamily Housing Revenue Refunding Bonds (President Gardens Apartment Project), Series 1997A, 5.550%, 8/01/25 2/08 at 102 AAA 657,748 1,250,000 The Industrial Development Authority of St. Charles County, Missouri, Multifamily Housing Revenue Bonds (Ashwood Apartments Project), Series 1998A 5.600% 4/01/30 (Alternative Minimum Tax) 4/08 at 102 Aaa 1,256,350 1,045,000 The Industrial Development Authority of the County of St. Louis, Missouri, Multifamily Housing Revenue Refunding Bonds (GNMA Collateralized-South Summit Apartments Project), Series 1997A, 5.950%, 4/20/17 4/07 at 102 AAA 1,105,924 600,000 Multifamily Housing Revenue Refunding Bonds (GNMA Collateralized-South Summit Apartments Project), Series 1997B, 6.000%, 10/20/15 (Alternative Minimum Tax) 4/07 at 102 AAA 631,842 1,250,000 The Industrial Development Authority of The City of University City, Missouri, Multifamily Housing Revenue Refunding Bonds (GNMA Collateralized-Canterbury Gardens Project), Series 1995A, 5.900%, 12/20/20 12/05 at 102 AAA 1,298,975 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 9.3% 2,190,000 Missouri Housing Development Commission, Single Family Mortgage Revenue Bonds, Series 1991-A (GNMA Mortgage-Backed Securities Program), 7.375%, 8/01/23 (Alternative Minimum Tax) 2/01 at 102 AAA 2,316,056 1,835,000 Missouri Housing Development Commission, Single Family Mortgage Revenue Bonds (Homeownership Loan Program), 1995 Series C, 7.250%, 9/01/26 (Alternative Minimum Tax) 3/06 at 105 AAA 2,065,036 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 17.2% 2,020,000 Ritenour School District of St. Louis County, Missouri, General Obligation School Bonds, Series 1995, 7.375%, 2/01/12 No Opt. Call Aaa 2,519,546 1,500,000 Francis Howell School District, St. Charles County, Missouri, General Obligation Refunding Bonds, Series 1994A, 7.800%, 3/01/08 No Opt. Call Aaa 1,890,480 1,000,000 School District of the City of St. Charles, Missouri, General Obligation Bonds (Missouri Direct Deposit Program), Series 1996A, 5.625%, 3/01/14 3/06 at 100 AA 1,054,140 1,395,000 The Board of Education of the City of St. Louis (Missouri), General Obligation School Refunding Bonds, Series 1993A, 8.500%, 4/01/07 No Opt. Call Aaa 1,805,800 625,000 Reorganized School District No. R-IV of Stone County, Missouri (Reeds Spring, Missouri), General Obligation School Building Refunding and Improvement Bonds, Series 1995, 7.600%, 3/01/10 No Opt. Call Aaa 799,325 PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 16.5% $ 1,000,000 Regional Convention and Sports Complex Authority, Convention and Sports Facility Project and Refunding Bonds, Series A 1993 (State of Missouri Sponsor), 5.500%, 8/15/13 8/03 at 102 A1 $ 1,027,140 1,000,000 Fort Zumwalt School District Improvement Corporation, Leasehold Revenue Bonds, Fort Zumwalt, S.D., St. Charles County, Series 1997, 5.600%, 3/01/17 3/07 at 100 Aaa 1,043,480 1,000,000 Land Clearance For Redevelopment Authority of Kansas City, Missouri, Lease Revenue Bonds (Municipal Auditorium and Muehlebach Hotel Redevelopment Projects), Series 1995A, 5.900%, 12/01/18 12/05 at 102 Aaa 1,072,810 1,000,000 Kansas City Municipal Assistance Corporation, Leasehold Revenue Capital Improvement Bonds (Kansas City, Missouri, Lessee), Series 1996B, 5.700%, 1/15/13 1/06 at 101 Aaa 1,064,750 1,800,000 St. Louis Municipal Finance Corporation, City Justice Center, Leasehold Revenue Improvement Bonds, Series 1996A (City of St. Louis, Missouri, Lessee), 5.750%, 2/15/11 2/06 at 102 Aaa 1,950,966 1,500,000 St. Louis Municipal Finance Corporation, Leasehold Revenue Refunding Bonds, 5.850%, 7/15/09 7/30 at 102 Aa3 1,593,105 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 6.0% 1,500,000 City of Kansas City, Missouri, General Improvement Airport Revenue Bonds, Series 1996A, 6.900%, 9/01/11 (Alternative Minimum Tax) 9/04 at 101 Aaa 1,692,480 1,000,000 The City of St. Louis, Missouri, Airport Revenue Bonds, Series 1997 (1997 Capital Improvement Program), Lambert-St. Louis International Airport, 6.000%, 7/01/12 (Alternative Minimum Tax) No Opt. Call Aaa 1,117,440 - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 9.5% 1,290,000 Health and Education Facilities Authority of the State of Missouri, Health Facilities Revenue Bonds (SSM Health Care Obligated Group Projects), Series 1990B, 7.000%, 6/01/15 No. Opt. Call Aaa 1,394,516 1,500,000 Certificates of Receipt, Series 1993. St. Louis County, Missouri, GNMA Collateralized Mortgage Revenue Bonds, Series 1989A, 5.650%, 7/01/20 (Alternative Minimum Tax) No Opt. Call AAA 1,643,220 1,275,000 St. Louis Municipal Finance Corporation, Leasehold Revenue Improvement and Refunding Bonds, Series 1992 (City of St. Louis Missouri, Lessee), 6.250%, 2/15/12 (Pre-refunded to 2/15/05) 2/05 at 100 Aaa 1,424,405 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 10.4% 1,225,000 State Environmental Improvement and Energy Resources Authority (State of Missouri), Water Pollution Control Revenue Bonds (State Revolving Fund Program-City of Kansas City Project), Series 1995B, 7.750%, 1/01/08 1/05 at 102 Aa1 1,482,127 1,000,000 State Environmental Improvement and Energy Resources Authority (State of Missouri), Water Pollution Control Revenue Bonds (State Revolving Fund Program-City of Branson Project), Series 1995A, 6.050%, 7/01/16 7/04 at 102 Aaa 1,090,800 1,000,000 State Environmental Improvement and Energy Resources Authority (State of Missouri), Water Pollution Control Revenue Bonds (State Revolving Fund Program-Multiple Participant Series), Series 1996D, 5.875%, 1/01/15 1/06 at 101 Aa1 1,065,430 350,000 State Environmental Improvement and Energy Resources Authority (State of Missouri),Water Pollution Control Revenue Bonds (State Revolving Fund Program-City of Kansas City Project), Series 1997C, 6.750%, 1/01/12 No Opt. Call Aa1 421,046 750,000 The City of St. Louis, Missouri, Water Revenue Refunding and Improvement Bonds, Series 1994, 6.000%, 7/01/14 7/04 at 102 Aaa 819,900 - ------------------------------------------------------------------------------------------------------------------------------------ $ 41,375,000 Total Investments - (costs $42,958,628) - 97.9% 45,961,066 ============= PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEMPORARY INVESTMENTS IN SHORT-TERM MUNICIPAL SECURITIES - 0.6% $ 300,000 The Industrial Development Authority of the City of Independence, Missouri, Variable Rate Demand ============= Industrial Development Revenue Bonds (The Groves and Graceland College Nursing Arts Center Projects), Series 1997A, 4.000%, 11/01/27+ A-1+ $ 300,000 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.5% 674,254 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $ 46,935,320 ==================================================================================================================== * Optional Call Provisions: (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. N/R Investment is not rated. + The security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements.
PORTFOLIO OF INVESTMENTS NUVEEN WASHINGTON PREMIUM INCOME MUNICIPAL FUND (NPW) May 31, 1998
PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ EDUCATIONAL AND CIVIC ORGANIZATIONS - 5.1% $ 1,400,000 Washington State University, Housing and Dining System Revenue and Refunding Bonds, Series 1994, 6.375%, 10/01/18 10/04 at 101 Aaa $ 1,545,684 1,000,000 University of Washington, Housing and Dining System Revenue Refunding Bonds, Junior Lien Series 1996, 5.125%, 12/01/15 12/06 at 102 Aaa 1,007,680 65,000 Western Washington University, Housing and Dining System Revenue Bonds, Series 1992, 6.375%, 10/01/22 10/02 at 101 Aaa 70,153 - ------------------------------------------------------------------------------------------------------------------------------------ HEALTH CARE - 9.9% 2,000,000 Washington Health Care Facilities Authority, Highline Community Hospital, Series 1998, 5.000%, 8/15/21 8/08 at 102 AA 1,915,100 2,000,000 Washington Health Care Authority, Revenue Bonds, Series 1992 (The Children's Hospital and Medical Center, Seattle), 6.125%, 10/01/13 10/02 at 102 Aaa 2,167,900 1,000,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1993A (The Heart Institute of Spokane), 5.800%, 8/15/18 8/04 at 102 AA- 1,038,240 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/MULTIFAMILY - 6.0% 970,000 Washington State Housing Finance Commission, Multifamily Mortgage Revenue Bonds (GNMA Mortgage Backed Securities Program), Series 1989A, 7.700%, 7/01/32 (Alternative Minimum Tax) 1/00 at 103 AAA 1,018,558 2,000,000 Housing Authority of the County of King Washington, Housing Revenue Bonds, 1995 (Woodridge Park Project), 6.350%, 5/01/25 (Alternative Minimum Tax) 5/05 at 100 AA+ 2,087,320 - ------------------------------------------------------------------------------------------------------------------------------------ HOUSING/SINGLE FAMILY - 4.4% 1,610,000 Washington State Housing Finance Commission, Single-Family Mortgage Revenue Bonds (Mortgage Backed Securities Program), Series 1992D-1, 6.150%, 1/01/26 (Alternative Minimum Tax) No Opt. Call AAA 1,751,294 500,000 Washington State Housing Finance Commission, Single Family Program Bonds, 1997 Series 2A, 6.050%, 12/01/16 6/07 at 102 Aaa 524,585 - ------------------------------------------------------------------------------------------------------------------------------------ LONG TERM CARE- 3.5% 1,640,000 Housing Authority of Skagit County, Low-Income Housing Assistance Revenue Bonds, 1993 (GNMA Collateralized Mortgage Loan-Sea Mar Project), 7.000%, 6/20/35 11/04 at 104 AAA 1,839,768 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/GENERAL - 20.7% 2,000,000 State of Washington, General Obligation Bonds, Series 1994B, 6.000%, 5/01/19 5/04 at 100 Aa1 2,108,660 1,655,000 Everett, Limited Tax General Obligation Bonds, 5.125%, 9/01/17 9/07 at 100 Aaa 1,660,313 1,000,000 Federal Way School District No. 210, King County, Washington, Unlimited Tax General Obligation and Refunding Bonds, 1993, 5.750%, 12/01/12 No Opt. Call Aaa 1,108,410 1,360,000 Tahoma School District No. 409, King County, Washington, Unlimited Tax General Obligation Improvement and Refunding Bonds, 1997, 6.000%, 12/01/10 No Opt. Call Aaa 1,544,402 1,000,000 Peninsula School District No. 401, Pierce County, Washington, Unlimited Tax General Obligation Refunding Bonds, 1993, 5.500%, 12/01/09 No Opt. Call Aaa 1,082,980 1,000,000 The City of Renton, Washington, Limited Tax General Obligation Bonds, General Purpose/Public Improvement Bonds, 1997B, 5.750%, 12/01/17 6/07 at 100 Aaa 1,061,290 1,500,000 Mukilteo School District No. 6, Snohomish County, Washington, Unlimited Tax General Obligation and Refunding Bonds, 1993, 5.700%, 12/01/12 No Opt. Call Aaa 1,656,465 500,000 Edmonds School District No. 15, Snohomish County, Washington, Unlimited Tax General Obligation Bonds, Series 1994, 6.500%, 12/01/08 No Opt. Call AA- 579,800 - ------------------------------------------------------------------------------------------------------------------------------------ TAX OBLIGATION/LIMITED - 3.6% Seattle Indian Services Commission, Special Obligation Bonds, 1994: 1,000,000 6.000%, 11/01/16 11/04 at 100 Aa1 1,061,070 750,000 6.150%, 11/01/24 11/04 at 100 Aa1 810,945 - ------------------------------------------------------------------------------------------------------------------------------------ TRANSPORTATION - 4.7% 1,300,000 Port of Seattle, Washington, Revenue Bonds, Series 1996A, 5.500%, 9/01/21 9/06 at 101 Aaa 1,339,806 1,000,000 Port of Vancouver, Clark County, Washington, Limited Tax General Obligation Bonds, 1994 Series B, 6.000%, 12/01/04 (Alternative Minimum Tax) No Opt. Call Aaa 1,099,750 PRINCIPAL OPTIONAL CALL MARKET AMOUNT DESCRIPTION PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ U.S. GUARANTEED - 12.8% $ 1,250,000 Washington Health Care Facilities Authority, Revenue Bonds Refunding Series 1992 (Franciscan Health System/Saint Clare Hospital, Tacoma), 6.625%, 7/01/20 (Pre-refunded to 7/01/02) 7/02 at 102 Aaa $ 1,388,075 2,400,000 Washington Health Care Facilities Authority, Revenue Bonds, Series 1992 (Swedish Hospital Medical Center, Seattle), 6.300%, 11/15/22 (Pre-refunded to 11/15/02) 11/02 at 102 Aaa 2,651,712 1,000,000 Port of Seattle, Washington, Revenue Bonds, Series 1990A, 6.000%, 12/01/14 (Pre-refunded to 12/01/00) 12/00 at 100 AA-*** 1,048,400 1,435,000 Western Washington University, Housing and Dining System Revenue Bonds, 6.375%, 10/01/22 (Pre-refunded to 10/01/02) 10/02 at 101 Aaa 1,576,391 - ------------------------------------------------------------------------------------------------------------------------------------ UTILITIES - 14.3% 1,000,000 Washington Public Power Supply System, Nuclear Project No. 1, Refunding Revenue Bonds, Series 1993A, 5.700%, 7/01/17 7/03 at 102 Aaa 1,034,010 1,000,000 Washington Public Power Supply System, Nuclear Project No. 3, Refunding Revenue Bonds, Series 1993B, 7.000%, 7/01/09 No Opt. Call Aa1 1,187,880 1,100,000 Public Utility District No. 1 of Klickitat County, Washington, Electric Revenue Bonds, 1995, 5.650%, 10/01/15 10/05 at 101 Aaa 1,155,220 1,000,000 Lewis County Public Utility District, Cowlitz Falls Hydroelectric Project, Revenue Refunding Bonds, Series 1993, 5.500%, 10/01/22 10/03 at 102 Aa1 1,018,640 500,000 The City of Seattle, Washington, Municipal Light and Power Revenue Bonds, 1992A, 5.750%, 8/01/12 8/02 at 102 AA 531,015 1,000,000 City of Seattle, Washington, Municipal Light and Power Revenue Bonds, 5.625%, 10/01/21 10/06 at 102 Aaa 1,046,620 1,385,000 Public Utility District No. 1 of Snohomish County, Washington, Generation System Revenue Bonds, Series 1993B, 5.750%, 1/01/09 (Alternative Minimum Tax) 1/04 at 102 A1 1,466,438 - ------------------------------------------------------------------------------------------------------------------------------------ WATER AND SEWER - 13.2% 1,050,000 City of Bellevue, King County, Washington, Water and Sewer Revenue Refunding Bonds, 1994, 5.875%, 7/01/09 7/04 at 100 Aa 1,128,708 1,035,000 Covington Water District, Water Revenue Bonds, Refunding Series 1995, 6.050%, 3/01/20 3/05 at 100 Aaa 1,102,844 800,000 Kitsap County, Washington, Sewer Revenue Bonds, 1996, 5.750%, 7/01/16 7/06 at 100 Aaa 844,376 900,000 City of Richland, Washington, Water and Sewer Improvement Revenue Bonds, 1993, 5.625%, 4/01/12 4/03 at 100 Aaa 945,441 1,200,000 Sammamish Plateau Water and Sewer District, King County, Washington, Water and Sewer Revenue Refunding Bonds, 1996, 5.500%, 12/01/16 12/06 at 100 Aaa 1,234,452 500,000 The City of Seattle, Washington, Water System and Refunding Revenue Bonds, 1993, 5.250%, 12/01/23 6/03 at 101 AA 500,870 1,000,000 Yakima-Tieton Irrigation District, Yakima County, Washington, Refunding Revenue Bonds, 1992, 6.125%, 6/01/13 6/03 at 102 Aaa 1,090,470 - ------------------------------------------------------------------------------------------------------------------------------------ $ 47,805,000 Total Investments - (cost $47,643,718) - 98.2% 51,031,735 ============= Temporary Investments in Short-Term Municipal Securities - 0.4% $ 200,000 Washington Health Care Facilities Authority, Variable Rate Demand Revenue Bonds (Sisters of ============= Providence), Series 1985B, 3.950%, 10/01/05+ VMIG-1 200,000 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.4% 716,360 -------------------------------------------------------------------------------------------------------------------- Net Assets - 100% $ 51,948,095 ==================================================================================================================== * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. government or U.S. government agency securities which ensures the timely payment of principal and interest. Securities are normally considered to be equivalent to AAA rated securities. + The security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements.
STATEMENT OF NET ASSETS May 31, 1998
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments in municipal securities, at market value (note 1) $111,997,081 $100,775,384 $45,961,066 $51,031,735 Temporary investments in short-term municipal securities, at amortized cost, which approximates market value (note 1) -- 300,000 300,000 200,000 Cash -- 230,610 22,063 57,938 Receivables: Interest 1,969,949 1,852,756 842,644 883,115 Investments sold -- 200,000 -- -- Other assets 13,877 12,307 4,418 2,918 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 113,980,907 103,371,057 47,130,191 52,175,706 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft 133,034 -- -- -- Accrued expenses: Management fees (note 6) 62,157 56,478 25,741 28,462 Other 47,720 45,592 30,971 47,606 Preferred share dividends payable 9,441 6,988 5,326 5,380 Common share dividends payable 344,483 326,029 132,833 146,163 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 596,835 435,087 194,871 227,611 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets (note 7) $113,384,072 $102,935,970 $46,935,320 $51,948,095 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value $ 38,300,000 $ 34,000,000 $16,000,000 $17,000,000 ==================================================================================================================================== Preferred shares outstanding 1,532 1,360 640 680 ==================================================================================================================================== Common shares outstanding 5,180,192 4,624,524 2,142,460 2,320,051 ==================================================================================================================================== Net asset value per Common share outstanding (net assets less Preferred shares at liquidation value, divided by Common shares outstanding) $ 14.49 $ 14.91 $ 14.44 $ 15.06 ==================================================================================================================================== See accompanying notes to financial statements.
STATEMENT OF OPERATIONS Year Ended May 31, 1998
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON INVESTMENT INCOME (NOTE 1) $6,139,952 $5,781,968 $2,581,960 $2,832,407 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees (note 6) 726,805 661,353 301,470 333,129 Preferred shares - auction fees 95,750 85,001 40,000 42,501 Preferred shares - dividend disbursing agent fees 9,629 9,548 9,629 9,548 Shareholders' servicing agent fees and expenses 17,063 8,584 7,125 2,997 Custodian's fees and expenses 38,206 37,528 32,810 32,080 Trustees' fees and expenses (note 6) 1,991 1,893 1,363 1,408 Professional fees 17,228 16,910 16,732 16,554 Shareholders' reports - printing and mailing expenses 31,228 28,835 20,183 7,333 Stock exchange listing fees 16,188 16,183 1,979 2,121 Investor relations expense 9,701 8,222 4,190 3,945 Other expenses 16,793 16,523 12,353 12,446 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses 980,582 890,580 447,834 464,062 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 5,159,370 4,891,388 2,134,126 2,368,345 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN FROM INVESTMENTS Net realized gain from investment transactions (notes 1 and 4) 422,013 671,439 380,799 94,941 Net change in unrealized appreciation or depreciation of investments 4,143,106 3,102,632 1,267,040 2,195,317 - ------------------------------------------------------------------------------------------------------------------------------------ Net gain from investments 4,565,119 3,774,071 1,647,839 2,290,258 - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets from operations $9,724,489 $8,665,459 $3,781,965 $4,658,603 ==================================================================================================================================== See accompanying notes to financial statements.
STATEMENT OF CHANGES IN NET ASSETS
CONNECTICUT MASSACHUSETTS - ----------------------------------------------------------------------------------------------------------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/98 5/31/97 5/31/98 5/31/97 - ----------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 5,159,370 $ 5,134,299 $ 4,891,388 $ 4,887,537 Net realized gain (loss) from investment transactions (notes 1 and 4) 422,013 (580,033) 671,439 (139,469) Net change in unrealized appreciation or depreciation of investments 4,143,106 3,607,938 3,102,632 2,550,049 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from operations 9,724,489 8,162,204 8,665,459 7,298,117 - ----------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1) From undistributed net investment income: Common shareholders (4,108,452) (3,909,724) (3,905,877) (3,840,666) Preferred shareholders (1,169,485) (1,050,779) (1,096,311) (1,017,157) - ----------------------------------------------------------------------------------------------------------------------------------- Decrease in net assets from distributions to shareholders (5,277,937) (4,960,503) (5,002,188) (4,857,823) - ----------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 2) Net proceeds from Common shares issued to shareholders due to reinvestment of distributions 413,844 394,287 266,611 262,693 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from capital share transactions 413,844 394,287 266,611 262,693 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets 4,860,396 3,595,988 3,929,882 2,702,987 Net assets at beginning of year 108,523,676 104,927,688 99,006,088 96,303,101 - ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $113,384,072 $108,523,676 $102,935,970 $99,006,088 =================================================================================================================================== Balance of undistributed net investment income at end of year $ 284,103 $ 402,670 $ 214,228 $ 325,028 =================================================================================================================================== MISSOURI WASHINGTON - ----------------------------------------------------------------------------------------------------------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/98 5/31/97 5/31/98 5/31/97 - ----------------------------------------------------------------------------------------------------------------------------------- OPERATIONS Net investment income $ 2,134,126 $ 2,125,190 $ 2,368,345 $ 2,371,693 Net realized gain (loss) from investment transactions (notes 1 and 4) 380,799 135,827 94,941 22,234 Net change in unrealized appreciation or depreciation of investments 1,267,040 1,026,731 2,195,317 1,324,756 - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from operations 3,781,965 3,287,748 4,658,603 3,718,683 - ----------------------------------------------------------------------------------------------------------------------------------- DISTRIBUTIONS TO SHAREHOLDERS (NOTE 1) From undistributed net investment income: Common shareholders (1,629,870) (1,553,262) (1,753,958) (1,742,358) Preferred shareholders (526,508) (524,137) (596,423) (602,507) - ----------------------------------------------------------------------------------------------------------------------------------- Decrease in net assets from distributions to shareholders (2,156,378) (2,077,399) (2,350,381) (2,344,865) - ----------------------------------------------------------------------------------------------------------------------------------- CAPITAL SHARE TRANSACTIONS (NOTE 2) Net proceeds from Common shares issued to shareholders due to reinvestment of distributions 85,411 -- -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets from capital share transactions 85,411 -- -- -- - ----------------------------------------------------------------------------------------------------------------------------------- Net increase in net assets 1,710,998 1,210,349 2,308,222 1,373,818 Net assets at beginning of year 45,224,322 44,013,973 49,639,873 48,266,055 - ----------------------------------------------------------------------------------------------------------------------------------- Net assets at end of year $46,935,320 $45,224,322 $51,948,095 $49,639,873 =================================================================================================================================== Balance of undistributed net investment income at end of year $ 156,882 $ 179,134 $ 105,628 $ 87,664 =================================================================================================================================== See accompanying notes to financial statements.
NOTES TO FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The state Funds (the "Funds") covered in this report and their corresponding stock exchange symbols are Nuveen Connecticut Premium Income Municipal Fund (NTC), Nuveen Massachusetts Premium Income Municipal Fund (NMT), Nuveen Missouri Premium Income Municipal Fund (NOM) and Nuveen Washington Premium Income Municipal Fund (NPW). Connecticut and Massachusetts are traded on the New York Stock Exchange while Missouri and Washington are traded on the American Stock Exchange. Each Fund invests primarily in a diversified portfolio of municipal obligations issued by state and local government authorities within a single state. The Funds are registered under the Investment Company Act of 1940 as closed-end, diversified management investment companies. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with generally accepted accounting principles. Securities Valuation The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Trustees. When price quotes are not readily available (which is usually the case for municipal securities), the pricing service establishes fair market value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers and general market conditions. Temporary investments in securities that have variable rate and demand features qualifying them as short-term securities are valued at amortized cost, which approximates market value. Securities Transactions Securities transactions are recorded on a trade date basis. Realized gains and losses from such transactions are determined on the specific identification method. Securities purchased or sold on a when-issued or delayed delivery basis may have extended settlement periods. The securities so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets in a separate account with a current value at least equal to the amount of the when-issued and delayed delivery purchase commitments. At May 31, 1998, there were no such outstanding purchase commitments in any of the Funds. Investment Income Interest income is determined on the basis of interest accrued, adjusted for amortization of premiums and accretion of discounts on long-term debt securities when required for federal income tax purposes. Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its tax-exempt net investment income, in addition to any significant amounts of net realized capital gains and/or market discount realized from investment transactions. The Funds currently consider significant net realized capital gains and/or market discount as amounts in excess of $.01 per Common share. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal and designated state income taxes, if any, to retain such tax-exempt status when distributed to shareholders of the Funds. All monthly tax-exempt income dividends paid during the fiscal year ended May 31, 1998, have been designated Exempt Interest Dividends. Net realized capital gain and market discount distributions are subject to federal taxation. Dividends and Distributions to Shareholders Tax-exempt net investment income is declared as a dividend monthly and payment is made or reinvestment is credited to shareholder accounts on the first business day after month-end. Net realized capital gains and/or market discount from investment transactions, 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 shareholders of tax-exempt net investment income, net realized capital gains and/or market discount are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from generally accepted accounting principles. Accordingly, temporary over-distributions as a result of these differences may occur and will be classified as either distributions in excess of net investment income, distributions in excess of net realized gains and/or distributions in excess of net ordinary taxable income from investment transactions, where applicable. Preferred Shares The Funds have issued and outstanding $25,000 stated value Preferred shares. Each Fund's Preferred shares are issued in one Series. The dividend rate on each Series may change every seven days, as set by the auction agent. The number of shares outstanding for each Fund is as follows:
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON - ---------------------------------------------------------------------------------------------------------- Number of Shares: Series Th 1,532 1,360 640 680 ==========================================================================================================
Derivative Financial Instruments The Funds may invest in transactions in certain derivative financial instruments including futures, forward, swap, option contracts, and other financial instruments with similar characteristics. Although the Funds are authorized to invest in such financial instruments, and may do so in the future, they did not make any such investments during the fiscal year ended May 31, 1998. Use of Estimates The preparation of financial statements in conformity with 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 from operations during the reporting period. 2. FUND SHARES Transactions in Common shares were as follows:
CONNECTICUT MASSACHUSETTS - ---------------------------------------------------------------------------------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/98 5/31/97 5/31/98 5/31/97 - ---------------------------------------------------------------------------------------------------------- Shares issued to shareholders due to reinvestment of distributions 27,446 25,362 17,254 18,609 ========================================================================================================== MISSOURI WASHINGTON - ---------------------------------------------------------------------------------------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 5/31/98 5/31/97 5/31/98 5/31/97 - ---------------------------------------------------------------------------------------------------------- Shares issued to shareholders due to reinvestment of distributions 5,923 -- -- -- ==========================================================================================================
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on July 1, 1998, to shareholders of record on June 15, 1998, as follows:
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON - ---------------------------------------------------------------------------------------------------------- Dividend per share $.0665 $.0705 $.0620 $.0630 ==========================================================================================================
4. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in municipal securities and temporary municipal investments for the year ended May 31, 1998, were as follows:
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON - ---------------------------------------------------------------------------------------------------------- Purchases: Investments in municipal securities $16,347,950 $16,775,239 $12,062,820 $4,928,148 Temporary municipal investments 5,600,000 8,300,000 4,800,000 4,600,000 Sales and Maturities: Investments in municipal securities 14,670,110 16,722,320 11,650,583 4,939,330 Temporary municipal investments 6,300,000 8,200,000 7,800,000 4,400,000 ==========================================================================================================
At May 31, 1998, the identified cost of investments owned for federal income tax purposes was the same as the cost for financial reporting purposes for each Fund. At May 31, 1998, the Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows:
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON - ---------------------------------------------------------------------------------------------------------- Expiration year: 2003 $ 895,482 $ 615,511 $ 949,075 $469,931 2004 1,105,901 945,779 708,417 70,082 2005 847,914 195,761 -- -- - ---------------------------------------------------------------------------------------------------------- Total $2,849,297 $1,757,051 $1,657,492 $540,013 ==========================================================================================================
5. UNREALIZED APPRECIATION (DEPRECIATION) Gross unrealized appreciation and gross unrealized depreciation of investments at May 31, 1998, were as follows:
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON - --------------------------------------------------------------------------------------------------------- Gross unrealized: appreciation $6,012,681 $6,441,166 $3,002,438 $3,394,435 depreciation (41,194) -- -- (6,418) - --------------------------------------------------------------------------------------------------------- Net unrealized appreciation $5,971,487 $6,441,166 $3,002,438 $3,388,017 =========================================================================================================
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Under the Funds' investment management agreements with Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund pays an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net asset value of each Fund as follows:
AVERAGE DAILY NET ASSET VALUE MANAGEMENT FEE - ----------------------------------------------------------------------------------------------------------- For the first $125 million .6500 of 1% For the next $125 million .6375 of 1 For the next $250 million .6250 of 1 For the next $500 million .6125 of 1 For the next $1 billion .6000 of 1 For net assets over $2 billion .5875 of 1 ===========================================================================================================
The fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its 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. 7. COMPOSITION OF NET ASSETS At May 31, 1998, net assets consisted of:
CONNECTICUT MASSACHUSETTS MISSOURI WASHINGTON - ---------------------------------------------------------------------------------------------------------- Preferred shares, $25,000 stated value per share, at liquidation value $ 38,300,000 $ 34,000,000 $16,000,000 $17,000,000 Common shares, $.01 par value per share 51,802 46,245 21,425 23,201 Paid-in surplus 71,625,977 63,991,382 29,412,067 31,971,262 Balance of undistributed net investment income 284,103 214,228 156,882 105,628 Accumulated net realized gain (loss) from investment transactions (2,849,297) (1,757,051) (1,657,492) (540,013) Net unrealized appreciation of investments 5,971,487 6,441,166 3,002,438 3,388,017 - ---------------------------------------------------------------------------------------------------------- Net assets $113,384,072 $102,935,970 $46,935,320 $51,948,095 ========================================================================================================== Authorized shares: Common Unlimited Unlimited Unlimited Unlimited Preferred Unlimited Unlimited Unlimited Unlimited ==========================================================================================================
Financial Highlights Selected data for a Common share outstanding throughout each period is as follows:
Investment Operations Less Distributions -------------------------------------------- ------------------------------------------------ Net Net Net Realized/ Investment Investment Capital Capital Beginning Net Unrealized Income Income Gain Gain Net Asset Investment Investment To Common To Preferred To Common To Preferred Value Income Gain (Loss) Total Shareholders Shareholders+ Shareholders Shareholders+ Total Connecticut Year Ended 5/31: 1998 $ 13.63 $ 1.00 $ .89 $ 1.89 $ (.80) $ (.23) $-- $-- $ (1.03) 1997 12.99 1.00 .60 1.60 (.76) (.20) -- -- (.96) 1996 13.20 .98 (.21) .77 (.73) (.25) -- -- (.98) 1995 12.45 .98 .74 1.72 (.74) (.23) -- -- (.97) 1994 13.96 .77 (1.40) (.63) (.61) (.13) -- -- (.74) Massachusetts Year Ended 5/31: 1998 14.11 1.06 .83 1.89 (.85) (.24) -- -- (1.09) 1997 13.58 1.06 .53 1.59 (.84) (.22) -- -- (1.06) 1996 13.76 1.05 (.19) .86 (.80) (.24) -- -- (1.04) 1995 12.90 1.04 .84 1.88 (.78) (.24) -- -- (1.02) 1994 14.08 .87 (1.01) (.14) (.74) (.15) -- -- (.89) Missouri Year Ended 5/31: 1998 13.68 .99 .78 1.77 (.76) (.25) -- -- (1.01) 1997 13.11 1.00 .55 1.55 (.73) (.25) -- -- (.98) 1996 13.37 .96 (.30) .66 (.67) (.25) -- -- (.92) 1995 12.35 .95 1.02 1.97 (.69) (.26) -- -- (.95) 1994 13.90 .76 (1.40) (.64) (.59) (.14) -- -- (.73) Washington Year Ended 5/31: 1998 14.07 1.02 .99 2.01 (.76) (.26) -- -- (1.02) 1997 13.48 1.02 .58 1.60 (.75) (.26) -- -- (1.01) 1996 13.71 1.02 (.23) .79 (.74) (.28) -- -- (1.02) 1995 12.97 1.01 .77 1.78 (.77) (.27) -- -- (1.04) 1994 14.09 .91 (.93) (.02) (.76) (.16) (.01) -- (.93) Total Returns ----------------------------- Organization and Offering Costs and Preferred Share Ending Underwriting Net Asset Ending Based on Based on Net Discounts Value Market Value Market Value** Asset Value** Connecticut Year Ended 5/31: 1998 $-- $14.49 $15.5000 15.61% 12.39% 1997 -- 13.63 14.1250 9.58 11.01 1996 -- 12.99 13.6250 14.06 3.97 1995 -- 13.20 12.6250 2.22 12.74 1994 (.14) 12.45 13.1250 (8.73) (6.74) Massachusetts Year Ended 5/31: 1998 -- 14.91 16.5000 18.08 11.91 1997 -- 14.11 14.7500 13.76 10.28 1996 -- 13.58 13.7500 8.99 4.55 1995 -- 13.76 13.3750 14.12 13.58 1994 (.15) 12.90 12.5000 (13.64) (3.38) Missouri Year Ended 5/31: 1998 -- 14.44 14.1875 14.53 11.31 1997 -- 13.68 13.0625 10.53 10.09 1996 -- 13.11 12.5000 10.07 3.09 1995 -- 13.37 12.0000 6.13 14.74 1994 (.18) 12.35 12.0000 (17.26) (7.16) Washington Year Ended 5/31: 1998 -- 15.06 13.6250 15.26 12.64 1997 -- 14.07 12.5000 12.94 10.16 1996 -- 13.48 11.7500 7.44 3.75 1995 -- 13.71 11.6250 .41 12.36 1994 (.17) 12.97 12.3750 (16.88) (2.73) Ratios/Supplemental Data ---------------------------------------------------- Ratio of Net Ratio of Investment Ending Expenses to Income to Portfolio Net Assets Average Average Turnover (000) Net Assets++ Net Assets++ Rate Connecticut Year Ended 5/31: 1998 $ 113,384 .88% 4.61% 13% 1997 108,524 .89 4.79 18 1996 104,928 .89 4.71 15 1995 105,851 .92 4.99 18 1994 101,595 .95 3.95 9 Massachusetts Year Ended 5/31: 1998 102,936 .88 4.81 17 1997 99,006 .88 4.99 22 1996 96,303 .88 4.95 18 1995 97,071 .94 5.20 29 1994 93,078 .97 4.26 33 Missouri Year Ended 5/31: 1998 46,935 .97 4.60 25 1997 45,224 .99 4.74 36 1996 44,014 1.01 4.57 34 1995 44,566 1.08 4.86 34 1994 42,343 1.05 3.92 39 Washington Year Ended 5/31: 1998 51,948 .91 4.62 10 1997 49,640 .94 4.83 11 1996 48,266 .94 4.81 20 1995 48,812 1.04 5.04 16 1994 47,095 1.08 4.42 29 * Annualized. ** Total Investment Return on Market Value is the combination of reinvested dividend income, reinvested capital gain distributions, if any, and changes in stock price per share. Total Return on Net Asset Value is the combination of reinvested dividend income, reinvested capital gain distributions, if any, and changes in net asset value per share. Total returns are not annualized. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to preferred shareholders.
Building a Better Portfolio Can Make You a Successful Investor NUVEEN FAMILY OF MUTUAL FUNDS Nuveen offers a variety of funds designed to help you reach your financial goals. GROWTH Nuveen Rittenhouse Growth Fund GROWTH AND INCOME European Value Fund Growth and Income Stock Fund Balanced Stock and Bond Fund Balanced Municipal and Stock Fund TAX-FREE INCOME NATIONAL FUNDS Long-Term Insured Intermediate-Term Limited-Term STATE FUNDS Alabama Arizona California Colorado Connecticut Florida Georgia Kansas Kentucky Louisiana Maryland Massachusetts Michigan Missouri New Jersey New Mexico New York North Carolina Ohio Pennsylvania South Carolina Tennessee Virginia Wisconsin Successful investors know that a well-diversified portfolio - one that balances different types of investments, levels of risk and tax management - can be the foundation for building and sustaining wealth. That's why Nuveen offers you and your financial adviser a wide range of quality investments that can help you build a better portfolio in the pursuit of your financial goals Exchange-Traded Funds Nuveen Exchange-Traded Funds offer investors actively managed portfolios of investment-grade quality municipal bonds. The fund shares are listed and traded on the New York and American stock exchanges. Exchange-traded funds provide the investment convenience, price visibility and liquidity of common stocks. MuniPreferred(R) Nuveen MuniPreferred offers investors a AAA rated investment with an attractive tax-free yield for the cash reserves portion of an investment portfolio. MuniPreferred shares are backed 2-to-1 by the long-term portfolios of Nuveen dual-class exchange-traded funds and are available for national as well as a wide variety of state-specific portfolios. Mutual Funds Nuveen offers a family of equity, balanced and municipal bond funds featuring Premier AdvisersSM including Institutional Capital Corporation, Rittenhouse Financial Services, and Nuveen Advisory Corp. Each brings a specialized expertise in a particular investment style or asset class, time-tested investment strategies and a focus on consistent, long-term performance. With Nuveen's Premier Adviser funds, you have all the advantages of a family of funds plus the benefits of specialized investment expertise. Private Asset Management Rittenhouse Financial Services and Nuveen Asset Management offer comprehensive, customized investment management solutions to investors with assets of $250,000 or more to invest. A range of actively managed growth, balanced and municipal income-oriented portfolios are available, all based upon a disciplined investment philosophy. Defined Portfolios Nuveen Defined Portfolios are fixed portfolios of quality securities that are a convenient, attractive alternative to purchasing individual securities. They provide low-cost diversification to reduce risk, experienced, professional security selection and surveillance and daily liquidity at that day's net asset value for quick access to your assets. Fund Information BOARD OF TRUSTEES Robert P. Bremner Lawrence H. Brown Anthony T. Dean Anne E. Impellizzeri Peter R. Sawers William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale FUND MANAGER Nuveen Advisory Corp. 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN, TRANSFER AGENT AND SHAREHOLDER SERVICES The Chase Manhattan Bank 4 New York Plaza New York, NY 10004-2413 (800) 257-8787 LEGAL COUNSEL Morgan, Lewis & Bockius LLP Washington, D.C. INDEPENDENT AUDITORS Ernst & Young LLP Chicago, IL YEAR 2000 The concern that computer systems may have problems processing date-related information in the year 2000 and beyond has challenged businesses and organizations to thoroughly review all aspects of their operations. We have undertaken just such an approach at Nuveen in preparation for the millennium. Over the last 10 years, our trading, fund management and pricing systems at Nuveen - the systems that directly affect our investors and their financial advisers - have been updated or replaced to address the Year 2000 concerns. We continue to work closely with our transfer agent, custodian and other service partners to monitor readiness and address other remaining systems issues. Our initial testing indicates we are on schedule, and we have targeted year-end 1998 to complete verification of vendor compliance and service partner readiness. However, we can give no complete assurance at this time that the steps we have taken will be sufficient to prevent any problems that would impact the Nuveen Exchange-Traded Funds. 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 12-month period ended May 31, 1998. Any future repurchases will be reported to shareholders in the next annual or semiannual report. Serving Investors for Generations Photo of: JOHN NUVEEN, SR. Since our founding in 1898, John Nuveen & Co. has been synonymous with investments that withstand the test of time. Today we offer a broad range of quality investments designed for individuals seeking to build and sustain wealth. In fact, more than 1.3 million investors have trusted Nuveen to help them pursue their financial goals. The cornerstone of Nuveen's investment philosophy is a commitment to disciplined long-term investment strategies focused on providing consistent, attractive performance over time - with moderated risk. We emphasize quality securities carefully chosen through in-depth research, and we follow those securities closely over time to ensure that they continue to meet our exacting standards. Whether your focus is long-term growth, dependable current income or sustaining accumulated wealth, Nuveen offers a wide variety of investments and services to help meet your unique circumstances and financial planning needs. Our equity, balanced, and tax-free income funds, along with our defined portfolios and private asset management, can help you build a better, well-diversified portfolio. Talk with your financial adviser to learn more about how Nuveen investment products and services can help you. Or call us at (800) 257-8787 for more information, including a prospectus where applicable. Please read that information carefully before investing. LOGO: 1898 - 1998 NUVEEN OUR SECOND CENTURY helping investors sustain the wealth of a lifetime.(tm) John Nuveen & Co. Incorporated 333 West Wacker Drive Chicago, IL60606-1286 www.nuveen.com FAN-3-5-98 -----END PRIVACY-ENHANCED MESSAGE-----