UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21153
---------------------
Nuveen Maryland Dividend Advantage Municipal Fund 3
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------
(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------
(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
-------------------
Date of fiscal year end: May 31
------------------
Date of reporting period: May 31, 2005
------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT MAY 31, 2005
Nuveen Investments
Municipal Closed-End
Exchange-Traded
Funds
NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND
NMY
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND
NFM
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NZR
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NWI
NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND
NPV
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NGB
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NNB
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Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
CHAIRMAN'S
LETTER TO SHAREHOLDERS
Once again, I am pleased to report that over the 12-month period covered by this
report your Fund continued to provide you with monthly tax-free income and an
attractive total return. For more details about the management strategy and
performance of your Fund, please see the Portfolio Manager's Comments and
Performance Overview sections of this report.
As I noted in my last letter to you, many market observers are wondering whether
longer-term interest rates will soon begin to rise substantially, mirroring the
rise that has taken place over the past year in shorter-term rates. If
longer-term rates do begin to rise significantly, some have suggested that this
would be a signal to begin adjusting your holdings of fixed-income investments.
Nobody knows what the market will do in the future. But from our experience, we
do know that a well-balanced portfolio, structured and carefully monitored with
the help of a trusted investment professional, can be an important component in
helping you achieve your long-term financial goals. In fact, a well-diversified
portfolio may actually help to reduce your overall
"IN FACT, A WELL-DIVERSIFIED PORTFOLIO MAY ACTUALLY HELP TO REDUCE YOUR OVERALL
INVESTMENT RISK OVER THE LONG TERM."
investment risk over the long term. That is one reason why we believe that a
municipal bond investment like your Nuveen Fund can be an important building
block in a comprehensive investment program designed to perform well in a
variety of market conditions.
As in past reports, I urge you to consider receiving future Fund reports and
other Fund information by e-mail and the Internet. Not only will you be able to
receive the information faster, but this also may help lower your Fund's
expenses. Sign up is quick and easy - see the inside front cover of this report
for instructions.
You may have heard that in April, 2005, The St. Paul Travelers Companies, Inc.,
which owned 79% of Nuveen Investments, Inc. (the parent of your Fund's
investment adviser) completed a public offering of a substantial portion of its
equity stake in Nuveen. At the same time, St. Paul Travelers also entered into
agreements to sell the balance of its shares in Nuveen to us or to others at a
future date.
These transactions had, and will have, no impact on the investment objectives or
management of your Fund. However, taken as a whole they are considered to be an
"assignment" of your Fund's investment management agreement. This means that you
and your fellow Fund shareholders will be asked to formally approve the
continuation of your Fund's management contract with Nuveen. We recently sent
you more information about this process. Be sure to read the information
carefully and return your completed proxy form by the date indicated.
At Nuveen Investments, our mission continues to be to assist you and your
financial advisor by offering investment services and products that can help you
to secure your financial objectives. We are grateful that you have chosen us as
a partner as you pursue your financial goals, and we look forward to continuing
to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
July 15, 2005
Nuveen Investments Maryland and Virginia Municipal Closed-End Exchange-Traded
Funds (NMY, NFM, NZR, NWI, NPV, NGB, NNB)
PORTFOLIO MANAGER'S
COMMENTS
Portfolio manager Paul Brennan reviews the economic and municipal market
environments, key investment strategies and the annual performance of these
Funds. Paul, who has 14 years of investment experience, including 8 years with
Nuveen, has managed NMY and NPV since 1999; NFM, NZR, NGB and NNB since 2001;
and NWI since 2002.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE 12-MONTH
REPORTING PERIOD ENDED MAY 31, 2005?
During this 12-month reporting period, the Federal Reserve implemented eight
separate one-quarter-point increases in the fed funds rate. These increases,
which were intended to help control economic growth and head off an increase in
the rate of inflation, raised this short-term target rate to 3.00% from 1.00%.
(On June 30, 2005, after the close of this reporting period, the fed funds rate
was raised another quarter point to 3.25%.) As the Fed raised short-term rates,
many market observers expected to see longer-term interest rates increase as
well. However, yields on longer-term municipal bonds (as measured by the
widely-followed Bond Buyer 25 Revenue Bond Index) actually declined by 61 basis
points during this reporting period. This resulted in a flattening of the
municipal market yield curve over the 12-month period.
The Fed's actions during this period seem to have helped the U.S. maintain a
fairly steady economic expansion. After growing at an annualized rate of 3.3% in
the second quarter of 2004, the U.S. gross domestic product (GDP) grew by 4.0%
in the third quarter of 2004 and by 3.8% in both the fourth quarter of 2004 and
the first quarter of 2005. The year-over-year increase in the Consumer Price
Index (CPI) as of May 31, 2005, was a modest 2.8%, while unemployment in May
2005 dropped to 5.1% nationally, down from 5.6% in May 2004.
HOW ABOUT ECONOMIC AND MARKET CONDITIONS IN MARYLAND AND VIRGINIA?
Maryland's economy continued to expand at a slow but steady pace over the
12-month period, with good job growth across a variety of industries. Increased
federal spending, tourism and ties to the Washington D.C. economy boosted the
state's economy and offset the impact of declines in manufacturing,
transportation and warehousing. As of May 2005, unemployment in Maryland was
4.2%, on par with May 2004 and well below the national average. Maryland is one
of the few states that has managed to maintain
4
healthy reserves despite a difficult budget environment. However, pressures
remain, given the rapid growth in Medicaid and education expenditures. As of May
31, 2005, Maryland's general obligation debt, which is constitutionally limited
to a maximum term of 15 years, carried Aaa/AAA/AAA ratings from Moody's,
Standard & Poor's, and Fitch, respectively. For the 12 months ended May 31,
2005, Maryland issuers offered $5.0 billion in new municipal debt, a decrease of
23% from the previous 12-month period.
Over the 12-month period, Virginia continued to outperform the national economy.
Construction and professional and business services led employment growth and
offset continuing job losses in manufacturing and telecommunications. Federal
spending remained a key growth driver, accounting for a third of the job growth
over the past year, with the strongest growth concentrated in northern Virginia.
In May 2005, Virginia's unemployment rate was 3.6%, slightly below the 3.7%
level of May 2004. As of May 31, 2005, Moody's, Standard & Poor's, and Fitch
rated Virginia's general obligation debt at Aaa/AAA/AAA, respectively. During
the 12-month reporting period ended May 31, 2005, new municipal issuance in
Virginia increased 48% from that of the previous 12 months, totaling $9.6
billion.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE MARYLAND AND VIRGINIA FUNDS DURING
THE 12 MONTHS ENDED MAY 31, 2005?
With many market participants anticipating higher interest rates throughout this
reporting period, our focus continued to be on finding bonds that we believed
would add immediate value to the Funds' portfolios while also offering the
potential to perform well under a variety of future market scenarios.
Overall, our purchase activity in these Funds emphasized bonds in the
intermediate part of the yield curve, that is, bonds that mature in 10 to 20
years. We believed that in Maryland and Virginia this part of the curve
generally offered the most attractive opportunities and the best values during
this period. We also placed an emphasis on purchasing premium bonds, which are
bonds that at the time of purchase were trading above their par values because
their coupons were higher than current interest rate levels. These bonds have
been in great demand recently, since historically they have held their value
better than current coupon bonds when interest rates rise.
5
The majority of our new purchases over this period included insured or highly
rated bonds, reflecting the overall high credit quality of new issue supply.
However, while the municipal markets in Maryland and Virginia did not provide
many opportunities to purchase non-rated bonds, or bonds rated BBB and lower,
during this period, we continued to look for these lower-rated issues.
Lower-rated bonds were generally among the best performers during this period.
Some of the additions to the Maryland and Virginia Funds during this period were
financed with the proceeds from sales of older pre-refunded bonds and other
"defensive" bonds with shorter maturities, which tended to underperform in the
generally bullish interest rate environment of the past 12 months.
As discussed in our last shareholder report, in late 2004 we began using forward
interest rate swaps, a type of derivative financial instrument, in an attempt to
reduce some of the interest rate risk in NFM, NZR, NWI and NNB. It is important
to note that we did not use these hedges in an attempt to profit from correctly
predicting the timing and direction of interest rate movements. Instead, our
sole objective was to reduce these Funds' durations (and therefore their price
sensitivity to interest rate changes) without having a negative impact on their
income streams or common share dividends over the short term. The gain or loss
from each Fund's hedging activity is reflected as an addition or subtraction to
the Fund's net asset value (NAV) as the market value of each hedge fluctuates.
The hedges were effective in helping to reduce the NAV volatility of these Funds
over the course of this reporting period. However, they did have negative
impacts on each Fund's total return during this period because declining
long-term interest rates caused the value of the hedges to decline as the value
of each Fund's portfolio rose.
HOW DID THE FUNDS PERFORM?
Individual results for these Funds, as well as for comparative indexes and
averages, are presented in the accompanying table.
TOTAL RETURNS ON NET ASSET VALUE*
For periods ended 5/31/05
MARYLAND FUNDS 1-YEAR 5-YEAR 10-YEAR
--------------------------------------------------------------------------------
NMY 12.52% 9.75% 7.24%
--------------------------------------------------------------------------------
NFM 11.60% NA NA
--------------------------------------------------------------------------------
NZR 12.22% NA NA
--------------------------------------------------------------------------------
NWI 12.67% NA NA
--------------------------------------------------------------------------------
6
VIRGINIA FUNDS 1-YEAR 5-YEAR 10-YEAR
--------------------------------------------------------------------------------
NPV 12.13% 9.62% 7.55%
--------------------------------------------------------------------------------
NGB 14.46% NA NA
--------------------------------------------------------------------------------
NNB 13.75% NA NA
--------------------------------------------------------------------------------
Lehman Brothers
Municipal Bond Index1 7.96% 7.30% 6.22%
--------------------------------------------------------------------------------
Lipper Other States
Municipal Debt
Funds Average2 12.61% 9.88% 7.10%
--------------------------------------------------------------------------------
* Annualized
Past performance is not predictive of future results. Current performance may be
higher or lower than the data shown. Returns do not reflect the deduction of
taxes that shareholders may have to pay on Fund distributions or upon the sale
of Fund shares.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the 12 months ended May 31, 2005, the total returns on NAV for all seven of
these Funds outperformed the return on the Lehman Brothers Municipal Bond Index.
NWI, NGB and NNB also outperformed the average return for the Lipper Other
States peer group, while NMY, NFM, NZR and NPV trailed the group average. Please
keep in mind that the Lipper Other States average represents the overall average
of returns for funds from 10 different states displaying a variety of economic
and municipal market conditions. We believe that makes direct comparisons
between the returns of specific state funds with a multi-state group average
less meaningful.
One of the primary factors benefiting the 12-month performance of these Funds
relative to that of the unleveraged, unmanaged Lehman Brothers index was the
Funds' use of financial leverage. While leveraging can add volatility to a
Fund's NAV and share price, especially during periods when interest rates rise,
this strategy also can provide opportunities for additional income and total
return for common shareholders when short-term interest rates remain relatively
low and long-term rates fall.
As noted earlier, over most of this reporting period, longer-term rates tended
to fall while shorter-term interest rates rose. As a result, bonds with longer
effective maturities and longer durations generally performed better than
securities with shorter effective maturities and shorter durations. Much of the
performance differential between these seven Funds over this period was the
result of this effective maturity and duration positioning.
All of the Funds in this report benefited during this period from their
allocations to non-rated bonds, or to bonds rated BBB or lower. These bonds
generally outperformed higher
1 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged
national index comprising a broad range of investment-grade municipal
bonds. Results for the Lehman index do not reflect any expenses.
2 The Lipper Other States Municipal Debt Funds category average is calculated
using the returns of all closed-end exchange-traded funds in this category
for each period as follows: 1 year, 44 funds; 5 years, 19 funds; and 10
years, 17 funds. Fund and Lipper returns assume reinvestment of dividends.
7
rated securities as the economy improved. Some of the sectors with larger
concentrations of these lower quality bonds that made positive contributions to
the Funds' 12-month returns were healthcare (including hospitals and lifecare
facilities) and higher education. In addition, bonds backed by the 1998 master
tobacco settlement agreement also produced solid performance during this period,
as the litigation environment improved and increased demand drove prices higher.
The performance of each of these Funds also was boosted to some extent by
several advance refundings of their holdings during this period, which resulted
in price appreciation as well as enhanced credit quality. At the same time,
however, their holdings of other bonds that already had been pre-refunded tended
to underperform the general municipal market, due primarily to the shorter
effective maturities of these bonds.
Housing was another sector of the market that tended to underperform during this
period, due largely to the increased risk of pre-payments and bond calls in the
current interest rate environment. All of the Maryland Funds held housing bonds,
with NFM having the largest exposure. Although these holdings were a good source
of core income for the Funds, their performance had a negative impact on overall
total return during this period.
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
MAY 31, 2005?
We continued to believe that, given the current geopolitical and economic
climate, maintaining strong credit quality was an important requirement. As of
May 31, 2005, all seven of these Funds continued to offer excellent credit
quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from
70% in NFM to 71% in NMY, 78% in NZR and NGB, 79% in NWI, 82% in NNB, and 83% in
NPV.
As of May 31, 2005, potential call exposure for the period June 2005 through the
end of 2007 ranged from 1% in NNB to 2% in NWI, 3% in NZR, 4% in NFM, 5% in NGB,
8% in NPV and 17% in NMY. In NMY, we have continued to hold most of these
callable bonds during the period, in part due to their strong collective
performance potential. The number of actual bond calls in all of these Funds
depends largely on future market interest rates.
8
DIVIDEND AND SHARE PRICE
INFORMATION
All seven of these Funds use leverage to enhance opportunities for additional
income for common shareholders. The extent of this benefit is tied in part to
the short-term rates the Funds pay their MuniPreferred(R) shareholders. During
periods of low short-term rates, leveraged Funds generally pay lower dividends
to their MuniPreferred shareholders, which can leave more earnings to support
common share dividends. However, when short-term interest rates rise, as they
did during this reporting period, the Funds' borrowing costs also rise. While
leveraging still provided benefits for common shareholders, the extent of the
benefit was reduced. As a result, NMY, NFM, NWI, NPV, NGB and NNB each
experienced a single dividend cut over the 12-month period ended May 31, 2005,
while the dividend of NZR remained stable during this period.
In addition, due to capital gains generated by normal portfolio activity, common
shareholders of the following Funds received capital gains and/or net ordinary
income distributions at the end of December 2004 as follows:
LONG-TERM
CAPITAL GAINS ORDINARY INCOME
(PER SHARE) (PER SHARE)
--------------------------------------------------------------------------------
NZR $0.0575 $0.0041
--------------------------------------------------------------------------------
NWI $0.0076 --
--------------------------------------------------------------------------------
NNB $0.1878 --
--------------------------------------------------------------------------------
The relatively large distribution from NNB represented an important part of this
Fund's total return for this period. For the most part, these distributions were
generated by bond calls or by sales of appreciated securities. The proceeds of
these calls or sales then were reinvested in bonds paying lower, current
interest rates. This had a slight negative impact on the Fund's earning power
and was a minor factor in the dividend reduction noted above.
All of the Funds in this report seek to pay stable monthly dividends at rates
that reflect each Fund's past results and projected future performance. During
certain periods, each Fund may pay dividends at a rate that may be more or less
than the amount of net investment income actually earned by the Fund during the
period. If a Fund has cumulatively earned more than it has paid in dividends, it
holds the excess in reserve as undistributed net investment income (UNII) as
part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in
excess of its earnings, the excess constitutes negative UNII that is likewise
reflected in the Fund's NAV. Each Fund will, over time, pay all of its net
investment income as dividends to shareholders. As of May 31, 2005, all of the
Funds in this report had positive UNII balances for both financial statement and
tax purposes.
9
At the end of the reporting period, the Funds' share prices were trading at
premiums or discounts to their NAVs as shown in the accompanying chart:
5/31/05 12-MONTH AVERAGE
PREMIUM/DISCOUNT PREMIUM/DISCOUNT
--------------------------------------------------------------------------------
NMY +4.37% +6.25%
--------------------------------------------------------------------------------
NFM +3.30% +4.95%
--------------------------------------------------------------------------------
NZR -0.26% -0.50%
--------------------------------------------------------------------------------
NWI -2.83% -3.73%
--------------------------------------------------------------------------------
NPV +11.57% +8.44%
--------------------------------------------------------------------------------
NGB +9.47% +12.24%
--------------------------------------------------------------------------------
NNB +6.62% +4.60%
--------------------------------------------------------------------------------
10
Nuveen Maryland Premium Income Municipal Fund
NMY
PERFORMANCE
OVERVIEW As of May 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 45%
AA 26%
A 13%
BBB 10%
BB or Lower 4%
NR 2%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.076
Jul 0.076
Aug 0.076
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.076
Jan 0.076
Feb 0.076
Mar 0.073
Apr 0.073
May 0.073
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/1/04 14.6
14.65
14.85
14.8
14.8
14.55
14.58
14.79
14.35
14.49
14.55
14.7
14.72
14.79
14.9
14.78
14.84
14.54
14.55
14.36
14.7
14.77
14.96
15
15.1
14.94
15
15.13
15.15
15.24
15.13
15.19
15.15
15.02
15.01
14.91
15.01
14.95
14.92
14.98
15.08
14.95
14.95
15.03
15.03
15.11
15.16
15.34
15.41
15.47
15.46
15.51
15.79
15.92
15.92
15.92
15.85
16.15
16.2
16.01
16
15.81
16
16.2
16.29
16.45
16.2
16.01
15.91
16
16.11
16.01
16.05
15.85
16
16.14
16
16.19
16.2
16.21
16.15
16.21
16.22
16.39
16.15
16.04
15.9
15.92
16.08
16.18
16.24
16.05
16.06
15.95
15.92
15.91
15.86
15.82
15.74
15.81
15.82
15.89
15.95
15.92
15.87
15.94
15.98
15.93
15.99
15.86
15.98
15.9
15.64
15.71
15.52
15.82
15.93
15.95
15.99
15.94
15.93
15.96
16
15.85
15.9
15.99
15.9
15.99
16.18
16.02
16.25
16.49
16.45
16.28
16.1
16.17
16.45
16.3
16.53
16.27
16.28
16.45
16.35
16.56
16.4
16.62
16.46
16.37
16.34
16.48
15.98
16.2
16.53
16.38
16.33
16.16
16.2
16
16
15.85
15.97
15.98
16.2
16.17
16.21
16.68
16.25
16.25
16.07
15.88
15.99
16.04
16.05
16.11
16.15
16.35
16.33
16.1
16.05
16.16
16.04
16
16.04
15.96
15.81
16.2
16.49
16.57
16.59
16.27
16.3
16.1
16.15
16.08
16.01
16
16.1
16.2
15.96
16.25
16.25
16.24
16
15.9
15.75
15.6
15.31
14.79
14.64
14.8
15.17
15.3
15.21
15.3
15.36
15.49
15.62
15.5
15.44
15.24
15.18
15.28
15.09
15.19
15.23
15.26
15.13
15.01
15.07
15.16
15.08
15
15
14.98
15.1
15.17
15.22
15.12
15.33
15.55
15.57
15.45
15.57
15.63
15.85
16
16.01
15.91
15.99
15.97
15.8
15.78
15.77
5/31/05 15.78
FUND SNAPSHOT
------------------------------------
Common Share Price $15.78
------------------------------------
Common Share
Net Asset Value $15.12
------------------------------------
Premium/(Discount) to NAV 4.37%
------------------------------------
Market Yield 5.55%
------------------------------------
Taxable-Equivalent Yield1 8.10%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $160,496
------------------------------------
Average Effective Maturity
on Securities (Years) 16.34
------------------------------------
Leverage-Adjusted Duration 8.39
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 15.64% 12.52%
------------------------------------
5-Year 9.48% 9.75%
------------------------------------
10-Year 8.37% 7.24%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 19.1%
------------------------------------
Tax Obligation/Limited 15.6%
------------------------------------
Healthcare 15.4%
------------------------------------
Education and Civic
Organizations 14.8%
------------------------------------
U.S. Guaranteed 12.5%
------------------------------------
Housing/Multifamily 10.1%
------------------------------------
Utilities 6.1%
------------------------------------
Other 6.4%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
11
Nuveen Maryland Dividend Advantage Municipal Fund
NFM
PERFORMANCE
OVERVIEW As of May 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 45%
AA 25%
A 13%
BBB 12%
BB or Lower 1%
NR 4%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.0785
Jul 0.0785
Aug 0.0785
Sep 0.0785
Oct 0.0785
Nov 0.0785
Dec 0.0785
Jan 0.0785
Feb 0.0785
Mar 0.0755
Apr 0.0755
May 0.0755
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/1/04 15.55
15.25
15.1
15.05
15
14.99
14.6
14.75
14.6
14.5
14.54
14.38
14.37
14.35
14.27
14.4
14.37
14.41
14.15
14.06
14.16
14.22
14.4
14.6
14.67
14.83
14.68
14.87
14.83
14.75
14.82
14.78
15
14.9
14.83
14.89
14.86
14.9
14.99
15.3
15.47
15.69
15.69
15.71
15.75
15.55
15.69
15.73
15.6
15.55
15.47
15.4
15.36
15.6
15.75
15.85
16
16.01
16.08
16.03
15.75
16.12
16
15.95
16.15
15.85
15.9
15.75
15.89
15.69
15.7
15.84
15.67
15.65
15.63
15.62
15.66
15.74
15.7
16.09
15.9
15.99
15.92
16.12
15.85
15.92
15.91
15.95
16.2
16.35
16
16
16.2
16.2
16.05
15.95
16.1
16.1
16.25
16.15
16.15
15.94
16.04
16.35
16.38
16.12
16.14
16.15
16.15
16.07
16.44
16.16
15.95
16.17
15.75
15.61
15.63
15.63
15.63
15.55
15.62
15.33
15.36
15.44
15.51
15.49
15.2
15.06
14.96
14.87
15.1
15.13
14.95
15.05
15.05
15.07
15.07
15
15.12
15.21
15.19
15.18
15.35
15.36
15.45
15.55
15.5
15.5
15.75
15.65
15.62
15.78
15.96
16
16.2
16.2
16.2
16.08
15.98
16.2
16.3
16.26
16.26
16.3
16.14
16.1
16.05
16.08
16.09
16.14
16.15
16.15
15.99
16.11
15.93
16.07
16.1
16.14
16.01
16.2
16.13
16.2
16.24
16.12
15.96
16.03
16.05
16
16.16
16.08
16.51
16.4
16.4
16.3
16.3
16.27
16.15
16.17
16.45
16.5
16.22
16.38
16.25
16.1
15.82
15.64
15.6
15.39
15.3
15.55
15.6
15.84
16
16.1
16.1
15.96
15.92
15.87
15.85
15.77
15.65
15.72
15.72
15.97
15.7
15.55
15.52
15.52
15.34
15.38
15.38
15.44
15.44
15.31
15.44
15.5
15.62
15.42
15.32
15.38
15.38
15.56
15.56
15.6
15.7
15.96
15.99
15.73
15.77
15.83
15.85
15.75
15.79
5/31/05 15.63
FUND SNAPSHOT
------------------------------------
Common Share Price $15.63
------------------------------------
Common Share
Net Asset Value $15.13
------------------------------------
Premium/(Discount) to NAV 3.30%
------------------------------------
Market Yield 5.80%
------------------------------------
Taxable-Equivalent Yield1 8.47%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $63,051
------------------------------------
Average Effective Maturity
on Securities (Years) 18.46
------------------------------------
Leverage-Adjusted Duration 7.15
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/23/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 6.22% 11.60%
------------------------------------
Since
Inception 6.68% 7.40%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 18.9%
------------------------------------
Tax Obligation/Limited 16.8%
------------------------------------
Healthcare 16.6%
------------------------------------
U.S. Guaranteed 15.6%
------------------------------------
Education and Civic
Organizations 10.5%
------------------------------------
Housing/Multifamily 10.1%
------------------------------------
Other 11.5%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
12
Nuveen Maryland Dividend Advantage Municipal Fund 2
NZR
PERFORMANCE
OVERVIEW As of May 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 49%
AA 29%
A 8%
BBB 10%
BB or Lower 1%
NR 3%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Jun 0.073
Jul 0.073
Aug 0.073
Sep 0.073
Oct 0.073
Nov 0.073
Dec 0.073
Jan 0.073
Feb 0.073
Mar 0.073
Apr 0.073
May 0.073
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/1/04 14.2
14.2
14.15
14.3
14.21
14.15
14.16
14.3
14
14.01
14.04
14.22
14.04
14.11
14.06
14.2
14.25
14.14
14.25
14.2
14.18
14.06
14.12
14.25
14.36
14.47
14.3
14.45
14.49
14.5
14.8
14.57
14.66
14.9
14.88
14.64
14.68
14.9
14.9
14.72
14.86
14.98
14.98
15
15.05
15.09
14.96
15.03
14.98
15
15
15
15
15.05
15.13
15
14.91
15.17
15.33
15.01
14.99
15.19
15.34
15.4
15.32
15.4
15.24
15.3
15.35
15.3
15.17
15.4
15.52
15.49
15.35
15.1
15.15
15
15.29
15.15
15.32
15.28
15.32
15.37
15.27
15.42
15.37
15.34
15.5
15.38
15.35
15.39
15.33
15.22
15.2
15.36
15.39
15.34
15.24
15.21
15.31
15.35
15.26
15.28
15.43
15.5
15.65
15.4
15.4
15.4
15.69
15.45
15.15
14.75
14.95
14.94
14.81
14.73
14.7
14.8
15.04
15.03
15.05
15.07
15
15.1
15
15.15
15.25
15.25
15.22
15.32
15.27
15.29
15.38
15.19
15.02
15.14
15.17
15.3
15.3
15.35
15.29
15.1
15.3
15.3
15.6
15.75
15.98
16.09
15.95
16.12
15.9
15.82
15.99
15.96
15.96
15.95
15.75
15.42
15.51
15.35
15.37
15.38
15.31
15.25
15.35
15.41
15.37
15.4
15.45
15.9
15.88
16
15.74
15.83
15.84
15.73
15.65
15.75
15.45
15.35
15.3
15.01
15.01
15.03
15.01
15.01
15.22
15.25
15.31
15.28
15.28
15.24
15.41
15.41
15.07
15.09
14.9
14.94
14.87
15.13
15.12
15.13
15.46
15.06
15.06
15.2
15.1
15.1
15.38
15.6
15.48
15.38
15.65
15.75
15.75
15.74
15.31
15.2
15.35
15.29
15.4
15.25
15.23
14.73
14.89
14.83
14.55
14.67
14.73
14.74
14.74
14.7
14.78
14.84
15.01
15.06
15.18
15.28
15.3
15.22
15.21
15.35
15.35
15.37
15.36
15.52
15.45
15.18
15.26
15.29
15.2
5/31/05 15.41
FUND SNAPSHOT
------------------------------------
Common Share Price $15.41
------------------------------------
Common Share
Net Asset Value $15.45
------------------------------------
Premium/(Discount) to NAV -0.26%
------------------------------------
Market Yield 5.68%
------------------------------------
Taxable-Equivalent Yield1 8.29%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $64,500
------------------------------------
Average Effective Maturity
on Securities (Years) 16.91
------------------------------------
Leverage-Adjusted Duration 7.60
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 14.71% 12.22%
------------------------------------
Since
Inception 6.52% 7.97%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 25.6%
------------------------------------
U.S. Guaranteed 17.3%
------------------------------------
Healthcare 14.5%
------------------------------------
Education and Civic
Organizations 12.3%
------------------------------------
Tax Obligation/Limited 12.0%
------------------------------------
Housing/Multifamily 8.0%
------------------------------------
Other 10.3%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2004 of $0.0616 per share.
13
Nuveen Maryland Dividend Advantage Municipal Fund 3
NWI
PERFORMANCE
OVERVIEW As of May 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 41%
AA 38%
A 6%
BBB 12%
BB or Lower 1%
NR 2%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Jun 0.0655
Jul 0.0655
Aug 0.0655
Sep 0.0655
Oct 0.0655
Nov 0.0655
Dec 0.0655
Jan 0.0655
Feb 0.0655
Mar 0.0625
Apr 0.0625
May 0.0625
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/1/04 13.08
13.31
13.05
13.18
13.18
13.25
13.24
13.35
13.25
13.2
13.16
13.08
13.05
13.02
13.04
13
12.97
13.02
12.92
13.11
13.14
13.43
13.47
13.52
13.4
13.48
13.61
13.76
13.63
13.75
13.75
13.51
13.63
13.68
13.51
13.46
13.38
13.4
13.41
13.49
13.49
13.62
13.62
13.79
13.79
13.8
13.78
13.79
13.8
13.83
13.76
13.68
13.69
13.8
13.9
13.92
14
14.02
13.9
13.95
14
14.11
14.02
14.05
14
14.07
14.07
14.08
14.24
14.49
14.34
14.31
14.24
14.35
14.22
14.35
14.48
14.36
14.38
14.35
14.34
14.32
14.32
14.38
14.32
14.33
14.4
14.29
14.09
14.22
14.27
14.48
14.48
14.25
14.11
14.32
14.2
14.33
14.38
14.46
14.5
14.38
14.35
14.35
14.35
14.24
14.1
14.3
14.32
14.13
14.16
13.87
13.54
13.65
13.67
13.65
13.75
13.87
14.05
14.29
14.25
14.07
13.87
13.79
13.75
13.83
13.72
13.59
13.55
13.47
13.55
13.55
13.8
13.68
13.68
13.85
13.72
13.61
13.6
13.69
13.41
13.5
13.57
13.66
13.67
13.4
13.58
13.46
13.71
13.66
14
14.18
14.28
14.42
14.52
14.4
14.33
14.28
14.2
14.3
14.28
14.15
13.87
14.2
14.2
14.05
14.15
14.2
14.2
14.29
14.63
14.65
14.62
14.71
14.55
14.54
14.51
14.47
14.42
14.6
14.6
14.5
14.5
14.17
14.19
14.65
14.5
14.6
14.59
14.65
14.7
14.6
14.57
14.55
14.57
14.22
14.25
14.16
14.55
14.37
13.99
13.76
13.8
13.75
13.93
13.71
13.93
13.72
13.89
13.78
13.98
14.15
14.03
14.14
14.15
14.2
14.2
14.02
14.13
14.18
14.1
13.94
14.21
14.06
14.04
14.04
13.84
13.89
13.81
14.19
14.16
14.06
14.06
14.13
14.07
14.13
14.35
14.14
14.35
14.21
14.5
14.4
14.4
14.55
14.7
14.65
14.5
14.45
14.25
14.53
14.37
14.43
14.36
5/31/05 14.4
FUND SNAPSHOT
------------------------------------
Common Share Price $14.40
------------------------------------
Common Share
Net Asset Value $14.82
------------------------------------
Premium/(Discount) to NAV -2.83%
------------------------------------
Market Yield 5.21%
------------------------------------
Taxable-Equivalent Yield1 7.61%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $79,443
------------------------------------
Average Effective Maturity
on Securities (Years) 18.11
------------------------------------
Leverage-Adjusted Duration 7.69
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 14.98% 12.67%
------------------------------------
Since
Inception 3.92% 6.73%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 25.3%
------------------------------------
Tax Obligation/General 18.7%
------------------------------------
U.S. Guaranteed 13.7%
------------------------------------
Healthcare 11.7%
------------------------------------
Education and Civic
Organizations 10.2%
------------------------------------
Housing/Multifamily 8.2%
------------------------------------
Utilities 4.8%
------------------------------------
Other 7.4%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31.5%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
2 The Fund also paid shareholders a capital gains distribution in December
2004 of $0.0076 per share.
14
Nuveen Virginia Premium Income Municipal Fund
NPV
PERFORMANCE
OVERVIEW As of May 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 54%
AA 29%
A 7%
BBB 6%
BB or Lower 1%
NR 3%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.076
Jul 0.076
Aug 0.076
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.076
Jan 0.076
Feb 0.076
Mar 0.073
Apr 0.073
May 0.073
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/1/04 15.05
15
15.14
15.43
15.5
15.47
15.12
15.15
15.05
14.92
15.2
14.89
14.79
14.63
14.89
14.9
14.97
15.25
14.98
14.87
15.1
15.35
15.3
15.56
15.65
15.56
15.55
15.75
15.8
15.7
15.4
15.38
15.44
15.4
15.43
15.4
15.53
15.35
15.4
15.35
15.36
15.55
15.55
15.46
15.64
15.65
15.68
15.73
15.94
16.22
16.25
16.07
16.26
16.26
16.14
16.25
16.06
16.28
16.07
15.92
16.33
16.33
16.12
16.32
16.24
16.46
16.41
16.65
16.67
16.39
16.58
16.45
16.43
16.4
16.43
16.5
16.75
16.8
16.65
16.34
16.45
16.3
16.52
16.9
16.87
16.93
16.75
16.97
16.99
16.98
16.99
16.99
17
16.99
17.28
17.5
17.5
17.31
17.45
17.5
17.6
17.9
17.94
17.85
17.69
17.6
17.46
17.73
18
18.01
18.08
17.69
17.35
17.44
17.44
17.35
17.19
17.3
17.4
18.1
17.98
18
18
18.05
17.74
17.65
17.9
17.65
17.52
17.5
17.5
17.69
17.82
17.72
17.68
17.99
17.9
17.95
17.81
17.5
17.7
17.92
17.89
17.78
17.7
17.4
17.32
17.7
17.42
17.57
17.75
17.65
17.7
17.73
17.67
17.72
17.75
17.81
17.53
17.6
17.9
17.91
17.75
17.65
17.61
17.55
17.5
17.51
17.42
17.55
17.8
17.75
17.78
17.9
18.2
17.9
18.01
17.85
18
18.37
17.92
17.82
17.65
17.55
17.67
17.39
17.58
17.56
17.62
17.55
17.7
17.77
17.64
17.64
17.58
17.51
17.73
17.83
17.52
17.64
17.53
17.25
17.23
17.15
17.15
16.76
16.6
16.6
16.75
16.6
16.57
16.5
16.32
16.5
16.5
16.54
16.55
16.46
16.5
16.55
16.5
16.37
16.55
16.65
16.5
16.49
16.51
16.52
16.32
16.52
16.45
16.51
16.51
16.62
16.66
16.7
16.96
16.79
16.56
16.97
17.15
17.18
17.18
17.32
17.54
17.63
17.77
17.76
17.76
18
17.45
17.29
17.4
5/31/05 17.65
FUND SNAPSHOT
------------------------------------
Common Share Price $17.65
------------------------------------
Common Share
Net Asset Value $15.82
------------------------------------
Premium/(Discount) to NAV 11.57%
------------------------------------
Market Yield 4.96%
------------------------------------
Taxable-Equivalent Yield1 7.29%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $140,340
------------------------------------
Average Effective Maturity
on Securities (Years) 16.15
------------------------------------
Leverage-Adjusted Duration 7.99
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/18/93)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 24.54% 12.13%
------------------------------------
5-Year 10.12% 9.62%
------------------------------------
10-Year 8.98% 7.55%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 19.3%
------------------------------------
Healthcare 15.2%
------------------------------------
Tax Obligation/General 14.7%
------------------------------------
U.S. Guaranteed 12.7%
------------------------------------
Transportation 8.4%
------------------------------------
Utilities 7.9%
------------------------------------
Education and Civic
Organizations 7.4%
------------------------------------
Water and Sewer 6.5%
------------------------------------
Other 7.9%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 32%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
15
Nuveen Virginia Dividend Advantage Municipal Fund
NGB
PERFORMANCE
OVERVIEW As of May 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 51%
AA 27%
A 8%
BBB 5%
BB or Lower 4%
NR 5%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Jun 0.0785
Jul 0.0785
Aug 0.0785
Sep 0.0785
Oct 0.0785
Nov 0.0785
Dec 0.0785
Jan 0.0785
Feb 0.0785
Mar 0.0755
Apr 0.0755
May 0.0755
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/1/04 14.97
15.01
15.07
15.27
15.3
15.34
15.3
15.43
15.08
14.93
14.9
14.96
14.97
15.01
15
15.04
15
14.95
15.07
15.25
15.2
15.13
15.25
15.18
15.24
15.45
15.49
15.67
15.59
15.7
15.75
15.6
15.59
15.88
15.53
15.45
15.68
16.02
15.82
15.83
15.91
15.99
15.99
16.1
16.22
16.25
16.25
16.31
16.3
16.45
16.48
16.45
16.4
16.4
16.42
16.55
16.69
17.05
16.56
16.17
15.95
16
16.22
16.23
16.26
16.46
16.54
16.6
16.7
16.72
16.64
16.67
16.58
16.58
16.52
16.8
16.69
16.8
17
16.95
16.83
16.85
16.85
16.91
17
16.84
16.66
17.05
17.18
17
16.92
17.32
17.66
17.71
17.58
17.75
17.75
17.55
17.8
17.75
17.6
17.6
17.6
17.6
17.7
17.7
17.7
17.49
17.53
17.7
17.8
18
17.7
17.56
17.73
17.55
17.38
17.4
17.46
17.39
17.39
17.18
17.18
17.3
17.3
17.32
17.48
17.35
17.34
17.06
17.1
16.95
17.1
17.26
17.56
17.64
17.43
17.49
17.25
17.26
17.26
17.15
17.15
17.15
17.19
17.27
17.21
17.15
17.99
17.83
17.75
17.9
17.84
17.85
18
17.67
17.51
17.17
16.97
17.1
17.2
18.15
18.1
18
18.01
17.75
17.47
17.55
17.5
17.48
17.4
17.42
17.4
17.59
18.15
18.14
17.94
17.9
18.2
18.1
18
17.93
17.75
17.7
17.25
17.22
17.25
17.45
17.66
17.58
17.32
17.32
17.8
18.1
18
17.92
17.87
17.87
17.74
17.21
17.21
17
17.36
17.59
17.85
17.5
17.4
17.55
17.56
17.56
17.56
17.48
17.53
17.4
17.39
17.43
17.43
17.36
17.5
17.5
17.39
17.2
17.2
17.11
17.04
17.15
17.15
17.35
17.12
17.05
17.05
16.88
16.88
16.96
16.86
16.86
17.34
17.34
17.44
17.43
17.51
17.44
17.35
17.37
17.37
17.37
17.37
17.42
18
17.59
17.29
17.4
17.2
5/31/05 16.99
FUND SNAPSHOT
------------------------------------
Common Share Price $16.99
------------------------------------
Common Share
Net Asset Value $15.52
------------------------------------
Premium/(Discount) to NAV 9.47%
------------------------------------
Market Yield 5.33%
------------------------------------
Taxable-Equivalent Yield1 7.84%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $48,474
------------------------------------
Average Effective Maturity
on Securities (Years) 16.49
------------------------------------
Leverage-Adjusted Duration 7.92
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 1/26/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 19.11% 14.46%
------------------------------------
Since
Inception 8.65% 8.06%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 18.9%
------------------------------------
Transportation 15.4%
------------------------------------
U.S. Guaranteed 14.9%
------------------------------------
Tax Obligation/Limited 13.6%
------------------------------------
Education and Civic
Organizations 9.1%
------------------------------------
Healthcare 8.7%
------------------------------------
Water and Sewer 5.5%
------------------------------------
Other 13.9%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 32%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
16
Nuveen Virginia Dividend Advantage Municipal Fund 2
NNB
PERFORMANCE
OVERVIEW As of May 31, 2005
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 48%
AA 34%
A 7%
BBB 5%
BB or Lower 2%
NR 4%
Bar Chart:
2004-2005 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Jun 0.0745
Jul 0.0745
Aug 0.0745
Sep 0.0745
Oct 0.0745
Nov 0.0745
Dec 0.0745
Jan 0.0745
Feb 0.0745
Mar 0.0715
Apr 0.0715
May 0.0715
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
6/1/04 14.95
15.15
14.9
14.92
14.97
14.92
15.05
15.05
14.8
14.78
15
14.62
14.66
14.8
14.82
14.88
14.9
14.85
14.97
14.9
15.12
14.99
15.2
15.2
15.05
15.14
15.17
15.31
15.21
15.2
15.03
15.1
15.08
15.09
15
15.06
15.18
15.08
14.97
15.14
15.19
15.4
15.4
15.33
15.2
15.24
15.3
15.37
15.42
15.55
15.51
15.53
15.54
15.55
15.7
16
15.94
15.92
15.68
15.6
15.55
15.6
15.74
15.78
15.84
15.86
15.87
15.87
15.92
16.05
16.19
16.35
16.31
16.35
16.2
15.92
16
16.1
16.2
16.4
16.25
16.21
16.45
16.71
16.37
16.31
16.49
16.45
16.58
16.36
16.55
16.65
16.65
16.42
16.45
16.47
16.5
16.53
16.58
16.48
16.52
16.6
17
16.95
16.7
16.7
16.65
16.65
16.74
16.75
16.8
16.72
16.05
15.91
15.86
15.85
15.89
15.94
15.9
15.97
16.05
16.04
15.84
15.85
15.91
15.95
15.7
15.76
15.8
15.77
16
16.03
16.12
16.45
16.44
16.43
16.03
16.25
16.28
16.28
16.45
16.5
16.55
16.7
16.7
16.85
17.04
17.24
17.03
17.14
17.01
17.25
17.1
17
16.57
16.53
16.65
16.61
16.32
16.55
16.8
17
17
16.92
16.75
16.35
16.36
16.44
16.44
16.44
16.47
16.65
16.54
16.71
16.93
16.8
16.79
17
17.3
17.1
16.7
16.69
16.73
16.5
16.6
16.31
16.36
16.34
16.6
17.03
16.8
16.7
16.7
17
17.1
17.08
16.72
16.64
16.39
16.15
16.04
16.09
16.2
16.11
15.86
16
15.8
15.9
16.01
15.88
16.11
16.45
16.47
16.35
16
16
16.06
16.4
16.3
16.16
16.05
15.93
16.25
16.4
16.28
16.35
16.39
16.4
16.15
16.5
16.74
16.75
16.75
16.9
16.89
16.89
16.72
16.79
16.88
16.83
16.7
16.43
16.42
16.8
16.64
16.6
16.65
16.65
16.85
16.8
16.65
16.87
16.74
5/31/05 16.74
FUND SNAPSHOT
------------------------------------
Common Share Price $16.74
------------------------------------
Common Share
Net Asset Value $15.70
------------------------------------
Premium/(Discount) to NAV 6.62%
------------------------------------
Market Yield 5.13%
------------------------------------
Taxable-Equivalent Yield1 7.54%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $89,626
------------------------------------
Average Effective Maturity
on Securities (Years) 17.31
------------------------------------
Leverage-Adjusted Duration 7.70
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/15/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 21.96% 13.75%
------------------------------------
Since
Inception 9.23% 8.93%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 25.4%
------------------------------------
Tax Obligation/Limited 17.4%
------------------------------------
Healthcare 12.9%
------------------------------------
Water and Sewer 10.8%
------------------------------------
U.S. Guaranteed 10.0%
------------------------------------
Housing/Single Family 5.9%
------------------------------------
Education and Civic
Organizations 5.3%
------------------------------------
Other 12.3%
------------------------------------
1 Taxable-equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 32%. When comparing this Fund to investments that generate
qualified dividend income, the taxable-equivalent yield is lower.
2 The Fund also paid shareholders a capital gains distribution in December
2004 of $0.1878 per share.
17
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF TRUSTEES AND SHAREHOLDERS
NUVEEN MARYLAND PREMIUM INCOME MUNICIPAL FUND
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN MARYLAND DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NUVEEN VIRGINIA PREMIUM INCOME MUNICIPAL FUND
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN VIRGINIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Maryland Premium Income Municipal Fund,
Nuveen Maryland Dividend Advantage Municipal Fund, Nuveen Maryland Dividend
Advantage Municipal Fund 2, Nuveen Maryland Dividend Advantage Municipal Fund 3,
Nuveen Virginia Premium Income Municipal Fund, Nuveen Virginia Dividend
Advantage Municipal Fund and Nuveen Virginia Dividend Advantage Municipal Fund 2
as of May 31, 2005, and the related statements of operations for the year then
ended, the statements of changes in net assets for each of the two years in the
period then ended, and the financial highlights for the periods indicated
therein. These financial statements and financial highlights are the
responsibility of the Funds' management. Our responsibility is to express an
opinion on these financial statements and financial highlights based on our
audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. We were
not engaged to perform an audit of the Funds' internal control over financial
reporting. Our audits included consideration of internal control over financial
reporting as a basis for designing audit procedures that are appropriate in the
circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Funds' internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights, assessing the accounting principles used
and significant estimates made by management, and evaluating the overall
financial statement presentation. Our procedures included confirmation of
securities owned as of May 31, 2005, by correspondence with the custodian and
brokers or by other appropriate auditing procedures where replies from brokers
were not received. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of Nuveen
Maryland Premium Income Municipal Fund, Nuveen Maryland Dividend Advantage
Municipal Fund, Nuveen Maryland Dividend Advantage Municipal Fund 2, Nuveen
Maryland Dividend Advantage Municipal Fund 3, Nuveen Virginia Premium Income
Municipal Fund, Nuveen Virginia Dividend Advantage Municipal Fund and Nuveen
Virginia Dividend Advantage Municipal Fund 2 at May 31, 2005, the results of
their operations for the year then ended, the changes in their net assets for
each of the two years in the period then ended, and the financial highlights for
the periods indicated therein, in conformity with U.S. generally accepted
accounting principles.
/s/Ernst & Young LLP
CHICAGO, ILLINOIS
JULY 14, 2005
18
Nuveen Maryland Premium Income Municipal Fund (NMY)
Portfolio of
INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.0% (1.4% OF TOTAL INVESTMENTS)
$ 3,160 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB $ 3,197,730
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 21.7% (14.8% OF TOTAL INVESTMENTS)
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
200 5.750%, 9/01/25 3/10 at 101.00 BBB 211,616
200 5.800%, 9/01/30 3/10 at 101.00 BBB 211,986
1,000 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 1,064,840
Bonds, Battelle Memorial Institute, Series 2004,
5.250%, 4/01/34
1,000 Maryland Economic Development Corporation, Student Housing 6/09 at 102.00 Baa3 1,062,950
Revenue Bonds, Collegiate Housing Foundation - Salisbury
State University, Series 1999A, 6.000%, 6/01/19
2,250 Maryland Economic Development Corporation, Student 6/09 at 102.00 Baa2 2,351,363
Housing Revenue Bonds, Collegiate Housing Foundation -
College Park, Series 1999A, 5.750%, 6/01/24
1,000 Maryland Economic Development Corporation, Student Housing 10/13 at 100.00 Baa3 1,065,230
Revenue Bonds, University of Maryland - Baltimore,
Series 2003A, 5.625%, 10/01/23
Maryland Economic Development Corporation, Utility
Infrastructure Revenue Bonds, University of Maryland - College
Park Project, Series 2001:
1,000 5.375%, 7/01/15 - AMBAC Insured 7/11 at 100.00 AAA 1,105,660
1,000 5.375%, 7/01/16 - AMBAC Insured 7/11 at 100.00 AAA 1,105,660
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Bullis School, Series 2000:
750 5.250%, 7/01/25 - FSA Insured 1/11 at 101.00 AAA 809,513
500 5.250%, 7/01/30 - FSA Insured 1/11 at 101.00 AAA 535,120
1,500 Maryland Health and Higher Educational Facilities Authority, 7/07 at 102.00 AA 1,597,485
Revenue Refunding Bonds, Johns Hopkins University,
Series 1997, 5.625%, 7/01/27
1,460 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 1,550,812
Revenue Bonds, Maryland Institute College of Art,
Series 2001, 5.625%, 6/01/36
1,250 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 1,305,875
Revenue Bonds, Goucher College, Series 2004,
5.125%, 7/01/34
9,445 Morgan State University, Maryland, Student Tuition and Fee No Opt. Call AAA 11,724,740
Revenue Refunding Bonds, Academic Fees and Auxiliary
Facilities, Series 1993, 6.100%, 7/01/20 - MBIA Insured
University of Maryland, Auxiliary Facility and Tuition Revenue
Bonds, Series 2003A:
5,645 5.000%, 4/01/15 4/13 at 100.00 AA 6,192,113
2,680 5.000%, 4/01/19 4/13 at 100.00 AA 2,913,026
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 22.6% (15.4% OF TOTAL INVESTMENTS)
2,000 Maryland Health and Higher Educational Facilities Authority, 6/09 at 101.00 A+ 2,138,840
Revenue Bonds, Kaiser Permanente System, Series 1998A,
5.375%, 7/01/15
750 Maryland Health and Higher Educational Facilities Authority, 7/10 at 101.00 A3 846,615
Revenue Bonds, University of Maryland Medical System,
Series 2000, 6.750%, 7/01/30
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,054,390
Revenue Bonds, Johns Hopkins Hospital, Howard County
General Hospital Acquisition, Series 1998, 5.000%, 7/01/19 -
MBIA Insured
1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 1,540,350
Revenue Bonds, Greater Baltimore Medical Center, Series 2001,
5.000%, 7/01/34
1,500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A 1,661,460
Revenue Bonds, University of Maryland Medical System,
Series 2002, 6.000%, 7/01/22
19
Nuveen Maryland Premium Income Municipal Fund (NMY) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE (continued)
$ 3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 $ 3,458,910
Revenue Bonds, Carroll County General Hospital, Series 2002,
5.800%, 7/01/32
1,400 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,451,996
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
3,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 3,480,718
Revenue Bonds, Union Hospital of Cecil County, Series 2002,
5.625%, 7/01/32
3,800 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 3,972,444
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 AAA 1,079,710
Revenue Bonds, University of Maryland Medical System,
Series 2004B, 5.000%, 7/01/24 - AMBAC Insured
1,750 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 Baa1 1,849,383
Revenue Bonds, MedStar Health, Series 2004,
5.375%, 8/15/24
1,540 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 1,608,838
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
1,525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 1,623,454
Revenue Bonds, Calvert Memorial Hospital, Series 2004,
5.500%, 7/01/36
1,665 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 1,734,897
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
Prince George's County, Maryland, Revenue Refunding and
Project Bonds, Dimensions Health Corporation, Series 1994:
825 5.000%, 7/01/05 No Opt. Call B3 823,721
3,080 5.375%, 7/01/14 7/05 at 101.00 B3 2,799,597
6,000 5.300%, 7/01/24 7/05 at 101.00 B3 5,085,240
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 14.8% (10.1% OF TOTAL INVESTMENTS)
Howard County, Maryland, FHA-Insured Mortgage Revenue Refunding
Bonds, Normandy Woods III Apartments Project, Series 1996A:
700 6.000%, 7/01/17 7/06 at 102.00 AAA 725,046
2,000 6.100%, 7/01/25 7/06 at 102.00 AAA 2,068,640
2,500 Maryland Community Development Administration, Housing 1/09 at 101.00 Aa2 2,562,850
Revenue Bonds, Series 1999A, 5.350%, 7/01/41
(Alternative Minimum Tax)
880 Maryland Community Development Administration, Housing 1/10 at 100.00 Aa2 929,491
Revenue Bonds, Series 1999B, 6.250%, 7/01/32 (Alternative
Minimum Tax)
1,450 Maryland Community Development Administration, FNMA 2/11 at 101.00 Aaa 1,550,848
Multifamily Development Revenue Bonds, Edgewater Village
Apartments, Series 2000B, 5.800%, 8/01/20 (Alternative
Minimum Tax)
2,000 Montgomery County Housing Opportunities Commission, 7/05 at 102.00 Aa2 2,042,680
Maryland, GNMA/FHA-Insured Multifamily Housing Revenue
Bonds, Series 1995A, 5.900%, 7/01/15
1,500 Montgomery County Housing Opportunities Commission, 7/06 at 102.00 Aaa 1,549,905
Maryland, Multifamily Housing Development Bonds,
Series 1996B, 5.900%, 7/01/26
3,830 Montgomery County Housing Opportunities Commission, 7/08 at 101.00 Aaa 3,924,716
Maryland, FNMA/FHA-Insured Multifamily Housing
Development Bonds, Series 1998A, 5.200%, 7/01/30
2,000 Montgomery County Housing Opportunities Commission, 7/10 at 100.00 Aaa 2,106,200
Maryland, Multifamily Housing Development Bonds,
Series 2000A, 6.100%, 7/01/30
Prince George's County Housing Authority, Maryland, GNMA
Collateralized Mortgage Revenue Refunding Bonds, Overlook
Apartments, Series 1995A:
2,000 5.700%, 12/20/15 12/05 at 102.00 AAA 2,057,040
1,670 5.750%, 12/20/19 12/05 at 102.00 AAA 1,715,290
970 Prince George's County Housing Authority, Maryland, 11/05 at 100.00 AAA 970,795
GNMA Collateralized Mortgage Revenue Refunding Bonds,
Foxglenn Apartments, Series 1998A, 5.450%, 11/20/14
(Alternative Minimum Tax)
540 Prince George's County Housing Authority, Maryland, 9/09 at 102.00 AAA 573,329
GNMA Collateralized Mortgage Revenue Bonds, University
Landing Apartments, Series 1999, 6.100%, 3/20/41
(Alternative Minimum Tax)
1,000 Salisbury, Maryland, FHA-Insured Mortgage Revenue 6/05 at 102.00 AAA 1,021,310
Refunding Bonds, College Lane Apartments, Series 1995A,
6.600%, 12/01/26
20
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.7% (0.4% OF TOTAL INVESTMENTS)
$ 750 Prince George's County Housing Authority, Maryland, 8/07 at 102.00 AA $ 762,443
FHLMC/FNMA/GNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 1997A, 5.625%, 8/01/17 (Alternative
Minimum Tax)
60 Prince George's County Housing Authority, Maryland, 8/10 at 100.00 AAA 62,944
FHLMC/FNMA/GNMA Collateralized Single Family
Mortgage Revenue Bonds, Series 2000A, 6.150%, 8/01/19
(Alternative Minimum Tax)
330 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 334,079
Securities Program Home Mortgage Revenue Bonds,
Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.7% (1.2% OF TOTAL INVESTMENTS)
1,000 Carroll County, Maryland, Revenue Refunding Bonds, EMA 1/09 at 101.00 AA 1,071,910
Obligated Group, Series 1999A, 5.625%, 1/01/25 -
RAAI Insured
1,695 Maryland Economic Development Corporation, Health and 4/11 at 102.00 N/R 1,727,171
Mental Hygiene Providers Revenue Bonds, Series 1996A,
7.625%, 4/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 28.1% (19.1% OF TOTAL INVESTMENTS)
4,000 Anne Arundel County, Maryland, General Obligation Bonds, No Opt. Call AA+ 4,456,240
Series 2003, 5.000%, 3/01/13
2,030 Anne Arundel County, Maryland, General Obligation Bonds, 4/14 at 100.00 AA+ 2,244,124
Series 2004, 5.000%, 4/01/16
Baltimore County, Maryland, Metropolitan District General
Obligation Bonds, 67th Issue:
2,500 5.000%, 6/01/25 6/11 at 101.00 AAA 2,669,850
3,500 5.000%, 6/01/26 6/11 at 101.00 AAA 3,719,415
1,000 Baltimore, Maryland, General Obligation Bonds, Consolidated No Opt. Call A+ 1,130,220
Public Improvement, Series 1989B, 7.150%, 10/15/08
1,540 Baltimore, Maryland, General Obligation Bonds, Consolidated 10/14 at 100.00 AAA 1,678,800
Public Improvement, Series 2004A, 5.000%, 10/15/22 -
AMBAC Insured
1,000 Charles County, Maryland, Consolidated General Obligation No Opt. Call AA 1,108,380
Public Improvement Bonds, Series 2005, 5.000%, 3/01/12
Frederick County, Maryland, General Obligation Public Facilities
Bonds, Series 2002:
1,000 5.000%, 11/01/21 11/12 at 101.00 AA 1,093,280
1,000 5.000%, 11/01/22 11/12 at 101.00 AA 1,090,350
615 Frederick County, Maryland, Special Obligation Bonds, 7/10 at 102.00 AA 676,734
Villages of Lake Linganore Community Development
Authority, Series 2001A, 5.700%, 7/01/29 - RAAI Insured
Howard County, Maryland, Consolidated Public Improvement
Bonds, Series 2004B:
735 5.000%, 8/15/16 2/14 at 100.00 AAA 813,307
1,625 5.000%, 8/15/17 2/14 at 100.00 AAA 1,789,174
1,180 5.000%, 8/15/19 2/14 at 100.00 AAA 1,290,000
1,190 Maryland National Capital Park and Planning Commission, 1/14 at 100.00 AA 1,308,334
Prince George's County, General Obligation Bonds, Park
Acquisition and Development, Series 2004EE-2,
5.000%, 1/15/17
Montgomery County, Maryland, General Obligation
Refunding Bonds, Consolidated Public Improvement,
Series 2001:
1,750 5.250%, 10/01/13 10/11 at 101.00 AAA 1,964,673
2,000 5.250%, 10/01/18 10/11 at 101.00 AAA 2,215,040
2,000 Montgomery County, Maryland, General Obligation Bonds, No Opt. Call AAA 2,233,660
Consolidated Public Improvement, Series 2004A,
5.000%, 4/01/13
925 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 990,139
Series 2000A, 6.000%, 6/01/20 - ACA Insured
1,000 Prince George's County, Maryland, General Obligation 12/11 at 101.00 AAA 1,098,100
Consolidated Public Improvement Bonds, Series 2001,
5.250%, 12/01/20 - FGIC Insured
2,000 Prince George's County, Maryland, General Obligation 9/12 at 101.00 AA 2,027,240
Consolidated Public Improvement Bonds, Series 2002,
4.100%, 9/15/19
5,770 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA 6,307,706
Consolidated Public Improvement Bonds, Series 2003A,
5.000%, 10/01/18
2,255 Prince George's County, Maryland, General Obligation No Opt. Call AA 2,498,901
Consolidated Public Improvement Bonds, Series 2004C,
5.000%, 12/01/11
460 Wicomico County, Maryland, General Obligation Public 12/09 at 101.00 AAA 513,917
Improvement Bonds, Series 1999, 5.750%, 12/01/19 -
FGIC Insured
21
Nuveen Maryland Premium Income Municipal Fund (NMY) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 22.9% (15.6% OF TOTAL INVESTMENTS)
Baltimore Board of School Commissioners, Maryland, Revenue
Bonds, City Public School System, Series 2003A:
$ 1,500 5.000%, 5/01/16 5/13 at 100.00 AA+ $ 1,638,105
1,000 5.000%, 5/01/18 5/13 at 100.00 AA+ 1,089,200
1,725 Howard County, Maryland, Metropolitan District Refunding 2/12 at 100.00 AAA 1,909,920
Bonds, Series 2002A, 5.250%, 8/15/18
900 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 924,075
Town Center Project, Series 2004, 5.750%, 7/01/34
1,465 Maryland Community Development Administration, 6/08 at 101.00 Aaa 1,547,685
Infrastructure Financing Bonds, Series 1998B,
5.200%, 6/01/28 - MBIA Insured
4,250 Maryland Department of Transportation, County Transportation No Opt. Call AA 4,949,550
Revenue Bonds, Series 2002, 5.500%, 2/01/16
2,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 2,228,940
Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13
1,875 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 2,093,400
Bonds, Department of Transportation Headquarters Building,
Series 2002, 5.375%, 6/01/19
Maryland Department of Transportation, Certificates of
Participation, Mass Transit Administration Project, Series 2000:
875 5.500%, 10/15/19 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 951,773
925 5.500%, 10/15/20 (Alternative Minimum Tax) 10/10 at 101.00 AA+ 1,006,160
1,700 Maryland Stadium Authority, Lease Revenue Bonds, 6/13 at 100.00 AA+ 1,835,252
Montgomery County Conference Center Facilities,
Series 2003, 5.000%, 6/15/24
2,455 Maryland Stadium Authority, Lease Revenue Bonds, Sports 3/06 at 101.00 AAA 2,529,779
Facilities, Series 1996, 5.750%, 3/01/18 - AMBAC Insured
1,000 Montgomery County, Maryland, Lease Revenue Bonds, 6/12 at 100.00 AA 1,063,040
Metrorail Garage, Series 2002, 5.000%, 6/01/21
675 Montgomery County, Maryland, Special Obligation Bonds, 7/12 at 101.00 AA 731,336
West Germantown Development District, Senior
Series 2002A, 5.500%, 7/01/27 - RAAI Insured
635 New Baltimore City Board of School Commissioners, 11/10 at 100.00 AA+ 695,827
Maryland, School System Revenue Bonds, Series 2000,
5.125%, 11/01/15
1,000 Puerto Rico, Highway Revenue Bonds, Highway and 7/16 at 100.00 A 1,117,800
Transportation Authority, Series 1996Y, 5.500%, 7/01/36
1,500 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 1,784,220
Transportation Authority, Series 2003AA, 5.500%, 7/01/19 -
MBIA Insured
2,100 Puerto Rico Municipal Finance Agency, Series 2002A, 8/12 at 100.00 AAA 2,308,698
5.250%, 8/01/21 - FSA Insured
2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 2,279,900
Loan Note, Series 1999A, 6.500%, 10/01/24
Washington Suburban Sanitary District, Montgomery and
Prince George's Counties, Maryland, Sewerage Disposal Bonds,
Series 2005:
1,235 5.000%, 6/01/23 6/15 at 100.00 AAA 1,349,275
1,235 5.000%, 6/01/24 6/15 at 100.00 AAA 1,346,076
1,235 5.000%, 6/01/25 6/15 at 100.00 AAA 1,341,803
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.3% (3.0% OF TOTAL INVESTMENTS)
1,060 Baltimore, Maryland, Revenue Refunding Bonds, Parking No Opt. Call AAA 1,207,234
System Facilities, Series 1998A, 5.250%, 7/01/17 -
FGIC Insured
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Medical
Institution, Series 2004B:
355 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 393,649
380 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 423,233
2,075 Puerto Rico Ports Authority, Special Facilities Revenue 6/06 at 102.00 CCC 1,610,532
Bonds, American Airlines Inc., Series 1996A,
6.250%, 6/01/26 (Alternative Minimum Tax)
3,000 District of Columbia Metropolitan Area Transit Authority, No Opt. Call AAA 3,317,250
Gross Revenue Bonds, Series 2003, 5.000%, 1/01/12 -
MBIA Insured
22
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 18.4% (12.5% OF TOTAL INVESTMENTS)
$ 2,500 Baltimore County, Maryland, General Obligation Consolidated 8/12 at 100.00 AAA $ 2,776,250
Public Improvement Bonds, Series 2002, 5.000%, 8/01/18
(Pre-refunded to 8/01/12)
2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water 7/08 at 101.00 AAA 2,182,580
Projects, Series 1998A, 5.000%, 7/01/28 - FGIC Insured
2,000 Baltimore, Maryland, Revenue Refunding Bonds, Water No Opt. Call AAA 2,263,680
System Projects, Series 1994A, 5.000%, 7/01/24 -
FGIC Insured
1,500 Baltimore, Maryland, Project and Revenue Refunding Bonds, 7/10 at 100.00 AAA 1,678,695
Wastewater Projects, Series 2000A, 5.625%, 7/01/30
(Pre-refunded to 7/01/10) - FSA Insured
745 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 791,101
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded to 7/01/10)
3,000 Frederick County, Maryland, General Obligation Public Facilities 7/09 at 101.00 AAA 3,285,900
Bonds, Series 1999, 5.250%, 7/01/18 (Pre-refunded
to 7/01/09)
2,550 Gaithersburg, Maryland, Hospital Facilities Refunding and No Opt. Call AAA 2,940,813
Improvement Revenue Bonds, Shady Grove Adventist
Hospital, Series 1995, 6.500%, 9/01/12 - FSA Insured
575 Howard County, Maryland, Consolidated Public Improvement 2/12 at 100.00 AAA 644,495
Refunding Bonds, Series 2002A, 5.250%, 8/15/18
(Pre-refunded to 2/15/12)
Howard County, Maryland, Consolidated Public Improvement
Refunding Bonds, Series 2003A:
1,720 5.000%, 8/15/17 (Pre-refunded to 8/15/12) 8/12 at 100.00 AAA 1,910,731
1,000 5.000%, 8/15/22 (Pre-refunded to 8/15/12) 8/12 at 100.00 AAA 1,110,890
145 Howard County, Maryland, Metropolitan District Refunding 2/12 at 100.00 AAA 162,525
Bonds, Series 2002A, 5.250%, 8/15/18 (Pre-refunded
to 2/15/12)
1,875 Maryland Health and Higher Educational Facilities Authority, 7/05 at 100.00 AAA 1,901,719
Revenue Bonds, Good Samaritan Hospital, Series 1993,
5.750%, 7/01/19 (Pre-refunded to 7/01/05) - AMBAC Insured
3,125 Maryland Health and Higher Educational Facilities Authority, 7/05 at 100.00 Aaa 3,294,656
Revenue Bonds, Howard County General Hospital, Series 1993,
5.500%, 7/01/25
3,135 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 3,476,746
Revenue Bonds, Helix Health, Series 1997, 5.000%, 7/01/27 -
AMBAC Insured
1,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 1,114,350
Obligation Bonds, Series 2000A, 5.500%, 10/01/20
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 8.9% (6.1% OF TOTAL INVESTMENTS)
6,500 Calvert County, Maryland, Pollution Control Revenue Refunding 7/05 at 101.00 A2 6,668,090
Bonds, Baltimore Gas and Electric Company Project,
Series 1993, 5.550%, 7/15/14
2,500 Maryland Energy Financing Administration, Revenue Bonds, 9/05 at 102.00 N/R 2,555,222
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
5,000 Prince George's County, Maryland, Pollution Control Revenue No Opt. Call A- 5,133,000
Refunding Bonds, Potomac Electric Power Company,
Series 1993, 6.375%, 1/15/23
23
Nuveen Maryland Premium Income Municipal Fund (NMY) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 0.7% (0.4% OF TOTAL INVESTMENTS)
$ 1,000 Baltimore, Maryland, Revenue Refunding Bonds, Water System No Opt. Call AAA $ 1,126,105
Projects, Series 1994A, 5.000%, 7/01/24 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 219,850 Total Long-Term Investments (cost $223,436,181) - 146.8% 235,581,813
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.5% 4,014,623
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.3)% (79,100,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 160,496,436
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. N/R Investment is not rated.
See accompanying notes to financial statements.
24
Nuveen Maryland Dividend Advantage Municipal Fund (NFM)
Portfolio of
INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 0.1% (0.1% OF TOTAL INVESTMENTS)
$ 50 Baltimore, Maryland, Pollution Control Revenue Bonds, No Opt. Call Baa3 $ 49,780
General Motors Corporation, Series 1993, 5.350%, 4/01/08
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.5% (1.7% OF TOTAL INVESTMENTS)
1,575 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 1,593,806
Asset-Backed Refunding Bonds, Series 2002,
5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 15.5% (10.5% OF TOTAL INVESTMENTS)
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
465 5.700%, 9/01/20 3/10 at 101.00 BBB 494,016
500 5.750%, 9/01/25 3/10 at 101.00 BBB 529,040
645 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 686,822
Bonds, Battelle Memorial Institute, Series 2004,
5.250%, 4/01/34
1,800 Maryland Economic Development Corporation, Student 7/11 at 101.00 A 1,963,476
Housing Revenue Bonds, Sheppard Pratt University Village,
Series 2001, 6.000%, 7/01/33 - ACA Insured
1,000 Maryland Economic Development Corporation, Utility 7/11 at 100.00 AAA 1,080,100
Infrastructure Revenue Bonds, University of Maryland -
College Park Project, Series 2001, 5.000%, 7/01/19 -
AMBAC Insured
1,500 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 1,571,355
Educational Facilities Leasehold Mortgage Revenue Bonds,
McLean School, Series 2001, 6.000%, 7/01/31
625 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 660,406
Revenue Bonds, Maryland Institute College of Art,
Series 2001, 5.500%, 6/01/32
500 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 522,350
Revenue Bonds, Goucher College, Series 2004,
5.125%, 7/01/34
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds, Ana G. Mendez University System,
Series 1999:
215 5.375%, 2/01/19 2/09 at 101.00 BBB 223,845
410 5.375%, 2/01/29 2/09 at 101.00 BBB 422,931
University of Maryland, Auxiliary Facility and Tuition Revenue
Bonds, Series 2003A:
1,000 5.000%, 4/01/15 4/13 at 100.00 AA 1,096,920
500 5.000%, 4/01/19 4/13 at 100.00 AA 543,475
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 24.5% (16.6% OF TOTAL INVESTMENTS)
2,225 Maryland Health and Higher Educational Facilities Authority, 6/09 at 101.00 A+ 2,379,459
Revenue Bonds, Kaiser Permanente System, Series 1998A,
5.375%, 7/01/15
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 A2 1,025,880
Revenue Bonds, Calvert Memorial Hospital, Series 1998,
5.000%, 7/01/28
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,054,560
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/28 - FSA Insured
570 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 A3 587,642
Revenue Refunding Bonds, Union Hospital of Cecil County,
Series 1998, 5.100%, 7/01/22
1,250 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 AA- 1,308,213
Revenue Bonds, Johns Hopkins Hospital, Series 2001,
5.000%, 5/15/21
1,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 1,046,790
Revenue Bonds, Mercy Medical Center, Series 2001,
5.625%, 7/01/31
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 667,485
Revenue Bonds, Greater Baltimore Medical Center,
Series 2001, 5.000%, 7/01/34
25
Nuveen Maryland Dividend Advantage Municipal Fund (NFM) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE (continued)
$ 2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A $ 2,088,160
Revenue Bonds, University of Maryland Medical System,
Series 2001, 5.250%, 7/01/28
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,084,090
Revenue Bonds, Carroll County General Hospital,
Series 2002, 6.000%, 7/01/26
500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 518,570
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,045,380
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 Baa1 739,753
Revenue Bonds, MedStar Health, Series 2004,
5.375%, 8/15/24
585 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 611,150
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
650 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 677,287
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
Prince George's County, Maryland, Revenue Refunding
and Project Bonds, Dimensions Health Corporation, Series 1994:
40 5.375%, 7/01/14 7/05 at 101.00 B3 36,358
700 5.300%, 7/01/24 7/05 at 101.00 B3 593,278
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 14.9% (10.1% OF TOTAL INVESTMENTS)
750 Baltimore County, Maryland, GNMA Collateralized Revenue 10/08 at 102.00 AAA 770,468
Refunding Bonds, Cross Creek Apartments Project,
Series 1998A, 5.250%, 10/20/33
2,000 Maryland Community Development Administration, Housing 7/08 at 101.00 Aa2 2,062,400
Revenue Bonds, Series 1998A, 5.625%, 1/01/40
(Alternative Minimum Tax)
520 Maryland Community Development Administration, 5/11 at 100.00 Aa2 539,583
Multifamily Housing Insured Mortgage Loans, Series 2001B,
5.350%, 5/15/32 (Alternative Minimum Tax)
1,000 Maryland Community Development Administration, 12/11 at 100.00 Aaa 1,040,470
Multifamily Housing Revenue Bonds, Princess Anne
Apartments, Series 2001D, 5.450%, 12/15/33 (Alternative
Minimum Tax)
750 Montgomery County Housing Opportunities Commission, 7/08 at 101.00 Aaa 768,720
Maryland, FNMA/FHA-Insured Multifamily Housing
Development Bonds, Series 1998A, 5.250%, 7/01/29
(Alternative Minimum Tax)
2,000 Montgomery County Housing Opportunities Commission, 7/10 at 100.00 Aaa 2,112,240
Maryland, Multifamily Housing Development Bonds,
Series 2000B, 6.200%, 7/01/30 (Alternative Minimum Tax)
2,000 Montgomery County Housing Opportunities Commission, 7/11 at 100.00 Aaa 2,083,460
Maryland, Multifamily Housing Development Bonds,
Series 2001A, 5.600%, 7/01/42 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 6.5% (4.4% OF TOTAL INVESTMENTS)
195 Maryland Community Development Administration, Residential 9/09 at 100.00 Aa2 202,874
Revenue Bonds, Series 1999E, 5.700%, 9/01/17
1,110 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 1,138,416
Revenue Bonds, Series 2000H, 5.800%, 9/01/32
(Alternative Minimum Tax)
415 Maryland Community Development Administration, Single 10/10 at 100.00 Aa2 419,673
Family Program Bonds, First Series 2001, 5.000%, 4/01/17
590 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 605,830
Revenue Bonds, Series 2001B, 5.450%, 9/01/32 (Alternative
Minimum Tax)
1,000 Maryland Community Development Administration, Residential 3/11 at 100.00 Aa2 1,043,630
Revenue Bonds, Series 2001F, 5.600%, 9/01/28 (Alternative
Minimum Tax)
690 Prince George's County Housing Authority, Maryland, 8/07 at 102.00 AA 716,413
FHLMC/FNMA/GNMA Collateralized Single Family Mortgage
Revenue Bonds, Series 1997A, 5.750%, 8/01/30 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.6% (1.1% OF TOTAL INVESTMENTS)
1,000 Northeast Maryland Waste Disposal Authority, Resource 1/09 at 101.00 BBB 1,022,680
Recovery Revenue Bonds, Baltimore RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
26
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.4% (0.8% OF TOTAL INVESTMENTS)
$ 1,000 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R $ 854,420
Revenue Bonds, Collington Episcopal Life Care Community
Inc., Series 2001A, 6.750%, 4/01/23
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 28.0% (18.9% OF TOTAL INVESTMENTS)
Anne Arundel County, Maryland, General Obligation Bonds,
Various Purpose, Series 2001:
580 4.800%, 2/15/18 2/11 at 101.00 AA+ 614,423
500 5.000%, 2/15/28 2/11 at 101.00 AA+ 528,325
1,000 Anne Arundel County, Maryland, General Obligation Bonds, No Opt. Call AA+ 1,114,060
Series 2003, 5.000%, 3/01/13
3,500 Baltimore County, Maryland, Metropolitan District General 6/11 at 101.00 AAA 3,717,490
Obligation Bonds, 67th Issue, 5.000%, 6/01/27
1,000 Charles County, Maryland, Consolidated General Obligation No Opt. Call AA 1,108,380
Public Improvement Bonds, Series 2005, 5.000%, 3/01/12
1,000 Frederick County, Maryland, General Obligation Public 11/12 at 101.00 AA 1,090,350
Facilities Bonds, Series 2002, 5.000%, 11/01/22
1,360 Howard County, Maryland, Consolidated Public Improvement 2/09 at 101.00 AAA 1,415,121
Bonds, Series 2001A, 4.750%, 2/15/21
1,000 Maryland National Capital Park and Planning Commission, 1/14 at 100.00 AA 1,099,440
Prince George's County, General Obligation Bonds, Park
Acquisition and Development, Series 2004EE-2,
5.000%, 1/15/17
1,000 Montgomery County, Maryland, General Obligation Refunding No Opt. Call AAA 1,122,230
Bonds, Consolidated Public Improvement, Series 2002A,
5.250%, 11/01/11
700 Montgomery County, Maryland, General Obligation Bonds, No Opt. Call AAA 781,781
Consolidated Public Improvement, Series 2004A,
5.000%, 4/01/13
430 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 460,281
Series 2000A, 6.000%, 6/01/20 - ACA Insured
740 Ocean City, Maryland, General Obligation Bonds, Series 2001, 3/11 at 101.00 AAA 783,712
4.875%, 3/01/19 - FGIC Insured
1,500 Prince George's County, Maryland, General Obligation 12/11 at 101.00 AAA 1,647,150
Consolidated Public Improvement Bonds, Series 2001,
5.250%, 12/01/20 - FGIC Insured
1,000 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA 1,093,190
Consolidated Public Improvement Bonds, Series 2003A,
5.000%, 10/01/17
900 Prince George's County, Maryland, General Obligation No Opt. Call AA 997,344
Consolidated Public Improvement Bonds, Series 2004C,
5.000%, 12/01/11
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 24.9% (16.8% OF TOTAL INVESTMENTS)
625 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 634,819
Project, Series 2005A, 5.350%, 7/01/34
745 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 752,711
Revenue Bonds, Parole Town Center Project, Series 2002,
5.000%, 7/01/12
500 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 544,600
Bonds, City Public School System, Series 2003A,
5.000%, 5/01/18
350 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 359,363
Town Center Project, Series 2004, 5.750%, 7/01/34
1,500 Maryland Department of Transportation, County Transportation No Opt. Call AA 1,746,900
Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,114,470
Transportation Revenue Bonds, Series 2004,
5.000%, 5/01/13
1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,568,654
Bonds, Department of Transportation Headquarters Building,
Series 2002, 5.375%, 6/01/19
370 Maryland Economic Development Corporation, Lease Revenue 9/12 at 100.00 AA+ 408,495
Bonds, Montgomery County Town Square Parking Garage,
Series 2002A, 5.000%, 9/15/13
740 Prince George's County, Maryland, Lease Revenue Bonds, 6/13 at 100.00 AAA 816,176
Upper Marlboro Justice Center, Series 2003A,
5.000%, 6/30/14 - MBIA Insured
700 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 832,636
Transportation Authority, Series 2003AA, 5.500%, 7/01/19 -
MBIA Insured
1,290 Virgin Islands Public Finance Authority, Gross Receipts 10/10 at 101.00 BBB 1,473,232
Taxes Loan Note, Series 1999A, 6.375%, 10/01/19
27
Nuveen Maryland Dividend Advantage Municipal Fund (NFM) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
Washington Suburban Sanitary District, Montgomery and
Prince George's Counties, Maryland, General Obligation
Construction Bonds, Series 2001:
$ 895 5.000%, 6/01/22 6/11 at 100.00 AAA $ 952,137
935 5.000%, 6/01/23 6/11 at 100.00 AAA 994,690
985 5.000%, 6/01/24 6/11 at 100.00 AAA 1,047,882
1,035 5.000%, 6/01/25 6/11 at 100.00 AAA 1,097,090
1,290 Washington Suburban Sanitary District, Montgomery and 6/11 at 100.00 AAA 1,347,805
Prince George's Counties, Maryland, Water Supply Bonds,
Series 2001, 4.750%, 6/01/20
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 3.3% (2.3% OF TOTAL INVESTMENTS)
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 AAA 682,799
Parking Facilities Revenue Bonds, Johns Hopkins Hospital,
Series 2001, 5.000%, 7/01/27 - AMBAC Insured
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Medical
Institution, Series 2004B:
150 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 166,331
135 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 150,359
1,000 District of Columbia Metropolitan Area Transit Authority, No Opt. Call AAA 1,105,750
Gross Revenue Bonds, Series 2003, 5.000%, 1/01/12 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 23.0% (15.6% OF TOTAL INVESTMENTS)
500 Anne Arundel County, Maryland, Special Obligation Bonds, 7/09 at 102.00 AAA 586,330
Arundel Mills Project, Series 1999, 7.100%, 7/01/29
(Pre-refunded to 7/01/09)
1,500 Baltimore County, Maryland, General Obligation Consolidated 8/12 at 100.00 AAA 1,665,750
Public Improvement Bonds, Series 2002, 5.000%, 8/01/18
(Pre-refunded to 8/01/12)
1,015 Baltimore, Maryland, Revenue Refunding Bonds, Water 7/08 at 101.00 AAA 1,107,659
Projects, Series 1998A, 5.000%, 7/01/28 - FGIC Insured
1,865 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,980,406
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded to 7/01/10)
1,220 Howard County, Maryland, Consolidated Public Improvement 2/09 at 101.00 AAA 1,308,108
Bonds, Series 2001A, 4.750%, 2/15/20 (Pre-refunded
to 2/15/09)
500 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA 555,445
Refunding Bonds, Series 2003A, 5.000%, 8/15/15
(Pre-refunded to 8/15/12)
950 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,119,775
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16
Puerto Rico Infrastructure Financing Authority, Special
Obligation Bonds, Series 2000A:
2,300 5.500%, 10/01/32 10/10 at 101.00 AAA 2,534,531
1,700 5.500%, 10/01/40 10/10 at 101.00 AAA 1,864,403
1,800 Puerto Rico Electric Power Authority, Power Revenue Refunding 7/05 at 100.00 A-*** 1,803,690
Bonds, Series 1995Z, 5.250%, 7/01/21 (Pre-refunded
to 7/01/05)
28
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 1.6% (1.1% OF TOTAL INVESTMENTS)
$ 1,000 Maryland Energy Financing Administration, Revenue Bonds, 9/05 at 102.00 N/R $ 1,022,090
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 87,535 Total Long-Term Investments (cost $88,962,873) - 147.8% 93,202,017
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.0% 1,849,477
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.8)% (32,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 63,051,494
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT MAY 31, 2005:
UNREALIZED
EFFECTIVE TERMINATION APPRECIATION
NOTIONAL AMOUNT DATE(2) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Agreement with Goldman Sachs dated December 6, 2004,
to pay semi-annually the notional amount multiplied
by 5.324% (annualized) and receive quarterly the
notional amount multiplied by the three-month
USD-LIBOR (United States Dollar-London Inter-Bank
Offered Rates). $100,000 7/11/05 7/11/25 $ (8,000)
Agreement with JPMorgan dated January 11, 2005,
to pay semi-annually the notional amount multiplied
by 5.235% (annualized) and receive quarterly the
notional amount multiplied by the three-month
USD-LIBOR (United States Dollar-London Inter-Bank
Offered Rates). 850,000 8/17/05 8/17/25 (56,747)
------------------------------------------------------------------------------------------------------------------------------------
$(64,747)
------------------------------------------------------------------------------------------------------------------------------------
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Effective date represents the date on which both the
Fund and counterparty commence interest payment
accruals on each forward swap contract.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
29
Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR)
Portfolio of
INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 0.1% (0.1% OF TOTAL INVESTMENTS)
$ 75 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call Baa3 $ 74,669
Motors Corporation, Series 1993, 5.350%, 4/01/08
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.4% (1.6% OF TOTAL INVESTMENTS)
790 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 799,433
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
800 Virgin Islands Tobacco Settlement Financing Corporation, 5/11 at 100.00 Baa3 764,720
Asset-Backed Bonds, Series 2001, 5.000%, 5/15/31
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 18.2% (12.3% OF TOTAL INVESTMENTS)
1,100 Anne Arundel County, Maryland, Economic Development 9/12 at 102.00 A3 1,180,740
Revenue Bonds, Community College Project, Series 2002,
5.125%, 9/01/22
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
100 5.750%, 9/01/25 3/10 at 101.00 BBB 105,808
100 5.800%, 9/01/30 3/10 at 101.00 BBB 105,993
645 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 686,822
Bonds, Battelle Memorial Institute, Series 2004,
5.250%, 4/01/34
1,000 Maryland Economic Development Corporation, Student 10/13 at 100.00 Baa3 1,065,230
Housing Revenue Bonds, University of Maryland -
Baltimore, Series 2003A, 5.625%, 10/01/23
250 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 BBB- 261,893
Educational Facilities Leasehold Mortgage Revenue Bonds,
McLean School, Series 2001, 6.000%, 7/01/31
415 Maryland Health and Higher Educational Facilities Authority, 1/11 at 101.00 AAA 444,150
Revenue Bonds, Bullis School, Series 2000, 5.250%, 7/01/30 -
FSA Insured
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 102.00 AA 1,077,430
Revenue Refunding Bonds, Johns Hopkins University,
Series 1998, 5.125%, 7/01/12
1,250 Maryland Health and Higher Educational Facilities Authority, 6/11 at 100.00 Baa1 1,320,813
Revenue Bonds, Maryland Institute College of Art,
Series 2001, 5.500%, 6/01/32
500 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 522,350
Revenue Bonds, Goucher College, Series 2004,
5.125%, 7/01/34
500 Morgan State University, Maryland, Student Tuition and 7/12 at 100.00 AAA 530,195
Fee Revenue Bonds, Academic Fees and Auxiliary Facilities,
Series 2001, 4.900%, 7/01/21 - FGIC Insured
500 Morgan State University, Maryland, Student Tuition and Fee 7/13 at 100.00 AAA 545,405
Revenue Bonds, Academic Fees and Auxiliary Facilities,
Series 2003A, 5.000%, 7/01/20 - FGIC Insured
University of Maryland, Auxiliary Facility and Tuition Revenue
Bonds, Series 2001B:
1,580 4.375%, 4/01/17 4/11 at 100.00 AA 1,630,813
1,140 4.500%, 4/01/19 4/11 at 100.00 AA 1,173,231
1,000 University of Maryland, Auxiliary Facility and Tuition Revenue 4/13 at 100.00 AA 1,086,950
Bonds, Series 2003A, 5.000%, 4/01/19
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 21.4% (14.5% OF TOTAL INVESTMENTS)
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,054,560
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/33 - FSA Insured
1,500 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 1,570,185
Revenue Bonds, Mercy Medical Center, Series 2001,
5.625%, 7/01/31
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 667,485
Revenue Bonds, Greater Baltimore Medical Center,
Series 2001, 5.000%, 7/01/34
30
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE (continued)
$ 2,000 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A $ 2,088,160
Revenue Bonds, University of Maryland Medical System,
Series 2001, 5.250%, 7/01/28
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,084,090
Revenue Bonds, Carroll County General Hospital, Series 2002,
6.000%, 7/01/26
500 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 518,570
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,045,380
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
700 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 Baa1 739,753
Revenue Bonds, MedStar Health, Series 2004,
5.375%, 8/15/24
525 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 548,468
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 825,034
Revenue Bonds, Calvert Memorial Hospital, Series 2004,
5.500%, 7/01/36
650 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 677,287
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
2,160 Montgomery County, Maryland, Economic Development 12/11 at 100.00 AA- 2,277,655
Revenue Bonds, Trinity Healthcare Group, Series 2001,
5.125%, 12/01/22
Prince George's County, Maryland, Revenue Refunding and
Project Bonds, Dimensions Health Corporation, Series 1994:
100 5.375%, 7/01/14 7/05 at 101.00 B3 90,896
700 5.300%, 7/01/24 7/05 at 101.00 B3 593,278
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 11.8% (8.0% OF TOTAL INVESTMENTS)
55 Maryland Community Development Administration, Multifamily 5/11 at 100.00 Aa2 56,498
Housing Insured Mortgage Loans, Series 2001A,
5.100%, 5/15/28
2,595 Maryland Community Development Administration, Multifamily 5/11 at 100.00 Aa2 2,692,728
Housing Insured Mortgage Loans, Series 2001B,
5.350%, 5/15/32 (Alternative Minimum Tax)
1,110 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 1,154,922
Housing Revenue Bonds, Princess Anne Apartments,
Series 2001D, 5.450%, 12/15/33 (Alternative Minimum Tax)
3,145 Maryland Community Development Administration, Multifamily 12/11 at 100.00 Aaa 3,272,278
Development Revenue Bonds, Waters Towers Senior
Apartments, Series 2001F, 5.450%, 12/15/33 (Alternative
Minimum Tax)
435 Maryland Community Development Administration, Multifamily 5/12 at 100.00 Aa2 458,655
Housing Insured Mortgage Revenue Bonds, Series 2002A,
5.300%, 5/15/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.3% (1.6% OF TOTAL INVESTMENTS)
500 Maryland Community Development Administration, Residential 3/07 at 101.50 Aa2 516,845
Revenue Bonds, Series 1997B, 5.875%, 9/01/25 (Alternative
Minimum Tax)
945 Maryland Community Development Administration, Residential 9/10 at 100.00 Aa2 970,165
Revenue Bonds, Series 2001H, 5.350%, 9/01/32 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.8% (1.2% OF TOTAL INVESTMENTS)
1,150 Northeast Maryland Waste Disposal Authority, Resource 1/09 at 101.00 BBB 1,176,082
Recovery Revenue Bonds, Baltimore RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 0.4% (0.3% OF TOTAL INVESTMENTS)
Maryland Health and Higher Educational Facilities Authority,
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001A:
31 6.750%, 4/01/20 4/09 at 100.00 N/R 26,740
25 6.750%, 4/01/23 4/11 at 101.00 N/R 21,360
5 Maryland Health and Higher Educational Facilities Authority, No Opt. Call N/R 4,310
Revenue Bonds, Collington Episcopal Life Care Community Inc.,
Series 2001B, 6.400%, 4/01/23 (Mandatory put 4/01/07)
31
Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE (continued)
Prince George's County, Maryland, Revenue Bonds, Collington
Episcopal Life Care Community Inc., Series 1994A:
$ 20 5.625%, 4/01/09 4/06 at 100.00 N/R $ 17,092
175 6.000%, 4/01/13 10/05 at 101.00 N/R 151,856
35 Prince George's County, Maryland, Revenue Bonds, Collington No Opt. Call N/R 34,335
Episcopal Life Care Community Inc., Series 1994B,
8.000%, 4/01/16 (Optional put 4/01/06)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 37.9% (25.6% OF TOTAL INVESTMENTS)
1,000 Anne Arundel County, Maryland, General Obligation Bonds, No Opt. Call AA+ 1,114,060
Series 2003, 5.000%, 3/01/13
750 Baltimore, Maryland, General Obligation Bonds, Consolidated 10/14 at 100.00 AAA 817,598
Public Improvement, Series 2004A, 5.000%, 10/15/22 -
AMBAC Insured
Cecil County, Maryland, General Obligation Bonds, Consolidated
Public Improvement, Series 2001B:
975 4.600%, 8/01/18 8/11 at 101.00 AA- 1,020,542
1,020 4.600%, 8/01/19 8/11 at 101.00 AA- 1,063,656
1,000 Frederick County, Maryland, General Obligation Public Facilities 11/12 at 101.00 AA 1,093,280
Bonds, Series 2002, 5.000%, 11/01/20
510 Frederick, Maryland, General Obligation Refunding and 12/11 at 101.00 AA- 538,795
Improvement Bonds, Series 2001, 4.750%, 12/01/19
1,000 Howard County, Maryland, Consolidated Public Improvement 2/14 at 100.00 AAA 1,106,540
Bonds, Series 2004B, 5.000%, 8/15/16
Maryland, General Obligation Bonds, State and Local Facilities
Loan, First Series 2001:
2,445 5.500%, 3/01/11 No Opt. Call AAA 2,755,735
1,500 5.500%, 3/01/12 No Opt. Call AAA 1,709,730
4,730 Montgomery County, Maryland, General Obligation Refunding 10/11 at 101.00 AAA 5,238,570
Bonds, Consolidated Public Improvement, Series 2001,
5.250%, 10/01/18
1,000 Montgomery County, Maryland, General Obligation Refunding No Opt. Call AAA 1,122,230
Bonds, Consolidated Public Improvement, Series 2002A,
5.250%, 11/01/11
800 Montgomery County, Maryland, General Obligation Bonds, No Opt. Call AAA 893,464
Consolidated Public Improvement, Series 2004A,
5.000%, 4/01/13
Prince George's County, Maryland, General Obligation
Consolidated Public Improvement Bonds, Series 2001:
1,000 5.250%, 12/01/20 - FGIC Insured 12/11 at 101.00 AAA 1,098,100
2,820 5.250%, 12/01/21 - FGIC Insured 12/11 at 101.00 AAA 3,096,642
800 Prince George's County, Maryland, General Obligation No Opt. Call AA 886,528
Consolidated Public Improvement Bonds, Series 2004C,
5.000%, 12/01/11
770 Puerto Rico, General Obligation and Public Improvement Bonds, 7/11 at 100.00 AAA 822,329
Series 2001, 5.000%, 7/01/24 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 17.8% (12.0% OF TOTAL INVESTMENTS)
625 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 634,819
Project, Series 2005A, 5.350%, 7/01/34
750 Anne Arundel County, Maryland, General Obligation Bonds, 8/09 at 101.00 AA+ 773,648
Consolidated Water and Sewerage, Series 1999,
4.500%, 8/01/19
745 Anne Arundel County, Maryland, Tax Increment Financing No Opt. Call N/R 752,711
Revenue Bonds, Parole Town Center Project, Series 2002,
5.000%, 7/01/12
Baltimore County, Maryland, Certificates of Participation,
Health and Social Services Building Project, Series 2001:
1,580 5.000%, 8/01/20 8/11 at 101.00 AA+ 1,681,894
1,660 5.000%, 8/01/21 8/11 at 101.00 AA+ 1,762,372
530 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 581,850
Bonds, City Public School System, Series 2003A,
5.000%, 5/01/15
350 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 359,363
Town Center Project, Series 2004, 5.750%, 7/01/34
1,000 Maryland Department of Transportation, County Transportation No Opt. Call AA 1,164,600
Revenue Bonds, Series 2002, 5.500%, 2/01/16
32
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA $ 1,114,470
Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13
1,405 Maryland Economic Development Corporation, Lease Revenue 6/12 at 100.50 AA+ 1,568,654
Bonds, Department of Transportation Headquarters Building,
Series 2002, 5.375%, 6/01/19
1,000 Montgomery County, Maryland, Special Obligation Bonds, 07/12 at 101.00 AA 1,083,460
West Germantown Development District, Senior Series 2002A,
5.500%, 7/01/27 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.9% (3.3% OF TOTAL INVESTMENTS)
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Hospital, Series
2001:
650 5.000%, 7/01/27 - AMBAC Insured 7/11 at 100.00 AAA 682,799
1,000 5.000%, 7/01/34 - AMBAC Insured 7/11 at 100.00 AAA 1,044,980
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Medical
Institution, Series 2004B:
155 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 171,875
135 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 150,359
1,000 District of Columbia Metropolitan Area Transit Authority, No Opt. Call AAA 1,105,750
Gross Revenue Bonds, Series 2003, 5.000%, 1/01/12 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 25.6% (17.3% OF TOTAL INVESTMENTS)
750 Anne Arundel County, Maryland, Special Obligation Bonds, 7/09 at 102.00 AAA 879,495
Arundel Mills Project, Series 1999, 7.100%, 7/01/29
(Pre-refunded to 7/01/09)
1,500 Baltimore County, Maryland, General Obligation Consolidated 8/12 at 100.00 AAA 1,665,750
Public Improvement Bonds, Series 2002, 5.000%, 8/01/18
(Pre-refunded to 8/01/12)
1,000 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,131,620
Asset-Backed Bonds, Series 2000, 6.000%, 7/01/26
(Pre-refunded to 7/01/10)
3,000 Frederick County, Maryland, General Obligation Public Facilities 12/10 at 101.00 AAA 3,340,860
Bonds, Series 2000, 5.200%, 12/01/19 (Pre-refunded
to 12/01/10)
750 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA 833,168
Refunding Bonds, Series 2003A, 5.000%, 8/15/15
(Pre-refunded to 8/15/12)
1,260 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 1,383,568
Revenue Bonds, Helix Health, Series 1997,
5.000%, 7/01/17 - AMBAC Insured
1,295 Maryland Transportation Authority, Revenue Refunding Bonds, No Opt. Call AAA 1,526,429
Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16
1,230 Puerto Rico, General Obligation and Public Improvement 7/11 at 100.00 AAA 1,352,542
Bonds, Series 2001, 5.000%, 7/01/24 (Pre-refunded
to 7/01/11) - FSA Insured
3,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 3,290,130
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
1,000 Washington Suburban Sanitary District, Montgomery and 6/08 at 102.00 AAA 1,078,930
Prince George's Counties, Maryland, Water Supply Bonds,
Series 1998, 5.000%, 6/01/15 (Pre-refunded to 6/01/08)
33
Nuveen Maryland Dividend Advantage Municipal Fund 2 (NZR) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.2% (2.2% OF TOTAL INVESTMENTS)
$ 1,000 Guam Power Authority, Revenue Bonds, Series 1999A, 10/09 at 101.00 AAA $ 1,072,170
5.250%, 10/01/34 - MBIA Insured
1,000 Maryland Energy Financing Administration, Revenue Bonds, 9/05 at 102.00 N/R 1,022,090
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 88,721 Total Long-Term Investments (cost $90,521,026) - 147.8% 95,299,467
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.8% 1,200,212
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.6)% (32,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 64,499,679
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT MAY 31, 2005:
UNREALIZED
EFFECTIVE TERMINATION APPRECIATION
NOTIONAL AMOUNT DATE(2) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Agreement with Goldman Sachs dated December 6, 2004,
to pay semi-annually the notional amount multiplied
by 5.324% (annualized) and receive quarterly the
notional amount multiplied by the three-month
USD-LIBOR (United States Dollar-London Inter-Bank
Offered Rates). $ 400,000 7/11/05 7/11/25 $(32,001)
Agreement with JPMorgan dated January 11, 2005,
to pay semi-annually the notional amount multiplied
by 5.235% (annualized) and receive quarterly the
notional amount multiplied by the three-month
USD-LIBOR (United States Dollar-London Inter-Bank
Offered Rates). 1,000,000 8/17/05 8/17/25 (66,761)
------------------------------------------------------------------------------------------------------------------------------------
$(98,762)
------------------------------------------------------------------------------------------------------------------------------------
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Effective date represents the date on which both the
Fund and counterparty commence interest payment
accruals on each forward swap contract.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest.
N/R Investment is not rated.
See accompanying notes to financial statements.
34
Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI)
Portfolio of
INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER DISCRETIONARY - 0.1% (0.2% OF TOTAL INVESTMENTS)
$ 75 Baltimore, Maryland, Pollution Control Revenue Bonds, General No Opt. Call Baa3 $ 74,669
Motors Corporation, Series 1993, 5.350%, 4/01/08
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.5% (2.4% OF TOTAL INVESTMENTS)
2,750 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 2,782,835
Asset-Backed Refunding Bonds, Series 2002,
5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 15.0% (10.2% OF TOTAL INVESTMENTS)
225 Anne Arundel County, Maryland, Economic Development 9/12 at 102.00 A3 241,515
Revenue Bonds, Community College Project, Series 2002,
5.125%, 9/01/22
Frederick County, Maryland, Educational Facilities Revenue
Bonds, Mount St. Mary's College, Series 2001A:
100 5.750%, 9/01/25 3/10 at 101.00 BBB 105,808
100 5.800%, 9/01/30 3/10 at 101.00 BBB 105,993
690 Hartford County, Maryland, Economic Development Revenue 4/14 at 100.00 A+ 734,740
Bonds, Battelle Memorial Institute, Series 2004,
5.250%, 4/01/34
Maryland Economic Development Corporation, Student Housing
Revenue Bonds, Sheppard Pratt University Village, Series 2001:
20 5.875%, 7/01/21 - ACA Insured 7/11 at 101.00 A 21,751
150 6.000%, 7/01/33 - ACA Insured 7/11 at 101.00 A 163,623
1,250 Maryland Economic Development Corporation, Student Housing 10/13 at 100.00 Baa3 1,331,538
Revenue Bonds, University of Maryland - Baltimore,
Series 2003A, 5.625%, 10/01/23
1,000 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 AA 1,048,850
Revenue Bonds, Johns Hopkins University, Series 2002A,
5.000%, 7/01/32
625 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A- 652,938
Revenue Bonds, Goucher College, Series 2004,
5.125%, 7/01/34
1,000 Morgan State University, Maryland, Student Tuition and Fee 7/13 at 100.00 AAA 1,063,840
Revenue Bonds, Academic Fees and Auxiliary Facilities,
Series 2003A, 5.000%, 7/01/32 - FGIC Insured
985 University of Maryland, Auxiliary Facility and Tuition Revenue 4/11 at 100.00 AA 1,015,407
Bonds, Series 2001B, 4.625%, 4/01/21
University of Maryland, Auxiliary Facility and Tuition Revenue
Bonds, Series 2002A:
1,000 5.000%, 4/01/09 No Opt. Call AA 1,075,440
2,000 5.125%, 4/01/22 4/12 at 100.00 AA 2,150,580
University of Maryland, Auxiliary Facility and Tuition Revenue
Bonds, Series 2003A:
1,000 5.000%, 4/01/15 4/13 at 100.00 AA 1,096,920
1,000 5.000%, 4/01/19 4/13 at 100.00 AA 1,086,950
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 17.1% (11.7% OF TOTAL INVESTMENTS)
1,000 Maryland Health and Higher Educational Facilities Authority, 7/08 at 101.00 AAA 1,054,560
Revenue Bonds, Anne Arundel Medical Center, Series 1998,
5.125%, 7/01/33 - FSA Insured
1,000 Maryland Health and Higher Educational Facilities Authority, 5/11 at 100.00 AA- 1,046,570
Revenue Bonds, Johns Hopkins Hospital, Series 2001,
5.000%, 5/15/21
650 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A- 680,414
Revenue Bonds, Mercy Medical Center, Series 2001,
5.625%, 7/01/31
800 Maryland Health and Higher Educational Facilities Authority, 7/11 at 100.00 A+ 821,520
Revenue Bonds, Greater Baltimore Medical Center,
Series 2001, 5.000%, 7/01/34
1,250 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 1,330,350
Revenue Bonds, Carroll County General Hospital, Series 2002,
5.800%, 7/01/32
35
Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE (continued)
$ 700 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 Baa1 $ 725,998
Revenue Bonds, Frederick Memorial Hospital, Series 2002,
5.125%, 7/01/35
1,845 Maryland Health and Higher Educational Facilities Authority, 7/12 at 100.00 A3 1,975,977
Revenue Bonds, Union Hospital of Cecil County,
Series 2002, 5.625%, 7/01/32
775 Maryland Health and Higher Educational Facilities Authority, 1/13 at 101.00 Baa1 837,744
Revenue Refunding Bonds, Adventist Healthcare,
Series 2003A, 5.750%, 1/01/25
1,000 Maryland Health and Higher Educational Facilities Authority, 7/13 at 100.00 Baa2 1,045,380
Revenue Bonds, Kennedy Krieger Institute, Series 2003,
5.500%, 7/01/33
900 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 Baa1 951,111
Revenue Bonds, MedStar Health, Series 2004,
5.375%, 8/15/24
725 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A 757,408
Revenue Bonds, LifeBridge Health System, Series 2004A,
5.125%, 7/01/34
775 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 A2 825,034
Revenue Bonds, Calvert Memorial Hospital, Series 2004,
5.500%, 7/01/36
770 Maryland Health and Higher Educational Facilities Authority, 7/14 at 100.00 AA 802,325
Revenue Bonds, Civista Medical Center, Series 2005,
5.000%, 7/01/37 - RAAI Insured
900 Prince George's County, Maryland, Revenue Refunding and 7/05 at 101.00 B3 762,786
Project Bonds, Dimensions Health Corporation, Series 1994,
5.300%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 12.0% (8.2% OF TOTAL INVESTMENTS)
980 Maryland Community Development Administration, Housing 7/12 at 100.00 Aa2 991,339
Revenue Bonds, Series 2002B, 4.950%, 7/01/32 (Alternative
Minimum Tax)
Montgomery County Housing Opportunities Commission,
Maryland, Multifamily Housing Development Bonds,
Series 2002B:
515 5.100%, 7/01/33 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 525,434
3,000 5.200%, 7/01/44 (Alternative Minimum Tax) 7/12 at 100.00 Aaa 3,060,930
4,860 Prince George's County Housing Authority, Maryland, GNMA 11/12 at 100.00 AAA 4,986,117
Collateralized Mortgage Revenue Bonds, Fairview and
Hillside Projects, Series 2002A, 4.700%, 11/20/22
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.3% (0.9% OF TOTAL INVESTMENTS)
1,000 Northeast Maryland Waste Disposal Authority, Resource 1/09 at 101.00 BBB 1,022,680
Recovery Revenue Bonds, Baltimore RESCO Retrofit Project,
Series 1998, 4.750%, 1/01/12 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 0.4% (0.3% OF TOTAL INVESTMENTS)
280 Maryland Health and Higher Educational Facilities Authority, 4/11 at 101.00 N/R 239,238
Revenue Bonds, Collington Episcopal Life Care Community
Inc., Series 2001A, 6.750%, 4/01/23
Prince George's County, Maryland, Revenue Bonds, Collington
Episcopal Life Care Community Inc., Series 1994A:
40 5.625%, 4/01/09 4/06 at 100.00 N/R 34,184
35 6.000%, 4/01/13 10/05 at 101.00 N/R 30,371
23 Prince George's County, Maryland, Revenue Bonds, Collington No Opt. Call N/R 22,563
Episcopal Life Care Community Inc., Series 1994B,
8.000%, 4/01/16 (Optional put 4/01/06)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 27.3% (18.7% OF TOTAL INVESTMENTS)
1,000 Annapolis, Maryland, General Obligation Public Improvement 4/12 at 101.00 AA 1,044,770
Refunding Bonds, Series 2002, 4.375%, 4/01/17
1,000 Anne Arundel County, Maryland, General Obligation Bonds, No Opt. Call AA+ 1,114,060
Series 2003, 5.000%, 3/01/13
1,000 Calvert County, Maryland, General Obligation Public 1/12 at 101.00 AA 1,056,900
Improvement Bonds, Series 2002, 4.500%, 1/01/16
1,260 Charles County, Maryland, Consolidated General Obligation 1/12 at 101.00 AA 1,326,163
Public Improvement Bonds, Series 2002, 4.400%, 1/15/16
36
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ Frederick County, Maryland, General Obligation Public
Facilities Bonds, Series 2002:
1,830 5.000%, 11/01/20 11/12 at 101.00 AA $ 2,000,702
2,035 5.000%, 11/01/21 11/12 at 101.00 AA 2,224,825
2,500 5.000%, 11/01/22 11/12 at 101.00 AA 2,725,875
245 Frederick County, Maryland, Special Obligation Bonds, 7/10 at 102.00 AA 269,909
Villages of Lake Linganore Community Development
Authority, Series 2001A, 5.600%, 7/01/20 - RAAI Insured
1,000 Maryland National Capital Park and Planning Commission, 1/14 at 100.00 AA 1,099,440
Prince George's County, General Obligation Bonds,
Park Acquisition and Development, Series 2004EE-2,
5.000%, 1/15/17
1,000 Maryland, General Obligation Bonds, State and Local No Opt. Call AAA 1,098,170
Facilities Loan, Series 2002B, 5.250%, 2/01/10
2,000 Montgomery County, Maryland, General Obligation Bonds, 2/12 at 101.00 AAA 2,171,640
Consolidated Public Improvement, Series 2002A,
5.000%, 2/01/20
1,000 Montgomery County, Maryland, General Obligation Refunding No Opt. Call AAA 1,122,230
Bonds, Consolidated Public Improvement, Series 2002A,
5.250%, 11/01/11
1,000 Montgomery County, Maryland, General Obligation Bonds, No Opt. Call AAA 1,116,830
Consolidated Public Improvement, Series 2004A,
5.000%, 4/01/13
1,000 Prince George's County, Maryland, General Obligation 10/13 at 100.00 AA 1,093,190
Consolidated Public Improvement Bonds, Series 2003A,
5.000%, 10/01/17
1,000 Prince George's County, Maryland, General Obligation No Opt. Call AA 1,108,160
Consolidated Public Improvement Bonds, Series 2004C,
5.000%, 12/01/11
1,000 St. Mary's County, Maryland, General Obligation Hospital No Opt. Call AA- 1,110,920
Bonds, Series 2002, 5.000%, 10/01/12
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 37.1% (25.3% OF TOTAL INVESTMENTS)
750 Annapolis, Maryland, Special Obligation Bonds, Park Place 1/15 at 101.00 N/R 761,783
Project, Series 2005A, 5.350%, 7/01/34
1,000 Baltimore Board of School Commissioners, Maryland, Revenue 5/13 at 100.00 AA+ 1,097,830
Bonds, City Public School System, Series 2003A,
5.000%, 5/01/15
450 Hyattsville, Maryland, Special Obligation Bonds, University 7/14 at 102.00 N/R 462,038
Town Center Project, Series 2004, 5.750%, 7/01/34
5,000 Maryland Department of Transportation, County Transportation No Opt. Call AA 5,823,000
Revenue Bonds, Series 2002, 5.500%, 2/01/16
1,000 Maryland Department of Transportation, Consolidated No Opt. Call AA 1,114,470
Transportation Revenue Bonds, Series 2004, 5.000%, 5/01/13
2,200 Maryland Economic Development Corporation, Lease 6/12 at 100.50 AA+ 2,289,760
Revenue Bonds, Department of Transportation Headquarters
Building, Series 2002, 4.750%, 6/01/22
450 Maryland Economic Development Corporation, Lease 9/12 at 100.00 AA+ 496,818
Revenue Bonds, Montgomery County Town Square
Parking Garage, Series 2002A, 5.000%, 9/15/13
2,935 Maryland Economic Development Corporation, Lease 9/12 at 100.00 AA+ 3,261,754
Revenue Bonds, Montgomery County Wayne Avenue
Parking Project, Series 2002A, 5.250%, 9/15/16
Maryland Stadium Authority, Lease Revenue Bonds,
Montgomery County Conference Center Facilities, Series 2003:
1,465 5.000%, 6/15/21 6/13 at 100.00 AA+ 1,593,920
1,620 5.000%, 6/15/23 6/13 at 100.00 AA+ 1,752,970
700 Puerto Rico, Highway Revenue Bonds, Highway and No Opt. Call AAA 832,636
Transportation Authority, Series 2003AA, 5.500%, 7/01/19 -
MBIA Insured
3,500 Puerto Rico Infrastructure Financing Authority, Special Tax 1/08 at 101.00 AAA 3,656,065
Revenue Bonds, Series 1997A, 5.000%, 7/01/28 -
AMBAC Insured
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Bonds, Series 2002G:
1,000 5.250%, 7/01/17 7/12 at 100.00 BBB 1,080,250
1,205 5.250%, 7/01/20 7/12 at 100.00 BBB 1,294,760
1,275 5.250%, 7/01/21 7/12 at 100.00 BBB 1,366,736
1,000 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call AAA 1,145,120
Appropriation Bonds, Series 1998A, 5.125%, 6/01/24 -
AMBAC Insured
37
Nuveen Maryland Dividend Advantage Municipal Fund 3 (NWI) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 235 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB- $ 252,731
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
25 Washington Suburban Sanitary District, Maryland, General 6/11 at 101.00 AAA 27,265
Obligation Construction Bonds, Second Series 2001,
5.000%, 6/01/17
1,000 Washington Suburban Sanitary District, Montgomery and No Opt. Call AAA 1,118,080
Prince George's Counties, Maryland, Sewerage Disposal
Bonds, Series 2004, 5.000%, 6/01/13
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.9% (1.3% OF TOTAL INVESTMENTS)
Maryland Health and Higher Educational Facilities Authority,
Parking Facilities Revenue Bonds, Johns Hopkins Medical
Institution, Series 2004B:
190 5.000%, 7/01/13 - AMBAC Insured No Opt. Call AAA 210,685
175 5.000%, 7/01/14 - AMBAC Insured No Opt. Call AAA 194,910
1,000 District of Columbia Metropolitan Area Transit Authority, No Opt. Call AAA 1,105,750
Gross Revenue Bonds, Series 2003, 5.000%, 1/01/12 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 20.1% (13.7% OF TOTAL INVESTMENTS)
10 Anne Arundel County, Maryland, General Obligation Bonds, 5/09 at 101.00 AA+*** 10,839
Consolidated Improvements, Series 1999, 5.000%, 5/15/19
(Pre-refunded to 5/15/09)
1,000 Anne Arundel County, Maryland, Special Obligation Bonds, 7/09 at 102.00 AAA 1,172,660
Arundel Mills Project, Series 1999, 7.100%, 7/01/29
(Pre-refunded to 7/01/09)
2,115 Baltimore County, Maryland, General Obligation Consolidated 8/12 at 100.00 AAA 2,382,251
Public Improvement Bonds, Series 2002, 5.250%, 8/01/17
(Pre-refunded to 8/01/12)
100 Frederick County, Maryland, General Obligation Public 7/09 at 101.00 AAA 109,530
Facilities Bonds, Series 1999, 5.250%, 7/01/17 (Pre-refunded
to 7/01/09)
1,210 Howard County, Maryland, Consolidated Public Improvement 2/09 at 101.00 AAA 1,297,386
Bonds, Series 2001A, 4.750%, 2/15/19 (Pre-refunded
to 2/15/09)
1,215 Howard County, Maryland, Consolidated Public Improvement 8/12 at 100.00 AAA 1,349,731
Refunding Bonds, Series 2003A, 5.000%, 8/15/15
(Pre-refunded to 8/15/12)
50 Maryland Health and Higher Educational Facilities Authority, No Opt. Call AAA 54,904
Revenue Bonds, Helix Health, Series 1997,
5.000%, 7/01/17 - AMBAC Insured
1,070 Maryland Transportation Authority, Revenue Refunding No Opt. Call AAA 1,261,220
Bonds, Transportation Facilities Projects, First Series 1978,
6.800%, 7/01/16
880 Puerto Rico, General Obligation and Public Improvement 7/11 at 100.00 AAA 973,711
Bonds, Series 2001, 5.125%, 7/01/30 (Pre-refunded
to 7/01/11) - FSA Insured
5,000 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 5,483,550
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
700 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 Aaa 794,227
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
(Pre-refunded to 2/01/12)
1,000 Washington Suburban Sanitary District, Montgomery 6/08 at 102.00 AAA 1,078,930
and Prince George's Counties, Maryland, Water Supply
Bonds, Series 1998, 5.000%, 6/01/15 (Pre-refunded to 6/01/08)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.1% (4.8% OF TOTAL INVESTMENTS)
1,250 Maryland Energy Financing Administration, Revenue Bonds, 9/05 at 102.00 N/R 1,277,613
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
4,025 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 4,347,684
Series 2000HH, 5.250%, 7/01/29 - FSA Insured
38
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 3.4% (2.3% OF TOTAL INVESTMENTS)
$ 2,570 Baltimore, Maryland, Revenue Refunding Bonds, Wastewater 7/12 at 100.00 AAA $ 2,706,052
Projects, Series 2002A, 5.125%, 7/01/42 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 108,033 Total Long-Term Investments (cost $112,009,829) - 146.3% 116,206,833
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.8% 2,235,999
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.1)% (39,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 79,442,832
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT MAY 31, 2005:
UNREALIZED
EFFECTIVE TERMINATION APPRECIATION
NOTIONAL AMOUNT DATE(2) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Agreement with Goldman Sachs dated December 6, 2004,
to pay semi-annually the notional amount multiplied
by 5.324% (annualized) and receive quarterly the
notional amount multiplied by the three-month
USD-LIBOR (United States Dollar-London Inter-Bank
Offered Rates). $ 600,000 7/11/05 7/11/25 $ (48,001)
Agreement with JPMorgan dated January 11, 2005,
to pay semi-annually the notional amount multiplied
by 5.235% (annualized) and receive quarterly the
notional amount multiplied by the three-month
USD-LIBOR (United States Dollar-London Inter-Bank
Offered Rates). 2,200,000 8/17/05 8/17/25 (146,875)
------------------------------------------------------------------------------------------------------------------------------------
$(194,876)
------------------------------------------------------------------------------------------------------------------------------------
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Effective date represents the date on which both the
Fund and counterparty commence interest payment
accruals on each forward swap contract.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
39
Nuveen Virginia Premium Income Municipal Fund (NPV)
Portfolio of
INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.9% (2.7% OF TOTAL INVESTMENTS)
$ Tobacco Settlement Financing Corporation of Virginia,
Tobacco Settlement Asset-Backed Bonds, Series 2005:
1,575 5.250%, 6/01/19 6/15 at 100.00 BBB $ 1,585,238
3,850 5.500%, 6/01/26 6/15 at 100.00 BBB 3,851,463
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 10.7% (7.4% OF TOTAL INVESTMENTS)
3,500 Alexandria Industrial Development Authority, Virginia, Fixed 10/10 at 101.00 AAA 3,924,900
Rate Revenue Bonds, Institute for Defense Analyses,
Series 2000A, 5.900%, 10/01/30 - AMBAC Insured
Danville Industrial Development Authority, Virginia, Student
Housing Revenue Bonds, Collegiate Housing Foundation, Averett
College Project, Series 1999A:
500 6.875%, 6/01/20 6/09 at 102.00 N/R 497,230
1,500 7.000%, 6/01/30 6/09 at 102.00 N/R 1,493,865
1,000 Prince William County Industrial Development Authority, 10/13 at 101.00 A3 1,062,530
Virginia, Educational Facilities Revenue Bonds, Catholic
Diocese of Arlington, Series 2003, 5.500%, 10/01/33
500 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 547,615
Revenue Refunding and Improvement Bonds, Series 1999,
6.000%, 10/15/28
700 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB 750,015
Environmental Control Facilities Financing Authority,
Higher Education Revenue Refunding Bonds, Ana G. Mendez
University System, Series 2002, 5.375%, 12/01/21
500 Rockbridge County Industrial Development Authority, 7/11 at 100.00 B2 476,145
Virginia, Horse Center Revenue and Refunding Bonds,
Series 2001C, 6.850%, 7/15/21
2,000 Virginia College Building Authority, Educational Facilities No Opt. Call Aa1 2,226,140
Revenue Bonds, Public Higher Education Financing Program,
Series 2004B, 5.000%, 9/01/13
2,120 Virginia College Building Authority, Educational Facilities 9/11 at 100.00 AA+ 2,225,915
Revenue Bonds, Public Higher Education Financing Program,
Series 2001A, 5.000%, 9/01/26
1,635 Virginia Commonwealth University, Revenue Bonds, 5/14 at 101.00 AAA 1,793,203
Series 2004A, 5.000%, 5/01/17 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 21.7% (15.2% OF TOTAL INVESTMENTS)
2,000 Albemarle County Industrial Development Authority, 10/12 at 100.00 A2 2,077,620
Virginia, Hospital Revenue Bonds, Martha Jefferson Hospital,
Series 2002, 5.250%, 10/01/35
2,000 Danville Industrial Development Authority, Virginia, Hospital No Opt. Call AAA 2,237,460
Revenue Bonds, Danville Regional Medical Center,
Series 1998, 5.200%, 10/01/18 - AMBAC Insured
4,850 Fairfax County Industrial Development Authority, Virginia, No Opt. Call AA+ 5,317,298
Hospital Revenue Refunding Bonds, Inova Health System
Hospitals Project, Series 1993A, 5.000%, 8/15/23
1,200 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 1,235,676
Revenue Bonds, MediCorp Health System, Series 2002B,
5.125%, 6/15/33
1,000 Hanover County Industrial Development Authority, Virginia, No Opt. Call AAA 1,211,290
Hospital Revenue Bonds, Memorial Regional Medical Center
Project, Series 1995, 6.375%, 8/15/18 - MBIA Insured
4,650 Hanover County Industrial Development Authority, Virginia, 8/05 at 102.00 AAA 4,761,554
Hospital Revenue Bonds, Bon Secours Health System
Projects, Series 1995, 5.500%, 8/15/25 - MBIA Insured
1,500 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 1,592,955
Revenue Bonds, Bon Secours Health System Inc.,
Series 2002A, 5.600%, 11/15/30
1,500 Henrico County Industrial Development Authority, Virginia, No Opt. Call AAA 1,876,710
Healthcare Revenue Bonds, Bon Secours Health System
Inc., Series 1996, 6.250%, 8/15/20 - MBIA Insured
1,950 Manassas Industrial Development Authority, Virginia, 4/13 at 100.00 A2 2,048,806
Hospital Revenue Bonds, Prince William Hospital,
Series 2002, 5.250%, 4/01/33
4,750 Medical College of Virginia Hospital Authority, General 7/08 at 102.00 AAA 4,979,995
Revenue Bonds, Series 1998, 5.125%, 7/01/23 -
MBIA Insured
40
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE (continued)
$ 3,000 Roanoke Industrial Development Authority, Virginia, 7/12 at 100.00 AAA $ 3,285,750
Hospital Revenue Bonds, Carilion Health System,
Series 2002A, 5.500%, 7/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 3.0% (2.1% OF TOTAL INVESTMENTS)
1,455 Arlington County Industrial Development Authority, Virginia, 5/10 at 100.00 Aaa 1,542,227
Multifamily Housing Revenue Bonds, Patrick Henry
Apartments, Series 2000, 6.050%, 11/01/32 (Alternative
Minimum Tax) (Mandatory put 11/01/20)
1,495 Henrico County Economic Development Authority, Virginia, 7/09 at 102.00 AAA 1,650,241
GNMA Mortgage-Backed Securities Beth Sholom
Assisted Living Revenue Bonds, Series 1999A,
5.900%, 7/20/29
1,000 Lynchburg Redevelopment and Housing Authority, Virginia, 4/10 at 102.00 AAA 1,046,600
Vistas GNMA Mortgage-Backed Revenue Bonds,
Series 2000A, 6.200%, 1/20/40 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.0% (0.8% OF TOTAL INVESTMENTS)
350 Puerto Rico Housing Finance Authority, Mortgage-Backed 6/13 at 100.00 AAA 354,326
Securities Program Home Mortgage Revenue Bonds,
Series 2003A, 4.875%, 6/01/34 (Alternative Minimum Tax)
1,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 1,037,110
Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.5% (1.0% OF TOTAL INVESTMENTS)
2,000 Charles County Industrial Development Authority, Virginia, No Opt. Call BBB 2,067,520
Solid Waste Disposal Facility Revenue Refunding Bonds,
USA Waste of Virginia Inc., Series 1999, 4.875%, 2/01/09
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 1.8% (1.3% OF TOTAL INVESTMENTS)
500 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 Ba3 502,870
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (a)
1,000 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 Ba3 1,006,190
Industrial Development Revenue Refunding Bonds,
Nekoosa Packaging Corporation Project, Series 1998,
5.650%, 12/01/25 (Alternative Minimum Tax) (a)
1,000 Isle of Wight County Industrial Development Authority, 5/07 at 102.00 BBB 1,033,650
Virginia, Solid Waste Disposal Facilities Revenue Bonds,
Union Camp Corporation Project, Series 1997,
6.100%, 5/01/27 (Alternative Minimum Tax) (a)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 20.8% (14.5% OF TOTAL INVESTMENTS)
900 Alexandria, Virginia, General Obligation Bonds, Series 2004B, No Opt. Call AAA 1,007,181
5.000%, 6/15/13
900 Alexandria, Virginia, General Obligation Bonds, Series 2004C, No Opt. Call AAA 998,694
5.000%, 12/15/11
1,400 Arlington County, Virginia, General Obligation Bonds, 5/15 at 100.00 AAA 1,568,350
Series 2005, 5.000%, 5/15/16 (WI, settling 6/01/05)
Chesapeake, Virginia, General Obligation Water and Sewer
Bonds, Series 2003B:
1,880 5.000%, 6/01/21 6/13 at 100.00 AA 2,036,134
2,060 5.000%, 6/01/23 6/13 at 100.00 AA 2,220,907
1,355 Harrisonburg, Virginia, General Obligation Bonds, Public 7/12 at 101.00 AAA 1,477,804
Safety and Steam Plant, Series 2002, 5.000%, 7/15/19 -
FGIC Insured
1,920 Loudoun County, Virginia, General Obligation Public No Opt. Call Aaa 2,155,891
Improvement Bonds, Series 2005A, 5.000%, 7/01/14
105 Loudoun County, Virginia, General Obligation Public 5/12 at 100.00 Aaa 115,117
Improvement Bonds, Series 2002A, 5.250%,5/01/22
1,185 Lynchburg, Virginia, General Obligation Bonds, 6/14 at 100.00 AA 1,287,360
Series 2004, 5.000%, 6/01/21
Newport News, Virginia, General Obligation Bonds, General
Improvement and Water Projects, Series 2002A:
2,770 5.000%, 7/01/19 7/13 at 100.00 AA 3,011,461
1,000 5.000%, 7/01/20 7/13 at 100.00 AA 1,087,170
1,350 Newport News, Virginia, General Obligation Bonds, 5/14 at 101.00 AA 1,496,840
Series 2004C, 5.000%, 5/01/16
1,400 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 1,498,588
Series 2000A, 6.000%, 6/01/20 - ACA Insured
1,000 Portsmouth, Virginia, General Obligation Bonds, No Opt. Call AAA 1,109,570
Series 2003, 5.000%, 7/01/12 - FSA Insured
1,480 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,605,667
5.000%, 7/15/21 - FSA Insured
41
Nuveen Virginia Premium Income Municipal Fund (NPV) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,430 Roanoke, Virginia, General Obligation Public Improvement 10/12 at 101.00 AA $ 1,574,316
Bonds, Series 2002A, 5.000%, 10/01/17
1,425 Virginia Beach, Virginia, General Obligation Public 6/11 at 101.00 AA+ 1,540,895
Improvement Bonds, Series 2001, 5.000%, 6/01/20
2,155 Virginia Beach, Virginia, General Obligation Bonds, 5/13 at 100.00 AA+ 2,365,824
Series 2003B, 5.000%, 5/01/15
1,000 Virginia Beach, Virginia, General Obligation Bonds, No Opt. Call AA+ 1,110,790
Series 2004B, 5.000%, 5/01/13
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 27.6% (19.3% OF TOTAL INVESTMENTS)
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
335 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 349,003
260 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 272,168
Cumberland County, Virginia, Certificates of Participation,
Series 1997:
1,075 6.200%, 7/15/12 No Opt. Call N/R 1,172,320
1,350 6.375%, 7/15/17 No Opt. Call N/R 1,535,612
500 Dinwiddie County Industrial Development Authority, Virginia, 2/07 at 102.00 N/R 521,535
Lease Revenue Bonds, Dinwiddie County School Facilities,
Series 1997A, 6.000%, 2/01/18
1,000 Dinwiddie County Industrial Development Authority, Virginia, 2/14 at 100.00 AAA 1,107,220
Lease Revenue Bonds, Series 2004B, 5.125%, 2/15/16 -
MBIA Insured
Fairfax County Economic Development Authority, Virginia, Lease
Revenue Bonds, Laurel Hill Public Facilities Project, Series
2003:
2,260 5.000%, 6/01/14 6/13 at 101.00 AA+ 2,508,216
2,165 5.000%, 6/01/22 6/13 at 101.00 AA+ 2,331,597
1,000 Fairfax County Economic Development Authority, Virginia, 9/09 at 102.00 AA 1,125,940
Parking Revenue Bonds, Vienna II Metrorail Station Project,
1999 First Series, 6.000%, 9/01/18
1,660 Front Royal and Warren County Industrial Development 4/14 at 100.00 AAA 1,804,951
Authority, Virginia, Lease Revenue Bonds, Series 2004B,
5.000%, 4/01/18 - FSA Insured
2,000 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 AAA 2,110,240
Revenue Bonds, Series 2002D, 5.000%, 7/01/32 -
FSA Insured
Puerto Rico Public Buildings Authority, Guaranteed Government
Facilities Revenue Refunding Bonds, Series 2002D:
265 5.250%, 7/01/27 7/12 at 100.00 BBB 281,054
320 5.250%, 7/01/36 7/12 at 100.00 BBB 338,182
1,110 Spotsylvania County Industrial Development Authority, 8/13 at 100.00 AAA 1,136,762
Virginia, Lease Revenue Bonds, School Facilities,
Series 2003B, 4.375%, 8/01/20 - AMBAC Insured
2,000 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 2,279,900
Loan Note, Series 1999A, 6.500%, 10/01/24
1,400 Virginia Beach Development Authority, Public Facilities 5/15 at 100.00 AA 1,552,950
Revenue Bonds, Series 2005A, 5.000%, 5/01/16
(WI, settling 6/07/05)
1,855 Virginia College Building Authority, Educational Facilities No Opt. Call AA+ 2,034,379
Revenue Bonds, 21st Century College Program, Series 2004A,
5.000%, 2/01/11
2,000 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 2,120,720
Revenue Bonds, 21st Century College Program, Series 2002A,
5.000%, 2/01/22
2,250 Virginia Transportation Board, Transportation Revenue Bonds, No Opt. Call AA+ 2,511,180
Northern Virginia Transportation District Program,
Series 2004A, 5.000%, 5/15/14
2,000 Virginia Public Building Authority, Public Facilities Revenue No Opt. Call AA+ 2,203,120
Bonds, Series 2004B, 5.000%, 8/01/11
875 Virginia Public School Authority, School Financing Bonds, No Opt. Call AA+ 963,865
1997 Resolution, Series 2004C, 5.000%, 8/01/11
2,000 Virginia Public School Authority, School Financing Bonds, 8/10 at 101.00 AA+ 2,160,740
1997 Resolution, Series 2000B, 5.000%, 8/01/18
Virginia Resources Authority, Infrastructure Revenue Bonds,
Pooled Loan Bond Program, Series 2000B:
1,120 5.500%, 5/01/20 - FSA Insured 5/10 at 101.00 AAA 1,229,782
3,060 5.500%, 5/01/30 - FSA Insured 5/10 at 101.00 AAA 3,339,653
42
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,740 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/11 at 101.00 AA $ 1,880,401
Pooled Loan Bond Program, Series 2002A, 5.000%, 5/01/19
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 12.1% (8.4% OF TOTAL INVESTMENTS)
755 Metropolitan District of Columbia Airports Authority, 10/07 at 101.00 Aa3 794,426
Virginia, Airport System Revenue Bonds, Series 1997A,
5.375%, 10/01/23
4,000 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 4,194,480
Series 2001A, 5.125%, 7/01/31 - FGIC Insured
530 Pocahontas Parkway Association, Virginia, Senior Lien Revenue 8/08 at 102.00 BB 524,133
Bonds, Route 895 Connector Toll Road, Series 1998A,
5.500%, 8/15/28
2,500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AAA 2,889,650
Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 -
FGIC Insured
6,065 Virginia Port Authority, Revenue Bonds, Port Authority Facilities, 7/07 at 101.00 AAA 6,365,581
Series 1997, 5.600%, 7/01/27 (Alternative Minimum Tax) -
MBIA Insured
2,000 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 2,146,500
Bonds, Series 2001A, 5.250%, 8/01/23
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 18.2% (12.7% OF TOTAL INVESTMENTS)
270 Arlington County Industrial Development Authority, Virginia, 7/05 at 102.00 A*** 276,029
Multifamily Housing Mortgage Revenue Bonds, Arlington
Housing Corporation, Series 1995, 5.700%, 7/01/07
(Pre-refunded to 7/01/05)
750 Bristol, Virginia, General Obligation Utility System Revenue 11/12 at 102.00 AAA 839,850
Bonds, Series 2002, 5.000%, 11/01/24 - FSA Insured
1,215 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 1,290,184
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded to 7/01/10)
2,000 Fairfax County Water Authority, Virginia, Water Revenue 4/10 at 101.00 AAA 2,249,400
Bonds, Series 2000, 5.625%, 4/01/25 (Pre-refunded
to 4/01/10)
Fairfax County Water Authority, Virginia, Water Revenue
Refunding Bonds, Series 2002:
1,925 5.375%, 4/01/19 (Pre-refunded to 4/01/12) 4/12 at 100.00 AAA 2,171,881
200 5.000%, 4/01/27 (Pre-refunded to 4/01/12) 4/12 at 100.00 AAA 221,090
Greater Richmond Convention Center Authority, Virginia, Hotel
Tax Revenue Bonds, Convention Center Expansion Project, Series
2000:
600 6.125%, 6/15/25 (Pre-refunded to 6/15/10) 6/10 at 101.00 A*** 688,350
2,000 6.125%, 6/15/29 (Pre-refunded to 6/15/10) 6/10 at 101.00 A*** 2,294,500
Hampton, Virginia, General Obligation Public Improvement
Bonds, Series 2000:
890 5.750%, 2/01/17 (Pre-refunded to 2/01/10) 2/10 at 102.00 AA*** 1,009,705
2,000 6.000%, 2/01/20 (Pre-refunded to 2/01/10) 2/10 at 102.00 AA*** 2,290,600
480 Loudoun County, Virginia, General Obligation Public 5/12 at 100.00 Aaa 538,963
Improvement Bonds, Series 2002A, 5.250%, 5/01/22
(Pre-refunded to 5/01/12)
Loudoun County Industrial Development Authority, Virginia,
Hospital Revenue Bonds, Loudoun Hospital Center,
Series 2002A:
375 6.000%, 6/01/22 (Pre-refunded to 6/01/12) 6/12 at 101.00 BBB*** 435,499
800 6.100%, 6/01/32 (Pre-refunded to 6/01/12) 6/12 at 101.00 BBB*** 933,992
645 Metropolitan District of Columbia Airports Authority, 10/07 at 101.00 Aa3*** 686,996
Virginia, Airport System Revenue Bonds, Series 1997A,
5.375%, 10/01/23 (Pre-refunded to 10/01/07)
1,230 Middlesex County Industrial Development Authority, 8/09 at 102.00 AAA 1,395,091
Virginia, Lease Revenue Bonds, School Facilities Project,
Series 1999, 6.000%, 8/01/24 (Pre-refunded
to 8/01/09) - MBIA Insured
2,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 2,741,775
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
Puerto Rico Public Buildings Authority, Guaranteed
Government Facilities Revenue Refunding Bonds,
Series 2002D:
735 5.250%, 7/01/27 (Pre-refunded to 7/01/12) 7/12 at 100.00 BBB*** 817,247
880 5.250%, 7/01/36 (Pre-refunded to 7/01/12) 7/12 at 100.00 BBB*** 978,472
2,250 Virginia College Building Authority, Educational Facilities 2/09 at 101.00 AA+*** 2,505,938
Revenue Bonds, 21st Century College Program, Series 2000,
6.000%, 2/01/20 (Pre-refunded to 2/01/09)
43
Nuveen Virginia Premium Income Municipal Fund (NPV) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** (continued)
$ 1,000 Virginia College Building Authority, Educational Facilities 4/10 at 101.00 A+*** $ 1,138,050
Revenue Bonds, Hampton University, Series 2000,
6.000%, 4/01/20 (Pre-refunded to 4/01/10)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.4% (7.9% OF TOTAL INVESTMENTS)
Bristol, Virginia, Utility System Revenue Refunding Bonds,
Series 2003:
1,705 5.250%, 7/15/14 - MBIA Insured 7/13 at 100.00 AAA 1,915,960
1,800 5.250%, 7/15/15 - MBIA Insured 7/13 at 100.00 AAA 2,011,518
2,775 5.250%, 7/15/23 - MBIA Insured 7/13 at 100.00 AAA 3,066,070
2,500 Mecklenburg County Industrial Development Authority, 10/12 at 100.00 A3 2,823,125
Virginia, Revenue Bonds, UAE Mecklenburg Cogeneration
LP, Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
3,500 Richmond, Virginia, Public Utility Revenue Refunding Bonds, 1/08 at 101.00 AAA 3,665,935
Series 1998A, 5.125%, 1/15/28 - FGIC Insured
Richmond, Virginia, Public Utility Revenue Refunding Bonds,
Series 2002:
750 5.000%, 1/15/27 - FSA Insured 1/12 at 100.00 AAA 788,543
1,600 5.000%, 1/15/33 - FSA Insured 1/12 at 100.00 AAA 1,671,840
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.4% (6.5% OF TOTAL INVESTMENTS)
Fairfax County Water Authority, Virginia, Water Revenue
Refunding Bonds, Series 2002:
105 5.375%, 4/01/19 4/12 at 100.00 AAA 117,104
800 5.000%, 4/01/27 4/12 at 100.00 AAA 844,680
1,650 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ 1,741,179
Refunding Bonds, Series 1999, 5.000%, 5/01/28
1,000 Loudoun County Sanitation Authority, Virginia, Water and 1/15 at 100.00 AA+ 1,071,930
Sewerage System Revenue Bonds, Series 2004,
5.000%, 1/01/26
1,200 Norfolk, Virginia, Water Revenue Bonds, Series 1995, 11/05 at 102.00 AAA 1,238,184
5.875%, 11/01/20 - MBIA Insured
Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
1,310 5.000%, 11/01/21 - FGIC Insured 11/11 at 100.00 AAA 1,398,726
1,380 5.000%, 11/01/22 - FGIC Insured 11/11 at 100.00 AAA 1,473,467
1,955 Rivanna Water and Sewerage Authority, Virginia, Regional 10/09 at 101.00 Aa3 2,136,580
Water and Sewerage System Revenue Bonds, Series 1999,
5.625%, 10/01/29
2,250 Virginia Beach, Virginia, Storm Water Utility Revenue Bonds, 9/10 at 101.00 Aa3 2,547,829
Series 2000, 6.000%, 9/01/24
500 Virginia Resources Authority, Clean Water State Revolving 10/10 at 100.00 AAA 555,110
Fund Revenue Bonds, Series 1999, 5.625%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
$ 185,270 Total Long-Term Investments (cost $187,479,800) - 143.1% 200,926,318
=============-----------------------------------------------------------------------------------------------------------------------
44
PRINCIPAL MARKET
AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.4% (0.2% OF TOTAL INVESTMENTS)
$ 500 Puerto Rico Government Development Bank, Adjustable VMIG-1 $ 500,000
Refunding Bonds, Variable Rate Demand Obligations,
Series 1985, 2.850%, 12/01/15 - MBIA Insured+
------------------------------------------------------------------------------------------------------------------------------------
$ 500 Total Short-Term Investments (cost $500,000) 500,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $187,979,800) - 143.5% 201,426,318
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.0% 2,714,078
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (45.5)% (63,800,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 140,340,396
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
(a) The issuer has received a preliminary adverse
determination from the Internal Revenue Service (the
"IRS") regarding the tax-exempt status of the bonds'
coupon payments. The Fund will continue to treat coupon
payments as tax-exempt income until such time that it
is formally determined that the interest on the bonds
should be treated as taxable.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that in
effect at the end of the reporting period. This rate
changes periodically based on market conditions or a
specified market index.
See accompanying notes to financial statements.
45
Nuveen Virginia Dividend Advantage Municipal Fund (NGB)
Portfolio of
INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.6% (3.1% OF TOTAL INVESTMENTS)
Guam Economic Development Authority, Tobacco Settlement
Asset-Backed Bonds, Series 2001A:
$ 85 5.000%, 5/15/22 5/11 at 100.00 Baa3 $ 86,204
850 5.400%, 5/15/31 5/11 at 100.00 Baa3 855,695
Tobacco Settlement Financing Corporation of Virginia,
Tobacco Settlement Asset-Backed Bonds, Series 2005:
550 5.250%, 6/01/19 6/15 at 100.00 BBB 553,575
725 5.500%, 6/01/26 6/15 at 100.00 BBB 725,276
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 13.4% (9.1% OF TOTAL INVESTMENTS)
500 Danville Industrial Development Authority, Virginia, 3/11 at 102.00 N/R 514,500
Educational Facilities Revenue Bonds, Averett University
Project, Series 2001, 6.000%, 3/15/22
500 Prince William County Industrial Development Authority, 10/13 at 101.00 A3 531,265
Virginia, Educational Facilities Revenue Bonds, Catholic
Diocese of Arlington, Series 2003, 5.500%, 10/01/33
850 Prince William County Park Authority, Virginia, Park Facilities 10/09 at 101.00 A3 930,946
Revenue Refunding and Improvement Bonds, Series 1999,
6.000%, 10/15/28
Puerto Rico Industrial, Tourist, Educational, Medical and
Environmental Control Facilities Financing Authority, Higher
Education Revenue Bonds, Ana G. Mendez University System,
Series 1999:
160 5.375%, 2/01/19 2/09 at 101.00 BBB 166,582
320 5.375%, 2/01/29 2/09 at 101.00 BBB 330,093
375 Rockbridge County Industrial Development Authority, Virginia, No Opt. Call B2 360,829
Horse Center Revenue and Refunding Bonds, Series 2001B,
6.125%, 7/15/11
1,000 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 100.00 B2 952,290
Horse Center Revenue and Refunding Bonds, Series 2001C,
6.850%, 7/15/21
700 Virginia College Building Authority, Educational Facilities No Opt. Call Aa1 779,149
Revenue Bonds, Public Higher Education Financing Program,
Series 2004B, 5.000%, 9/01/13
1,325 Virginia College Building Authority, Educational Facilities 9/10 at 100.00 AA+ 1,421,791
Revenue Bonds, Public Higher Education Financing Program,
Series 2000A, 5.000%, 9/01/17
500 Virginia College Building Authority, Educational Facilities 7/08 at 101.00 AA 518,295
Revenue Refunding Bonds, Marymount University,
Series 1998, 5.100%, 7/01/18 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 12.9% (8.7% OF TOTAL INVESTMENTS)
1,000 Fauquier County Industrial Development Authority, Virginia, 10/12 at 102.00 AA 1,078,720
Hospital Revenue Bonds, Fauquier Hospital, Series 2002,
5.250%, 10/01/25 - RAAI Insured
1,500 Fredericksburg Industrial Development Authority, Virginia, 6/07 at 102.00 AAA 1,586,940
Hospital Facilities Revenue Refunding Bonds, MediCorp
Health System Obligated Group, Series 1996,
5.250%, 6/15/16 - AMBAC Insured
500 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 514,865
Revenue Bonds, MediCorp Health System, Series 2002B,
5.125%, 6/15/33
500 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 530,985
Revenue Bonds, Bon Secours Health System Inc.,
Series 2002A, 5.600%, 11/15/30
575 Manassas Industrial Development Authority, Virginia, 4/13 at 100.00 A2 604,135
Hospital Revenue Bonds, Prince William Hospital,
Series 2002, 5.250%, 4/01/33
1,000 Norfolk Industrial Development Authority, Virginia, Healthcare 8/07 at 102.00 AAA 1,054,850
Revenue Bonds, Bon Secours Health System, Series 1997,
5.250%, 8/15/26 - MBIA Insured
800 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 A 872,032
Revenue Refunding and Improvement Bonds, Norton
Community Hospital, Series 2001, 6.000%, 12/01/22 -
ACA Insured
46
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.3% (2.9% OF TOTAL INVESTMENTS)
$ 1,000 Arlington County Industrial Development Authority, Virginia, 11/11 at 102.00 AAA $ 1,038,340
Multifamily Housing Mortgage Revenue Bonds, Arlington
View Terrace Apartments, Series 2001, 5.150%, 11/01/31
(Alternative Minimum Tax) (Mandatory put 11/01/19)
1,000 Virginia Housing Development Authority, Rental Housing Bonds, 10/10 at 100.00 AA+ 1,050,570
Series 2000G, 5.625%, 10/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.1% (1.5% OF TOTAL INVESTMENTS)
1,000 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 1,037,110
Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 0.1% (0.2% OF TOTAL INVESTMENTS)
50 Charles County Industrial Development Authority, Virginia, No Opt. Call BBB 51,688
Solid Waste Disposal Facility Revenue Refunding Bonds,
USA Waste of Virginia Inc., Series 1999, 4.875%, 2/01/09
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.0% (2.7% OF TOTAL INVESTMENTS)
500 Albemarle County Industrial Development Authority, 1/12 at 100.00 N/R 526,720
Virginia, Residential Care Facility Revenue Bonds,
Westminster Canterbury of the Blue Ridge First Mortgage,
Series 2001, 6.200%, 1/01/31
350 Chesterfield County Health Center Commission, Virginia, 12/15 at 100.00 N/R 349,206
Mortgage Revenue Bonds, Lucy Corr Village, Series 2005,
5.625%, 12/01/39
650 James City County Industrial Development Authority, 3/12 at 101.00 N/R 701,720
Virginia, Residential Care Facility First Mortgage Revenue
Refunding Bonds, Williamburg Landing Inc., Series 2003A,
6.000%, 3/01/23
350 Winchester Industrial Development Authority, Virginia, 1/15 at 100.00 N/R 353,668
Residential Care Facility Revenue Bonds, Westminster-
Canterbury of Winchester Inc., Series 2005A,
5.200%, 1/01/27 (WI, settling 6/09/05)
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 1.8% (1.2% OF TOTAL INVESTMENTS)
100 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 Ba3 100,574
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (a)
20 Bedford County Industrial Development Authority, Virginia, 12/09 at 101.00 Ba3 20,968
Industrial Development Revenue Refunding Bonds,
Nekoosa Packaging Corporation, Series 1999A,
6.550%, 12/01/25 (Alternative Minimum Tax)
220 Goochland County Industrial Development Authority, 12/08 at 101.00 Ba3 221,362
Virginia, Industrial Development Revenue Refunding Bonds,
Nekoosa Packaging Corporation Project, Series 1998,
5.650%, 12/01/25 (Alternative Minimum Tax) (a)
500 Hopewell Industrial Development Authority, Virginia, No Opt. Call B 506,170
Environmental Improvement Revenue Bonds, Smurfit
Stone Container Corporation, Series 2005, 5.250%, 6/01/15
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 27.8% (18.9% OF TOTAL INVESTMENTS)
330 Alexandria, Virginia, General Obligation Bonds, Series 2004B, No Opt. Call AAA 369,300
5.000%, 6/15/13
300 Alexandria, Virginia, General Obligation Bonds, Series 2004C, No Opt. Call AAA 332,898
5.000%, 12/15/11
500 Arlington County, Virginia, General Obligation Bonds, 5/15 at 100.00 AAA 560,125
Series 2005, 5.000%, 5/15/16 (WI, settling 6/01/05)
2,000 Chesterfield County, Virginia, General Obligation Public 1/11 at 100.00 AAA 2,124,540
Improvement Bonds, Series 2001, 5.000%, 1/15/21
3,310 Leesburg, Virginia, General Obligation Public Improvement 1/11 at 101.00 AAA 3,559,905
Bonds, Series 2000, 5.125%, 1/15/21 - FGIC Insured
660 Loudoun County, Virginia, General Obligation Public Improvement No Opt. Call Aaa 741,088
Bonds, Series 2005A, 5.000%, 7/01/14
845 Newport News, Virginia, General Obligation Bonds, 5/14 at 101.00 AA 936,911
Series 2004C, 5.000%, 5/01/16
320 Northern Mariana Islands, General Obligation Bonds, 6/10 at 100.00 A 342,534
Series 2000A, 6.000%, 6/01/20 - ACA Insured
500 Portsmouth, Virginia, General Obligation Bonds, Series 2003, No Opt. Call AAA 554,785
5.000%, 7/01/12 - FSA Insured
1,300 Richmond, Virginia, General Obligation Refunding and Public 1/10 at 101.00 AAA 1,389,076
Improvement Bonds, Series 1999A, 5.125%, 1/15/24 -
FSA Insured
2,425 Virginia Beach, Virginia, General Obligation Public 6/11 at 101.00 AA+ 2,622,225
Improvement Bonds, Series 2001, 5.000%, 6/01/21
47
Nuveen Virginia Dividend Advantage Municipal Fund (NGB) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 20.1% (13.6% OF TOTAL INVESTMENTS)
$ 295 Bell Creek Community Development Authority, Virginia, Special 3/13 at 101.00 N/R $ 302,791
Assessment Bonds, Series 2003A, 6.750%, 3/01/22
500 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 526,025
Revenue Bonds, Series 2003, 7.500%, 6/01/33
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
120 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 125,016
95 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 99,446
1,000 Spotsylvania County Industrial Development Authority, 8/13 at 100.00 AAA 1,096,640
Virginia, Lease Revenue Bonds, School Facilities,
Series 2003B, 5.125%, 8/01/23 - AMBAC Insured
960 Virgin Islands Public Finance Authority, Gross Receipts 10/10 at 101.00 BBB 1,096,358
Taxes Loan Note, Series 1999A, 6.375%, 10/01/19
500 Virginia Beach Development Authority, Public Facilities 5/15 at 100.00 AA 554,625
Revenue Bonds, Series 2005A, 5.000%, 5/01/16
(WI, settling 6/07/05)
500 Virginia College Building Authority, Educational Facilities No Opt. Call AA+ 548,350
Revenue Bonds, 21st Century College Program,
Series 2004A, 5.000%, 2/01/11
500 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 530,180
Revenue Bonds, 21st Century College Program,
Series 2002A, 5.000%, 2/01/22
1,000 Virginia Transportation Board, Transportation Revenue No Opt. Call AA+ 1,116,080
Bonds, Northern Virginia Transportation District Program,
Series 2004A, 5.000%, 5/15/14
350 Virginia Gateway Community Development Authority, Prince 3/13 at 102.00 N/R 363,997
William County, Special Assessment Bonds, Series 2003,
6.375%, 3/01/30
750 Virginia Public Building Authority, Public Facilities Revenue No Opt. Call AA+ 826,170
Bonds, Series 2004B, 5.000%, 8/01/11
345 Virginia Public School Authority, School Financing Bonds, No Opt. Call AA+ 380,038
1997 Resolution, Series 2004C, 5.000%, 8/01/11
2,000 Virginia Public School Authority, School Financing Bonds, 8/11 at 101.00 AA+ 2,175,580
1997 Resolution, Series 2001A, 5.000%, 8/01/19
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 22.7% (15.4% OF TOTAL INVESTMENTS)
1,000 Capital Region Airport Authority, Richmond, Virginia, Revenue 7/15 at 100.00 AAA 1,096,630
Bonds, Richmond International Airport, Series 2005A,
5.000%, 7/01/18 - FSA Insured
1,000 Chesapeake Bay Bridge and Tunnel Commission, Virginia, No Opt. Call AAA 1,194,120
General Resolution Revenue Refunding Bonds,
Series 1998, 5.500%, 7/01/25 - MBIA Insured
3,000 Metropolitan Washington D.C. Airports Authority, Airport 10/11 at 101.00 AAA 3,246,840
System Revenue Bonds, Series 2001A, 5.500%, 10/01/27
(Alternative Minimum Tax) - MBIA Insured
250 Metropolitan Washington D.C. Airports Authority, Airport 10/11 at 101.00 AAA 264,518
System Revenue Bonds, Series 2001B, 5.000%, 10/01/21 -
MBIA Insured
1,500 Norfolk Airport Authority, Virginia, Airport Revenue Bonds, 7/11 at 100.00 AAA 1,572,930
Series 2001A, 5.125%, 7/01/31 - FGIC Insured
Pocahontas Parkway Association, Virginia, Senior Lien
Revenue Bonds, Route 895 Connector Toll Road, Series 1998A:
25 5.000%, 8/15/05 No Opt. Call BB 25,023
200 5.250%, 8/15/07 No Opt. Call BB 204,706
200 5.500%, 8/15/28 8/08 at 102.00 BB 197,786
500 Richmond Metropolitan Authority, Virginia, Revenue Refunding No Opt. Call AAA 577,930
Bonds, Expressway System, Series 2002, 5.250%, 7/15/22 -
FGIC Insured
1,225 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,314,731
Bonds, Series 2001A, 5.250%, 8/01/23
1,250 Virginia Resources Authority, Airports Revolving Fund Revenue 2/11 at 100.00 Aa2 1,296,975
Bonds, Series 2001B, 5.125%, 8/01/27 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 22.0% (14.9% OF TOTAL INVESTMENTS)
1,000 Bristol, Virginia, Utility System Revenue Refunding Bonds, 7/11 at 102.00 AAA 1,101,500
Series 2001, 5.000%, 7/15/21 - FSA Insured
48
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** (continued)
$ 750 Capital Region Airport Authority, Richmond, Virginia, Revenue 7/05 at 102.00 AAA $ 766,725
Bonds, Richmond International Airport, Series 1995A,
5.625%, 7/01/20 (Pre-refunded to 7/01/05) - AMBAC Insured
485 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 515,012
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded to 7/01/10)
1,540 Loudoun County, Virginia, General Obligation Public 1/11 at 101.00 Aaa 1,720,226
Improvement Bonds, Series 2001B, 5.250%, 1/01/20
(Pre-refunded to 1/01/11)
425 Loudoun County Industrial Development Authority, Virginia, 6/12 at 101.00 BBB*** 493,565
Hospital Revenue Bonds, Loudoun Hospital Center,
Series 2002A, 6.000%, 6/01/22 (Pre-refunded to 6/01/12)
1,000 Lynchburg Industrial Development Authority, Virginia, 1/08 at 101.00 A*** 1,064,430
Healthcare Facilities Revenue Refunding Bonds, Centra
Health Inc., Series 1998, 5.200%, 1/01/23 (Pre-refunded
to 1/01/08)
1,000 Newport News, Virginia, General Obligation Bonds, 5/10 at 102.00 AA*** 1,133,560
Series 2000A, 5.625%, 5/01/16 (Pre-refunded to 5/01/10)
520 Prince William County Service Authority, Virginia, Water and 7/09 at 101.00 AAA 574,309
Sewerage System Revenue Bonds, Series 1999,
5.500%, 7/01/19 (Pre-refunded to 7/01/09) - FGIC Insured
Puerto Rico Infrastructure Financing Authority, Special
Obligation Bonds, Series 2000A:
1,500 5.500%, 10/01/32 10/10 at 101.00 AAA 1,652,955
1,500 5.500%, 10/01/40 10/10 at 101.00 AAA 1,645,065
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.4% (2.3% OF TOTAL INVESTMENTS)
1,000 Mecklenburg County Industrial Development Authority, 10/12 at 100.00 A3 1,129,250
Virginia, Revenue Bonds, UAE Mecklenburg Cogeneration
LP, Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
500 Richmond, Virginia, Public Utility Revenue Refunding Bonds, 1/12 at 100.00 AAA 525,695
Series 2002, 5.000%, 1/15/27 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 8.2% (5.5% OF TOTAL INVESTMENTS)
2,000 Henrico County, Virginia, Water and Sewer System Revenue 5/09 at 102.00 AA+ 2,121,040
Refunding Bonds, Series 1999, 5.000%, 5/01/22
1,680 Virginia Resources Authority, Clean Water State Revolving 10/10 at 100.00 AAA 1,830,577
Fund Revenue Bonds, Series 2000, 5.400%, 10/01/20
------------------------------------------------------------------------------------------------------------------------------------
$ 66,510 Total Long-Term Investments (cost $67,351,467) - 147.4% 71,467,894
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.1% 1,005,720
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.5)% (24,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 48,473,614
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
(a) The issuer has received a preliminary adverse
determination from the Internal Revenue Service (the
"IRS") regarding the tax-exempt status of the bonds'
coupon payments. The Fund will continue to treat coupon
payments as tax-exempt income until such time that it
is formally determined that the interest on the bonds
should be treated as taxable.
See accompanying notes to financial statements.
49
Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB)
Portfolio of
INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.2% (2.9% OF TOTAL INVESTMENTS)
Tobacco Settlement Financing Corporation of Virginia, Tobacco
Settlement Asset-Backed Bonds, Series 2005:
$ 1,050 5.250%, 6/01/19 6/15 at 100.00 BBB $ 1,056,825
2,700 5.500%, 6/01/26 6/15 at 100.00 BBB 2,701,026
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 7.8% (5.3% OF TOTAL INVESTMENTS)
1,000 Fairfax County Economic Development Authority, Virginia, 9/09 at 101.00 Aaa 1,079,510
Revenue Bonds, National Wildlife Federation Project,
Series 1999, 5.375%, 9/01/29 - MBIA Insured
1,000 Prince William County Industrial Development Authority, 10/13 at 101.00 A3 1,062,530
Virginia, Educational Facilities Revenue Bonds, Catholic
Diocese of Arlington, Series 2003, 5.500%, 10/01/33
1,500 Puerto Rico Industrial, Tourist, Educational, Medical and 12/12 at 101.00 BBB 1,607,175
Environmental Control Facilities Financing Authority, Higher
Education Revenue Refunding Bonds, Ana G. Mendez
University System, Series 2002, 5.375%, 12/01/21
1,000 Virginia College Building Authority, Educational Facilities No Opt. Call Aa1 1,113,070
Revenue Bonds, Public Higher Education Financing Program,
Series 2004B, 5.000%, 9/01/13
2,000 Winchester Industrial Development Authority, Virginia, 10/08 at 102.00 AAA 2,142,780
Educational Facilities First Mortgage Revenue Bonds,
Shenandoah University, Series 1998,
5.250%, 10/01/28 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 18.8% (12.9% OF TOTAL INVESTMENTS)
1,500 Albemarle County Industrial Development Authority, 10/12 at 100.00 A2 1,558,215
Virginia, Hospital Revenue Bonds, Martha Jefferson
Hospital, Series 2002, 5.250%, 10/01/35
1,215 Danville Industrial Development Authority, Virginia, No Opt. Call AAA 1,359,257
Hospital Revenue Bonds, Danville Regional Medical
Center, Series 1998, 5.200%, 10/01/18 - AMBAC Insured
3,000 Fauquier County Industrial Development Authority, 10/12 at 102.00 AA 3,236,160
Virginia, Hospital Revenue Bonds, Fauquier Hospital,
Series 2002, 5.250%, 10/01/25 - RAAI Insured
675 Fredericksburg Industrial Development Authority, Virginia, 6/12 at 100.00 A3 695,068
Revenue Bonds, MediCorp Health System, Series 2002B,
5.125%, 6/15/33
1,000 Henrico County Economic Development Authority, Virginia, 11/12 at 100.00 A- 1,061,970
Revenue Bonds, Bon Secours Health System Inc.,
Series 2002A, 5.600%, 11/15/30
1,155 Manassas Industrial Development Authority, Virginia, 4/13 at 100.00 A2 1,213,524
Hospital Revenue Bonds, Prince William Hospital,
Series 2002, 5.250%, 4/01/33
1,000 Medical College of Virginia Hospital Authority, General 7/08 at 102.00 AAA 1,078,610
Revenue Bonds, Series 1998, 5.250%, 7/01/14 - MBIA Insured
1,200 Norton Industrial Development Authority, Virginia, Hospital 12/11 at 101.00 A 1,308,048
Revenue Refunding and Improvement Bonds, Norton
Community Hospital, Series 2001, 6.000%, 12/01/22 -
ACA Insured
1,000 Prince William County Industrial Development Authority, 10/08 at 102.00 Aaa 1,064,410
Virginia, Hospital Facility Revenue Refunding Bonds,
Potomac Hospital Corporation of Prince William, Series 1998,
5.000%, 10/01/18 - FSA Insured
3,915 Roanoke Industrial Development Authority, Virginia, Hospital 7/12 at 100.00 AAA 4,290,409
Revenue Bonds, Carilion Health System, Series 2002A,
5.500%, 7/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 8.7% (5.9% OF TOTAL INVESTMENTS)
7,485 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 7,762,768
Mortgage Bonds, Series 2001H-1, 5.350%, 7/01/31 -
MBIA Insured
50
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.3% (2.2% OF TOTAL INVESTMENTS)
$ 165 Albemarle County Industrial Development Authority, Virginia, 1/12 at 100.00 N/R $ 173,818
Residential Care Facility Revenue Bonds, Westminster
Canterbury of the Blue Ridge First Mortgage, Series 2001,
6.200%, 1/01/31
650 Chesterfield County Health Center Commission, Virginia, 12/15 at 100.00 N/R 648,525
Mortgage Revenue Bonds, Lucy Corr Village, Series 2005,
5.625%, 12/01/39
1,350 James City County Industrial Development Authority, Virginia, 3/12 at 101.00 N/R 1,457,419
Residential Care Facility First Mortgage Revenue Refunding
Bonds, Williamburg Landing Inc., Series 2003A,
6.000%, 3/01/23
650 Winchester Industrial Development Authority, Virginia, 1/15 at 100.00 N/R 656,812
Residential Care Facility Revenue Bonds, Westminster-
Canterbury of Winchester Inc., Series 2005A,
5.200%, 1/01/27 (WI, settling 6/09/05)
------------------------------------------------------------------------------------------------------------------------------------
MATERIALS - 1.8% (1.4% OF TOTAL INVESTMENTS)
165 Bedford County Industrial Development Authority, Virginia, 2/08 at 102.00 Ba3 165,947
Industrial Development Revenue Refunding Bonds, Nekoosa
Packaging Corporation, Series 1998, 5.600%, 12/01/25
(Alternative Minimum Tax) (a)
460 Goochland County Industrial Development Authority, Virginia, 12/08 at 101.00 Ba3 462,847
Industrial Development Revenue Refunding Bonds,
Nekoosa Packaging Corporation Project, Series 1998,
5.650%, 12/01/25 (Alternative Minimum Tax) (a)
1,000 Hopewell Industrial Development Authority, Virginia, No Opt. Call B 1,012,340
Environmental Improvement Revenue Bonds, Smurfit
Stone Container Corporation, Series 2005, 5.250%, 6/01/15
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 37.1% (25.4% OF TOTAL INVESTMENTS)
600 Alexandria, Virginia, General Obligation Bonds, Series 2004B, No Opt. Call AAA 671,454
5.000%, 6/15/13
540 Alexandria, Virginia, General Obligation Bonds, Series 2004C, No Opt. Call AAA 599,216
5.000%, 12/15/11
1,000 Arlington County, Virginia, General Obligation Bonds, 5/15 at 100.00 AAA 1,120,250
Series 2005, 5.000%, 5/15/16 (WI, settling 6/01/05)
1,750 Chesapeake, Virginia, General Obligation Bonds, 12/11 at 100.00 AA 1,965,740
Series 2001, 5.500%, 12/01/16
1,000 Fairfax County, Virginia, General Obligation Refunding and 6/10 at 101.00 AAA 1,065,240
Improvement Bonds, Series 2002, 5.000%, 6/01/20
1,200 Loudoun County, Virginia, General Obligation Public No Opt. Call Aaa 1,347,432
Improvement Bonds, Series 2005A, 5.000%, 7/01/14
95 Loudoun County, Virginia, General Obligation Public 5/12 at 100.00 Aaa 104,153
Improvement Bonds, Series 2002A, 5.250%, 5/01/22
1,730 Loudoun County, Virginia, General Obligation Public 11/11 at 101.00 Aaa 1,814,995
Improvement Bonds, Series 2001C, 4.500%, 11/01/17
1,840 Newport News, Virginia, General Obligation Bonds, General 7/13 at 100.00 AA 2,000,393
Improvement and Water Projects, Series 2002A,
5.000%, 7/01/20
1,000 Newport News, Virginia, General Obligation Bonds, 11/13 at 100.00 AA 1,081,530
Series 2003B, 5.000%, 11/01/22
565 Portsmouth, Virginia, General Obligation Public Utility Refunding 6/08 at 100.00 AAA 589,103
Bonds, Series 2001B, 5.000%, 6/01/21 - FGIC Insured
1,500 Portsmouth, Virginia, General Obligation Bonds, Series 2003, No Opt. Call AAA 1,664,355
5.000%, 7/01/12 - FSA Insured
Powhatan County, Virginia, General Obligation Bonds,
Series 2001:
660 5.000%, 1/15/23 - AMBAC Insured 1/11 at 101.00 AAA 699,560
1,000 5.000%, 1/15/27 - AMBAC Insured 1/11 at 101.00 AAA 1,050,210
1,000 Richmond, Virginia, General Obligation Bonds, Series 2004A, 7/14 at 100.00 AAA 1,084,910
5.000%, 7/15/21 - FSA Insured
Roanoke, Virginia, General Obligation Public Improvement
Bonds, Series 2002A:
2,400 5.000%, 10/01/18 10/12 at 101.00 AA 2,638,944
2,435 5.000%, 10/01/19 10/12 at 101.00 AA 2,677,429
1,280 Roanoke, Virginia, General Obligation Public Improvement 10/12 at 101.00 AAA 1,394,880
Bonds, Series 2002B, 5.000%, 10/01/15 (Alternative
Minimum Tax) - FGIC Insured
Salem, Virginia, General Obligation Public Improvement
Bonds, Series 2002:
1,145 5.375%, 1/01/21 1/12 at 100.00 Aa3 1,251,920
1,200 5.375%, 1/01/22 1/12 at 100.00 Aa3 1,312,056
1,260 5.375%, 1/01/23 1/12 at 100.00 Aa3 1,377,659
1,325 5.375%, 1/01/24 1/12 at 100.00 Aa3 1,448,728
1,000 Staunton, Virginia, General Obligation Bonds, Series 2004, 2/14 at 101.00 AAA 1,205,980
6.250%, 2/01/25 - AMBAC Insured
51
Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,500 Virginia Beach, Virginia, General Obligation Public Improvement 6/11 at 101.00 AA+ $ 1,629,435
Bonds, Series 2001, 5.000%, 6/01/19
1,420 Virginia Beach, Virginia, General Obligation Refunding and 3/12 at 100.00 AA+ 1,515,310
Public Improvement Bonds, Series 2002, 5.000%, 3/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 25.5% (17.4% OF TOTAL INVESTMENTS)
545 Bell Creek Community Development Authority, Virginia, 3/13 at 101.00 N/R 559,393
Special Assessment Bonds, Series 2003A, 6.750%, 3/01/22
1,000 Broad Street Community Development Authority, Virginia, 6/13 at 102.00 N/R 1,052,050
Revenue Bonds, Series 2003, 7.500%, 6/01/33
Buena Vista Public Recreational Facilities Authority, Virginia,
Lease Revenue Bonds, Golf Course Project, Series 2005A:
210 5.250%, 7/15/25 - ACA Insured 7/15 at 100.00 A 218,778
165 5.500%, 7/15/35 - ACA Insured 7/15 at 100.00 A 172,722
1,800 Loudoun County Industrial Development Authority, Virginia, 3/13 at 100.00 AA 1,951,272
Lease Revenue Refunding Bonds, Public Facility Project,
Series 2003, 5.000%, 3/01/19
400 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB 424,232
Facilities Revenue Refunding Bonds, Series 2002D,
5.250%, 7/01/27
455 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 BBB- 489,330
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
1,000 Spotsylvania County Industrial Development Authority, 8/13 at 100.00 AAA 1,096,640
Virginia, Lease Revenue Bonds, School Facilities,
Series 2003B, 5.125%, 8/01/23 - AMBAC Insured
800 Virginia Beach Development Authority, Public Facilities 5/15 at 100.00 AA 887,400
Revenue Bonds, Series 2005A, 5.000%, 5/01/16
(WI, settling 6/07/05)
1,000 Virginia College Building Authority, Educational Facilities No Opt. Call AA+ 1,096,700
Revenue Bonds, 21st Century College Program,
Series 2004A, 5.000%, 2/01/11
1,790 Virginia College Building Authority, Educational Facilities 2/12 at 100.00 AA+ 1,898,044
Revenue Bonds, 21st Century College Program,
Series 2002A, 5.000%, 2/01/22
1,710 Virginia Transportation Board, Transportation Revenue 5/11 at 100.00 AA+ 1,785,514
Bonds, Northern Virginia Transportation District Program,
Series 2001A, 5.000%, 5/15/26
Virginia Transportation Board, Transportation Revenue Bonds,
U.S. Route 58 Corridor Development Program, Series 2001B:
1,705 5.000%, 5/15/22 5/11 at 100.00 AA+ 1,813,097
1,665 5.000%, 5/15/23 5/11 at 100.00 AA+ 1,770,561
1,000 Virginia Transportation Board, Transportation Revenue Bonds, No Opt. Call AA+ 1,116,080
Northern Virginia Transportation District Program,
Series 2004A, 5.000%, 5/15/14
690 Virginia Gateway Community Development Authority, 3/13 at 102.00 N/R 717,593
Prince William County, Special Assessment Bonds,
Series 2003, 6.375%, 3/01/30
1,000 Virginia Public Building Authority, Public Facilities Revenue No Opt. Call AA+ 1,101,560
Bonds, Series 2004B, 5.000%, 8/01/11
570 Virginia Public School Authority, School Financing Bonds, No Opt. Call AA+ 627,889
1997 Resolution, Series 2004C, 5.000%, 8/01/11
2,540 Virginia Public School Authority, School Financing Bonds, 8/11 at 101.00 AA+ 2,762,987
1997 Resolution, Series 2001B, 5.000%, 8/01/19
1,265 Virginia Resources Authority, Infrastructure Revenue Bonds, 5/10 at 101.00 AA 1,323,215
Pooled Loan Bond Program, Series 2001D, 5.000%, 5/01/26
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 2.3% (1.5% OF TOTAL INVESTMENTS)
1,000 Metropolitan Washington D.C. Airports Authority, Airport 10/12 at 100.00 AAA 1,047,000
System Revenue Bonds, Series 2002A, 5.125%, 10/01/26
(Alternative Minimum Tax) - FGIC Insured
52
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION (continued)
$ Pocahontas Parkway Association, Virginia, Senior Lien
Revenue Bonds, Route 895 Connector Toll Road, Series 1998A:
25 5.000%, 8/15/05 No Opt. Call BB $ 25,023
300 5.250%, 8/15/07 No Opt. Call BB 307,059
325 5.500%, 8/15/28 8/08 at 102.00 BB 321,402
300 Virginia Resources Authority, Airports Revolving Fund 2/11 at 100.00 Aa2 326,469
Revenue Bonds, Series 2001A, 5.250%, 8/01/17
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED *** - 14.6% (10.0% OF TOTAL INVESTMENTS)
1,000 Bristol, Virginia, General Obligation Utility System Revenue 11/12 at 102.00 AAA 1,119,800
Bonds, Series 2002, 5.000%, 11/01/24 - FSA Insured
195 Fairfax County Water Authority, Virginia, Water Revenue 4/12 at 100.00 AAA 215,563
Refunding Bonds, Series 2002, 5.000%, 4/01/27
(Pre-refunded to 4/01/12)
445 Loudoun County, Virginia, General Obligation Public 5/12 at 100.00 Aaa 499,664
Improvement Bonds, Series 2002A, 5.250%, 5/01/22
(Pre-refunded to 5/01/12)
Loudoun County Industrial Development Authority, Virginia,
Hospital Revenue Bonds, Loudoun Hospital Center,
Series 2002A:
250 6.000%, 6/01/22 (Pre-refunded to 6/01/12) 6/12 at 101.00 BBB*** 290,333
600 6.100%, 6/01/32 (Pre-refunded to 6/01/12) 6/12 at 101.00 BBB*** 700,494
3,750 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 4,112,663
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
1,100 Puerto Rico Public Buildings Authority, Guaranteed 7/12 at 100.00 BBB*** 1,223,090
Government Facilities Revenue Refunding Bonds,
Series 2002D, 5.250%, 7/01/27 (Pre-refunded to 7/01/12)
1,345 Puerto Rico Public Finance Corporation, Commonwealth 2/12 at 100.00 Aaa 1,526,050
Appropriation Bonds, Series 2002E, 5.500%, 8/01/29
(Pre-refunded to 2/01/12)
1,000 Virginia College Building Authority, Educational Facilities 8/07 at 101.00 AA+*** 1,053,690
Revenue Bonds, 21st Century College Program,
Series 1998, 5.000%, 8/01/13 (Pre-refunded to 8/01/07)
1,710 Virginia Public Building Authority, Public Facilities Revenue 8/08 at 100.00 AAA 1,816,670
Bonds, Series 1999A, 5.000%, 8/01/19 (Pre-refunded
to 8/01/08) - MBIA Insured
500 Virginia Public Building Authority, Public Facilities Revenue 8/10 at 100.00 AA+*** 562,910
Bonds, Series 2000A, 5.750%, 8/01/20 (Pre-refunded
to 8/01/10)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.3% (4.3% OF TOTAL INVESTMENTS)
2,000 Mecklenburg County Industrial Development Authority, 10/12 at 100.00 A3 2,258,500
Virginia, Revenue Bonds, UAE Mecklenburg Cogeneration
LP, Series 2002, 6.500%, 10/15/17 (Alternative Minimum Tax)
3,125 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 3,375,531
Series 2000HH, 5.250%, 7/01/29 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 15.8% (10.8% OF TOTAL INVESTMENTS)
805 Fairfax County Water Authority, Virginia, Water Revenue 4/12 at 100.00 AAA 849,959
Refunding Bonds, Series 2002, 5.000%, 4/01/27
Henry County Public Service Authority, Virginia, Water and
Sewer Revenue Refunding Bonds, Series 2001:
1,000 5.500%, 11/15/17 - FSA Insured No Opt. Call AAA 1,165,800
3,000 5.500%, 11/15/19 - FSA Insured No Opt. Call AAA 3,528,330
Norfolk, Virginia, Water Revenue Refunding Bonds, Series 2001:
1,130 5.000%, 11/01/18 - FGIC Insured 11/11 at 100.00 AAA 1,222,717
1,190 5.000%, 11/01/19 - FGIC Insured 11/11 at 100.00 AAA 1,287,640
1,450 5.000%, 11/01/23 - FGIC Insured 11/11 at 100.00 AAA 1,548,209
1,525 5.000%, 11/01/24 - FGIC Insured 11/11 at 100.00 AAA 1,628,288
53
Nuveen Virginia Dividend Advantage Municipal Fund 2 (NNB) (continued)
Portfolio of INVESTMENTS May 31, 2005
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
$ 500 Virginia Beach, Virginia, Water and Sewerage System 8/10 at 100.00 AA $ 543,345
Revenue Bonds, Series 2000, 5.125%, 8/01/14
2,250 Virginia Resources Authority, Water and Sewerage System 5/11 at 101.00 AA 2,355,525
Revenue Bonds, Caroline County Public Improvements
Project, Series 2001, 5.000%, 5/01/32
------------------------------------------------------------------------------------------------------------------------------------
$ 121,410 Total Long-Term Investments (cost $123,010,441) - 146.2% 131,056,726
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.7% 569,337
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (46.9)% (42,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 89,626,063
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT MAY 31, 2005:
UNREALIZED
EFFECTIVE TERMINATION APPRECIATION
NOTIONAL AMOUNT DATE(2) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Agreement with Goldman Sachs dated December 6, 2004,
to pay semi-annually the notional amount multiplied by
5.324% (annualized) and receive quarterly the notional
amount multiplied by the three-month USD-LIBOR
(United States Dollar-London Inter-Bank Offered Rates). $ 700,000 7/11/05 7/11/25 $ (56,001)
Agreement with JPMorgan dated January 11, 2005,
to pay semi-annually the notional amount multiplied by
5.235% (annualized) and receive quarterly the notional
amount multiplied by the three-month USD-LIBOR
(United States Dollar-London Inter-Bank Offered Rates). 2,400,000 8/17/05 8/17/25 (160,227)
------------------------------------------------------------------------------------------------------------------------------------
$(216,228)
------------------------------------------------------------------------------------------------------------------------------------
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares
unless otherwise noted.
(2) Effective date represents the date on which both the
Fund and counterparty commence interest payment
accruals on each forward swap contract.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
(a) The issuer has received a preliminary adverse
determination from the Internal Revenue Service (the
"IRS") regarding the tax-exempt status of the bonds'
coupon payments. The Fund will continue to treat coupon
payments as tax-exempt income until such time that it
is formally determined that the interest on the bonds
should be treated as taxable.
See accompanying notes to financial statements.
54
Statement of
ASSETS AND LIABILITIES May 31, 2005
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $223,436,181, $88,962,873,
$90,521,026 and $112,009,829, respectively) $235,581,813 $93,202,017 $95,299,467 $116,206,833
Cash -- 97,545 -- 815,530
Receivables:
Interest 4,120,335 1,607,716 1,520,044 1,683,469
Investments sold 100,000 250,000 -- --
Other assets 7,998 7,814 4,527 4,610
------------------------------------------------------------------------------------------------------------------------------------
Total assets 239,810,146 95,165,092 96,824,038 118,710,442
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft 5,198 -- 174,589 --
Payable for investments purchased -- -- -- --
Forward swaps, at value -- 64,747 98,762 194,876
Accrued expenses:
Management fees 128,760 27,455 27,864 32,208
Other 54,159 19,642 21,795 26,314
Preferred share dividends payable 25,593 1,754 1,349 14,212
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 213,710 113,598 324,359 267,610
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 79,100,000 32,000,000 32,000,000 39,000,000
====================================================================================================================================
Net assets applicable to Common shares $160,496,436 $63,051,494 $64,499,679 $ 79,442,832
====================================================================================================================================
Common shares outstanding 10,612,282 4,166,281 4,174,247 5,359,275
====================================================================================================================================
Net asset value per Common share outstanding (net assets applicable
to Common shares, divided by Common shares outstanding) $ 15.12 $ 15.13 $ 15.45 $ 14.82
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 106,123 $ 41,663 $ 41,742 $ 53,593
Paid-in surplus 147,373,888 59,098,438 59,214,312 75,640,534
Undistributed net investment income 989,129 395,654 516,056 110,535
Accumulated net realized gain (loss) from investments and
forward swaps (118,336) (658,658) 47,890 (363,958)
Net unrealized appreciation of investments and forward swaps 12,145,632 4,174,397 4,679,679 4,002,128
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $160,496,436 $63,051,494 $64,499,679 $ 79,442,832
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
55
Statement of
ASSETS AND LIABILITIES (continued)
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $187,979,800, $67,351,467
and $123,010,441, respectively) $201,426,318 $71,467,894 $131,056,726
Cash 460,718 884,433 800,986
Receivables:
Interest 2,906,276 1,012,232 1,679,949
Investments sold 2,640,806 611,562 1,021,611
Other assets 9,702 7,743 6,304
------------------------------------------------------------------------------------------------------------------------------------
Total assets 207,443,820 73,983,864 134,565,576
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- -- --
Payable for investments purchased 3,125,612 1,465,415 2,658,399
Forward swaps, at value -- -- 216,228
Accrued expenses:
Management fees 109,925 20,910 37,912
Other 45,976 16,034 24,903
Preferred share dividends payable 21,911 7,891 2,071
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 3,303,424 1,510,250 2,939,513
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 63,800,000 24,000,000 42,000,000
====================================================================================================================================
Net assets applicable to Common shares $140,340,396 $48,473,614 $ 89,626,063
====================================================================================================================================
Common shares outstanding 8,871,611 3,123,586 5,708,726
====================================================================================================================================
Net asset value per Common share outstanding (net assets applicable
to Common shares, divided by Common shares outstanding) $ 15.82 $ 15.52 $ 15.70
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 88,716 $ 31,236 $ 57,087
Paid-in surplus 124,803,922 44,283,129 81,038,843
Undistributed net investment income 1,047,355 370,691 592,424
Accumulated net realized gain (loss) from investments and
forward swaps 953,885 (327,869) 107,652
Net unrealized appreciation of investments and forward swaps 13,446,518 4,116,427 7,830,057
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $140,340,396 $48,473,614 $ 89,626,063
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
56
Statement of
OPERATIONS year ended May 31, 2005
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $11,687,694 $4,570,192 $4,418,238 $5,166,760
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,504,914 605,304 614,377 752,609
Preferred shares - auction fees 197,750 80,000 80,000 97,500
Preferred shares - dividend disbursing agent fees 20,000 10,000 10,000 10,000
Shareholders' servicing agent fees and expenses 28,643 2,387 1,290 1,224
Custodian's fees and expenses 55,860 26,913 25,593 30,888
Trustees' fees and expenses 5,517 2,239 2,018 2,604
Professional fees 17,933 12,775 12,686 13,700
Shareholders' reports - printing and mailing expenses 34,903 14,584 13,060 19,985
Stock exchange listing fees 10,786 354 355 456
Investor relations expense 32,728 10,838 8,016 16,065
Other expenses 28,988 14,637 10,949 14,035
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 1,938,022 780,031 778,344 959,066
Custodian fee credit (7,844) (5,257) (5,821) (6,342)
Expense reimbursement -- (282,000) (286,227) (374,006)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,930,178 492,774 486,296 578,718
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 9,757,516 4,077,418 3,931,942 4,588,042
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain from investments 795,306 114,678 274,944 94,606
Net realized gain (loss) from forward swaps -- (186,945) (171,422) (447,668)
Change in net unrealized appreciation (depreciation)
of investments 9,023,910 3,306,967 3,746,058 5,755,731
Change in net unrealized appreciation (depreciation)
of forward swaps -- (64,747) (98,762) (194,876)
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain 9,819,216 3,169,953 3,750,818 5,207,793
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,044,071) (417,536) (392,360) (514,154)
From accumulated net realized gains from investments -- -- (15,798) (2,976)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,044,071) (417,536) (408,158) (517,130)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common
shares from operations $18,532,661 $6,829,835 $7,274,602 $9,278,705
====================================================================================================================================
See accompanying notes to financial statements.
57
Statement of
OPERATIONS (continued)
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 9,879,638 $3,489,824 $ 6,103,885
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,287,027 457,896 836,070
Preferred shares - auction fees 159,500 60,000 105,000
Preferred shares - dividend disbursing agent fees 20,000 10,000 10,000
Shareholders' servicing agent fees and expenses 23,799 1,443 1,734
Custodian's fees and expenses 49,197 20,601 33,651
Trustees' fees and expenses 4,332 1,715 2,793
Professional fees 16,819 13,031 14,084
Shareholders' reports - printing and mailing expenses 28,753 12,049 17,370
Stock exchange listing fees 10,818 266 485
Investor relations expense 28,482 10,188 15,212
Other expenses 16,852 13,933 14,320
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 1,645,579 601,122 1,050,719
Custodian fee credit (8,249) (4,556) (6,372)
Expense reimbursement -- (213,330) (389,800)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,637,330 383,236 654,547
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 8,242,308 3,106,588 5,449,338
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain from investments 1,338,639 277,377 886,193
Net realized gain (loss) from forward swaps -- -- (378,231)
Change in net unrealized appreciation (depreciation)
of investments 6,847,395 3,250,753 6,118,300
Change in net unrealized appreciation (depreciation)
of forward swaps -- -- (216,228)
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain 8,186,034 3,528,130 6,410,034
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (765,695) (282,554) (505,130)
From accumulated net realized gains from investments -- -- (60,997)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (765,695) (282,554) (566,127)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common
shares from operations $15,662,647 $6,352,164 $11,293,245
====================================================================================================================================
See accompanying notes to financial statements.
58
Statement of
CHANGES IN NET ASSETS
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
---------------------------- ----------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/05 5/31/04 5/31/05 5/31/04 5/31/05 5/31/04
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 9,757,516 $ 10,156,311 $ 4,077,418 $ 4,218,418 $ 3,931,942 $ 4,014,581
Net realized gain (loss) from
investments 795,306 1,568,621 114,678 (29,789) 274,944 323,150
Net realized gain (loss) from
forward swaps -- -- (186,945) -- (171,422) --
Change in net unrealized
appreciation (depreciation)
of investments 9,023,910 (10,232,161) 3,306,967 (4,437,544) 3,746,058 (4,844,253)
Change in net unrealized appreciation
(depreciation) of forward swaps -- -- (64,747) -- (98,762) --
Distributions to Preferred
Shareholders:
From net investment income (1,044,071) (599,393) (417,536) (223,126) (392,360) (251,576)
From accumulated net
realized gains
from investments -- -- -- -- (15,798) (7,701)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 18,532,661 893,378 6,829,835 (472,041) 7,274,602 (765,799)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (9,572,060) (9,643,203) (3,885,205) (3,881,861) (3,655,367) (3,627,102)
From accumulated net realized gains
from investments -- -- -- -- (256,385) (77,957)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (9,572,060) (9,643,203) (3,885,205) (3,881,861) (3,911,752) (3,705,059)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares sold
and issued to shareholders due to
reinvestment of distributions 429,038 441,548 65,542 57,266 56,507 46,904
Preferred shares offering costs -- -- -- -- 16,302 (1,870)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from capital
share transactions 429,038 441,548 65,542 57,266 72,809 45,034
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 9,389,639 (8,308,277) 3,010,172 (4,296,636) 3,435,659 (4,425,824)
Net assets applicable to Common
shares at the
beginning of year 151,106,797 159,415,074 60,041,322 64,337,958 61,064,020 65,489,844
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $160,496,436 $151,106,797 $63,051,494 $60,041,322 $64,499,679 $61,064,020
====================================================================================================================================
Undistributed net investment
income at the end of year $ 989,129 $ 1,848,894 $ 395,654 $ 621,007 $ 516,056 $ 638,104
====================================================================================================================================
See accompanying notes to financial statements.
59
Statement of
CHANGES IN NET ASSETS (continued)
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND
ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB)
---------------------------- ----------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/05 5/31/04 5/31/05 5/31/04 5/31/05 5/31/04
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 4,588,042 $ 4,664,021 $ 8,242,308 $ 8,615,487 $ 3,106,588 $ 3,184,343
Net realized gain (loss) from
investments 94,606 419,773 1,338,639 1,376,071 277,377 134,876
Net realized gain (loss) from
forward swaps (447,668) -- -- -- -- --
Change in net unrealized
appreciation (depreciation)
of investments 5,755,731 (5,940,325) 6,847,395 (10,254,013) 3,250,753 (3,401,688)
Change in net unrealized
appreciation (depreciation)
of forward swaps (194,876) -- -- -- -- --
Distributions to Preferred
Shareholders:
From net investment income (514,154) (329,706) (765,695) (443,213) (282,554) (168,056)
From accumulated net
realized gains
from investments (2,976) -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 9,278,705 (1,186,237) 15,662,647 (705,668) 6,352,164 (250,525)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (4,164,157) (4,211,017) (7,997,824) (8,044,962) (2,913,141) (2,910,545)
From accumulated net realized gains
from investments (40,734) -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (4,204,891) (4,211,017) (7,997,824) (8,044,962) (2,913,141) (2,910,545)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares sold
and issued to shareholders due to
reinvestment of distributions -- 72,758 553,214 649,807 46,268 47,883
Preferred shares offering costs -- (6,570) -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from capital
share transactions -- 66,188 553,214 649,807 46,268 47,883
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 5,073,814 (5,331,066) 8,218,037 (8,100,823) 3,485,291 (3,113,187)
Net assets applicable to Common
shares at the beginning
of year 74,369,018 79,700,084 132,122,359 140,223,182 44,988,323 48,101,510
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $79,442,832 $74,369,018 $140,340,396 $132,122,359 $48,473,614 $44,988,323
====================================================================================================================================
Undistributed net investment
income at the end of year $ 110,535 $ 206,638 $ 1,047,355 $ 1,592,552 $ 370,691 $ 459,798
====================================================================================================================================
See accompanying notes to financial statements.
60
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
----------------------------
YEAR ENDED YEAR ENDED
5/31/05 5/31/04
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 5,449,338 $ 5,615,166
Net realized gain (loss) from
investments 886,193 729,712
Net realized gain (loss) from
forward swaps (378,231) --
Change in net unrealized appreciation
(depreciation) of investments 6,118,300 (7,681,558)
Change in net unrealized appreciation
(depreciation) of forward swaps (216,228) --
Distributions to Preferred Shareholders:
From net investment income (505,130) (320,789)
From accumulated net realized gains
from investments (60,997) (24,663)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 11,293,245 (1,682,132)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (5,047,084) (5,062,594)
From accumulated net realized gains
from investments (1,070,956) (268,662)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (6,118,040) (5,331,256)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares sold
and issued to shareholders due to
reinvestment of distributions 202,523 196,390
Preferred shares offering costs -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from capital
share transactions 202,523 196,390
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 5,377,728 (6,816,998)
Net assets applicable to Common
shares at the beginning of year 84,248,335 91,065,333
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $89,626,063 $84,248,335
====================================================================================================================================
Undistributed net investment
income at the end of year $ 592,424 $ 695,300
====================================================================================================================================
See accompanying notes to financial statements.
61
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds (the "Funds") covered in this report and their corresponding Common
share stock exchange symbols are Nuveen Maryland Premium Income Municipal Fund
(NMY), Nuveen Maryland Dividend Advantage Municipal Fund (NFM), Nuveen Maryland
Dividend Advantage Municipal Fund 2 (NZR), Nuveen Maryland Dividend Advantage
Municipal Fund 3 (NWI), Nuveen Virginia Premium Income Municipal Fund (NPV),
Nuveen Virginia Dividend Advantage Municipal Fund (NGB) and Nuveen Virginia
Dividend Advantage Municipal Fund 2 (NNB). Common shares of Maryland Premium
Income (NMY) and Virginia Premium Income (NPV) are traded on the New York Stock
Exchange while Common shares of Maryland Dividend Advantage (NFM), Maryland
Dividend Advantage 2 (NZR), Maryland Dividend Advantage 3 (NWI), Virginia
Dividend Advantage (NGB) and Virginia Dividend Advantage 2 (NNB) are traded on
the American Stock Exchange. The Funds are registered under the Investment
Company Act of 1940, as amended, as closed-end management investment companies.
Each Fund seeks to provide current income exempt from both regular federal and
designated state income taxes by investing primarily in a diversified portfolio
of municipal obligations issued by state and local government authorities within
a single state.
Effective January 1, 2005, Nuveen Advisory Corp. ("NAC"), the Funds' previous
Adviser, and its affiliate, Nuveen Institutional Advisory Corp. ("NIAC"), were
merged into Nuveen Asset Management ("NAM"), each wholly owned subsidiaries of
Nuveen Investments, Inc. ("Nuveen"). As a result of the merger, NAM is now the
Adviser to all funds previously advised by either NAC or NIAC.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
Investment Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Trustees. When price quotes
are not readily available (which is usually the case for municipal securities),
the pricing services establishes fair market value based on yields or prices of
municipal bonds of comparable quality, type of issue, coupon, maturity and
rating, indications of value from securities dealers, evaluations of anticipated
cash flows or collateral and general market conditions. Prices of derivative
investments are also provided by an independent pricing service approved by each
Fund's Board of Trustees. If the pricing service is unable to supply a price for
a derivative investment each Fund may use a market quote provided by a major
broker/dealer in such investments. If it is determined that market prices for an
investment are unavailable or inappropriate, the Board of Trustees of the Funds,
or its designee, may establish a fair value for the investment. Temporary
investments in securities that have variable rate and demand features qualifying
them as short-term securities are valued at amortized cost, which approximates
market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased on a when-issued or delayed delivery basis may have
extended settlement periods. Any securities so purchased are subject to market
fluctuation during this period. The Funds have instructed the custodian to
segregate assets with a current value at least equal to the amount of the
when-issued and delayed delivery purchase commitments. At May 31, 2005, Virginia
Premium Income (NPV), Virginia Dividend Advantage (NGB) and Virginia Dividend
Advantage 2 (NNB) had outstanding when-issued purchase commitments of
$3,125,612, $1,465,415, and $2,658,399, respectively. There were no such
outstanding purchase commitments in any of the other Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Investment income also includes paydown gains and losses, if any.
62
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all net investment income and net capital
gains to shareholders and to otherwise comply with the requirements of
Subchapter M of the Internal Revenue Code applicable to regulated investment
companies. Therefore, no federal income tax provision is required. Furthermore,
each Fund intends to satisfy conditions which will enable interest from
municipal securities, which is exempt from regular federal and designated state
income taxes, to retain such tax-exempt status when distributed to shareholders
of the Funds. All monthly tax-exempt income dividends paid during the fiscal
year ended May 31, 2005, have been designated Exempt Interest Dividends. Net
realized capital gains and ordinary income distributions paid by the Funds are
subject to federal taxation.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
Preferred Shares
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in one or more Series. The dividend rate on each Series is determined
every seven days, pursuant to a dutch auction process overseen by the auction
agent, and is payable weekly at the end of each rate period. The number of
Preferred shares outstanding, by Series and in total, for each Fund is as
follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------
Number of shares:
Series M -- 1,280 -- --
Series T -- -- -- 1,560
Series W 1,404 -- -- --
Series TH 1,760 -- -- --
Series F -- -- 1,280 --
--------------------------------------------------------------------------------
Total 3,164 1,280 1,280 1,560
================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB
--------------------------------------------------------------------------------
Number of shares:
Series M -- -- 1,680
Series T 832 -- --
Series W -- 960 --
Series TH 1,720 -- --
Series F -- -- --
--------------------------------------------------------------------------------
Total 2,552 960 1,680
================================================================================
63
Notes to
FINANCIAL STATEMENTS (continued)
Forward Swap Transactions
The Funds may invest in certain derivative financial instruments. The Funds' use
of forward interest rate swap transactions is intended to mitigate the negative
impact that an increase in long-term interest rates could have on Common share
net asset value. Forward interest rate swap transactions involve each Fund's
agreement with the counterparty to pay, in the future, a fixed rate payment in
exchange for the counterparty paying the Fund a variable rate payment. The
amount of the payment obligation is based on the notional amount of the forward
swap contract. The Funds may close out a contract prior to the effective date at
which point a realized gain or loss would be recognized. When a forward swap is
terminated, it does not involve the delivery of securities or other underlying
assets or principal, but rather is settled in cash. Each Fund intends, but is
not obligated to, terminate its forward swaps before the effective date.
Accordingly, the risk of loss with respect to the swap counterparty on such
transactions is limited to the credit risk associated with a counterparty
failing to honor its commitment to pay any realized gain to the Fund upon
termination. To minimize such credit risk, all counterparties are required to
pledge collateral daily (based on the daily valuation of each swap) on behalf of
each Fund with a value approximately equal to the amount of any unrealized gain
above a pre-determined threshold. Reciprocally, when any of the Funds have an
unrealized loss on a swap contract, the Funds have instructed the custodian to
pledge assets of the Funds as collateral with a value approximately equal to the
amount of the unrealized loss above a pre-determined threshold. Collateral
pledges are monitored and subsequently adjusted if and when the swap valuations
fluctuate, either up or down, by at least the pre-determined threshold amount.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Indemnifications
Under the Funds' organizational documents, their Officers and Trustees are
indemnified against certain liabilities arising out of the performance of their
duties to the Funds. In addition, in the normal course of business, the Funds
enter into contracts that provide general indemnifications to other parties. The
Funds' maximum exposure under these arrangements is unknown as this would
involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
64
2. FUND SHARES
Transactions in Common shares were as follows:
MARYLAND PREMIUM MARYLAND DIVIDEND MARYLAND DIVIDEND
INCOME (NMY) ADVANTAGE (NFM) ADVANTAGE 2 (NZR)
----------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/05 5/31/04 5/31/05 5/31/04 5/31/05 5/31/04
---------------------------------------------------------------------------------------------------------
Common shares issued
to shareholders
due to reinvestment of
distributions 27,491 27,206 4,162 3,448 3,606 2,757
=========================================================================================================
MARYLAND DIVIDEND VIRGINIA PREMIUM VIRGINIA DIVIDEND
ADVANTAGE 3 (NWI) INCOME (NPV) ADVANTAGE (NGB)
------------------------ ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
5/31/05 5/31/04 5/31/05 5/31/04 5/31/05 5/31/04
---------------------------------------------------------------------------------------------------------
Common shares issued
to shareholders
due to reinvestment of
distributions -- 4,992 33,307 37,945 2,761 2,763
=========================================================================================================
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
-----------------------
YEAR ENDED YEAR ENDED
5/31/05 5/31/04
---------------------------------------------------------------------------------------------------------
Common shares issued
to shareholders
due to reinvestment of
distributions 12,458 11,856
=========================================================================================================
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities during the fiscal year ended May 31, 2005, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
----------------------------------------------------------------------------------------------------------
Purchases $22,782,143 $9,712,115 $9,756,308 $13,847,395
Sales and maturities 22,973,381 9,669,954 9,600,840 13,206,813
==========================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
----------------------------------------------------------------------------------------------------------
Purchases $34,305,395 $10,986,478 $17,223,117
Sales and maturities 34,192,119 10,450,186 16,943,064
==========================================================================================================
65
Notes to
FINANCIAL STATEMENTS (continued)
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the treatment of paydown gains and losses on investments,
timing differences in recognizing income on taxable market discount securities
and timing differences in recognizing certain gains and losses on investment
transactions.
At May 31, 2005, the cost of investments was as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
----------------------------------------------------------------------------------------------------------
Cost of investments $223,153,695 $89,066,231 $90,572,057 $112,240,795
==========================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
----------------------------------------------------------------------------------------------------------
Cost of investments $187,737,808 $67,328,282 $123,277,111
==========================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at May 31, 2005, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
----------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $13,061,319 $4,406,091 $4,852,235 $4,283,788
Depreciation (633,201) (270,305) (124,825) (317,750)
----------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments $12,428,118 $4,135,786 $4,727,410 $3,966,038
==========================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
----------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $13,715,337 $4,199,313 $8,136,964
Depreciation (26,827) (59,701) (357,349)
----------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments $13,688,510 $4,139,612 $7,779,615
==========================================================================================================
66
The tax components of undistributed net investment income and net realized gains
at May 31, 2005, were as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
----------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $1,385,615 $691,669 $794,023 $446,690
Undistributed net ordinary income ** -- -- 106 --
Undistributed net long-term capital gains 2,980 -- 126,916 --
==========================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
----------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $1,474,901 $591,228 $954,043
Undistributed net ordinary income ** -- -- --
Undistributed net long-term capital gains 953,885 -- 422,949
==========================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared May 2, 2005, paid on June 1, 2005.
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the fiscal years ended May 31,
2005 and May 31, 2004, was designated for purposes of the dividends paid
deduction as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2005 (NMY) (NFM) (NZR) (NWI)
---------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $10,630,390 $4,316,846 $4,052,176 $4,686,785
Distributions from net ordinary income ** -- -- 17,820 108
Distributions from net long-term capital gains -- -- 254,971 43,198
=========================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
2005 (NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $8,771,875 $3,200,407 $5,574,792
Distributions from net ordinary income ** -- -- --
Distributions from net long-term capital gains -- -- 1,131,953
=========================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
67
Notes to
FINANCIAL STATEMENTS (continued)
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2004 (NMY) (NFM) (NZR) (NWI)
---------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $10,234,475 $4,085,826 $3,868,426 $4,538,274
Distributions from net ordinary income ** -- -- -- --
Distributions from net long-term capital gains -- -- 85,658 --
=========================================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
2004 (NPV) (NGB) (NNB)
---------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $8,481,892 $3,063,648 $5,362,717
Distributions from net ordinary income ** -- -- 83,459
Distributions from net long-term capital gains -- -- 209,866
=========================================================================================================
** Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At May 31, 2005, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
MARYLAND VIRGINIA
DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE
(NFM) (NGB)
--------------------------------------------------------------------------------
Expiration year:
2005 $ -- $ --
2006 -- --
2007 -- --
2008 -- --
2009 7,580 --
2010 37,159 12,972
2011 -- 32,605
2012 430,282 282,292
--------------------------------------------------------------------------------
Total $475,021 $327,869
================================================================================
The following Funds have elected to defer net realized losses from investments
incurred from November 1, 2004 through May 31, 2005 ("post-October losses") in
accordance with Federal income tax regulations. The following post-October
losses are treated as having arisen on the first day of the following fiscal
year:
MARYLAND MARYLAND
DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE 3
(NFM) (NWI)
--------------------------------------------------------------------------------
$59,987 $119,983
================================================================================
68
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
As approved by the Board of Trustees, effective August 1, 2004, a complex-wide
management fee structure was adopted for all funds sponsored by the Adviser, or
its predecessor and its affiliates. This fee structure separates each fund's
management fee into two components - a complex-level component, based on the
aggregate amount of all fund assets managed by the Adviser, and a specific
fund-level component, based only on the amount of assets within each individual
fund. This pricing structure enables Nuveen fund shareholders to benefit from
growth in the assets within each individual fund as well as from growth in the
amount of complex-wide assets managed by the Adviser. Under no circumstances
will this pricing structure result in a fund paying management fees at a rate
higher than would otherwise have been applicable had the complex-wide management
fee structure not been implemented. As of June 30, 2005, the complex-level fee
rate was .1900%; that is, the funds' effective management fee were reduced by
approximately .0100%.
Effective August 1, 2004, the annual fund-level fee, payable monthly, for each
of the Funds is based upon the average daily net assets (including net assets
attributable to Preferred shares) of each Fund as follows:
AVERAGE DAILY NET ASSETS MARYLAND PREMIUM INCOME (NMY)
(INCLUDING NET ASSETS VIRGINIA PREMIUM INCOME (NPV)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For net assets over $5 billion .3750
================================================================================
MARYLAND DIVIDEND ADVANTAGE (NFM)
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
AVERAGE DAILY NET ASSETS VIRGINIA DIVIDEND ADVANTAGE (NGB)
(INCLUDING NET ASSETS VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For net assets over $2 billion .3750
================================================================================
69
Notes to
FINANCIAL STATEMENTS (continued)
Effective August 1, 2004, the annual complex-level fee, payable monthly, which
is additive to the fund-level fee, for all Nuveen sponsored funds in the U.S.,
is based on the aggregate amount of total fund assets managed as follows:
COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $55 billion .2000%
For the next $1 billion .1800
For the next $1 billion .1600
For the next $3 billion .1425
For the next $3 billion .1325
For the next $3 billion .1250
For the next $5 billion .1200
For the next $5 billion .1175
For the next $15 billion .1150
For Managed Assets over $91 billion (2) .1400
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds
in the U.S.
(2) With respect to the complex-wide Managed Assets over $91 billion, the fee
rate or rates that will apply to such assets will be determined at a later
date. In the unlikely event that complex-wide Managed Assets reach $91
billion prior to a determination of the complex-level fee rate or rates to
be applied to Managed Assets in excess of $91 billion, the complex-level
fee rate for such complex-wide Managed Assets shall be .1400% until such
time as a different rate or rates is determined.
Each Fund paid through July 31, 2004, an annual management fee, payable monthly,
at the rates set forth below, which were based upon the average daily net assets
(including net assets attributable to Preferred shares) of each Fund as follows:
AVERAGE DAILY NET ASSETS MARYLAND PREMIUM INCOME (NMY)
(INCLUDING NET ASSETS VIRGINIA PREMIUM INCOME (NPV)
ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For the next $3 billion .5875
For net assets over $5 billion .5750
================================================================================
MARYLAND DIVIDEND ADVANTAGE (NFM)
MARYLAND DIVIDEND ADVANTAGE 2 (NZR)
MARYLAND DIVIDEND ADVANTAGE 3 (NWI)
AVERAGE DAILY NET ASSETS VIRGINIA DIVIDEND ADVANTAGE (NGB)
(INCLUDING NET ASSETS VIRGINIA DIVIDEND ADVANTAGE 2 (NNB)
ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For net assets over $2 billion .5750
================================================================================
70
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Trustees who are affiliated with the
Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates. The Board of Trustees
has adopted a deferred compensation plan for independent Trustees that enables
Trustees to elect to defer receipt of all or a portion of the annual
compensation they are entitled to receive from certain Nuveen advised Funds.
Under the plan, deferred amounts are treated as though equal dollar amounts had
been invested in shares of select Nuveen advised Funds.
For the first ten years of Maryland Dividend Advantage's (NFM) and Virginia
Dividend Advantage's (NGB) operations, the Adviser has agreed to reimburse the
Funds, as a percentage of average daily net assets (including net assets
attributable to Preferred shares), for fees and expenses in the amounts and for
the time periods set forth below:
YEAR ENDING YEAR ENDING
JANUARY 31, JANUARY 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage (NFM) and
Virginia Dividend Advantage (NGB) for any portion of its fees and expenses
beyond January 31, 2011.
For the first ten years of Maryland Dividend Advantage 2's (NZR) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage 2 (NZR) for
any portion of its fees and expenses beyond September 30, 2011.
For the first eight years of Maryland Dividend Advantage 3's (NWI) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2002* .32% 2007 .32%
2003 .32 2008 .24
2004 .32 2009 .16
2005 .32 2010 .08
2006 .32
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Maryland Dividend Advantage 3 (NWI) for
any portion of its fees and expenses beyond September 30, 2010.
71
Notes to
FINANCIAL STATEMENTS (continued)
For the first ten years of Virginia Dividend Advantage 2's (NNB) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Virginia Dividend Advantage 2 (NNB) for
any portion of its fees and expenses beyond November 30, 2011.
6. ANNOUNCEMENT REGARDING PARENT COMPANY OF ADVISER
In early April, 2005, The St. Paul Travelers Companies, Inc. ("St. Paul
Travelers"), which owned 79% of Nuveen, (A) completed a public offering of a
substantial portion of its equity stake in Nuveen, (B) sold Nuveen $200 million
of its Nuveen shares, (C) entered into an agreement with Nuveen to sell an
additional $400 million of its Nuveen shares on a "forward" basis with payment
for and settlement of these shares delayed for several months, and (D) entered
into agreements with two unaffiliated investment banking firms to sell an amount
equal to most or all of its remaining Nuveen shares for current payment but for
future settlement. The settlement of transactions (C) and (D) above would likely
be deemed an "assignment" (as defined in the 1940 Act) of the investment
management agreements between the Funds and the Adviser, which would result in
the automatic termination of each agreement under the 1940 Act. The Board of
Trustees will consider approval of new ongoing investment management agreements
for each Fund and the submission of those agreements for approval by each
respective Fund's shareholders, would take effect upon such approval. There can
be no assurance that these approvals will be obtained.
7. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on July 1, 2005, to shareholders of record on
June 15, 2005, as follows:
MARYLAND MARYLAND MARYLAND MARYLAND
PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NMY) (NFM) (NZR) (NWI)
--------------------------------------------------------------------------------
Dividend per share $.0690 $.0715 $.0730 $.0595
================================================================================
VIRGINIA VIRGINIA VIRGINIA
PREMIUM DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2
(NPV) (NGB) (NNB)
--------------------------------------------------------------------------------
Dividend per share $.0690 $.0755 $.0715
================================================================================
72
Financial
HIGHLIGHTS
73
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
-------------------------------------------------------------- ------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
MARYLAND PREMIUM
INCOME (NMY)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 $14.28 $ .92 $ .92 $(.10) $ -- $1.74 $(.90) $ -- $(.90)
2004 15.10 .96 (.81) (.06) -- .09 (.91) -- (.91)
2003 14.04 1.02 1.00 (.07) -- 1.95 (.89) -- (.89)
2002 13.83 1.03 .14 (.13) -- 1.04 (.83) -- (.83)
2001 12.83 1.03 1.01 (.25) -- 1.79 (.79) -- (.79)
MARYLAND DIVIDEND
ADVANTAGE (NFM)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 14.43 .98 .75 (.10) -- 1.63 (.93) -- (.93)
2004 15.47 1.01 (1.07) (.05) -- (.11) (.93) -- (.93)
2003 14.18 1.04 1.18 (.08) -- 2.14 (.86) -- (.86)
2002 13.90 1.04 .22 (.14) -- 1.12 (.84) -- (.84)
2001(a) 14.33 .22 (.25) (.05) -- (.08) (.21) -- (.21)
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 14.64 .94 .90 (.09) -- 1.75 (.88) (.06) (.94)
2004 15.71 .96 (1.08) (.06) -- (.18) (.87) (.02) (.89)
2003 14.01 .97 1.62 (.09) -- 2.50 (.81) -- (.81)
2002(b) 14.33 .57 (.22) (.06) -- .29 (.46) -- (.46)
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 13.88 .86 .97 (.10) -- 1.73 (.78) (.01) (.79)
2004 14.89 .87 (1.03) (.06) -- (.22) (.79) -- (.79)
2003(c) 14.33 .52 .75 (.05) -- 1.22 (.46) -- (.46)
====================================================================================================================================
Total Returns
--------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
=============================================================================================
MARYLAND PREMIUM
INCOME (NMY)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 $ -- $15.12 $15.78 15.64% 12.52%
2004 -- 14.28 14.45 (10.77) .64
2003 -- 15.10 17.15 15.22 14.33
2002 -- 14.04 15.73 4.77 7.71
2001 -- 13.83 15.85 26.24 14.18
MARYLAND DIVIDEND
ADVANTAGE (NFM)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 -- 15.13 15.63 6.22 11.60
2004 -- 14.43 15.62 2.99 (.69)
2003 .01 15.47 16.08 9.98 15.55
2002 -- 14.18 15.44 1.98 8.21
2001(a) (.14) 13.90 15.99 8.02 (1.53)
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 -- 15.45 15.41 14.71 12.22
2004 -- 14.64 14.28 (2.90) (1.16)
2003 .01 15.71 15.60 12.71 18.39
2002(b) (.15) 14.01 14.61 .52 1.01
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 -- 14.82 14.40 14.98 12.67
2004 -- 13.88 13.24 (5.97) (1.51)
2003(c) (.20) 14.89 14.90 2.53 7.31
=============================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
---------------------------------- ------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
================================================================================================================================
MARYLAND PREMIUM
INCOME (NMY)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 $160,496 1.24% 6.22% 1.23% 6.22% 10%
2004 151,107 1.24 6.54 1.23 6.55 16
2003 159,415 1.26 7.00 1.25 7.01 16
2002 147,795 1.32 7.33 1.31 7.34 13
2001 145,201 1.31 7.58 1.31 7.58 8
MARYLAND DIVIDEND
ADVANTAGE (NFM)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 63,051 1.26 6.11 .79 6.57 11
2004 60,041 1.24 6.34 .78 6.80 10
2003 64,338 1.26 6.54 .79 7.01 12
2002 58,925 1.35 6.81 .82 7.34 36
2001(a) 57,740 1.17* 4.33* .75* 4.75* 10
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 64,500 1.23 5.74 .77 6.20 10
2004 61,064 1.24 5.90 .78 6.36 11
2003 65,490 1.26 6.07 .80 6.53 12
2002(b) 58,370 1.22* 5.55* .79* 5.99* 21
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
--------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 79,443 1.23 5.40 .74 5.89 12
2004 74,369 1.22 5.59 .73 6.08 15
2003(c) 79,700 1.18* 5.01* .70* 5.50* 13
================================================================================================================================
Preferred Shares at End of Period
--------------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
==========================================================================
MARYLAND PREMIUM
INCOME (NMY)
--------------------------------------------------------------------------
Year Ended 5/31:
2005 $79,100 $25,000 $75,726
2004 79,100 25,000 72,758
2003 79,100 25,000 75,384
2002 79,100 25,000 71,712
2001 79,100 25,000 70,891
MARYLAND DIVIDEND
ADVANTAGE (NFM)
--------------------------------------------------------------------------
Year Ended 5/31:
2005 32,000 25,000 74,259
2004 32,000 25,000 71,907
2003 32,000 25,000 75,264
2002 32,000 25,000 71,035
2001(a) 32,000 25,000 70,109
MARYLAND DIVIDEND
ADVANTAGE 2 (NZR)
--------------------------------------------------------------------------
Year Ended 5/31:
2005 32,000 25,000 75,390
2004 32,000 25,000 72,706
2003 32,000 25,000 76,164
2002(b) 32,000 25,000 70,601
MARYLAND DIVIDEND
ADVANTAGE 3 (NWI)
--------------------------------------------------------------------------
Year Ended 5/31:
2005 39,000 25,000 75,925
2004 39,000 25,000 72,672
2003(c) 39,000 25,000 76,090
==========================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of changes in
the market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. Total Return on Common Share Net
Asset Value is the combination of changes in Common share net asset value,
reinvested dividend income at net asset value and reinvested capital gains
distributions at net asset value, if any. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period January 23, 2001 (commencement of operations) through May
31, 2001.
(b) For the period September 25, 2001 (commencement of operations) through May
31, 2002.
(c) For the period September 25, 2002 (commencement of operations) through May
31, 2003.
See accompanying notes to financial statements.
74-75 SPREAD
Financial Highlights (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
-------------------------------------------------------------- ------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
VIRGINIA PREMIUM
INCOME (NPV)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 $14.95 $ .93 $ .93 $(.09) $ -- $1.77 $(.90) $ -- $ (.90)
2004 15.93 .97 (.99) (.05) -- (.07) (.91) -- (.91)
2003 14.69 1.00 1.21 (.07) -- 2.14 (.90) -- (.90)
2002 14.59 1.04 .03 (.11) -- .96 (.86) -- (.86)
2001 13.36 1.08 1.21 (.25) -- 2.04 (.81) -- (.81)
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 14.42 .99 1.13 (.09) -- 2.03 (.93) -- (.93)
2004 15.43 1.02 (1.05) (.05) -- (.08) (.93) -- (.93)
2003 14.23 1.02 1.10 (.07) -- 2.05 (.86) -- (.86)
2002 13.87 1.02 .32 (.13) -- 1.21 (.85) -- (.85)
2001(a) 14.33 .24 (.28) (.05) -- (.09) (.21) -- (.21)
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 14.79 .96 1.13 (.09) (.01) 1.99 (.89) (.19) (1.08)
2004 16.02 .99 (1.22) (.06) -- (.29) (.89) (.05) (.94)
2003 14.31 .97 1.69 (.08) -- 2.58 (.84) (.03) (.87)
2002(b) 14.33 .41 .09 (.04) -- .46 (.35) -- (.35)
====================================================================================================================================
Total Returns
--------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
=============================================================================================
VIRGINIA PREMIUM
INCOME (NPV)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 $ -- $15.82 $17.65 24.54% 12.13%
2004 -- 14.95 14.95 (10.70) (.42)
2003 -- 15.93 17.67 15.27 14.99
2002 -- 14.69 16.17 6.64 6.71
2001 -- 14.59 16.00 18.45 15.53
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 -- 15.52 16.99 19.11 14.46
2004 -- 14.42 15.07 (8.11) (.50)
2003 .01 15.43 17.35 21.45 14.92
2002 -- 14.23 15.09 5.10 8.89
2001(a) (.16) 13.87 15.18 2.61 (1.73)
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
---------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 -- 15.70 16.74 21.96 13.75
2004 -- 14.79 14.65 (3.81) (1.84)
2003 -- 16.02 16.14 14.58 18.51
2002(b) (.13) 14.31 14.90 1.71 2.30
=============================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
---------------------------------- ------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
==================================================================================================================================
VIRGINIA PREMIUM
INCOME (NPV)
----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 $140,340 1.20% 5.98% 1.19% 5.99% 17%
2004 132,122 1.20 6.33 1.19 6.34 14
2003 140,223 1.25 6.61 1.24 6.62 17
2002 128,655 1.28 7.01 1.27 7.02 14
2001 127,145 1.23 7.51 1.21 7.53 7
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 48,474 1.28 6.13 .81 6.59 15
2004 44,988 1.24 6.39 .77 6.86 7
2003 48,102 1.28 6.45 .81 6.92 10
2002 44,308 1.37 6.68 .84 7.21 21
2001(a) 43,155 1.27* 4.76* .80* 5.23* 20
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
----------------------------------------------------------------------------------------------------------------------------------
Year Ended 5/31:
2005 89,626 1.19 5.74 .74 6.19 13
2004 84,248 1.20 5.99 .74 6.44 16
2003 91,065 1.21 6.01 .75 6.47 15
2002(b) 81,325 1.14* 5.00* .70* 5.44* 12
==================================================================================================================================
Preferred Shares at End of Period
--------------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
=========================================================================
VIRGINIA PREMIUM
INCOME (NPV)
-------------------------------------------------------------------------
Year Ended 5/31:
2005 $63,800 $25,000 $79,992
2004 63,800 25,000 76,772
2003 63,800 25,000 79,946
2002 63,800 25,000 75,413
2001 63,800 25,000 74,822
VIRGINIA DIVIDEND
ADVANTAGE (NGB)
-------------------------------------------------------------------------
Year Ended 5/31:
2005 24,000 25,000 75,493
2004 24,000 25,000 71,863
2003 24,000 25,000 75,106
2002 24,000 25,000 71,154
2001(a) 24,000 25,000 69,953
VIRGINIA DIVIDEND
ADVANTAGE 2 (NNB)
-------------------------------------------------------------------------
Year Ended 5/31:
2005 42,000 25,000 78,349
2004 42,000 25,000 75,148
2003 42,000 25,000 79,206
2002(b) 42,000 25,000 73,408
=========================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of changes in
the market price per share and the effect of reinvested dividend income and
reinvested capital gains distributions, if any, at the average price paid
per share at the time of reinvestment. Total Return on Common Share Net
Asset Value is the combination of changes in Common share net asset value,
reinvested dividend income at net asset value and reinvested capital gains
distributions at net asset value, if any. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period January 26, 2001 (commencement of operations) through May
31, 2001.
(b) For the period November 15, 2001 (commencement of operations) through May
31, 2002.
See accompanying notes to financial statements.
76-77 SPREAD
Board Members
AND OFFICERS
The management of the Fund, including general supervision of the duties
performed for the Fund by the Adviser, is the responsibility of the Board
Members of the Fund. The number of board members of the Fund is currently set at
nine. None of the board members who are not "interested" persons of the Fund has
ever been a director or employee of, or consultant to, Nuveen or its affiliates.
The names and business addresses of the board members and officers of the Fund,
their principal occupations and other affiliations during the past five years,
the number of portfolios each oversees and other directorships they hold are set
forth below.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUND APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUND:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger(1) Chairman of 1994 Chairman and Director (since 1996) of Nuveen Investments, 155
3/28/49 the Board Inc. and Nuveen Investments, LLC; Director (since 1992) and
333 W. Wacker Drive and Trustee Chairman (since 1996) of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.(3); Chairman and Director (since
1997) of Nuveen Asset Management; Director (since 1996)
of Institutional Capital Corporation; Chairman and Director
(since 1999) of Rittenhouse Asset Management, Inc.;
Chairman of Nuveen Investments Advisers Inc. (since 2002).
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUND:
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Board member 1997 Private Investor and Management Consultant. 155
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Board member 1993 Retired (1989) as Senior Vice President of The Northern 155
7/29/34 Trust Company; Director, Community Advisory Board for
333 W. Wacker Drive Highland Park and Highwood, United Way of the North
Chicago, IL 60606 Shore (since 2002).
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 155
10/22/48 corporation (since 1996); Director and Vice Chairman, United
333 W. Wacker Drive Fire Group, a publicly held company; Adjunct Faculty Member,
Chicago, IL 60606 University of Iowa; Director, Gazette Companies; Life Trustee
of Coe College; Director, Iowa College Foundation; formerly,
Director, Alliant Energy; formerly, Director, Federal Reserve
Bank of Chicago; formerly, President and Chief Operating Officer,
SCI Financial Group, Inc., a regional financial services firm.
------------------------------------------------------------------------------------------------------------------------------------
William C. Hunter Board member 2004 Dean and Distinguished Professor of Finance, School of 155
3/6/48 Business at the University of Connecticut (since 2003);
333 W. Wacker Drive previously, Senior Vice President and Director of Research
Chicago, IL 60606 at the Federal Reserve Bank of Chicago (1995-2003); Director
(since 1997), Credit Research Center at Georgetown University;
Director of Xerox Corporation (since 2004).
------------------------------------------------------------------------------------------------------------------------------------
David J. Kundert Board member 2005 Retired (2004) as Chairman, JPMorgan Fleming Asset 153
10/28/42 Management, President and CEO, Banc One Investment
333 W. Wacker Drive Advisors Corporation, and President, One Group Mutual
Chicago, IL 60606 Funds; prior thereto, Executive Vice President, Banc One
Corporation and Chairman and CEO, Banc One Investment
Management Group; Board of Regents, Luther College;
currently a member of the American and Wisconsin
Bar Associations.
78
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUND APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUND (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider Board member 1997 Chairman, formerly, Senior Partner and Chief Operating 155
9/24/44 Officer, Miller-Valentine Partners Ltd., a real estate
333 W. Wacker Drive investment company; formerly, Vice President, Miller-Valentine
Chicago, IL 60606 Realty, a construction company; Board Member and Chair of the
Finance Committee, member of the Audit Committee of Premier
Health Partners, the not-for-profit company of Miami
Valley Hospital; Board Member, formerly Chair, Dayton
Development Coalition; President, Dayton Philharmonic
Orchestra Association; formerly, Member, Community
Advisory Board, National City Bank, Dayton, Ohio and
Business Advisory Council, Cleveland Federal Reserve Bank.
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale Board member 1997 Executive Director, Gaylord and Dorothy Donnelley 155
12/29/47 Foundation (since 1994); prior thereto, Executive Director,
333 W. Wacker Drive Great Lakes Protection Fund (from 1990 to 1994).
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Eugene S. Sunshine Board member 2005 Senior Vice President for Business and Finance (since 1997), 155
1/22/50 Northwestern University; Director (since 2003), Chicago
333 W. Wacker Drive Board of Options Exchange; Director (since 2003), National
Chicago, IL 60606 Mentor Holdings, a privately-held, national provider of home
and community-based services; Chairman (since 1997),
Board of Directors, Rubicon, an insurance company owned
by Northwestern University; Director (since 1997),
Evanston of Commerce and Evanston Inventure, a business
development organization.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUND:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 155
9/9/56 Administrative Associate General Counsel, formerly, Vice President and
333 W. Wacker Drive Officer Assistant General Counsel of Nuveen Investments, LLC;
Chicago, IL 60606 Managing Director (since 2002), General Counsel and
Assistant Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory Corp.(3);
Managing Director (since 2002), Assistant Secretary and
Associate General Counsel, formerly, Vice President
(since 2000), of Nuveen Asset Management; Managing
Director (since 2004) and Assistant Secretary (since 1994)
of Nuveen Investments, Inc.; Assistant Secretary of NWQ
Investment Management Company, LLC (since 2002); Vice
President and Assistant Secretary of Nuveen Investments
Advisers Inc. (since 2002); Managing Director, Associate
General Counsel and Assistant Secretary of Rittenhouse
Asset Management, Inc. (since 2003); Chartered
Financial Analyst.
79
Board Members
AND OFFICERS (CONTINUED)
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUND (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Julia L. Antonatos Vice President 2004 Managing Director (since 2005), previously, Vice President 155
9/22/63 (since 2002), formerly, Assistant Vice President (since 1999)
333 W. Wacker Drive of Nuveen Investments, LLC; Chartered Financial Analyst.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 155
2/3/66 and Assistant President (since 2000) of Nuveen Investments, LLC.
333 W. Wacker Drive Secretary
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999); 155
11/28/67 and Treasurer Vice President and Treasurer of Nuveen Investments, Inc.
333 W. Wacker Drive (since 1999); Vice President and Treasurer of Nuveen Advisory
Chicago, IL 60606 Corp. and Nuveen Institutional Advisory Corp (since 1999)(3);
Vice President and Treasurer of Nuveen Asset Management
(since 2002) and of Nuveen Investments Advisers Inc.;
Assistant Treasurer of NWQ Investment Management
Company, LLC (since 2002); Vice President and Treasurer of
Nuveen Rittenhouse Asset Management, Inc. (since 2003);
Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 1998 Vice President (since 2002) and Assistant General Counsel 155
9/24/64 and Secretary (since 1998), formerly, Assistant Vice President (since 1998) of
333 W. Wacker Drive Nuveen Investments, LLC; Vice President (since 2002)
Chicago, IL 60606 and Assistant Secretary (since 1998), formerly Assistant
Vice President of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); and (since 2005) Nuveen
Asset Management.
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Managing Director (since 2004) formerly, Vice President of 155
10/24/45 Nuveen Investments, LLC; Managing Director (since 2004)
333 W. Wacker Drive formerly, Vice President (since 1998) of Nuveen Advisory Corp.
Chicago, IL 60606 and Nuveen Institutional Advisory Corp.(3); Managing Director
(since 2005) of Nuveen Asset Management.
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 155
3/2/64 LLC; Managing Director (since 2001), formerly, Vice President
333 W. Wacker Drive (since 1995) of Nuveen Advisory Corp. and Nuveen Institutional
Chicago, IL 60606 Advisory Corp.(3); Managing Director (since 2001) of Nuveen
Asset Management; Vice President (since 2002) of Nuveen
Investment Advisers Inc.; Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 1998) 155
5/31/54 and Controller of Nuveen Investments, LLC; formerly, Vice President and
333 W. Wacker Drive Funds Controller (1998-2004) of Nuveen Investments, Inc.;
Chicago, IL 60606 Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
James D. Grassi Vice President 2004 Vice President and Deputy Director of Compliance (since 2004) 155
4/13/56 and Chief of Nuveen Investments, LLC, Nuveen Investments Advisers Inc.,
333 W. Wacker Drive Compliance Nuveen Asset Management and Rittenhouse Asset Management,
Chicago, IL 60606 Officer Inc.; previously, Vice President and Deputy Director of Complliance
(2004) of Nuveen Advisory Corp. and Nuveen Institutional Advisory
Corp. (3); formerly, Senior Attorney (1994 to 2004), The Northern
Trust Company.
80
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(4) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUND (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 155
3/22/63 LLC; Certified Public Accountant.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President (since 1999) of Nuveen Investments, LLC. 155
8/27/61
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 155
7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and
333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.(3); Vice President (since 2005)
and Assistant Secretary of Nuveen Investments, Inc. and of Nuveen
Asset Management; Vice President (since 2000), Assistant
Secretary and Assistant General Counsel (since 1998) of
Rittenhouse Asset Management; Vice President and Assistant
Secretary of Nuveen Investments Advisers Inc. (since 2002);
Assistant Secretary of NWQ Investment Management
Company, LLC (since 2002).
(1) Mr. Schwertfeger is an "interested person" of the Fund, as defined in the
Investment Company Act of 1940, because he is an officer and board member of
the Adviser.
(2) Board members serve an indefinite term until his/her successor is elected.
The year first elected or appointed represents the year in which the board
member was first elected or appointed to any fund in the Nuveen Complex.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
81
ANNUAL INVESTMENT
MANAGEMENT AGREEMENT
APPROVAL PROCESS
At a meeting held on May 10-12, 2005, the Board of Trustees of each Fund,
including the independent Trustees, unanimously approved the Investment
Management Agreement between each Fund and NAM.
THE APPROVAL PROCESS
To assist the Board in its evaluation of an advisory contract with NAM, the
independent Trustees received a report in adequate time in advance of their
meeting which outlined, among other things, the services provided by NAM; the
organization of NAM, including the responsibilities of various departments and
key personnel; the Fund's past performance as well as the Fund's performance
compared to funds of similar investment objectives compiled by an independent
third party (a "Peer Group") and if available, with recognized or, in certain
cases, customized benchmarks; the profitability of NAM and certain industry
profitability analyses for advisers to unaffiliated investment companies; the
expenses of NAM in providing the various services; the advisory fees of NAM,
including comparisons of such fees with the management fees of comparable funds
in its Peer Group as well as comparisons of NAM's management fees with the fees
NAM assesses to other types of investment products or accounts, if any; the soft
dollar practices of NAM; and the expenses of each Fund, including comparisons of
the Fund's expense ratios (after any fee waivers) with the expense ratios of its
Peer Group. This information supplements that received by the Board throughout
the year regarding Fund performance, expense ratios, portfolio composition,
trade execution and sales activity.
In addition to the foregoing materials, independent legal counsel to the
independent Trustees provided, in advance of the meeting, a legal memorandum
outlining, among other things, the duties of the Trustees under the 1940 Act as
well as the general principles of relevant state law in reviewing and approving
advisory contracts; the requirements of the 1940 Act in such matters; an
adviser's fiduciary duty with respect to advisory agreements and compensation;
the standards used by courts in determining whether investment company boards of
directors have fulfilled their duties and factors to be considered by the board
in voting on advisory agreements.
At the Board meeting, NAM made a presentation to and responded to questions from
the Board. After the presentations and after reviewing the written materials,
the independent Trustees met privately with their legal counsel to review the
Board's duties in reviewing advisory contracts and consider the renewal of the
advisory contract. It is with this background that the Trustees considered each
Investment Management Agreement with NAM. The independent Trustees, in
consultation with independent counsel, reviewed the factors set out in judicial
decisions and SEC directives relating to the renewal of advisory contracts. As
outlined in more detail below, the Trustees considered all factors they believed
relevant with respect to each Fund, including the following: (a) the nature,
extent and quality of the services to be provided by NAM; (b) the investment
performance of the Fund and NAM; (c) the costs of the services to be provided
and profits to be realized by NAM and its affiliates from the relationship with
the Fund; (d) the extent to which economies of scale would be realized as the
Fund grows; and (e) whether fee levels reflect these economies of scale for the
benefit of Fund investors.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In evaluating the nature, extent and quality of NAM's services, the Trustees
reviewed information concerning the types of services that NAM or its affiliates
provide and are expected to provide to the Nuveen Funds; narrative and
statistical information concerning the Fund's performance record and how such
performance compares to the Fund's Peer Group and, if available, recognized
benchmarks or, in certain cases, customized benchmarks (as described in further
detail in Section B below); information describing NAM's organization and its
various departments, the experience and responsibilities of key personnel, and
available resources. In the discussion of key personnel, the Trustees received
materials regarding the changes or additions in personnel of NAM. The Trustees
further noted the willingness of the personnel of NAM to engage in open, candid
discussions with the Board. The Trustees further considered the quality of NAM's
investment process in making portfolio management decisions, including any
refinements or improvements to the portfolio management processes, enhancements
to technology and systems that are available to portfolio managers, and any
additions of new personnel which may strengthen or expand the research and
investment capabilities of NAM. In their review of advisory contracts for the
fixed income funds, the Trustees also noted that Nuveen won the Lipper Award for
Best Fund Family: Fixed Income-Large Asset Class, for 2004. Given the Trustees'
experience with the Funds, other Nuveen funds and NAM, the Trustees noted that
they were familiar with and continue to have a good understanding of the
organization, operations and personnel of NAM.
In addition to advisory services, the independent Trustees considered the
quality of the administrative or non-advisory services provided. In this regard,
NAM provides the Fund with such administrative and other services (exclusive of,
and in addition to, any such services provided by others for the Funds) and
officers and other personnel as are necessary for the operations of the
respective Fund. In addition to investment management services, NAM and its
affiliates provide each Fund with a wide range of services, including: preparing
shareholder reports; providing daily accounting; providing quarterly financial
statements; overseeing and coordinating the
82
activities of other service providers; administering and organizing Board
meetings and preparing the Board materials for such meetings; providing legal
support (such as helping to prepare registration statements, amendments thereto
and proxy statements and responding to regulatory inquiries); and performing
other Fund administrative tasks necessary for the operation of the respective
Fund (such as tax reporting and fulfilling regulatory filing requirements). In
addition, in evaluating the administrative services, the Trustees considered, in
particular, NAM's policies and procedures for assuring compliance with
applicable laws and regulations in light of the new SEC regulations governing
compliance. The Trustees noted NAM's focus on compliance and its compliance
systems. In their review, the Trustees considered, among other things, the
additions of experienced personnel to NAM's compliance group and modifications
and other enhancements to NAM's computer systems. In addition to the foregoing,
the Trustees also noted that NAM outsources certain services that cannot be
replicated without significant costs or at the same level of expertise. Such
outsourcing has been a beneficial and efficient use of resources by keeping
expenses low while obtaining quality services.
In addition to the above, in reviewing the variety of additional services that
NAM or its affiliates must provide to closed-end funds, such as the Funds, the
independent Trustees determined that Nuveen's commitment to supporting the
secondary market for the common shares of its closed-end funds is particularly
noteworthy. In this regard, the Trustees noted Nuveen's efforts to sponsor
numerous forums for analysts and specialists regarding the various Nuveen
closed-end funds, its creation of a new senior position dedicated to providing
secondary market support services and enhancing communications with investors
and analysts, and its advertising and media relations efforts designed to raise
investor and analyst awareness of the closed-end funds.
With respect to services provided to municipal funds, such as the Funds, the
Trustees also noted, among other things, the enhancements NAM implemented to its
municipal portfolio management processes (e.g., the increased use of benchmarks
to guide and assess the performance of its portfolio managers); the
implementation of a risk management program; and the various initiatives being
undertaken to enhance or modify NAM's computer systems as necessary to support
the innovations of the municipal investment team (such as, the ability to assess
certain historical data in order to create customized benchmarks, perform
attribution analysis and facilitate the use of derivatives as hedging
instruments). With respect to certain of the Funds with a less seasoned
portfolio, the Trustees also noted the hedging program implemented for such
Funds and the team responsible for developing, implementing and monitoring the
hedging procedures. The hedging program was designed to help maintain the
applicable Fund's duration within certain benchmarks.
Based on their review, the Trustees found that, overall, the nature, extent and
quality of services provided (and expected to be provided) to the Funds under
the Investment Management Agreements were of a high level and were quite
satisfactory.
B. THE INVESTMENT PERFORMANCE OF THE FUND AND ADVISER
As previously noted, the Board received a myriad of performance information
regarding each Fund and its Peer Group, if available. Among other things, the
Board received materials reflecting a Fund's historic performance, the Fund's
performance compared to its Peer Group and, if available, its performance
compared to recognized and, in certain cases, customized benchmarks. Further, in
evaluating the performance information, in certain limited instances, the
Trustees noted that the closest Peer Group for a Fund still would not adequately
reflect such Fund's investment objectives and strategies, thereby limiting the
usefulness of the comparisons of such Fund's performance with that of the Peer
Group.
For state municipal funds, such as the Funds, the performance data included,
among other things, the respective Fund's performance relative to its peers.
More specifically, a Fund's one, three and five year total returns (as
available) for the periods ending December 31, 2004 were evaluated relative to
the unaffiliated funds in its respective Peer Group (including the returns of
individual peers as well as the Peer Group average) as well as additional
performance information with respect to all the funds in the Peer Group, subject
to the following. Certain state municipal Funds do not have a corresponding Peer
Group in which case their performance is measured against a state-specific
municipal index compiled by an independent third party. Such indices measure
bond performance rather than fund performance. The closed-end Funds that utilize
such indices are from Connecticut, Georgia, Maryland, Missouri, North Carolina,
Texas and Virginia. Based on their review, the Trustees determined that each
Fund's absolute and relative investment performance over time had been
satisfactory.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
In evaluating the management fees and expenses that a Fund is expected to
bear, the Trustees considered the Fund's current management fee structure
and the Fund's expected expense ratios in absolute terms as well as
compared with the fees and expense ratios of the unaffiliated funds in its
Peer Group. The Trustees reviewed the financial information of NAM,
including its respective revenues, expenses and profitability. In reviewing
fees, the Trustees, among other things, reviewed comparisons of the Fund's
gross management fees (fees after fund-level and complex-wide level
breakpoints but before reimbursement and fee waivers), net management fees
(after breakpoints and reimbursements and fee waivers) and total expense
ratios (before and after waivers) with those of the unaffiliated funds in
the Peer Group and peer averages. In this regard, the Trustees noted that
the relative ranking of the Nuveen Funds on fees and expenses was aided by
the significant level of fee reductions provided by the fund-level and
complex-wide breakpoint schedules, and the fee waivers and reimbursements
provided by Nuveen for certain Funds launched since 1999. The complex-wide
breakpoint schedule was instituted in 2004 and is described in further
detail below in Section D entitled "Economies of Scale." In their review of
the fee and expense information provided, including, in particular, the
expense ratios of the unaffiliated funds in the respective Peer Group, the
Trustees determined that each Fund's net total expense ratio was within an
acceptable range compared to such peers.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
The Trustees further compared the fees of NAM to the fees NAM assessed for
other types of clients investing in municipal funds (such as municipal
managed accounts). With respect to such separately managed accounts, the
advisory fees for such accounts
83
ANNUAL INVESTMENT MANAGEMENT
AGREEMENT APPROVAL PROCESS (continued)
are generally lower than those charged to the comparable Fund. The Trustees
noted, however, the additional services that are provided and the costs
incurred by Nuveen in managing and operating registered investment
companies, such as the Funds, compared to individually managed separate
accounts. For instance, as described above, NAM and its affiliates provide
numerous services to the Funds including, but not limited to, preparing
shareholder reports; providing daily accounting; preparing quarterly
financial statements; overseeing and coordinating the activities of other
service providers; administering and organizing Board meetings and
preparing the Board materials for such meetings; providing legal support;
and administering all other aspects of the Fund's operations. Further, the
Trustees noted the increased compliance requirements for funds in light of
new SEC regulations and other legislation. These services are generally not
required to the same extent, if at all, for separate accounts. In addition
to the differences in services, the Trustees also considered, among other
things, the differences in product distribution, investment policies,
investor profiles and account sizes. Accordingly, the Trustees believe that
the nature and number of services provided to operate a Fund merit the
higher fees than those to separate managed accounts.
3. PROFITABILITY OF ADVISER
In conjunction with its review of fees, the Trustees also considered NAM's
profitability. The Trustees reviewed NAM's revenues, expenses and
profitability margins (on both a pre-tax and after-tax basis). In reviewing
profitability, the Trustees recognized that one of the most difficult
issues in determining profitability is establishing a method of allocating
expenses. Accordingly, the Trustees reviewed NAM's assumptions and
methodology of allocating expenses. In this regard, the methods of
allocation used appeared reasonable but the Board noted the inherent
limitations in allocating costs among various advisory products. The
Trustees also recognized that individual fund or product line profitability
of other advisers is generally not publicly available. Further,
profitability may be affected by numerous factors including the types of
funds managed, expense allocations, business mix, etc. and therefore
comparability of profitability is somewhat limited. Nevertheless, to the
extent available, the Trustees considered NAM's profit margin compared to
the profitability of various publicly-traded investment management
companies and/or investment management companies that publicly disclose
some or all of their financial results compiled by three independent
third-party service providers. The Trustees also reviewed the revenues,
expenses and profit margins of various unaffiliated advisory firms with
similar amounts of assets under management for the last year prepared by
NAM. Based on their review, the Trustees were satisfied that NAM's level of
profitability from its relationship with each Fund was reasonable in light
of the services provided.
In evaluating the reasonableness of the compensation, the Trustees also
considered any other revenues paid to NAM as well as any indirect benefits
(such as soft dollar arrangements, if any) NAM and its affiliates are
expected to receive that are directly attributable to their management of
the Funds, if any. See Section E below for additional information. Based on
their review of the overall fee arrangements of the applicable Fund, the
Trustees determined that the advisory fees and expenses of the respective
Fund were reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
In reviewing the compensation, the Trustees have long understood the benefits of
economies of scale as the assets of a fund grows and have sought to ensure that
shareholders share in these benefits. One method for shareholders to share in
economies of scale is to include breakpoints in the advisory fee schedules that
reduce fees as fund assets grow. Accordingly, the Trustees received and reviewed
the schedules of advisory fees for each Fund, including fund-level breakpoints
thereto. In addition, after lengthy negotiations with management, the Board in
May, 2004 approved a complex-wide fee arrangement pursuant to which fees of the
funds in the Nuveen complex, including the Funds, are reduced as the assets in
the fund complex reach certain levels. The complex-wide fee arrangement was
introduced on August 1, 2004 and the Trustees reviewed data regarding the
reductions of fees for the Funds for the period of August 1, 2004 to December
31, 2004. In evaluating the complex-wide fee arrangement, the Trustees
considered, among other things, the historic and expected fee savings to
shareholders as assets grow, the amount of fee reductions at various asset
levels, and that the arrangement would extend to all Funds in the Nuveen
complex. The Trustees also considered the impact, if any, the complex-wide fee
arrangement may have on the level of services provided. Based on their review,
the Trustees concluded that the breakpoint schedule and complex-wide fee
arrangement currently was acceptable and desirable in providing benefits from
economies of scale to shareholders.
E. INDIRECT BENEFITS
In evaluating fees, the Trustees also considered any indirect benefits or
profits NAM or its affiliates may receive as a result of its relationship with
each Fund. In this regard, the Trustees considered any benefits from soft dollar
arrangements. The Trustees noted that although NAM manages a large amount of
assets, it has very little, if any, brokerage to allocate. This is due to the
fact that NAM
84
typically manages the portfolios of the municipal funds in the Nuveen complex
and municipal bonds generally trade on a principal basis. Accordingly, NAM does
not currently have any soft dollar arrangements and does not pay excess
brokerage commissions (or spreads on principal transactions) in order to receive
research services. In addition to soft dollar arrangements, the Trustees also
considered any other revenues, if any, received by NAM or its affiliates. With
respect to Funds with outstanding preferred shares and new Funds, the Trustees
considered revenues received by Nuveen for serving as agent for broker-dealers
at its preferred trading desk and for acting as co-manager in the initial public
offering of new closed-end exchange-traded funds.
F. OTHER CONSIDERATIONS
Nuveen, until recently, was a majority-owned subsidiary of St. Paul Travelers.
As noted, St. Paul earlier this year announced its intention to divest its
equity stake in Nuveen. Nuveen is the parent of NAM. Pursuant to a series of
transactions, St. Paul has begun to reduce its interest in Nuveen which will
ultimately result in a change of control of Nuveen and therefore NAM. As
mandated by the 1940 Act, such a change in control would result in an assignment
of the advisory agreement with NAM and the automatic termination of such
agreement. Accordingly, the Board also considered for each Fund the approval of
a New Investment Management Agreement with each Fund in light of, and which
would take effect upon, the anticipated change of control. More specifically,
the Board considered for each Fund a New Investment Management Agreement on
substantially identical terms to the existing Investment Management Agreement,
to take effect after the change of control has occurred and the contract has
been approved by Fund shareholders. In its review, the Board considered whether
the various transactions necessary to divest St. Paul's interest will have an
impact on the various factors they considered in approving NAM, such as the
scope and quality of services to be provided following the change of control. In
reviewing the St. Paul transactions, the Board considered, among other things,
the impact, if any, on the operations and organizational structure of NAM; the
possible benefits and costs of the transactions to the respective Fund; the
potential implications of any arrangements used by Nuveen to finance certain of
the transactions; the ability of NAM to perform its duties after the
transactions; whether a Fund's fee structure or expense ratio would change; any
changes to the current practices of the respective Fund; any changes to the
terms of the advisory agreement; and any anticipated changes to the operations
of NAM. Based on its review, the Board determined that St. Paul's divestiture
would not affect the nature and quality of services provided by NAM, the terms
of the Investment Management Agreement, including the fees thereunder, and would
not materially affect the organization or operations of NAM. Accordingly, the
Board determined that their analysis of the various factors regarding their
approval of NAM would continue to apply after the change of control.
G. APPROVAL
The Trustees did not identify any single factor discussed previously as
all-important or controlling. The Trustees, including a majority of independent
Trustees, concluded that the terms of the Investment Management Agreements were
fair and reasonable, that the respective Fund Adviser's fees are reasonable in
light of the services provided to each Fund, that the renewal of the NAM
Investment Management Agreements should be approved, and that the new,
post-change of control NAM Investment Management Agreements be approved and
recommended to shareholders.
85
REINVEST AUTOMATICALLY
EASILY AND CONVENIENTLY
Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS
DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive
a statement showing your total dividends and distributions, the date of
investment, the shares acquired and the price per share, and the total number of
shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
the shares may increase before purchases are completed, the average purchase
price per share may exceed the market price at the time of valuation, resulting
in the acquisition of fewer shares than if the dividend or distribution had been
paid in shares issued by the Fund. A pro rata portion of any applicable
brokerage commissions on open market purchases will be paid by Plan
participants. These commissions usually will be lower than those charged on
individual transactions.
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
86
OTHER USEFUL
INFORMATION
Effective Jan. 1, 2005, the asset management services and operations of Nuveen
Advisory Corp. (NAC) and Nuveen Institutional Advisory Corp (NIAC) became part
of Nuveen Asset Management (NAM). This internal consolidation is intended to
simplify the delivery of services to the investment management clients of Nuveen
Investments. It does not affect the investment objectives or portfolio
management of any Fund.
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Funds voted proxies relating to portfolio securities held during the
12-month period ended June 30, 2004, and (iii) a description of the policies and
procedures that the Funds used to determine how to vote proxies relating to
portfolio securities are available without charge, upon request, by calling
Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's website at
www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the New York Stock Exchange
the annual CEO certification as required by Section 303A.12(a) of the NYSE
Listed Company Manual.
Each Fund has filed with the Securities and Exchange Commission the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.
GLOSSARY OF TERMS USED IN THIS REPORT
AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return that would have been necessary each year to equal the
investment's actual cumulative performance (including change in NAV or market
price and reinvested dividends and capital gains distributions, if any) over the
time period being considered.
AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a
Fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
LEVERAGE-ADJUSTED DURATION: Duration is a measure of the expected period over
which a bond's principal and interest will be paid, and consequently is a
measure of the sensitivity of a bond's or bond Fund's value to changes when
market interest rates change. Generally, the longer a bond's or Fund's duration,
the more the price of the bond or Fund will change as interest rates change.
Leverage-adjusted duration takes into account the leveraging process for a Fund
and therefore is longer than the duration of the Fund's portfolio of bonds.
MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's
current annualized dividend divided by its current market price.
NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by
subtracting the liabilities of the Fund (including any MuniPreferred shares
issued in order to leverage the Fund) from its total assets and then dividing
the remainder by the number of shares outstanding. Fund NAVs are calculated at
the end of each business day.
TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
(Sidebar)
BOARD OF DIRECTORS/TRUSTEES
ROBERT P. BREMNER
LAWRENCE H. BROWN
JACK B. EVANS
WILLIAM C. HUNTER
DAVID J. KUNDERT
WILLIAM J. SCHNEIDER
TIMOTHY R. SCHWERTFEGER
JUDITH M. STOCKDALE
EUGENE S. SUNSHINE
FUND MANAGER
NUVEEN ASSET MANAGEMENT
333 WEST WACKER DRIVE
CHICAGO, IL 60606
CUSTODIAN
STATE STREET BANK & TRUST
BOSTON, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
STATE STREET BANK & TRUST
NUVEEN FUNDS
P.O. BOX 43071
PROVIDENCE, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
CHAPMAN AND CUTLER LLP
CHICAGO, IL
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
ERNST & YOUNG LLP
CHICAGO, IL
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the period covered by this report. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
87
NUVEEN INVESTMENTS:
SERVING INVESTORS
FOR GENERATIONS
Photo of: 2 women looking at a photo album.
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS.
Managing more than $115 billion in assets, Nuveen Investments offers access to a
number of different asset classes and investing solutions through a variety of
products. Nuveen Investments markets its capabilities under four distinct
brands: Nuveen, a leader in fixed-income investments; NWQ, a leader in
value-style equities; Rittenhouse, a leader in growth-style equities; and
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios.
FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest.
Be sure to obtain a prospectus, where applicable. Investors should consider the
investment objective and policies, risk considerations, charges and expenses of
the Fund carefully before investing. The prospectus contains this and other
information relevant to an investment in the Fund. For a prospectus, please
contact your securities representative or Nuveen Investments, 333 W. Wacker Dr.,
Chicago, IL 60606. Please read the prospectus carefully before you invest or
send money.
(Sidebar)
o Share prices
o Fund details
LEARN MORE o Daily financial news
ABOUT NUVEEN FUNDS AT o Investor education
WWW.NUVEEN.COM/ETF o Interactive planning tools
Logo: NUVEEN Investments
EAN-A-0505D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted a
code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. There were no amendments to or waivers
from the Code during the period covered by this report. The registrant has
posted the code of ethics on its website at www.nuveen.com/etf. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then click on Code of Conduct.)
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's Board of Directors or Trustees determined that the registrant
has at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its Audit Committee. The registrant's audit committee
financial expert is Jack B. Evans, Chairman of the Audit Committee, who is
"independent" for purposes of Item 3 of Form N-CSR.
Mr. Evans was formerly President and Chief Operating Officer of SCI Financial
Group, Inc., a full service registered broker-dealer and registered investment
adviser ("SCI"). As part of his role as President and Chief Operating Officer,
Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and
actively supervised the CFO's preparation of financial statements and other
filings with various regulatory authorities. In such capacity, Mr. Evans was
actively involved in the preparation of SCI's financial statements and the
resolution of issues raised in connection therewith. Mr. Evans has also served
on the audit committee of various reporting companies. At such companies, Mr.
Evans was involved in the oversight of audits, audit plans, and the preparation
of financial statements. Mr. Evans also formerly chaired the audit committee of
the Federal Reserve Bank of Chicago.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Nuveen Maryland Dividend Advantage Municipal Fund 3
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP entered into on or after May 6, 2003, the
Audit Committee approved in advance all audit services and non-audit services
that Ernst & Young LLP provided to the Fund, except for those non-audit services
that were subject to the pre-approval exception under Rule 2-01 of Regulation
S-X (the "pre-approval exception"). The pre-approval exception for services
provided directly to the Fund waives the pre-approval requirement for services
other than audit, review or attest services if: (A) the aggregate amount of all
such services provided constitutes no more than 5% of the total amount of
revenues paid by the Fund to its accountant during the fiscal year in which the
services are provided; (B) the Fund did not recognize the services as non-audit
services at the time of the engagement; and (C) the services are promptly
brought to the Audit Committee's attention, and the Committee (or its delegate)
approves the services before the audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND BILLED TO FUND BILLED TO FUND BILLED TO FUND
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2005 $ 8,411 $ 0 $ 582 $ 2,650
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved N/A 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2004 $ 7,994 $ 0 $ 1,032 $ 2,450
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved N/A 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
The above "All Other Fees" are fees paid to audit firms to perform agreed upon
procedures required by the rating agencies to rate fund preferred shares. The
above "Tax Fees" were billed for professional services for tax advice, tax
compliance, and tax planning.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAM ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The table also shows the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
---------------------------------------------------------------------------------------------------------------------
May 31, 2005 $ 0 $ 282,575 $ 0
---------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
---------------------------------------------------------------------------------------------------------------------
May 31, 2004 $ 0 $ 0 $ 0
---------------------------------------------------------------------------------------------------------------------
Percentage approved N/A N/A N/A
pursuant to
pre-approval
exception
---------------------------------------------------------------------------------------------------------------------
The above "Tax Fees" are primarily fees billed to the Adviser for Fund tax
return preparation.
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. For
engagements entered into on or after May 6, 2003, the Audit Committee is
required to pre-approve non-audit services that Ernst & Young LLP provides to
the Adviser and any Affiliated Fund Services Provider, if the engagement related
directly to the Fund's operations and financial reporting (except for those
subject to the de minimis exception described above). The Audit Committee
requested and received information from Ernst & Young LLP about any non-audit
services that Ernst & Young LLP rendered during the Fund's last fiscal year to
the Adviser and any Affiliated Fund Service Provider. The Committee considered
this information in evaluating Ernst & Young LLP's independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
------------------------------------------------------------------------------------------------------------------------------------
May 31, 2005 $ 3,232 $ 282,575 $ 0 $ 285,807
May 31, 2004 $ 3,482 $ 0 $ 0 $ 3,482
The above "Non-Audit Fees billed to Adviser" for 2005 include "Tax-Fees" billed
to Adviser in the amount of $282,575 from previous table.
Audit Committee Pre-Approval Policies and Procedures. Generally, the audit
committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the audit committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the audit committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the audit committee at
the next audit committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
The registrant's Board of Directors or Trustees has a separately designated
audit committee established in accordance with Section 3(a)(58)(A) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") (15 U.S.C.
78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner,
Lawrence H. Brown, Jack B. Evans and William J. Schneider.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
In the rare event that a municipal issuer held by the Fund were to issue a proxy
or that the Fund were to receive a proxy issued by a cash management security,
the Adviser would either engage an independent third party to determine how the
proxy should be voted or vote the proxy with the consent, or based on the
instructions, of the Fund's Board of Directors or Trustees or its
representative. In the case of a conflict of interest, the proxy would be
submitted to the applicable Fund's Board to determine how the proxy should be
voted. A member of the Adviser's legal department would oversee the
administration of the voting, and ensure that records were maintained in
accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17
CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the
results were provided to the Board of Directors or Trustees and made available
to shareholders as required by applicable rules.
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.
Not applicable at this time.
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable.
ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
There have been no material changes to the procedures by which shareholders may
recommend nominees to the registrant's Board implemented after the registrant
last provided disclosure in response to this Item.
ITEM 11. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")
(17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter
of the period covered by this report that has materially affected, or
is reasonably likely to materially affect, the registrant's internal
control over financial reporting.
ITEM 12. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because the code is posted on registrant's website at www.nuveen.com/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, click on Fund
Governance and then Code of Conduct.)
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Maryland Dividend Advantage Municipal Fund 3
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By (Signature and Title)* /s/ Jessica R. Droeger
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Jessica R. Droeger
Vice President and Secretary
Date: August 8, 2005
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Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
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Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)
Date: August 8, 2005
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By (Signature and Title)* /s/ Stephen D. Foy
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Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: August 8, 2005
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* Print the name and title of each signing officer under his or her signature.