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