SEMIANNUAL REPORT February 28, 2002
[LOGO: NUVEEN Municipal Closed-End Exhange-Traded FUNDS]
[PHOTO OF MEN WALKING]
[PHOTO OF WOMAN WITH CHILDREN]
CALIFORNIA
NPC
NCL
NCU
NAC
NVX
NZH
DEPENDABLE,
TAX-FREE INCOME
BECAUSE
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
[LOGO: NUVEEN Investments]
RECEIVE YOUR
NUVEEN
FUND
UPDATES
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[PHOTO OF Timothy R. Schwertfeger]
Timothy R. Schwertfeger
Chairman of the Board
[sidebar text]
"I URGE YOU TO CONSIDER RECEIVING FUTURE FUND REPORTS AND OTHER INFORMATION
ELECTRONICALLY ...SEE THE INSIDE FRONT COVER OF THIS REPORT FOR DETAILED
INSTRUCTIONS."
Dear
SHAREHOLDER
This letter is dated April 15 - income tax day for most Americans. While most of
us recognize the need to pay taxes, we also look for ways to keep our taxes as
low as possible. One popular way to do this is through an investment in high
quality municipal bonds, such as those owned by your Nuveen Fund.
During the period covered by this report, your Fund continued to meet its
primary objective of providing attractive monthly income, while at the same time
offering opportunities to reduce overall portfolio volatility. Detailed
information on your Fund's performance can be found in the Portfolio Managers'
Comments and Performance Overview sections of this report. I urge you to take
the time to read them.
I also urge you to consider receiving future Fund reports and other information
electronically via the Internet and e-mail rather than in hard copy. Not only
will you be able to receive the information faster, but this also may help lower
Fund expenses. Sign up is quick and easy - see the inside front cover of this
report for detailed instructions.
In addition to providing you with steady tax-free income, your Nuveen Fund also
features several characteristics that can help make it an essential part of your
overall investment strategy. These include careful research, constant
surveillance and judicious trading by Nuveen's seasoned portfolio management
team, with every action designed to supplement income, improve Fund structure,
better adapt to current market conditions or increase diversification. In
uncertain markets like these, prudent investors understand the importance of
diversification, balance, and risk management, all attributes your Nuveen Fund
can bring to your portfolio.
For more than 100 years, Nuveen has specialized in offering quality investments
such as these Nuveen Funds to those seeking to accumulate and preserve wealth.
Our mission continues to be to assist you and your financial advisor by offering
the investment services and products that can help you meet your financial
objectives. We thank you for continuing to choose Nuveen Investments as a
partner as you work toward that goal.
/s/ TIMOTHY R. SCHWERTFEGER
TIMOTHY R. SCHWERTFEGER
Chairman of the Board
April 15, 2002
1
Nuveen California Municipal Closed-End Exchange-Traded Funds (NPC, NCL, NCU,
NAC, NVX, NZH)
Portfolio Managers'
COMMENTS
Portfolio managers Steve Krupa and Bill Fitzgerald review economic and market
conditions, key strategies, and recent Fund performance. With 23 years of
investment management experience at Nuveen, Steve has managed NPC and NCL since
March 2001. Bill, who joined Nuveen in 1988, assumed portfolio management
responsibility for NCU in 1998, NAC in 1999, and NVX and NZH upon their
inceptions in 2001.
WHAT WERE THE MAJOR DRIVERS OF THE U.S. ECONOMY AND THE MUNICIPAL MARKET DURING
THIS REPORTING PERIOD?
The major forces at work during the twelve months ended February 28, 2002, were
the general slowdown in economic growth and the Federal Reserve's aggressive
approach to easing short-term interest rates. In addition, the events of
September 11, 2001, and the uncertain geopolitical climate that followed, also
have impacted the economy and the markets.
These factors produced a generally positive environment for fixed-income
investments, and over the past twelve months many municipal securities have
performed well. During 2001, national new municipal supply reached its highest
level - $286.3 billion - since 1993. This strong new issue supply has continued
during the first two months of 2002, with $41.3 billion in new issuance, up 23%
over January/February 2001. On the demand side, municipal bonds continued to be
highly sought after by individual investors looking for diversification,
tax-free income, quality, and an alternative to a volatile stock market.
Institutional investors, especially traditional purchasers such as insurance
companies and pension plans, also have been active buyers in the new issue
market.
HOW WAS THE ECONOMIC AND MARKET ENVIRONMENT IN CALIFORNIA?
Over the past year, the California economy has contended with the same economic
weakness that has affected the rest of the nation. Because the state remains
heavily dependent on economically sensitive revenue sources, such as sales,
income, and capital gains taxes, the economic decline has had a major impact on
the state's general revenues. As a result, California is now facing a budget
deficit estimated at $7 billion. The state also continues to deal with the
aftermath of the 2001 power crisis. Unless the state can issue a proposed
offering of power bonds by the conclusion of fiscal 2002 on June 30, its general
fund reserves and resources may continue to dwindle, and California may have to
seek new and broader revenue sources.
On the positive side, one byproduct of the declining economy was lower
electricity prices. California also remained the nation's top state for exports,
selling $107 billion of goods, primarily computer and electronic products, to
other countries in 2001.
During calendar year 2001, California experienced a 33% increase in new
municipal bond issuance over 2000 totals. In January and February 2002, the
state continued to see strong new supply, with issuance up 37% over the same
period in 2001. However, the possible budget shortfall, combined with the
uncertainties surrounding the resolution of the state's power problems, have put
pressure on California's credit ratings. In November 2001, Moody's downgraded
the rating on California general obligation bonds for the second time in twelve
months. Moody's rating currently stands at A1, while Standard & Poor's and Fitch
have maintained their ratings at A+/AA over the past six months. All three
agencies also maintained a negative outlook for the state.
HOW DID THESE NUVEEN CALIFORNIA FUNDS PERFORM OVER THE PAST TWELVE MONTHS?
During the twelve months ended February 28, 2002, the Fed's policy of interest
rate easing, combined with favorable market technicals, created a generally
positive total return environment for municipal bonds. Individual results for
the Nuveen California Funds are presented in the accompanying table.
2
TOTAL RETURN LEHMAN LIPPER
MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2
--------------------------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
2/28/02 EQUIVALENT3 2/28/02 2/28/02 2/28/02
--------------------------------------------------------------------------------
NPC 5.40% 8.50% 7.30% 6.90% 6.98%
--------------------------------------------------------------------------------
NCL 5.55% 8.74% 7.70% 6.90% 6.98%
--------------------------------------------------------------------------------
NCU 5.81% 9.15% 9.14% 6.68% 7.33%
--------------------------------------------------------------------------------
NAC 5.88% 9.26% 9.05% 6.68% 7.33%
--------------------------------------------------------------------------------
NVX 6.00% 9.45% NA - -
--------------------------------------------------------------------------------
NZH 6.24% 9.83% NA - -
--------------------------------------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
Overall, the market environment of the past twelve months favored funds with
longer durations. As of February 28, 2002, the durations4 of the two insured
Funds were 9.54 and 8.31, compared with 8.63 for the unleveraged Lehman Brothers
California Insured Tax-Exempt Bond Index, while NCU and NAC had durations of
11.30 and 12.42, respectively, versus 8.12 for the Lehman California Tax-Exempt
Index. The durations of NVX and NZH, which were established in 2001, were 15.01
and 18.29, respectively, which is typical of newer Funds. Over time, we plan to
move these durations in line with the other Nuveen California Municipal
Closed-End Exchange-Traded Funds. In addition to duration, the performance of
these Funds was influenced by market activity, portfolio structure, including
call exposure, and individual holdings.
HOW DID THE MARKET ENVIRONMENT AFFECT THE FUNDS' DIVIDENDS AND SHARE PRICES?
With the Fed's interest rate cuts, the dividend-payment capabilities of these
Funds benefited from the use of leverage, a strategy that can potentially
enhance the dividends paid to common shareholders. This benefit is tied in part
to the short-term rates these leveraged Funds pay their MuniPreferred(R)
shareholders. For example, declining short-term rates can enable the Funds to
reduce the amount of income they pay preferred shareholders, which can leave
more earnings to support common share dividends.
During the year ended February 28, 2002, steady or falling short-term interest
rates helped us to implement three dividend increases in NCL and NCU and two
increases in NPC and NAC. NVX and NZH, which were introduced during 2001, began
paying regular monthly dividends on schedule and are currently providing very
attractive levels of tax-free income to shareholders. Over the next twelve
months, the level of short-term rates, the number of bond calls, and the
interest rates at which we can reinvest the proceeds of any calls will continue
to influence the dividends of these Nuveen Funds.
Over the past year, continued fluctuations in the stock market and the strong
performance of the bond market prompted many investors to turn to tax-free
fixed-income investments as a way to rebalance their portfolios and reduce
overall volatility. As investors recognized the opportunities offered by the
Nuveen Funds, the share prices of the insured NPC and NCL improved, causing the
discount (share price below NAV) on NPC to move to a premium (share price above
NAV), while NCL's discount shrank considerably. Because the NAVs of NCU and NAC
appreciated more rapidly than their share prices, these Funds saw their
discounts widen over the past year.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE NUVEEN CALIFORNIA FUNDS DURING THE
YEAR ENDED FEBRUARY 28, 2002?
In view of recent world events, maintaining strong credit quality remained a
primary area of emphasis. All of these Funds continued to offer excellent credit
quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from
55% to 92% in the four non-insured Funds as of February 28, 2002. These Funds
also had a portion of their assets invested in BBB and/or non-rated bonds, which
serve to enhance the Funds' income streams. As insured Funds, NPC and NCL are
100% invested in insured and/or U.S. guaranteed securities, which means that
credit quality is not an issue.
As mentioned previously, continued uncertainty over the timing of a possible
power bond issuance, together with the potential of a state budget shortfall,
resulted in downgrades of California's credit ratings during the past twelve
months. In anticipation of this, we sold California general obligation bonds
from the non-insured Funds. As credit spreads subsequently widened, these bonds
underperformed, reinforcing our decision to sell. Over this period, these Funds
maintained their positions in California's three major utilities: Pacific Gas
and Electric, Southern California Edison, and San Diego Gas and Electric. While
these holdings restrained the performance of some of the Funds during the power
crisis last year, the bonds have recovered much of their value over the past six
months.
[SIDEBAR FOOTNOTES]:
1 The performance of the insured Funds - NPC and NCL - is compared with that
of the Lehman Brothers California Insured Tax-Exempt Bond Index, an
unleveraged index comprising a broad range of insured California municipal
bonds, while the performance of the non-insured Funds is compared with that
of the Lehman California Tax-Exempt Bond Index, an unleveraged index
comprising a broad range of investment-grade California muni-cipal bonds.
Results for the Lehman indexes do not reflect any expenses.
2 The total returns of NPC and NCL are compared with the average annualized
return of the 9 funds in the Lipper California Insured Municipal Debt Funds
category, while the non-insured Funds are compared with the average
annualized return of the 18 funds in the Lipper California Municipal Debt
Funds category. Fund and Lipper returns assume reinvestment of dividends.
3 The taxable-equivalent yield represents the yield that must be earned on a
taxable investment in order to equal the yield of the Nuveen Fund on an
after-tax basis. The taxable-equivalent yield is based on the fund's market
yield on the indicated date and a combined federal and state in-come tax
rate of 36.5%.
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
The financial situation in California also illustrates the value that fully
insured Funds can add to the portfolios of investors with moderate risk
tolerance. As credit spreads widened on unenhanced California general obligation
bonds, municipal securities with higher credit ratings, especially insured
bonds, outperformed the rest of the California market.
In investing new cash and proceeds from sales and bond calls over the past
twelve months, we focused on attractive bonds with the potential to support the
Funds' long-term dividend-payment capabilities, enhance total return potential,
and add value and diversification. In the insured Funds, we found value in the
healthcare sector and in selected airport offerings. In the non-insured Funds,
we took advantage of opportunities in insured bonds in the 15-year to 20-year
part of the yield curve across several sectors, particularly healthcare. This
sector remains an important strategic selection for us, providing attractive
income as well as competitive total returns.
In terms of bond calls, the Funds offer excellent levels of call protection in
2002 and 2003, with call exposure ranging from 2% in NAC and NVX to 18% in NCU
over the next 22 months. NPC, which was established in November 1992, faces a
slightly higher level of potential calls (24% in 2002 and 2003) as the Fund
works its way past its 10-year anniversary, a period normally associated with
increased call exposure. The number of actual calls experienced by the Funds
will depend largely on market interest rates over this time. We believe the
overall call exposure of these Funds is very manageable, and we foresee no
problems in working through the call risk. Our general approach has been to
watch for opportunities to sell holdings with short calls and use the occasion
to buy bonds that can extend call protection and enhance structure. Over the
past twelve months, increased levels of municipal supply have helped us to
implement this strategy.
In September 2001, we introduced the Nuveen California Dividend Advantage
Municipal Fund 3 (NZH). This Fund is now fully invested and, in our opinion,
performing well for shareholders. As mentioned earlier, NZH paid its first
dividend on target in December 2001, and we believe the Fund's holdings place it
in an excellent position to pay an attractive, stable dividend on a monthly
basis going forward.
WHAT IS YOUR OUTLOOK FOR THE MUNICIPAL MARKET IN GENERAL AND THE NUVEEN
CALIFORNIA FUNDS IN PARTICULAR?
In general, our outlook for the fixed-income markets over the next twelve months
remains positive. The U.S. economy appears headed for a recovery, but one
characterized by a more moderate pace of growth, with inflation and interest
rates remaining low over the near term. Nationally, new municipal issuance
should continue to be strong, and we expect issuance in California to increase
over 2001's high levels, as the state deals with the budget deficit, the
issuance of power bonds, and the continued need for essential services such as
schools and roads. Given the current situation, we expect much of this issuance
to be offered as insured bonds. Shortly after the conclusion of this reporting
period, California issued $1.1 billion in general obligation bonds as part of
the state's plan to restructure debt and provide some budgetary relief. We also
expect demand for tax-exempt municipal bonds to remain robust, as investors
continue to look for ways to rebalance their portfolios and reduce risk.
One of our priorities will be managing portfolio structure, including duration
and - in the non-insured Funds - credit quality, to strategically position the
Funds for an economic recovery. Depending on the direction of interest rates, we
plan to use coupon characteristics to help us manage the duration of the
non-insured Funds. As California addresses the issue of balancing the state
budget, we believe the performance of the state's general obligation bonds
should improve. As a result, we are once again looking for opportunities to
increase our exposure to California GOs in the non-insured Funds. In the insured
Funds, we plan to watch for opportunities presented by increased issuance,
including the California power bonds when they finally come to market. In NVX
and NZH, our focus will be on enhancing diversification and lowering durations.
Overall, we believe the Nuveen California Funds represent an important element
of investors' long-range financial programs, providing dependable tax-free
income as well as balance, diversification, and quality.
4
Nuveen Insured California Premium Income Municipal Fund, Inc.
Performance
OVERVIEW As of February 28, 2002
NPC
[PIE CHART DATA]
CREDIT QUALITY
------------------------------
Insured 82%
------------------------------
U.S. Guaranteed 18%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $15.90
--------------------------------------------------
Net Asset Value $15.80
--------------------------------------------------
Market Yield 5.40%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.71%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.50%
--------------------------------------------------
Fund Net Assets ($000) $146,682
--------------------------------------------------
Average Effective Maturity (Years) 20.13
--------------------------------------------------
Leverage-Adjusted Duration 9.54
--------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 11/92)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 11.45% 7.30%
--------------------------------------------------
5-Year 8.88% 6.71%
--------------------------------------------------
Since Inception 6.50% 6.97%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/General 23%
--------------------------------------------------
U.S. Guaranteed 18%
--------------------------------------------------
Water and Sewer 17%
--------------------------------------------------
Healthcare 10%
--------------------------------------------------
Tax Obligation/Limited 9%
--------------------------------------------------
[BAR CHART DATA]
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar $0.0695
Apr 0.0695
May 0.0695
Jun 0.0695
Jul 0.0695
Aug 0.0695
Sep 0.0705
Oct 0.0705
Nov 0.0705
Dec 0.0715
Jan 0.0715
Feb 0.0715
[LINE CHART DATA]
SHARE PRICE PERFORMANCE
Weekly Closing Price
3/1/01 $15.3
15.02
15.2
15.2
15.25
15.19
15
14.78
14.78
14.92
14.85
14.65
14.64
15.1
14.85
14.81
14.9
15
15.2
14.95
14.8
14.9
14.98
15.01
15.08
15.05
15.25
15.45
15.65
15.7
15.69
15.42
15.57
15
15.25
15.45
15.2
15.2
15.6
15.87
15.9
15.91
15.71
15.95
15.9
15.5
15.79
15.5
15.5
15.7
15.69
15.85
15.9
16
15.84
2/28/02 15.95
Past performance is not predictive of future results.
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 30%. 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 36.5%.
5
Nuveen Insured California Premium Income Municipal Fund 2, Inc.
Performance
OVERVIEW As of February 28, 2002
NCL
[PIE CHART DATA]
CREDIT QUALITY
---------------------------------------
Insured 89%
---------------------------------------
Insured and U.S. Guaranteed 8%
---------------------------------------
U.S. Guaranteed 3%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.80
--------------------------------------------------
Net Asset Value $14.82
--------------------------------------------------
Market Yield 5.55%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.93%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.74%
--------------------------------------------------
Fund Net Assets ($000) $282,268
--------------------------------------------------
Average Effective Maturity (Years) 17.70
--------------------------------------------------
Leverage-Adjusted Duration 8.31
--------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 3/93)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 9.36% 7.70%
--------------------------------------------------
5-Year 8.72% 7.22%
--------------------------------------------------
Since Inception 5.70% 6.29%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 36%
--------------------------------------------------
U.S. Guaranteed 11%
--------------------------------------------------
Tax Obligation/General 11%
--------------------------------------------------
Water and Sewer 9%
--------------------------------------------------
Utilities 8%
--------------------------------------------------
[BAR CHART DATA]
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar $0.0645
Apr 0.0645
May 0.0645
Jum 0.066
Jul 0.066
Aug 0.066
Sep 0.067
Oct 0.067
Nov 0.067
Dec 0.0685
Jan 0.0685
Feb 0.0685
[LINE CHART DATA]
SHARE PRICE PERFORMANCE
Weekly Closing Price
3/1/01 $14.67
14.51
14.45
14.35
14.39
14.2
13.88
13.63
14.02
13.91
13.61
13.72
13.66
13.79
13.91
13.96
13.8
13.9
13.96
13.82
13.96
14
14.05
14.1
14.26
14.47
14.53
14.85
14.88
14.91
14.83
14.83
14.84
14.2
14.47
15
14.73
14.94
14.88
15.24
15.47
15.16
14.92
14.84
14.7
14.66
14.36
14.62
14.51
14.45
14.77
14.7
14.71
14.87
14.71
2/28/02 14.87
Past performance is not predictive of future results.
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 30%. 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 36.5%.
6
Nuveen California Premium Income Municipal Fund
Performance
OVERVIEW As of February 28, 2002
NCU
[PIE CHART DATA]
CREDIT QUALITY
------------------------------
AAA/U.S. Guaranteed 62%
------------------------------
AA 9%
------------------------------
A 7%
------------------------------
BBB 9%
------------------------------
NR 10%
------------------------------
Other 3%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $13.94
--------------------------------------------------
Net Asset Value $14.13
--------------------------------------------------
Market Yield 5.81%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.30%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.15%
--------------------------------------------------
Fund Net Assets ($000) $124,585
--------------------------------------------------
Average Effective Maturity (Years) 16.62
--------------------------------------------------
Leverage-Adjusted Duration 11.30
--------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 6/93)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 5.47% 9.14%
--------------------------------------------------
5-Year 8.00% 7.23%
--------------------------------------------------
Since Inception 5.18% 5.96%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 33%
--------------------------------------------------
U.S. Guaranteed 16%
--------------------------------------------------
Healthcare 13%
--------------------------------------------------
Housing/Multifamily 11%
--------------------------------------------------
Tax Obligation/General 8%
--------------------------------------------------
[BAR CHART DATA]
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar $0.064
Apr 0.064
May 0.064
Jun 0.065
Jul 0.065
Aug 0.065
Sep 0.066
Oct 0.066
Nov 0.066
Dec 0.0675
Jan 0.0675
Feb 0.0675
[LINE CHART DATA]
SHARE PRICE PERFORMANCE
Weekly Closing Price
3/1/01 $14.08
13.97
14
14
14.02
14
13.56
13
13.3
13.49
13.18
13.05
13.09
13.01
13.18
13.35
13.28
13.25
13.48
13.41
13.36
13.53
13.45
13.46
13.5
13.54
13.9
14.03
14.21
14.2
14.17
13.81
13.77
13.44
13.53
13.87
14.04
14.03
13.86
14.05
14.39
14.14
14.18
13.95
13.84
13.63
13.34
13.38
13.51
13.58
13.69
13.72
13.82
14.01
14
2/28/02 13.96
Past performance is not predictive of future results.
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 30%. 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 36.5%.
7
Nuveen California Dividend Advantage Municipal Fund
Performance
OVERVIEW As of February 28, 2002
NAC
[PIE CHART DATA]
CREDIT QUALITY
------------------------------
AAA/U.S. Guaranteed 49%
------------------------------
AA 6%
------------------------------
A 22%
------------------------------
BBB 14%
------------------------------
NR 9%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.38
--------------------------------------------------
Net Asset Value $14.89
--------------------------------------------------
Market Yield 5.88%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.40%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.26%
--------------------------------------------------
Fund Net Assets ($000) $523,621
--------------------------------------------------
Average Effective Maturity (Years) 22.78
--------------------------------------------------
Leverage-Adjusted Duration 12.42
--------------------------------------------------
ANNUALIZED TOTAL RETURN (Inception 5/99)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 6.42% 9.05%
--------------------------------------------------
Since Inception 4.50% 7.52%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 30%
--------------------------------------------------
Transportation 16%
--------------------------------------------------
Healthcare 11%
--------------------------------------------------
Utilities 11%
--------------------------------------------------
Housing/Multifamily 9%
--------------------------------------------------
[BAR CHART DATA]
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar $0.067
Apr 0.067
May 0.067
Jun 0.069
Jul 0.069
Aug 0.069
Sep 0.0705
Oct 0.0705
Nov 0.0705
Dec 0.0705
Jan 0.0705
Feb 0.0705
[LINE CHART DATA]
SHARE PRICE PERFORMANCE
Weekly Closing Price
3/1/01 $14.38
14.45
14.24
14.2
14.48
14.15
14.06
13.41
14.3
13.7
13.44
13.49
13.44
13.7
14
14
13.92
13.9
14
14
13.98
13.94
14.13
14.19
14.25
14.42
14.7
14.81
14.9
14.81
14.89
14.66
14.74
14.25
14.24
14.97
14.68
14.75
14.89
14.98
15.15
15.1
15.15
14.66
14.44
14.02
14.05
14.4
14.27
14.32
14.34
14.25
14.59
14.73
14.49
2/28/02 14.38
Past performance is not predictive of future results.
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 30%. 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 36.5%.
8
Nuveen California Dividend Advantage Municipal Fund 2
Performance
OVERVIEW As of February 28, 2002
NVX
[PIE CHART DATA]
CREDIT QUALITY
------------------------------
AAA/U.S. Guaranteed 73%
------------------------------
AA 9%
------------------------------
A 9%
------------------------------
BBB 2%
------------------------------
NR 7%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.39
--------------------------------------------------
Net Asset Value $14.67
--------------------------------------------------
Market Yield 6.00%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.57%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.45%
--------------------------------------------------
Fund Net Assets ($000) $326,939
--------------------------------------------------
Average Effective Maturity (Years) 26.27
--------------------------------------------------
Leverage-Adjusted Duration 15.01
--------------------------------------------------
TOTAL RETURN (Inception 3/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
Since Inception 0.77% 7.53%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 30%
--------------------------------------------------
Tax Obligation/General 14%
--------------------------------------------------
Education and Civic Organizations 14%
--------------------------------------------------
Water and Sewer 11%
--------------------------------------------------
Utilities 11%
--------------------------------------------------
[BAR CHART DATA]
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Mar $0.072
Apr 0.072
May 0.072
Jun 0.072
Jul 0.072
Aug 0.072
Sep 0.072
Oct 0.072
Nov 0.072
Dec 0.072
Jan 0.072
Feb 0.072
[LINE CHART DATA]
SHARE PRICE PERFORMANCE
Weekly Closing Price
3/30/01 $15
15.12
15.01
15.07
15.01
15.14
15.07
14.99
14.72
14.7
14.5
14.56
14.39
14.42
14.79
15
15.02
14.8
15.07
15.1
15.24
15.34
15.21
15.07
15.04
14.41
15.07
15.2
15
14.95
14.74
15.14
15.1
15.1
14.76
14.89
14.75
14.44
13.97
13.75
14.02
14.37
14.49
14.46
14.48
14.52
14.37
2/28/02 14.45
Past performance is not predictive of future results.
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 30%. 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 36.5%.
9
Nuveen California Dividend Advantage Municipal Fund 3
Performance
OVERVIEW As of February 28, 2002
NZH
[PIE CHART DATA]
CREDIT QUALITY
------------------------------
AAA/U.S. Guaranteed 82%
------------------------------
AA 10%
------------------------------
A 7%
------------------------------
BBB 1%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $13.84
--------------------------------------------------
Net Asset Value $14.11
--------------------------------------------------
Market Yield 6.24%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.91%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.83%
--------------------------------------------------
Fund Net Assets ($000) $527,141
--------------------------------------------------
Average Effective Maturity (Years) 26.58
--------------------------------------------------
Leverage-Adjusted Duration 18.29
--------------------------------------------------
TOTAL RETURN (Inception 9/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
Since Inception -5.82% 0.51%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 37%
--------------------------------------------------
Tax Obligation/General 20%
--------------------------------------------------
Water and Sewer 16%
--------------------------------------------------
Education and Civic Organizations 8%
--------------------------------------------------
Healthcare 7%
--------------------------------------------------
[BAR CHART DATA]
2001-2002 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Nov $0.072
Dec 0.072
Jan 0.072
Feb 0.072
[LINE CHART DATA]
SHARE PRICE PERFORMANCE
Weekly Closing Price
3/28/01 $15.05
15.03
15.02
15.01
15.01
14.83
14.95
14.84
14.29
14.5
14.42
14.33
13.78
13.14
13.87
14.06
14.16
14.07
14.15
14.4
13.97
2/28/02 14.15
Past performance is not predictive of future results.
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 30%. 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 36.5%.
10
Shareholder
MEETING REPORT
The Shareholder Meeting was held in Chicago, Illinois on November 15, 2001.
NPC NCL
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Preferred Preferred Preferred
Common Shares Common Shares Shares
Shares Series-T Shares Series-T Series-TH
====================================================================================================================================
Robert P. Bremner
For 5,857,657 1,713 11,874,627 1,755 1,637
Withhold 47,864 1 70,217 -- 51
------------------------------------------------------------------------------------------------------------------------------------
Total 5,905,521 1,714 11,944,844 1,755 1,688
====================================================================================================================================
Lawrence H. Brown
For 5,857,257 1,713 11,874,227 1,755 1,637
Withhold 48,264 1 70,617 -- 51
------------------------------------------------------------------------------------------------------------------------------------
Total 5,905,521 1,714 11,944,844 1,755 1,688
====================================================================================================================================
Anne E. Impellizzeri
For 5,853,157 1,713 11,870,357 1,755 1,637
Withhold 52,364 1 74,487 -- 51
------------------------------------------------------------------------------------------------------------------------------------
Total 5,905,521 1,714 11,944,844 1,755 1,688
====================================================================================================================================
Peter R. Sawers
For 5,853,540 1,713 11,874,227 1,755 1,637
Withhold 51,981 1 70,617 -- 51
------------------------------------------------------------------------------------------------------------------------------------
Total 5,905,521 1,714 11,944,844 1,755 1,688
====================================================================================================================================
Judith M. Stockdale
For 5,852,657 1,713 11,872,027 1,755 1,637
Withhold 52,864 1 72,817 -- 51
------------------------------------------------------------------------------------------------------------------------------------
Total 5,905,521 1,714 11,944,844 1,755 1,688
====================================================================================================================================
William J. Schneider
For -- 1,713 -- 1,755 1,637
Withhold -- 1 -- -- 51
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,714 -- 1,755 1,688
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,713 -- 1,755 1,637
Withhold -- 1 -- -- 51
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,714 -- 1,755 1,688
====================================================================================================================================
11
Shareholder
MEETING REPORT (continued)
NCU NAC
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Preferred Preferred Preferred
Common Shares Common Shares Shares
Shares Series-M Shares Series-TH Series-F
====================================================================================================================================
Robert P. Bremner
For 5,428,357 1,523 23,087,714 3,387 3,205
Withhold 37,627 30 149,592 15 18
------------------------------------------------------------------------------------------------------------------------------------
Total 5,465,984 1,553 23,237,306 3,402 3,223
====================================================================================================================================
Lawrence H. Brown
For 5,427,468 1,523 23,078,114 3,387 3,205
Withhold 38,516 30 159,192 15 18
------------------------------------------------------------------------------------------------------------------------------------
Total 5,465,984 1,553 23,237,306 3,402 3,223
====================================================================================================================================
Anne E. Impellizzeri
For 5,426,768 1,523 23,081,448 3,385 3,205
Withhold 39,216 30 155,858 17 18
------------------------------------------------------------------------------------------------------------------------------------
Total 5,465,984 1,553 23,237,306 3,402 3,223
====================================================================================================================================
Peter R. Sawers
For 5,427,968 1,523 23,075,114 3,385 3,205
Withhold 38,016 30 162,192 17 18
------------------------------------------------------------------------------------------------------------------------------------
Total 5,465,984 1,553 23,237,306 3,402 3,223
====================================================================================================================================
Judith M. Stockdale
For 5,428,357 1,523 23,086,847 3,385 3,205
Withhold 37,627 30 150,459 17 18
------------------------------------------------------------------------------------------------------------------------------------
Total 5,465,984 1,553 23,237,306 3,402 3,223
====================================================================================================================================
William J. Schneider
For -- 1,523 -- 3,387 3,205
Withhold -- 30 -- 15 18
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,553 -- 3,402 3,223
====================================================================================================================================
Timothy R. Schwertfeger
For -- 1,523 -- 3,387 3,205
Withhold -- 30 -- 15 18
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,553 -- 3,402 3,223
====================================================================================================================================
12
Nuveen Insured California Premium Income Municipal Fund, Inc. (NPC)
Portfolio of
INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 5.7%
$ 2,000 California Educational Facilities Authority, Revenue Bonds (Santa Clara 9/06 at 102.00 AAA $ 2,116,000
University), Series 1996, 5.750%, 9/01/26
6,620 California Educational Facilities Authority, Revenue Bonds (Loyola No Opt. Call Aaa 1,045,960
Marymount University), Series 2001A Refunding, 0.000%, 10/01/35
5,000 California Educational Facilities Authority, Student Loan Revenue Bonds 3/08 at 102.00 Aaa 5,133,300
(California Loan Program), Series 2001A, 5.400%, 3/01/21
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 9.4%
3,000 California Health Facilities Financing Authority, Insured Revenue Bonds 8/08 at 101.00 AAA 3,088,260
(Sutter Health), Series 1998A, 5.375%, 8/15/30
1,500 California Statewide Communities Development Authority, Certificates 8/09 at 101.00 AAA 1,591,035
of Participation (Members of the Sutter Health Obligated Group),
5.500%, 8/15/19
4,000 California Statewide Communities Development Authority, Certificates 8/02 at 102.00 AAA 4,144,920
of Participation (Sutter Health Obligated Group), 6.125%, 8/15/22
4,800 The Regents of the University of California, Hospital Revenue Bonds 7/06 at 101.00 AAA 5,031,888
(UC Davis Medical Center), Series 1996, 5.750%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.0%
1,000 ABAG Finance Authority for Nonprofit Corporations, California, 9/09 at 100.00 AAA 1,040,430
Multifamily Housing Revenue Bonds (Civic Center Drive Apartments
Project), 1999 Series A, 5.800%, 9/01/20 (Alternative Minimum Tax)
3,650 California Housing Finance Agency, Multi-Unit Rental Housing Revenue 2/03 at 102.00 Aa2 3,757,602
Bonds, Series 1992A-II, 6.625%, 2/01/24 (Alternative Minimum Tax)
3,935 City of Los Angeles, California, Tax-Exempt Mortgage Revenue Refunding 7/02 at 102.00 AAA 3,993,671
Bonds (FHA-Insured Mortgage Loans - Section 8 Assisted Projects),
Series 1993A, 6.300%, 1/01/25
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 3.2%
1,495 California Housing Finance Agency, Single Family Mortgage Bonds II, 2/07 at 102.00 AAA 1,567,283
1997 Series A-1, 6.000%, 8/01/20 (Alternative Minimum Tax)
3,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 8/08 at 101.00 AAA 3,054,060
Series 1998Q, 5.050%, 8/01/17
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 22.1%
State of California, Various Purpose General Obligation Bonds:
7,995 5.750%, 3/01/22 3/10 at 101.00 AAA 8,607,737
2,000 5.750%, 3/01/27 3/10 at 101.00 AAA 2,147,460
2,000 State of California, Veterans General Obligation Bonds, 2001 Series BZ, 6/07 at 101.00 AAA 2,005,080
5.375%, 12/01/24 (Alternative Minimum Tax)
1,225 Fresno Unified School District, Fresno County, California, 1998 General 2/13 at 103.00 AAA 1,451,221
Obligation Refunding Bonds, Series A, 6.550%, 8/01/20
2,500 Fresno Unified School District, Fresno County, California, General 8/09 at 102.00 AAA 2,529,725
Obligation Bonds (Election of 2001), Series 2001A, 5.125%, 8/01/26
2,000 Los Angeles Unified School District, California, General Obligation Bonds, 7/08 at 102.00 AAA 2,015,480
1997 Series A, 5.000%, 7/01/21
500 Los Angeles Unified School District, California, General Obligation Bonds 7/10 at 100.00 AAA 517,625
(Election of 1997), Series 2000D, 5.375%, 7/01/25
3,000 Pomona Unified School District, California, General Obligation Refunding 8/11 at 103.00 AAA 3,532,380
Bonds, Series 1997-A, 6.500%, 8/01/19
13
Nuveen Insured California Premium Income Municipal Fund, Inc. (NPC) (continued)
Portfolio of INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
San Diego Unified School District, San Diego County, California,
General Obligation Bonds (Election of 1998), Series 2001C:
$ 1,335 5.000%, 7/01/21 7/11 at 102.00 AAA $ 1,348,163
3,500 5.000%, 7/01/22 7/11 at 102.00 AAA 3,522,365
4,895 5.000%, 7/01/23 7/11 at 102.00 AAA 4,913,601
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 9.1%
2,000 California State Public Works Board, Department of Health Services, Lease 11/09 at 101.00 AAA 2,144,520
Revenue Bonds (Richmond Laboratory Project), 1999 Series A,
5.750%, 11/01/24
5,000 El Monte Department of Public Services Facility Phase II, California, 1/11 at 100.00 AAA 5,097,050
Certificates of Participation, Senior Lien Series 2001, 5.250%, 1/01/34
2,135 City of San Buenaventura, California, 1993 Refunding Certificates of 1/03 at 100.00 AAA 2,154,685
Participation (Capital Improvements Project), 5.500%, 1/01/17
3,890 Santa Clara County Financing Authority, California, Lease Revenue Bonds 11/07 at 102.00 AAA 3,908,244
(VMC Facility Replacement Project), 1994 Series A, 5.000%, 11/15/22
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 18.1%
6,000 Huntington Park Redevelopment Agency, California, Single Family No Opt. Call AAA 8,316,540
Residential Mortgage Revenue Refunding Bonds, 1986 Series A,
8.000%, 12/01/19
5,135 Palmdale Community Redevelopment Agency, California, Single Family No Opt. Call AAA 6,902,159
Mortgage Revenue Bonds, Series 1986A Restructured, 8.000%,
3/01/16 (Alternative Minimum Tax)
6,220 Riverside County, California, Single Family Mortgage Revenue Bonds No Opt. Call AAA 9,120,137
(GNMA Mortgage-Backed Securities Program), Issue 1987A,
9.000%, 5/01/21 (Alternative Minimum Tax)
1,485 City of San Jose, California, Single Family Mortgage Revenue Bonds, No Opt. Call AAA 2,208,344
1985 Series A, 9.500%, 10/01/13
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 8.4%
4,000 California Pollution Control Financing Authority, Pollution Control 12/02 at 102.00 AAA 4,154,320
Revenue Bonds (Southern California Edison Company), 1992 Series B,
6.400%, 12/01/24 (Alternative Minimum Tax)
4,000 City of Chula Vista, California, Industrial Development Revenue Bonds 12/02 at 102.00 AA- 4,108,160
(San Diego Gas and Electric Company), 1992 Series A, 6.400%,
12/01/27 (Alternative Minimum Tax)
2,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 2002 7/12 at 101.00 AAA 2,024,240
Series II, 5.125%, 7/01/26
2,000 Sacramento Municipal Utility District, California, Electric Revenue 8/02 at 100.00 AAA 2,035,560
Refunding Bonds, 1992 Series A, 5.750%, 8/15/13
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 16.4%
7,000 City of Los Angeles, California, Wastewater System Revenue Bonds, 11/03 at 102.00 AAA 6,888,140
Series 1993D, 4.700%, 11/01/19
2,750 San Diego Public Facilities Financing Authority, California, Sewer 5/05 at 101.00 AAA 2,747,910
Revenue Bonds, Series 1995, 5.000%, 5/15/25
3,400 San Diego Public Facilities Financing Authority, California, Sewer 5/07 at 101.00 AAA 3,482,722
Revenue Bonds, Series 1997A, 5.250%, 5/15/22
2,000 City and County of San Francisco Public Utilities Commission, California, 11/11 at 100.00 AAA 2,022,040
Water Revenue Bonds, Series 2001A, 5.000%, 11/01/20
5,000 Wheeler Ridge-Maricopa Water Storage District, Kern County, California, 11/06 at 102.00 AAA 5,412,700
1996 Water Refunding Bonds, 5.700%, 11/01/15
3,425 City of Woodland, Yolo County, California, Certificates of Participation 3/03 at 100.00 AAA 3,458,872
(1992 Wastewater System Refunding Project), 5.500%, 3/01/18
------------------------------------------------------------------------------------------------------------------------------------
$ 138,390 Total Investments (cost $133,567,448) - 98.4% 144,341,589
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.6% 2,340,400
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $146,681,989
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
* Optional Call Provisions: 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: Using the higher of Standard & Poor's or Moody's
rating.
See accompanying notes to financial statements.
14
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL)
Portfolio of
INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 7.0%
California Educational Facilities Authority, Revenue Bonds (Santa Clara
University), Series 1996:
$ 2,400 5.750%, 9/01/21 9/06 at 102.00 AAA $ 2,547,792
3,000 5.750%, 9/01/26 9/06 at 102.00 AAA 3,174,000
2,000 California Educational Facilities Authority, Revenue Bonds (University 11/10 at 100.00 Aaa 2,188,800
of the Pacific), Series 2000, 5.875%, 11/01/20
California Educational Facilities Authority, Revenue Bonds (Loyola
Marymount University), Series 2001A Refunding:
6,615 0.000%, 10/01/33 No Opt. Call Aaa 1,168,011
6,615 0.000%, 10/01/34 No Opt. Call Aaa 1,104,903
5,000 California Educational Facilities Authority, Student Loan Revenue Bonds 3/08 at 102.00 Aaa 5,133,300
(California Loan Program), Series 2001A, 5.400%, 3/01/21
(Alternative Minimum Tax)
California Infrastructure and Economic Development Bank, Revenue
Bonds (Asian Art Museum of San Francisco Project), Series 2000:
1,295 5.500%, 6/01/19 6/10 at 101.00 AAA 1,384,510
1,000 5.500%, 6/01/20 6/10 at 101.00 AAA 1,062,730
1,900 The Regents of the University of California, Housing System Revenue 11/03 at 102.00 AAA 1,964,543
Bonds (University of California), Series A, 5.500%, 11/01/18
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 3.5%
1,450 California Health Facilities Financing Authority, Insured Health Facility 7/06 at 102.00 AAA 1,617,519
Refunding Revenue Bonds (Mark Twain St. Joseph's Healthcare),
1996 Series A, 6.000%, 7/01/19
5,000 California Health Facilities Financing Authority, Insured Health Facility 7/06 at 102.00 AAA 5,421,350
Refunding Revenue Bonds (Catholic Healthcare West), 1996
Series A, 6.000%, 7/01/25
2,500 City of Oakland, California, Insured Revenue Bonds (1800 Harrison 1/10 at 100.00 AAA 2,727,200
Foundation - Kaiser Permanente), Series 1999A, 6.000%, 1/01/29
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.2%
ABAG Financing Authority for Nonprofit Corporations, California,
Multifamily Housing Revenue Bonds (Civic Center Drive Apartments
Project), 1999 Series A:
4,000 5.800%, 9/01/20 (Alternative Minimum Tax) 9/09 at 100.00 AAA 4,161,720
1,370 5.875%, 3/01/32 (Alternative Minimum Tax) 9/09 at 100.00 AAA 1,421,704
3,785 Los Angeles Community Redevelopment Agency, California, Multifamily 6/05 at 105.00 AAA 4,220,275
Housing Revenue Refunding Bonds (Angelus Plaza Project), 1995
Series A, 7.400%, 6/15/10
7,400 Santa Cruz Housing Authority, California, Tax-Exempt Multifamily 5/03 at 102.00 Aaa 7,612,454
Housing Revenue Refunding Bonds (GNMA Collateralized -
Meadowview Apartments), Series 1993A, 6.125%, 5/20/28
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.9%
4,375 California Housing Finance Agency, Single Family Mortgage Bonds II, 8/07 at 101.50 AAA 4,509,838
1997 Series C-2, 5.625%, 8/01/20 (Alternative Minimum Tax)
1,065 California Housing Finance Agency, Home Mortgage Revenue Bonds, 2/06 at 102.00 AAA 1,114,757
1996 Series E, 6.150%, 8/01/25 (Alternative Minimum Tax)
12,745 California Housing Finance Agency, Home Mortgage Revenue Bonds, 2/09 at 32.13 AAA 2,554,098
1999 Series B, 0.000%, 2/01/30 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 11.3%
1,460 ABC Unified School District, Los Angeles County, California, General 8/10 at 101.00 AAA 1,626,674
Obligation Bonds (Election of 1997), Series B, 5.750%, 8/01/16
485 State of California, General Obligation Veterans Welfare Bonds, 12/03 at 102.00 AAA 488,143
Series 1997BH, 5.500%, 12/01/24 (Alternative Minimum Tax)
15
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL) (continued)
Portfolio of INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
State of California, Various Purpose General Obligation Bonds:
$ 7,995 5.750%, 3/01/22 3/10 at 101.00 AAA $ 8,607,737
2,500 5.500%, 9/01/24 9/09 at 101.00 AAA 2,620,175
2,000 5.750%, 3/01/27 3/10 at 101.00 AAA 2,147,460
3,000 State of California, General Obligation Veterans Bonds, 2001 Series BZ, 6/07 at 101.00 AAA 3,007,620
5.375%, 12/01/24 (Alternative Minimum Tax)
2,575 Calipatria Unified School District, Imperial County, California, General 8/06 at 102.00 AAA 2,792,304
Obligation Bonds, 1996 Series A, 5.625%, 8/01/13
3,000 Escondido Union High School District, San Diego County, California, 11/06 at 102.00 AAA 3,321,510
General Obligation Bonds (Election of 1996), 5.700%, 11/01/10
Fresno Unified School District, Fresno County, California,
General Obligation Bonds (Election of 1995), Series 2001F:
1,065 5.125%, 8/01/21 8/09 at 102.00 AAA 1,086,502
1,160 5.125%, 8/01/22 8/09 at 102.00 AAA 1,179,036
1,220 5.125%, 8/01/23 8/09 at 102.00 AAA 1,238,178
1,500 Hacienda La Puente Unified School District, City of Los Angeles, 8/10 at 101.00 AAA 1,540,905
California, General Obligation Bonds (Election of 2000),
Series A, 5.250%, 8/01/25
1,750 Lake Tahoe Unified School District, El Dorado County, California, General 8/09 at 100.00 AAA 1,790,408
Obligation Bonds (Election of 1999), Series A, 5.250%, 8/01/24
1,125 San Diego Unified School District, California, 1999 General Obligation No Opt. Call AAA 400,264
Bonds (Election of 1998), Series A, 0.000%, 7/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 35.0%
Anaheim Public Financing Authority, California, Subordinate
Lease Revenue Bonds (Anaheim Public Improvements Project), 1997
Series C:
5,130 0.000%, 9/01/18 No Opt. Call AAA 2,186,560
8,000 0.000%, 9/01/21 No Opt. Call AAA 2,818,880
1,800 California Public School District Financing Authority, Lease Revenue Bonds 9/06 at 102.00 AAA 1,945,548
(Southern Kern Unified School District Projects), Series 1996B,
5.800%, 9/01/16
5,250 California State Public Works Board, Department of Corrections, Lease 1/06 at 100.00 AAA 5,317,148
Revenue Bonds (California Substance Abuse Treatment Facility and
State Prison at Corcoran II), 1996 Series A, 5.250%, 1/01/21
3,450 California State Public Works Board, Department of Health Services, 11/09 at 101.00 AAA 3,699,297
Lease Revenue Bonds (Richmond Laboratory Project), 1999
Series A, 5.750%, 11/01/24
5,000 Compton Community Redevelopment Agency, California, Refunding Tax 8/05 at 102.00 AAA 5,679,850
Allocation Bonds (Compton Redevelopment Project), Series 1995A
(Project Tax Revenues, Subventions and Housing Tax Revenues),
6.500%, 8/01/13
4,000 Contra Costa County, California, Certificates of Participation (Merrithew 11/07 at 102.00 AAA 4,184,240
Memorial Hospital Replacement Project), Refunding Series 1997,
5.500%, 11/01/22
6,000 El Monte Department of Public Services Facility Phase II, California, 1/11 at 100.00 AAA 6,035,820
Certificates of Participation, Senior Lien Series 2001,
5.000%, 1/01/21
3,000 Galt Schools Joint Powers Authority, Sacramento County, California, 11/07 at 102.00 AAA 3,232,620
1997 Refunding Revenue Bonds (High School and Elementary
School Facilities), Series A, 5.875%, 11/01/24
5,000 Kern County Board of Education, California, Refunding Certificates of 5/08 at 102.00 AAA 5,080,500
Participation, 1998 Series A 5.200%, 5/01/28
5,000 La Quinta Redevelopment Agency, California, Tax Allocation Refunding 9/07 at 102.00 AAA 5,072,250
Bonds (La Quinta Redevelopment Project Area No. 1), Series 1998,
5.200%, 9/01/28
3,865 Los Angeles County Metropolitan Transportation Authority, California, 7/10 at 101.00 AAA 3,952,078
Proposition C Sales Tax Revenue Bonds, Second Senior Lien
Series 2000A, 5.250%, 7/01/30
2,020 Menifee Union School District, Riverside County, California, Certificates 9/06 at 102.00 AAA 2,184,347
of Participation (1996 School Project), 6.125%, 9/01/24
2,690 Norwalk Community Facilities Financing Authority, Los Angeles County, 9/05 at 102.00 AAA 2,904,393
California, Tax Allocation Refunding Revenue Bonds, 1995
Series A, 6.000%, 9/01/15
16
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,000 Poway Redevelopment Agency, California, Tax Allocation Refunding Bonds 12/10 at 102.00 AAA $ 2,166,380
(Paguay Redevelopment Project), Series 2000, 5.750%, 6/15/33
9,000 City of Redlands, California, Certificates of Participation (1993 9/03 at 102.00 AAA 9,364,590
Refunding of 1986 and 1987 Projects), 5.800%, 9/01/17
5,000 San Bernardino Joint Powers Financing Authority, California, Refunding 9/09 at 102.00 AAA 5,309,750
Certificates of Participation (Police Station South Valle Refunding
and 201 Building Projects), 5.500%, 9/01/20
3,500 San Francisco Bay Area Rapid Transit District, California, Sales Tax 7/09 at 101.00 AAA 3,657,745
Revenue Bonds, Series 1999, 5.500%, 7/01/34
1,930 Santa Margarita/Dana Point Authority, Orange County, California, No Opt. Call AAA 2,231,350
Revenue Bonds (1994 Improvement Districts Nos. 1, 2, 2A and 8
General Obligation Bond Refinancing), Series A, 7.250%, 8/01/05
South Orange County Public Financing Authority, California,
Special Tax Revenue Bonds (Foothill Area), 1994 Series C:
3,000 8.000%, 8/15/08 No Opt. Call AAA 3,807,690
6,830 8.000%, 8/15/09 No Opt. Call AAA 8,799,635
3,770 Suisun City Redevelopment Agency, Solano County, California, 1993 Tax 10/03 at 102.00 AAA 3,914,655
Allocation Refunding Bonds (Suisun City Redevelopment Project),
5.900%, 10/01/23
5,450 Visalia Public Financing Authority, California, Refunding Certificates 12/06 at 102.00 AAA 5,604,889
of Participation (Motor Vehicle License Fee Enhancement), Series 1996A,
5.375%, 12/01/26
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.8%
6,500 Foothill/Eastern Transportation Corridor Agency, California, Toll Road 1/10 at 65.32 AAA 2,770,950
Refunding Revenue Bonds, Series 1999, 0.000%, 1/15/18
2,000 City and County of San Francisco Airports Commission, California, 1/08 at 102.00 AAA 1,963,200
Revenue Bonds (San Francisco International Airport), Issue 15A,
Second Series, 5.000%, 5/01/28 (Alternative Minimum Tax)
5,000 City and County of San Francisco Airports Commission, California, 5/11 at 100.00 AAA 5,037,650
Revenue Refunding Bonds (San Francisco International Airport),
Issue 27A, Second Series, 5.250%, 5/01/31
(Alternative Minimum Tax)
3,750 City of San Jose, California, Airport Revenue Bonds, Series 1993, 3/03 at 102.00 AAA 3,850,650
5.700%, 3/01/18 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 11.3%
3,620 Alameda County, California, Certificates of Participation (1991 Financing 9/06 at 102.00 AAA 4,106,781
Project - Alameda County Public Facilities Corporation), 6.000%,
9/01/21 (Pre-refunded to 9/01/06)
4,485 Alameda County, California, 1993 Refunding Certificates of Participation 12/03 at 102.00 AAA 4,877,886
(Santa Rita Jail Project), 5.700%, 12/01/14 (Pre-refunded to 12/01/03)
3,000 Central Unified School District, Fresno County, California, General 3/03 at 102.00 AAA 3,167,670
Obligation Bonds (Election of 1992), 5.625%, 3/01/18
(Pre-refunded to 3/01/03)
4,320 Riverside County, California, Single Family Mortgage Revenue Bonds No Opt. Call AAA 6,002,942
(GNMA Mortgage-Backed Securities Program), Issue 1987B,
8.625%, 5/01/16 (Alternative Minimum Tax)
1,850 City of Sacramento Unified School District, Sacramento County, California, 7/09 at 102.00 Aaa 2,162,465
General Obligation Bonds, Series 2000A, 5.750%, 7/01/18
(Pre-refunded to 7/01/09)
9,000 City and County of San Francisco Airports Commission, California, 5/04 at 101.00 AAA 9,894,870
Revenue Bonds (San Francisco International Airport), Issue 8B,
Second Series, 6.100%, 5/01/20 (Pre-refunded to 5/01/04)
1,515 City of Torrance, California, Hospital Revenue Bonds (Little Company of
Mary Hospital), 1985 Series A, 12/05 at 100.00 AAA 1,723,540
7.100%, 12/01/15 (Pre-refunded to 12/01/05)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 8.1%
3,740 California Pollution Control Financing Authority, Pollution Control 9/09 at 101.00 AAA 3,819,288
Revenue Refunding Bonds, 1999 Series B, 5.450%, 9/01/29
3,215 Modesto Irrigation District Financing Authority, California, Refunding 10/06 at 102.00 AAA 3,568,007
Revenue Bonds, Series A, 6.000%, 10/01/15
3,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 2002 7/12 at 101.00 AAA 3,036,360
Series II, 5.125%, 7/01/26
17
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL) (continued)
Portfolio of INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 1,790 Sacramento Financing Authority, California, 1999 Capital Improvement 12/09 at 102.00 AAA $ 1,963,093
Revenue Bonds (Solid Waste and Redevelopment Projects),
5.800%, 12/01/19
3,500 Sacramento Municipal Utility District, California, Electric Revenue Bonds, 8/06 at 102.00 AAA 3,658,900
1996 Series J, 5.600%, 8/15/24
6,650 Turlock Irrigation District, California, Revenue Refunding Bonds, Series 7/02 at 100.00 AAA 6,679,194
1992-A, 5.750%, 1/01/18
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 8.7%
3,530 Castaic Lake Water Agency, California, Refunding Revenue Certificates No Opt. Call AAA 4,027,942
of Participation (Water System Improvement Projects), Series
1994A, 8.000%, 8/01/04
2,975 Chino Basin Regional Financing Authority, California, Revenue Bonds 8/04 at 102.00 AAA 3,256,465
(Chino Basin Municipal Water District Sewer System Project),
Series 1994, 6.000%, 8/01/16
2,775 Pomona Public Financing Authority, California, 1999 Revenue Bonds 5/09 at 101.00 AAA 2,903,538
(Water Facilities Project), Series AC, 5.500%, 5/01/29
1,000 Sacramento County Sanitation Districts Financing Authority, California, 6/10 at 101.00 AAA 1,064,780
Revenue Bonds (Sacramento Regional County Sanitation District),
Series 2000A, 5.500%, 12/01/20
2,900 City and County of San Francisco, California, Sewer Revenue Refunding 10/02 at 102.00 AAA 2,976,821
Bonds, Series 1992, 5.500%, 10/01/15
2,520 City and County of San Francisco Public Utilities Commission, California, 11/11 at 100.00 AAA 2,547,770
Water Revenue Bonds, Series 2001A, 5.000%, 11/01/20
2,000 South San Joaquin Irrigation District, San Joaquin County, California, 1/03 at 102.00 AAA 2,060,379
1993 Refunding Revenue Certificates of Participation (1987 and
1992 Project), 5.500%, 1/01/15
5,410 City of Tulare, California, 1996 Sewer Revenue Bonds, 5.750%, 11/15/21 11/06 at 102.00 AAA 5,751,911
------------------------------------------------------------------------------------------------------------------------------------
$ 295,080 Total Investments (cost $260,267,944) - 98.8% 278,959,687
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.2% 3,308,614
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $282,268,301
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
* Optional Call Provisions: 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: Using the higher of Standard & Poor's or
Moody's rating.
See accompanying notes to financial statements
18
Nuveen California Premium Income Municipal Fund (NCU)
Portfolio of
INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 12.4%
$ 5,150 California Health Facilities Financing Authority, Hospital Revenue Bonds 5/03 at 102.00 BBB+ $ 5,174,205
(Downey Community Hospital), Series 1993, 5.750%, 5/15/15
8,100 California Statewide Community Development Authority, Revenue No Opt. Call AAA 8,303,796
Refunding Bonds (Sherman Oaks Project), Series 1998A,
5.000%, 8/01/22
2,000 City of Loma Linda, California, Hospital Revenue Bonds (Loma Linda 12/03 at 102.00 BB- 1,963,380
University Medical Center Project), Series 1993-A, 6.000%, 12/01/06
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 11.0%
2,000 California Statewide Communities Development Authority, Apartment 7/08 at 101.00 BBB 2,048,020
Development Revenue Refunding Bonds (Irvine Apartment Communities,
L.P.), Series 1998A, 5.250%, 5/15/25 (Mandatory put 5/15/13)
6,785 Los Angeles Community Redevelopment Agency, California, Multifamily 6/05 at 105.00 AAA 7,565,275
Housing Revenue Refunding Bonds (Angelus Plaza Project), 1995
Series A, 7.400%, 6/15/10
3,890 City of Stanton, California, Multifamily Housing Revenue Bonds 8/07 at 102.00 AAA 4,043,966
(Continental Gardens Apartments), Series 1997, 5.625%, 8/01/29
(Alternative Minimum Tax) (Mandatory put 8/01/09)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 6.8%
2,795 California Housing Finance Agency, Single Family Mortgage Bonds II, 2/07 at 102.00 AAA 2,930,138
1997 Series A-1, 6.000%, 8/01/20 (Alternative Minimum Tax)
1,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 8/04 at 102.00 Aa2 1,048,160
1994 Series A, 6.550%, 8/01/26
1,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 8/05 at 102.00 AAA 1,027,760
1994 Series F-3, 6.100%, 8/01/15 (Alternative Minimum Tax)
2,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 2/07 at 102.00 AAA 2,119,360
1997 Series B, 6.000%, 8/01/16 (Alternative Minimum Tax)
1,165 California Rural Home Mortgage Finance Authority, Single Family No Opt. Call AAA 1,328,648
Mortgage Revenue Bonds (Mortgage-Backed Securities Program),
1996 Series C, 7.500%, 8/01/27 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 8.4%
4,000 State of California, General Obligation Veterans Welfare Bonds, 6/04 at 101.00 AA- 3,911,520
Series BR, 5.300%, 12/01/29 (Alternative Minimum Tax)
3,000 Pomona Unified School District, California, General Obligation Refunding 8/11 at 103.00 AAA 3,517,080
Bonds, Series 1997-A, 6.150%, 8/01/15
3,000 San Diego Unified School District, California, 2000 General Obligation 7/10 at 100.00 AAA 3,044,550
Bonds (Election of 1998), Series B, 5.125%, 7/01/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 32.2%
4,500 Bonita Canyon Public Facilities Financing Authority, California, Special 3/02 at 103.00 N/R 4,271,805
Tax Bonds (Community Facilities District No. 98-1), Series 1998,
5.375%, 9/01/28
5,920 California State Public Works Board, Department of Veterans Affairs of 11/09 at 101.00 AAA 6,336,176
the State of California, Lease Revenue Bonds (Southern California
Veterans Home - Chula Vista Facility), 1999 Series A,
5.600%, 11/01/19
2,480 City of Carlsbad, California, Limited Obligation Improvement Bonds 3/02 at 101.50 N/R 2,362,175
(Assessment District No. 96-1 - Rancho Carillo), 5.500%, 9/02/28
1,000 Carson Redevelopment Agency, California, Refunding Tax Allocation 10/03 at 102.00 BBB 1,039,870
Bonds (Redevelopment Project Area No. 2), Series 1993,
5.875%, 10/01/09
3,500 City of Livermore, California, Tax Allocation Revenue Bonds (Livermore 8/11 at 100.00 AAA 3,497,410
Redevelopment Project Area), Series 2001A, 5.000%, 8/01/26
2,160 Los Angeles Community Redevelopment Financing Authority of the 6/03 at 102.00 BB 2,056,946
Community Redevelopment Agency, California, Grand Central Square
Multifamily Housing Bonds, 1993 Series A, 5.750%, 12/01/13
(Alternative Minimum Tax)
19
Nuveen California Premium Income Municipal Fund (NCU) (continued)
Portfolio of INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,000 Poway Community Facilities District No. 88-1, California, Special Tax 8/08 at 102.00 N/R $ 1,103,260
Refunding Bonds (Parkway Business Centre), Series 1998,
6.500%, 8/15/09
1,205 Puerto Rico Highway and Transportation Authority, Transportation 7/12 at 100.00 A 1,222,774
Revenue Bonds, Series D, 5.375%,7/01/36
5,000 Riverside County Redevelopment Agency, California, 2001 Tax Allocation 10/11 at 102.00 AAA 5,089,400
Bonds (Jurupa Valley Project Area), 5.150%, 10/01/21
6,200 Sacramento Financing Authority, California, Lease Revenue Refunding Bonds, No Opt. Call AA- 6,627,180
Series 1993B, 5.400%, 11/01/20
San Marcos Public Facilities Authority, California, Refunding Revenue
Bonds, Series 1998:
1,500 5.800%, 9/01/18 9/08 at 101.00 Baa3 1,526,475
1,000 5.800%, 9/01/27 9/08 at 101.00 Baa3 1,012,100
2,050 Santa Barbara County, California, Certificates of Participation, Series 12/11 at 102.00 AAA 2,157,441
2001, 5.250%, 12/01/19
2,000 City of Vista, California, Mobile Home Park Subordinate Revenue Bonds 3/09 at 102.00 N/R 1,805,380
(Vista Manor Mobile Home Park Project), Series 1999B,
5.750%, 3/15/29
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.1%
2,750 City and County of San Francisco Airports Commission, California, 5/04 at 102.00 AAA 2,999,233
Revenue Bonds (San Francisco International Airport), Issue 5,
Second Series, 6.500%, 5/01/24 (Alternative Minimum Tax)
2,000 City and County of San Francisco Airports Commission, California, 5/06 at 102.00 AAA 2,069,580
Revenue Bonds (San Francisco International Airport), Issue 10A,
Second Series, 5.700%, 5/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 15.8%
1,500 ABAG Financing Authority for Nonprofit Corporations, California, No Opt. Call AAA 1,577,775
Certificates of Participation (Stanford University Hospital),
Series 1993, 5.250%, 11/01/20
3,200 California State Public Works Board, The Trustees of the California 10/04 at 102.00 A*** 3,623,104
State University, Lease Revenue Bonds (Various California State
University Projects), 1994 Series A, 6.375%, 10/01/14
(Pre-refunded to 10/01/04)
4,000 California Statewide Communities Development Authority, Hospital 8/02 at 102.00 A3*** 4,158,520
Revenue Certificates of Participation (Cedars-Sinai Medical Center),
Series 1992, 6.500%, 8/01/15 (Pre-refunded to 8/01/02)
6,500 Commonwealth of Puerto Rico, General Obligation Public Improvement 7/10 at 100.00 AAA 7,516,665
Bonds of 2000, 5.750%, 7/01/21 (Pre-refunded to 7/01/10)
2,475 City of Torrance, California, Hospital Revenue Bonds (Little Company of 12/05 at 100.00 AAA 2,815,684
Mary Hospital), 1985 Series A, 7.100%, 12/01/15
(Pre-refunded to 12/01/05)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.2%
1,000 California Pollution Control Financing Authority, Pollution Control 12/02 at 102.00 AAA 1,038,580
Revenue Bonds (Southern California Edison Company), 1992
Series B, 6.400%, 12/01/24 (Alternative Minimum Tax)
3,000 Merced Irrigation District, California, 2001 Electric System Refunding 9/05 at 102.00 N/R 3,000,660
Revenue Bonds (Electric System Project), 6.500%, 9/01/22
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 4.3%
5,000 Culver City, California, Wastewater Facilities Refunding Revenue Bonds, 9/09 at 102.00 AAA 5,353,299
1999 Series A, 5.700%, 9/01/29
------------------------------------------------------------------------------------------------------------------------------------
$ 116,825 Total Investments (cost $116,710,411) - 98.2% 122,287,350
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.9%
$ 1,140 California Statewide Community Development Authority, Revenue A-1 1,140,000
============= Bonds (Fremont-Rideout Health Group), Variable Rate Demand
Bonds, Series 2001A, 1.250%, 1/01/31+
------------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.9% 1,157,430
------------------------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $124,584,780
====================================================================================================================
* Optional Call Provisions: 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: Using the higher of Standard & Poor's or
Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
+ 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.
20
Nuveen California Dividend Advantage Municipal Fund (NAC)
Portfolio of
INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 3.3%
$ 5,000 California Statewide Communities Development Authority, Certificates 11/09 at 102.00 N/R $ 5,149,800
of Participation (Pride Industries and Pride One, Inc), 7.250%, 11/01/29
Northern California Tobacco Securitization Authority, Tobacco Settlement
Asset-Backed Bonds, Series 2001A:
2,500 5.250%, 6/01/31 6/11 at 100.00 A1 2,457,575
4,500 5.375%, 6/01/41 6/11 at 100.00 A1 4,427,280
5,000 Southern California Tobacco Securitization Authority, Tobacco Settlement 6/12 at 100.00 A1 5,054,550
Asset-Backed Bonds (San Diego County Tobacco Asset Securitization
Corporation), Senior Series 2001A, 5.250%, 6/01/27
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 2.0%
3,000 Long Beach Bond Financing Authority, California, Lease Revenue Refunding 11/11 at 100.00 AAA 3,263,700
Bonds (The Aquarium of the South Pacific), 5.500%, 11/01/17
700 The Regents of the University of California, Certificates of Participation 1/10 at 101.00 Aa2 710,976
(San Diego Campus and Sacramento Projects), 2002 Series A,
5.250%, 1/01/22
6,000 The Regents of the University of California, Multiple Purpose Project 9/08 at 101.00 AA 6,396,060
Revenue Bonds, Series K, 5.000%, 9/01/12
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 11.2%
8,400 California Health Facilities Financing Authority, Kaiser Permanente 10/08 at 101.00 A 8,702,064
Revenue Bonds, Series 1998B, 5.250%, 10/01/14
(Optional put 10/01/08)
15,000 California Health Facilities Financing Authority, Revenue Bonds (Cedars- 12/09 at 101.00 A3 15,948,450
Sinai Medical Center), Series 1999A, 6.125%, 12/01/30
9,755 California Health Facilities Financing Authority, Revenue Bonds 11/08 at 101.00 AAA 9,676,082
(USCF - Stanford Healthcare), 1998 Series A, 5.000%, 11/15/28
8,000 Central California Joint Powers Health Financing Authority, Certificates 2/10 at 101.00 BBB+ 8,170,480
of Participation (Community Hospitals of Central California Obligated
Group Project), Series 2000, 6.000%, 2/01/30
10,500 City of Duarte, California, Certificates of Participation (City of Hope 4/09 at 101.00 BBB 9,727,095
National Medical Center), Series 1999A, 5.250%, 4/01/31
4,000 City of Upland, California, Certificates of Participation (San Antonio 1/04 at 102.00 A 4,139,440
Community Hospital), 1993 Series, 5.250%, 1/01/08
2,500 City of Whittier, California, Health Facility Revenue Bonds (Presbyterian 6/12 at 101.00 A- 2,498,250
Intercommunity Hospital), Series 2002, 5.600%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 8.7%
15,000 California Statewide Communities Development Authority, Apartment 7/08 at 101.00 BBB 15,547,350
Development Revenue Refunding Bonds (Irvine Apartment Communities,
L.P.), Series 1998A, 4.900%, 5/15/25 (Mandatory put 5/15/08)
10,000 California Statewide Communities Development Authority, Multifamily No Opt. Call BBB+ 10,228,800
Housing Revenue Refunding Bonds (Archstone/LeClub Apartments),
Issue 1999, Series G, 5.300%, 6/01/29 (Mandatory put 6/01/08)
5,000 Contra Costa County, California, Multifamily Housing Revenue Bonds 6/09 at 102.00 N/R 4,774,200
(Delta View Apartments), Series 1999C, 6.750%, 12/01/30
(Alternative Minimum Tax)
15,000 San Bernardino County Housing Authority, California, Multifamily No Opt. Call A3 15,198,750
Housing Revenue Refunding Bonds (Equity Residential/Redlands
Lawn and Tennis Apartments), Series 1999, 5.200%, 6/15/29
(Mandatory put 6/15/09)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 3.8%
40,795 California Housing Finance Agency, Single Family Mortgage Bonds II, 2/09 at 31.14 AAA 8,326,260
1999 Series D2, 0.000%, 2/01/29 (Alternative Minimum Tax)
11,500 California Housing Finance Agency, Home Mortgage Revenue Bonds, 2/09 at 101.50 AAA 11,499,540
1998 Series E, 5.250%, 2/01/33 (Alternative Minimum Tax)
21
Nuveen California Dividend Advantage Municipal Fund (NAC) (continued)
Portfolio of INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.6%
$ 8,500 Riverside County Public Financing Authority, California, Certificates of 5/09 at 101.00 BBB- $ 8,317,080
Participation (Air Force Village West, Inc), 5.800%, 5/15/29
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 4.7%
18,500 Los Angeles Unified School District, California, General Obligation Bonds 7/09 at 101.00 AAA 18,969,530
(Election of 1997), Series 1999C, 5.250%, 7/01/24
3,600 Los Angeles Unified School District, California, General Obligation Bonds 7/10 at 100.00 AAA 4,001,796
(Election of 1997),
Series 2000D, 5.625%, 7/01/14
1,750 Oakland Unified School District, Alameda County, California, General 8/08 at 101.00 AAA 1,779,103
Obligation Bonds, Series 2001, 5.125%, 8/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 29.9%
8,665 Bonita Canyon Public Facilities Financing Authority, California, Community 3/02 at 103.00 N/R 8,225,598
Facilities District No. 98-1 Special Tax Bonds, Series 1998,
5.375%, 9/01/28
Brentwood Infrastructure Financing Authority, Contra Costa
County, California, Capital Improvement Revenue Bonds, Series
2001:
1,110 5.375%, 11/01/18 11/11 at 100.00 AAA 1,182,294
1,165 5.375%, 11/01/19 11/11 at 100.00 AAA 1,230,590
3,515 Dinuba Redevelopment Agency, California, Tax Allocation Bonds 9/11 at 102.00 AAA 3,488,743
(Redevelopment Project 2), Refunding Series 2001, 4.875%, 9/01/21
3,490 Fontana Community Facilities District No. 2, California, Senior Lien 9/08 at 102.00 AAA 3,682,159
Special Tax Refunding Bonds, 1998 Series A, 5.250%, 9/01/17
13,290 Mira Loma Area of Jurupa Community Services District, California, 9/08 at 102.00 AAA 12,870,302
1998 Special Tax Bonds (Community Facilities District No. 1),
4.750%, 9/01/24 (Optional put 9/01/10)
5,500 Los Angeles County, California, Certificates of Participation (1998 Disney 9/08 at 101.00 AAA 5,332,855
Parking Refunding Project), 4.750%, 3/01/23
5,000 Los Angeles County Metropolitan Transportation Authority, California, 7/08 at 101.00 AAA 5,010,350
Proposition C Sales Tax Revenue Bonds, Second Senior Bonds,
Series 1998A Refunding, 5.000%, 7/01/23
10,000 Los Angeles County Public Works Financing Authority, California, 10/07 at 101.00 AA 10,339,900
Revenue Bonds (Los Angeles County Regional Park and Open
Space District), Series 1997A, 5.000%, 10/01/16
4,245 Nevada County, California, Certificates of Participation, Series 2001 10/11 at 100.00 Aaa 4,421,762
Refunding, 5.250%, 10/01/19
9,200 Norco Redevelopment Agency, California, Tax Allocation Bonds (Project 3/11 at 102.00 AAA 9,383,540
Area No. 1), Series 2001 Refunding, 5.000%, 3/01/19
4,670 Oakland Joint Powers Financing Authority, California, Lease Revenue No Opt. Call AAA 5,271,029
Refunding Bonds (Oakland Convention Centers), Series 2001,
5.500%, 10/01/14
14,160 Oakland State Building Authority, California, Lease Revenue Bonds 4/08 at 101.00 AAA 14,201,347
(Elihu M. Harris State Office Building), 1998 Series A, 5.000%, 4/01/23
4,000 Orange County Local Transportation Authority, California, Measure M No Opt. Call AAA 4,517,880
Sales Tax Revenue Refunding Bonds, Limited Tax Bonds, Second
Senior Bonds, Series 1997A, 5.700%, 2/15/08
5,600 Palm Springs Financing Authority, California, Lease Revenue Refunding 11/11 at 101.00 AAA 5,636,568
Bonds (Convention Center Project), Series 2001A, 5.000%, 11/01/22
8,100 Poway Redevelopment Agency, California, Tax Allocation Refunding 12/10 at 102.00 AAA 8,773,839
Bonds (Paguay Redevelopment Project), Series 2000, 5.750%, 6/15/33
6,500 Puerto Rico Highway and Transportation Authority, Transportation 7/12 at 100.00 A 6,595,875
Revenue Bonds, Series D, 5.375%, 7/01/36
11,925 Riverside County Public Financing Authority, California, Junior Lien No Opt. Call N/R 12,640,262
Reassessment Revenue Bonds (Rancho Village Project/AD No. 159),
1999 Series B, 6.000%, 9/02/07
2,980 San Diego County, California, Certificates of Participation (MTS Tower), 11/11 at 100.00 AAA 3,114,309
Refunding Series 2001, 5.250%, 11/01/19
22
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
City and County of San Francisco, California, Certificates of
Participation (30 Van Ness Avenue Property), Series 2001A:
$ 1,205 4.600%, 9/01/18 9/09 at 101.00 AAA $ 1,188,672
1,260 4.700%, 9/01/19 9/09 at 101.00 AAA 1,242,977
1,340 4.750%, 9/01/20 9/09 at 101.00 AAA 1,316,523
1,400 4.800%, 9/01/21 9/09 at 101.00 AAA 1,380,288
25,060 San Jose Redevelopment Agency, California, Tax Allocation Bonds 8/08 at 102.00 A 25,271,005
(Merged Area Redevelopment Project), Series 1998, 5.250%, 8/01/29
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 16.1%
21,150 Foothill/Eastern Transportation Corridor Agency, California, Toll Road 1/10 at 101.00 BBB- 21,636,450
Refunding Revenue Bonds, Series 1999, 5.750%, 1/15/40
8,515 Los Angeles Harbor Department, California, Revenue Refunding Bonds, 8/11 at 100.00 AAA 8,985,454
Series 2001B, 5.500%, 8/01/18 (Alternative Minimum Tax)
23,000 Port of Oakland, California, Revenue Bonds, 2000 Series K, 5.750%, 5/10 at 100.00 AAA 24,120,560
11/01/29 (Alternative Minimum Tax)
5,000 City and County of San Francisco Airports Commission, California, 5/06 at 101.00 AAA 5,148,150
Revenue Bonds (San Francisco International Airport), Issue 13B,
Second Series, 5.625%, 5/01/21 (Alternative Minimum Tax)
23,275 City and County of San Francisco Airports Commission, California, 5/10 at 101.00 AAA 24,516,256
Revenue Bonds (San Francisco International Airport), Issue 25,
Second Series, 5.750%, 5/01/30 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 1.1%
5,000 Commonwealth of Puerto Rico, General Obligation Public Improvement 7/10 at 100.00 AAA 5,782,050
Bonds of 2000, 5.750%, 7/01/16 (Pre-refunded to 7/01/10)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 10.5%
8,370 Los Angeles Department of Water and Power, California, Power System 7/11 at 100.00 AAA 8,821,813
Revenue Refunding Bonds, Series 2001A2, 5.375%, 7/01/19
10,000 Merced Irrigation District, California, 2001 Electric System Refunding 9/05 at 102.00 N/R 10,067,800
Revenue Bonds (Electric System Project), 6.750%, 9/01/31
10,500 Northern California Power Agency, Hydroelectric Project Number One 7/08 at 101.00 AAA 10,657,500
Revenue Bonds, 1998 Refunding Series A, 5.200%, 7/01/32
10,500 Puerto Rico Electric Power Authority, Power Revenue Bonds, Series DD, 7/08 at 101.50 A- 10,204,320
5.000%, 7/01/28
15,000 Sacramento Municipal Utility District, California, Electric Revenue 7/04 at 101.00 A 15,076,950
Refunding Bonds, 1999 Series M, 5.250%, 7/01/28
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 6.1%
2,000 Carmichael Water District, Sacramento County, California, 1999 Water 9/09 at 102.00 AAA 2,016,460
Revenue Certificates of Participation, 5.125%, 9/01/29
7,200 Castaic Lake Water Agency, California, Revenue Certificates of 8/09 at 101.00 AAA 7,248,672
Participation (Water System Improvement Project), Series 1999A,
5.125%, 8/01/30
14,000 Orange County Water District, California, Revenue Certificates of 8/09 at 101.00 AA 14,431,479
Participation, Series 1999A, 5.375%, 8/15/29
8,250 Pico Rivera Water Authority, California, Revenue Bonds, 2001 12/11 at 102.00 N/R 8,305,027
Series A, 6.250%, 12/01/32
------------------------------------------------------------------------------------------------------------------------------------
$ 539,640 Total Investments (cost $498,861,491) - 99.0% 518,301,819
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.0% 5,319,261
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $523,621,080
====================================================================================================================
* Optional Call Provisions: 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: Using the higher of Standard & Poor's or
Moody's rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
23
Nuveen California Dividend Advantage Municipal Fund 2 (NVX)
Portfolio of
INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.8%
$ 3,000 Northern California Tobacco Securitization Authority, Tobacco Settlement 6/11 at 100.00 A1 $ 2,951,520
Asset-Backed Bonds, Series 2001A, 5.375%, 6/01/41
2,800 Southern California Tobacco Securitization Authority, Tobacco Settlement 6/12 at 100.00 A 2,797,592
Asset-Backed Bonds (San Diego County Tobacco Asset Securitization
Corporation), Senior Series 2001A, 5.500%, 6/01/36
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 13.4%
5,000 California Educational Facilities Authority, Revenue Bonds (Stanford 6/11 at 101.00 AAA 5,141,400
University), Series Q, 5.250%, 12/01/32
California Educational Facilities Authority, Revenue Bonds (Loyola
Marymount University), Series 2001A Refunding:
7,620 0.000%, 10/01/26 No Opt. Call Aaa 1,999,488
7,365 0.000%, 10/01/27 No Opt. Call Aaa 1,823,427
4,120 0.000%, 10/01/28 No Opt. Call Aaa 964,657
15,000 California Educational Facilities Authority, Student Loan Revenue Bonds 3/08 at 102.00 Aaa 15,399,900
(California Loan Program), Series 2001A, 5.400%, 3/01/21
(Alternative Minimum Tax)
9,000 Long Beach Bond Financing Authority, California, Lease Revenue 11/11 at 101.00 AAA 9,217,440
Refunding Bonds (The Aquarium of the South Pacific),
5.250%, 11/01/30
9,000 The Regents of the University of California, Multiple Purpose Project 9/08 at 101.00 AA 9,158,400
Revenue Bonds, Series K, 5.300%, 9/01/30
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 5.9%
5,000 California Health Facilities Financing Authority, Kaiser Permanente 5/03 at 102.00 A 5,010,950
Revenue Bonds, 1993 Series C, 5.600%, 5/01/33
7,000 California Infrastructure and Economic Development Bank, Revenue 8/11 at 102.00 A 7,119,980
Bonds (Kaiser Hospital Assistance I-LLC), Series 2001A,
5.550%, 8/01/31
3,000 Central California Joint Powers Health Financing Authority, Certificates 2/10 at 101.00 BBB+ 3,063,930
of Participation (Community Hospitals of Central California Obligated
Group Project), Series 2000, 6.000%, 2/01/30
2,500 City of Torrance, California, Revenue Bonds (Torrance Memorial Medical 6/11 at 101.00 A+ 2,494,350
Center), Series 2001A, 5.500%, 6/01/31
1,500 City of Whittier, California, Health Facility Revenue Bonds (Presbyterian 6/12 at 101.00 A- 1,498,950
Intercommunity Hospital), Series 2002, 5.600%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 5.0%
10,200 California Statewide Communities Development Authority, Multifamily No Opt. Call N/R 10,199,694
Housing Revenue Bonds (Citrus Gardens Apartments Project),
Series 2001J, 6.250%, 6/01/37 (Mandatory put 6/01/02)
5,962 California Statewide Communities Development Authority, Multifamily 6/11 at 102.00 AAA 6,051,490
Housing Revenue Refunding Bonds (Claremont Village Apartments),
Series 2001D, 5.500%, 6/01/31 (Mandatory put 6/01/16)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.9%
6,000 California Rural Home Mortgage Finance Authority, Single Family 6/11 at 102.00 AAA 6,145,080
Mortgage Revenue Bonds (Mortgage-Backed Securities Program),
2001 Series A, 5.650%, 12/01/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.5%
4,650 City and County of San Francisco Redevelopment Agency, California, 10/11 at 100.00 Aaa 4,767,273
Multifamily Housing Revenue Bonds (Kokoro Assisted Living Project),
GNMA Series 2001A, 5.675%, 4/20/43
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 13.5%
9,000 State of California, Veterans General Obligation Bonds, Series BV, 6/06 at 101.00 AAA 9,177,480
5.600%, 12/01/32
8,330 Los Angeles Unified School District, California, General Obligation 7/10 at 100.00 AAA 8,623,633
Bonds, Series 2000D, 5.375%, 7/01/25
24
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 275 Sacramento Unified School District, Sacramento County, California, 7/10 at 102.00 AAA $ 273,127
General Obligation Bonds (Election of 1999), Series 2001B,
5.000%, 7/01/30
14,190 City of San Jose, California, General Obligation Bonds (Libraries and 9/11 at 100.00 AA+ 14,285,499
Parks Projects), Series 2001, 5.125%, 9/01/31
4,050 Santa Rosa High School District, Sonoma County, California, General 5/11 at 101.00 AAA 4,183,853
Obligation Bonds, Series 2001, 5.300%, 5/01/26
7,600 Southwestern Community College District, San Diego County, California, 8/11 at 101.00 AAA 7,920,036
General Obligation Bonds, Series 2001, 5.375%, 8/01/25
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 29.9%
9,000 Anitoch Area Public Facilities Financing Authority, California, Special 8/08 at 103.00 AAA 9,245,430
Tax Bonds (Community Facilities District No. 1989-1), Series 2001,
5.250%, 8/01/25
7,595 Encinitas Public Financing Authority, California, Lease Revenue Bonds 4/08 at 102.00 AAA 7,747,584
(Acquisition Project), Series 2001A, 5.250%, 4/01/31
8,000 Los Angeles County Metropolitan Transportation Authority, California, 7/08 at 101.00 AAA 8,016,560
Proposition C Sales Tax Revenue Bonds, Second Senior Bonds,
Series 1998A Refunding, 5.000%, 7/01/23
3,300 Puerto Rico Highway and Transportation Authority, Transportation 7/12 at 100.00 A 3,348,675
Revenue Bonds, Series D, 5.375%, 7/01/36
4,400 Puerto Rico Public Finance Corporation, Commonwealth Appropriation No Opt. Call A- 4,965,972
Bonds, 2002 Series E, 6.000%, 8/01/26
9,000 Riverside County Redevelopment Agency, California, 2001 Tax Allocation 10/11 at 102.00 AAA 9,204,480
Bonds (Jurupa Valley Project Area), 5.250%, 10/01/35
9,000 Sacramento Financing Authority, California, 2001 Capital Improvement 6/11 at 100.00 AAA 8,922,420
Revenue Bonds (Water and Capital Improvement Projects),
Series A, 5.000%, 12/01/32
7,000 San Diego Redevelopment Agency, California, Tax Allocation Bonds 8/10 at 101.00 AAA 6,982,710
(Merged Area Redevelopment Project), Series 2002, 5.000%, 8/01/27
Santa Clara Valley Transportation Authority, California, Sales Tax
Revenue Bonds, Series 2001A:
16,090 5.000%, 6/01/25 6/11 at 100.00 AAA 16,106,412
15,345 5.000%, 6/01/26 6/11 at 100.00 AAA 15,333,031
3,045 Yucaipa Redevelopment Agency, California, Mobile Home Park Revenue 5/11 at 102.00 N/R 3,004,562
Bonds (Rancho del Sol and Grandview), Series 2001A, 6.750%, 5/15/36
5,600 City of Yucaipa, Chapman Heights, San Bernardino County, California, 9/09 at 102.00 N/R 5,278,504
1998 Special Tax Bonds (Community Facilities District No. 98-1),
6.000%, 9/01/28
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.5%
5,500 California Statewide Communities Development Authority, Special 10/11 at 100.00 N/R 2,832,555
Facility Revenue Bonds (United Air Lines, Inc. - Los Angeles
International Airport Cargo Project), Series 2001, 6.250%,
10/01/35 (Alternative Minimum Tax)
3,840 Sacramento-Yolo Port District, Sacramento and Yolo Counties, California, 7/08 at 101.00 Baa2 3,898,406
Port Facilities Refunding and Improvement Revenue Bonds,
Series 2001, 5.125%, 7/01/14
1,750 City and County of San Francisco Airports Commission, California, 5/09 at 101.00 AAA 1,712,340
Revenue Bonds (San Francisco International Airport), Issue 23B,
Second Series, 5.000%, 5/01/30 (Alternative Minimum Tax)
6,100 City and County of San Francisco Airports Commission, California, 5/10 at 101.00 AAA 6,149,776
Revenue Bonds (San Francisco International Airport), Issue 26A,
Second Series, 5.250%, 5/01/30 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 10.7%
5,000 California Pollution Control Financing Authority, Pollution Control 4/11 at 102.00 AAA 5,186,200
Refunding Revenue Bonds (Pacific Gas and Electric Company),
1996A Series Remarketed, 5.350%, 12/01/16
(Alternative Minimum Tax)
30,000 Sacramento Municipal Utility District, California, Electric Revenue 8/11 at 100.00 AAA 29,890,200
Bonds, Series 2001N, 5.000%, 8/15/28
25
Nuveen California Dividend Advantage Municipal Fund 2 (NVX) (continued)
Portfolio of INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 10.8%
$ 15,000 East Bay Municipal Utility District, Alameda and Contra Costa Counties, 6/11 at 100.00 AAA $ 14,988,300
California, Water System Subordinated Revenue Bonds,
Series 2001, 5.000%, 6/01/26
13,400 Los Angeles Department of Water and Power, California, Waterworks 7/11 at 100.00 AAA 13,437,519
Revenue Bonds, Series 2001A Refunding, 5.125%, 7/01/41
6,850 Southern California Metropolitan Water District, Water Revenue Bonds 1/08 at 101.00 AA 6,733,481
(1997 Authorization), Series A, 5.000%, 7/01/37
------------------------------------------------------------------------------------------------------------------------------------
$ 336,977 Total Investments (cost $316,654,377) - 98.9% 323,254,266
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.1% 3,684,553
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $326,938,819
====================================================================================================================
* Optional Call Provisions: 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: Using the higher of Standard & Poor's or
Moody's rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
26
Nuveen California Dividend Advantage Municipal Fund 3 (NZH)
Portfolio of
INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 0.8%
$ 4,200 Southern California Tobacco Securitization Authority, Tobacco Settlement 6/12 at 100.00 A $ 4,196,388
Asset-Backed Bonds (San Diego County Tobacco Asset Securitization
Corporation), Senior Series 2001A, 5.500%, 6/01/36
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 8.1%
9,000 California Educational Facilities Authority, Student Loan Revenue Bonds 3/08 at 102.00 Aaa 9,239,940
(California Loan Program), Series 2001A, 5.400%, 3/01/21
(Alternative Minimum Tax)
5,000 San Diego State University Foundation, California, Auxiliary Organization 3/12 at 100.00 AAA 4,948,550
Revenue Bonds, Series 2002A, 5.000%, 3/01/37
7,595 San Francisco State University Foundation Inc, California, Auxiliary 9/11 at 100.00 AAA 7,589,608
Organization Revenue Bonds (Student Housing), Series 2001,
5.000%, 9/01/26
2,990 The Regents of the University of California, Multiple Purpose Project 9/08 at 101.00 AA 2,976,336
Revenue Bonds, Series K, 5.000%, 9/01/23
8,720 The Regents of the University of California, Multiple Purpose Projects 9/09 at 101.00 AAA 8,791,766
Revenue Bonds, Series 2001M, 5.125%, 9/01/30
The Regents of the University of California, Research Facilities
Revenue Bonds, 2001 Series E:
3,820 5.000%, 9/01/26 9/09 at 101.00 AAA 3,801,282
5,360 5.000%, 9/01/27 9/09 at 101.00 AAA 5,338,560
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 7.3%
6,650 California Health Facilities Financing Authority, Revenue Bonds 11/08 at 101.00 AAA 6,553,309
(USCF - Stanford Healthcare), 1998 Series A, 5.000%, 11/15/31
California Health Facilities Financing Authority, Revenue Bonds
(Casa Colina Inc.), Series 2001:
4,000 6.000%, 4/01/22 4/12 at 100.00 BBB+ 4,069,400
2,000 6.125%, 4/01/32 4/12 at 100.00 BBB+ 2,038,300
6,550 California Health Facilities Financing Authority, Kaiser Permanente 5/03 at 102.00 A 6,564,345
Revenue Bonds, 1993 Series C, 5.600%, 5/01/33
9,000 California Infrastructure and Economic Development Bank, Revenue 8/11 at 102.00 A 9,154,260
Bonds (Kaiser Hospital Assistance I-LLC), Series 2001A,
5.550%, 8/01/31
7,665 California Communities Development Authority, Insured Mortgage 11/09 at 102.00 A+ 7,774,073
Hospital Revenue Bonds (Mission Community Hospital),
Series 2001, 5.375%, 11/01/21
2,500 City of Whittier, California, Health Facility Revenue Bonds (Presbyterian 6/12 at 101.00 A- 2,498,250
Intercommunity Hospital), Series 2002, 5.600%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 1.6%
3,610 San Bernardino County Housing Authority, California, Multifamily 11/11 at 105.00 Aaa 4,078,434
Mortgage Revenue Bonds (GNMA Collateralized - Pacific Palms
Mobile Home Park), Series 2001A, 6.700%, 12/20/41
City of San Jose, California, Multifamily Housing Revenue Bonds
(GNMA Mortgage-Backed Securities Program - Lenzen Housing),
Series 2001B:
1,250 5.350%, 2/20/26 8/11 at 102.00 AAA 1,259,588
2,880 5.450%, 2/20/43 8/11 at 102.00 AAA 2,892,154
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.5%
3,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 2/08 at 101.50 AAA 3,039,600
Series 1998B, 5.150%, 2/01/18 (Alternative Minimum Tax)
27,855 California Housing Finance Agency, Home Mortgage Revenue Bonds, 8/11 at 30.75 AAA 4,819,472
Series 2001T, 0.000%, 8/01/32 (Alternative Minimum Tax)
27
Nuveen California Dividend Advantage Municipal Fund 3 (NZH) (continued)
Portfolio of INVESTMENTS February 28, 2002 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 21.2%
$ 8,500 State of California, General Obligation Veterans Welfare Bonds, Series 12/03 at 102.00 AA- $ 8,612,795
1997BH, 5.500%, 12/01/18 (Alternative Minimum Tax)
7,165 State of California, General Obligation Veterans Bonds, Series BJ, 12/06 at 102.00 AA- 7,325,496
5.500%, 12/01/18 (Alternative Minimum Tax)
15,000 State of California, Various Purpose General Obligation Bonds, 11/11 at 100.00 AAA 14,852,250
Series 2001, 5.000%, 11/01/30
14,300 State of California, General Obligation Veterans Bonds, 2001 6/07 at 101.00 AAA 14,370,356
Series BZ, 5.350%, 12/01/21 (Alternative Minimum Tax)
5,300 Cupertino Union School District, Santa Clara County, California, General 8/11 at 100.00 AAA 5,117,733
Obligation Bonds, Series 2001A, 4.750%, 8/01/26
15,635 Newport-Mesa Unified School District, Orange County, California, 8/11 at 101.00 Aaa 15,097,312
General Obligation Bonds (Election of 2000), Series 2001,
4.750%, 8/01/26
7,490 Palm Springs Unified School District, Riverside County, California, 8/09 at 102.00 AAA 7,163,885
General Obligation Bonds, Series 2001B, 4.750%, 8/01/31
Pasadena Unified School District, Los Angeles County,
California, General Obligation Bonds (Election of 1997), Series
2001C:
480 4.750%, 11/01/23 11/11 at 101.00 AAA 466,363
460 4.750%, 11/01/25 11/11 at 101.00 AAA 445,666
3,670 4.750%, 11/01/26 11/11 at 101.00 AAA 3,548,083
3,300 Peralta Community College District, Alamda County, California, General 8/09 at 102.00 AAA 3,272,214
Obligation Bonds (Election of 2000), Series A, 5.000%, 8/01/31
3,000 Commonwealth of Puerto Rico, General Obligation Public Improvement 7/11 at 100.00 AAA 3,016,500
Bonds, Series 2001, 5.000%, 7/01/24
9,750 Commonwealth of Puerto Rico, General Obligation Public Improvement No Opt. Call AAA 10,707,353
Refunding Bonds, 2002 Series A, 5.500%, 7/01/20
5,000 Riverside Unified School District, Riverside County, California, General 2/12 at 101.00 AAA 4,994,850
Obligation Bonds, Series 2002A, 5.000%, 2/01/27 (WI, settling 3/14/02)
San Diego Unified School District, San Diego County, California,
General Obligation Bonds (Election of 1998), Series 2001C:
1,790 5.000%, 7/01/23 7/11 at 102.00 AAA 1,796,802
10,810 5.000%, 7/01/26 7/11 at 102.00 AAA 10,801,676
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 39.0%
2,000 Anaheim Public Financing Authority, California, Senior Lease Revenue 9/07 at 101.00 AAA 1,979,420
Bonds (Anaheim Public Improvements Project), 1997 Series A,
5.000%, 3/01/37
Brentwood Infrastructure Financing Authority, Contra Costa
County, California, Capital Improvement Revenue Bonds, Series
2001:
7,135 5.000%, 11/01/25 11/11 at 100.00 AAA 7,142,634
6,955 5.000%, 11/01/31 11/11 at 100.00 AAA 6,896,022
4,510 California State Public Works Board, Lease Revenue Bonds (Department 12/11 at 102.00 AAA 4,456,015
of Mental Health - Hospital Addition), Series 2001A, 5.000%, 12/01/26
15,000 California State Public Works Board, Lease Revenue Bonds (Department 3/12 at 100.00 AAA 14,851,800
of General Services), Series 2002B, 5.000%, 3/01/27
(WI, settling 3/13/02)
3,000 Cotati Redevelopment Agency, California, Tax Allocation Bonds (Cotati 9/11 at 100.00 AAA 2,974,830
Redevelopment Project), Subordinate Series 2001A, 5.000%, 9/01/31
6,755 Dinuba Redevelopment Agency, California, Tax Allocation Bonds 9/11 at 102.00 AAA 6,657,525
(Redevelopment Project 2), Refunding Series 2001, 5.000%, 9/01/31
7,945 La Quinta Redevelopment Agency, Riverside County, California, Tax 9/11 at 102.00 AAA 7,992,432
Allocation Bonds (La Quinta Redevelopment Project Area No. 1),
Series 2001, 5.100%, 9/01/31
5,425 Lodi, California, Certificates of Participation (Public Improvement 10/12 at 100.00 AAA 5,420,931
Financing Project), Series 2002, 5.000%, 10/01/26
14,410 Los Angeles Unified School District, California, Certificates of 10/11 at 100.00 AAA 14,288,380
Participation (Administration Building Project), Series 2001B,
5.000%, 10/01/31
28
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 13,515 Norco Redevelopment Agency, California, Tax Allocation Bonds (Project 3/11 at 102.00 AAA $13,639,473
Area No. 1), Series 2001 Refunding, 5.125%, 3/01/30
4,520 Ontario Redevelopment Financing Authority, California, Lease Revenue 8/11 at 101.00 AAA 4,525,695
Bonds (Capital Projects), Series 2001, 5.000%, 8/01/24
11,165 Palm Desert Financing Authority, California, Tax Allocation Revenue 4/12 at 102.00 AAA 11,165,000
Bonds (Project Area No. 1), Series 2002 Refunding, 5.100%,
4/01/30 (WI, settling 3/13/02)
Pomona Public Financing Authority, California, Revenue Bonds
(Merged Redevelopment Projects), Refunding Series 2001AD:
5,000 5.000%, 2/01/27 2/11 at 100.00 AAA 4,973,700
7,525 5.000%, 2/01/33 2/11 at 100.00 AAA 7,425,520
2,925 Pomona Valley Educational Joint Power Authority, California, Lease 8/09 at 102.00 AAA 2,879,721
Revenue Bonds (Pomona Unified School District Financing),
Series 2001, 4.875%, 8/01/26
6,500 Puerto Rico Highway and Transportation Authority, Transportation 7/12 at 100.00 A 6,595,875
Revenue Bonds, Series D, 5.375%, 7/01/36
2,000 Puerto Rico Public Financing Corporation, Commonwealth Appropriation 8/11 at 100.00 AAA 2,135,540
Bonds, Series 2001A, 5.500%, 8/01/19
4,400 Puerto Rico Public Financing Corporation, Commonwealth Appropriation No Opt. Call A- 4,965,972
Bonds, Series 2002E, 6.000%, 8/01/26
9,000 Sacramento Financing Authority, California, Lease Revenue Bonds, No Opt. Call AAA 9,829,800
Series 1993A Refunding, 5.400%, 11/01/20
2,385 San Buenaventura Public Facilities Financing Authority, California, 2001 2/11 at 101.00 AAA 2,310,683
Certificates of Participation, Series C, 4.750%, 2/01/24
14,505 San Diego Redevelopment Agency, California, Subordinate Tax Allocation 9/11 at 101.00 AAA 14,494,701
Bonds (Centre City Redevelopment Project), Series 2001A,
5.000%, 9/01/26
5,805 City and County of San Francisco, California, Certificates of 9/09 at 101.00 AAA 5,756,296
Participation (30 Van Ness Avenue Property), Series 2001A,
5.000%, 9/01/31
San Francisco Bay Area Rapid Transit District, California, Sales
Tax Revenue Bonds, Series 2001:
8,725 5.000%, 7/01/26 7/11 at 100.00 AAA 8,718,282
1,400 5.125%, 7/01/36 7/11 at 100.00 AAA 1,409,618
10,000 San Diego Redevelopment Agency, California, Tax Allocation Bonds 8/10 at 101.00 AAA 9,975,300v
(Merged Area Redevelopment Project), Series 2002, 5.000%, 8/01/27
12,760 San Jose Financing Authority, California, Lease Revenue Bonds 9/11 at 100.00 AAA 12,987,128
(Convention Center Project), Refunding Series 2001F, 5.000%, 9/01/19
2,160 Santa Barbara County, California, Certificates of Participation, Series 12/11 at 102.00 AAA 2,255,299
2001, 5.250%, 12/01/20
4,595 Santa Clara Valley Transportation Authority, California, Sales Tax Revenue 6/11 at 100.00 AAA 4,620,043
Bonds, Series 2001A, 5.000%, 6/01/22
2,500 Yucaipa-Calimesa Joint Union School District, San Bernardino County, 10/11 at 100.00 AAA 2,494,625
California, General Obligation Bonds, Series 2001A Refunding,
5.000%, 10/01/26
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.0%
1,500 Port of Oakland, California, Refunding Revenue Bonds, 1997 Series I, 11/07 at 102.00 AAA 1,598,865
5.600%, 11/01/19
1,420 City and County of San Francisco Airports Commission, California, 5/09 at 101.00 AAA 1,429,202
Revenue Bonds (San Francisco International Airport), Issue 23B,
Second Series, 5.125%, 5/01/30
6,000 City and County of San Francisco Airports Commission, California, 5/10 at 101.00 AAA 5,941,380
Revenue Bonds (San Francisco International Airport), Issue 26B,
Second Series, 5.000%, 5/01/30
10,350 City and County of San Francisco Airports Commission, California, 5/11 at 100.00 AAA 10,450,499
Revenue Refunding Bonds (San Francisco International Airport),
Issue 27A, Second Series, 5.250%, 5/01/26 (Alternative Minimum Tax)
1,500 City of San Jose, California, Airport Revenue Bonds, Series 2001A, 3/11 at 100.00 AAA 1,483,005
5.000%, 3/01/31
29
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.7%
$ 15,000 Anaheim Public Financing Authority, California, Revenue Bonds (Electric 10/12 at 100.00 AAA $14,873,400
System Distribution Facilities), Series 2002A, 5.000%, 10/01/31
(WI, settling 3/12/02)
7,000 Los Angeles Department of Water and Power, California, Power System 7/11 at 100.00 AAA 7,215,810
Revenue Bonds, 2001 Series A1, 5.250%, 7/01/21
7,790 Modesto Irrigation District, California, Certificates of Participation 1/12 at 100.00 AAA 7,724,330
(Capital Improvements), Series 2001A, 5.000%, 7/01/31
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 17.3%
7,000 Carmichael Water District, Sacramento County, California, 1999 Water 9/09 at 102.00 AAA 7,057,610
Revenue Certificates of Participation, 5.125%, 9/01/29
20,440 East Bay Municipal Utility District, Alameda and Contra Costa Counties, 6/11 at 100.00 AAA 20,424,057
California, Water System Subordinated Revenue Bonds, Series 2001,
5.000%, 6/01/26
Los Angeles Department of Water and Power, California,
Waterworks Revenue Bonds, Series 2001A Refunding:
12,000 5.125%, 7/01/41 7/11 at 100.00 AAA 12,033,600
18,000 5.125%, 7/01/41 7/11 at 100.00 AA 17,935,200
17,425 Southern California Metropolitan Water District, Water Revenue Bonds 1/08 at 101.00 AA 17,128,601
(1997 Authorization), Series A, 5.000%, 7/01/37
2,475 Southern California Metropolitan Water District, Water Revenue 7/08 at 101.00 AA 2,397,953
Refunding Bonds, 1998 Series A, 4.750%, 7/01/22
12,975 South Gate Utility Authority, California, Subordinate Revenue Bonds 10/11 at 102.00 AAA 12,863,933
(Water and Sewer System Projects), 2001 Series, 5.000%, 10/01/32
1,600 Sunnyvale Financing Authority, California, Water and Wastewater 10/11 at 100.00 AAA 1,598,799
Revenue Bonds, Series 2001, 5.000%, 10/01/26
------------------------------------------------------------------------------------------------------------------------------------
$ 582,290 Total Investments (cost $560,974,307) - 106.5% 561,187,453
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (6.5)% (34,046,236)
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $527,141,217
====================================================================================================================
* Optional Call Provisions: 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: Using the higher of Standard & Poor's or
Moody's rating.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
30
Statement of
ASSETS AND LIABILITIES February 28, 2002 (Unaudited)
INSURED INSURED CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA CALIFORNIA PREMIUM DIVIDEND DIVIDEND DIVIDEND
PREMIUM INCOME PREMIUM INCOME 2 INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPC) (NCL) (NCU) (NAC) (NVX) (NZH)
-----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in municipal securities,
at market value $144,341,589 $278,959,687 $122,287,350 $518,301,819 $323,254,266 $561,187,453
Temporary investments in
short-term municipal securities,
at amortized cost, which
approximates market value -- -- 1,140,000 -- -- --
Cash 652,880 27,302 -- 31,167 78,116 7,002,733
Interest receivable 2,310,686 4,401,832 1,783,532 7,280,240 4,881,383 7,088,299
Other assets 838 11,551 6,682 7,067 6,932 13,947
-----------------------------------------------------------------------------------------------------------------------------------
Total assets 147,305,993 283,400,372 125,217,564 525,620,293 328,220,697 575,292,432
-----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- -- 81,370 -- -- --
Payable for investments purchased -- -- -- -- -- 45,865,400
Accrued expenses:
Management fees 72,543 138,311 61,792 133,166 84,708 134,112
Offering costs -- -- -- -- -- 86,209
Other 88,989 115,665 93,797 182,675 118,838 296,038
Preferred share dividends payable 2,462 12,352 6,065 32,825 13,404 33,671
Common share dividends payable 460,010 865,743 389,760 1,650,547 1,064,928 1,735,785
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 624,004 1,132,071 632,784 1,999,213 1,281,878 48,151,215
-----------------------------------------------------------------------------------------------------------------------------------
Net assets $146,681,989 $282,268,301 $124,584,780 $523,621,080 $326,938,819 $527,141,217
===================================================================================================================================
Preferred shares, at
liquidation value $ 45,000,000 $ 95,000,000 $ 43,000,000 $175,000,000 $110,000,000 $187,000,000
===================================================================================================================================
Preferred shares outstanding 1,800 3,800 1,720 7,000 4,400 7,480
===================================================================================================================================
Common shares outstanding 6,433,708 12,638,591 5,774,216 23,412,013 14,790,660 24,108,129
===================================================================================================================================
Netasset value per Common
share outstanding (net assets
less Preferred shares
at liquidation value, divided
by Common shares outstanding) $ 15.80 $ 14.82 $ 14.13 $ 14.89 $ 14.67 $ 14.11
===================================================================================================================================
NET ASSETS CONSIST OF:
Preferred shares, $25,000
stated value
per share, at liquidation
value $ 45,000,000 $ 95,000,000 $ 43,000,000 $175,000,000 $110,000,000 $187,000,000
Common shares, $.01 par
value per share 64,337 126,386 57,742 234,120 147,907 241,081
Paid-in surplus 89,014,190 175,276,913 80,181,422 332,500,716 210,010,181 342,268,222
Balance of undistributed net
investment income 1,558,607 1,203,410 638,777 1,733,695 619,720 299,659
Accumulated net realized gain (loss)
from investment transactions 270,714 (8,030,151) (4,870,100) (5,287,779) (438,878) (2,880,891)
Net unrealized appreciation of
investments 10,774,141 18,691,743 5,576,939 19,440,328 6,599,889 213,146
-----------------------------------------------------------------------------------------------------------------------------------
Net assets $146,681,989 $282,268,301 $124,584,780 $523,621,080 $326,938,819 $527,141,217
===================================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 Unlimited Unlimited Unlimited Unlimited
Preferred 1,000,000 1,000,000 Unlimited Unlimited Unlimited Unlimited
===================================================================================================================================
See accompanying notes to financial statements.
31
Statement of
OPERATIONS Six Months Ended February 28, 2002 (Unaudited)
INSURED INSURED CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
CALIFORNIA CALIFORNIA PREMIUM DIVIDEND DIVIDEND DIVIDEND
PREMIUM INCOME PREMIUM INCOME 2 INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPC) (NCL) (NCU) (NAC) (NVX) (NZH)*
-----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 4,005,604 $ 7,494,071 $3,382,580 $13,759,507 $ 8,589,752 $ 8,821,982
-----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 470,524 897,222 400,275 1,642,997 1,039,393 1,247,879
Preferred shares - auction fees 55,788 117,773 53,308 216,952 127,565 127,586
Preferred shares - dividend
disbursing agent fees 4,959 9,917 4,959 9,917 9,917 5,753
Shareholders' servicing agent fees
and expenses 8,571 14,281 6,695 4,959 4,364 2,565
Custodian's fees and expenses 20,735 37,818 20,438 62,620 47,205 39,678
Directors'/Trustees' fees and expenses 892 1,736 744 3,571 1,736 3,206
Professional fees 7,501 7,537 7,253 8,908 7,997 9,168
Shareholders' reports - printing
and mailing expenses 8,853 15,958 7,888 18,019 12,265 23,254
Stock exchange listing fees 11,162 15,620 2,661 15,673 496 306
Investor relations expense 7,953 18,223 8,787 22,966 -- --
Portfolio insurance expense 6,305 2,532 -- -- -- --
Other expenses 6,558 10,143 6,247 13,479 4,991 3,988
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee
credit and expense reimbursement 609,801 1,148,760 519,255 2,020,061 1,255,929 1,463,383
Custodian fee credit (7,108) (8,969) (7,427) (9,140) (14,604) (14,718)
Expense reimbursement -- -- -- (778,167) (487,751) (584,235)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 602,693 1,139,791 511,828 1,232,754 753,574 864,430
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income 3,402,911 6,354,280 2,870,752 12,526,753 7,836,178 7,957,552
-----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss) from
investment transactions 2,811,521 641,250 (38,629) 2,293,614 166,059 (2,880,891)
Change in net unrealized
appreciation (depreciation)
of investments (4,661,846) (3,686,864) (713,743) (9,248,618) (7,357,283) 213,146
-----------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (1,850,325) (3,045,614) (752,372) (6,955,004) (7,191,224) (2,667,745)
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations $ 1,552,586 $ 3,308,666 $2,118,380 $ 5,571,749 $ 644,954 $ 5,289,807
===================================================================================================================================
* For the period September 25, 2001 (commencement of operations) through
February 28, 2002.
See accompanying notes to financial statements.
32
Statement of
CHANGES IN NET ASSETS (Unaudited)
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) PREMIUM INCOME (NCU)
------------------------------ ------------------------------- -----------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED 2/28/02 8/31/01 ENDED 2/28/02 8/31/01 ENDED 2/28/02 8/31/01
-----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 3,402,911 $ 6,701,784 $ 6,354,280 $ 12,730,709 $ 2,870,752 $ 5,776,782
Net realized gain (loss) from
investment transactions 2,811,521 (3,088) 641,250 (518,300) (38,629) 727,947
Change in net unrealized
appreciation (depreciation)
of investments (4,661,846) 6,344,071 (3,686,864) 12,002,378 (713,743) 4,435,492
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 1,552,586 13,042,767 3,308,666 24,214,787 2,118,380 10,940,221
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From and in excess of net
investment income:
Common shareholders (2,738,575) (5,501,796) (5,135,587) (9,845,915) (2,312,300) (4,535,399)
Preferred shareholders (324,128) (1,375,685) (647,203) (2,765,748) (326,709) (1,321,933)
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (3,062,703) (6,877,481) (5,782,790) (12,611,663) (2,639,009) (5,857,332)
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- -- -- --
Net proceeds from shares issued
to shareholders due to
reinvestment of
distributions 124,281 -- 109,414 53,134 38,176 106,665
Preferred shares:
Net proceeds from sale of shares -- -- -- -- -- --
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
capital share transactions 124,281 -- 109,414 53,134 38,176 106,665
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets (1,385,836) 6,165,286 (2,364,710) 11,656,258 (482,453) 5,189,554
Net assets at the beginning
of period 148,067,825 141,902,539 284,633,011 272,976,753 125,067,233 119,877,679
-----------------------------------------------------------------------------------------------------------------------------------
Net assets at the
end of period $146,681,989 $148,067,825 $282,268,301 $284,633,011 $124,584,780 $125,067,233
===================================================================================================================================
Undistributed (Over-distribution
of) net investment income
at the end of period $ 1,558,607 $ 324,927 $ 1,203,410 $ 544,540 $ 638,777 $ 304,995
===================================================================================================================================
See accompanying notes to financial statements.
33
Statement of
CHANGES IN NET ASSETS (Unaudited) (continued)
CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND ADVANTAGE (NAC) DIVIDEND ADVANTAGE 2 (NVX) DIVIDEND ADVANTAGE 3 (NZH)
------------------------------ ------------------------------- ---------------------------
FOR THE FOR THE
PERIOD 3/27/01 PERIOD 9/25/01
(COMMENCEMENT (COMMENCEMENT
SIX MONTHS YEAR ENDED SIX MONTHS OF OPERATIONS) OF OPERATIONS)
ENDED 2/28/02 8/31/01 ENDED 2/28/02 THROUGH 8/31/01 THROUGH 2/28/02
-----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 12,526,753 $ 24,993,570 $ 7,836,178 $ 5,021,117 $ 7,957,552
Net realized gain (loss)
from investment
transactions 2,293,614 153,449 166,059 (604,937) (2,880,891)
Change in net unrealized
appreciation (depreciation)
of investments (9,248,618) 30,026,536 (7,357,283) 13,963,695 213,146
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 5,571,749 55,173,555 644,954 18,379,875 5,289,807
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From and in excess of net
investment income:
Common shareholders (9,902,083) (18,957,806) (6,389,004) (4,258,658) (6,942,944)
Preferred shareholders (1,330,300) (5,398,060) (831,015) (765,421) (714,949)
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (11,232,383) (24,355,866) (7,220,019) (5,024,079) (7,657,893)
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- 211,280,100 344,509,500
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions 84,644 53,132 73,486 227 15,778
Preferred shares:
Net proceeds from sale of shares -- -- -- 108,704,000 184,883,750
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from
capital share transactions 84,644 53,132 73,486 319,984,327 529,409,028
-----------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets (5,575,990) 30,870,821 (6,501,579) 333,340,123 527,040,942
Net assets at the beginning
of period 529,197,070 498,326,249 333,440,398 100,275 100,275
-----------------------------------------------------------------------------------------------------------------------------------
Net assets at the end
of period $523,621,080 $529,197,070 $326,938,819 $333,440,398 $527,141,217
===================================================================================================================================
Undistributed (Over-distribution
of) net investment income
at the end of period $ 1,733,695 $ 439,325 $ 619,720 $ (2,962) $ 299,659
===================================================================================================================================
See accompanying notes to financial statements.
34
Notes to
FINANCIAL STATEMENTS (Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The California Funds (the "Funds") covered in this report and their
corresponding stock exchange symbols are Nuveen Insured California Premium
Income Municipal Fund, Inc. (NPC), Nuveen Insured California Premium Income
Municipal Fund 2, Inc. (NCL), Nuveen California Premium Income Municipal Fund
(NCU), Nuveen California Dividend Advantage Municipal Fund (NAC), Nuveen
California Dividend Advantage Municipal Fund 2 (NVX) and Nuveen California
Dividend Advantage Municipal Fund 3 (NZH). Insured California Premium Income
(NPC), Insured California Premium Income 2 (NCL) and California Dividend
Advantage (NAC) are traded on the New York Stock Exchange while California
Premium Income (NCU), California Dividend Advantage 2 (NVX) and California
Dividend Advantage 3 (NZH) are traded on the American Stock Exchange. Prior to
the commencement of operations of California Dividend Advantage 2 (NVX) and
California Dividend Advantage 3 (NZH), the Funds had no operations other than
those related to organizational matters, the initial capital contribution of
$100,275 by Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of
The John Nuveen Company and the recording of the organizational expenses
($15,000 and $11,500, respectively) and their reimbursement by Nuveen
Investments, also a wholly owned subsidiary of The John Nuveen Company.
Each Fund seeks to provide current income exempt from both regular federal and
California state income taxes by investing primarily in a diversified portfolio
of municipal obligations issued by state and local government authorities within
the state of California. The Funds are registered under the Investment Company
Act of 1940 as closed-end management investment companies.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
Securities Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers and general
market conditions. If it is determined that market prices for a security are
unavailable or inappropriate, the Board of Directors/Trustees of the Funds 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 in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At
February 28, 2002, California Dividend Advantage 3 (NZH) had outstanding
when-issued purchase commitments of $45,865,400. There were no such outstanding
purchase commitments in any of the other Funds.
Investment Income
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt securities
for financial reporting purposes.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its 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
California state income taxes, to retain such tax-exempt status when distributed
to shareholders of the Funds.
35
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
Dividends and Distributions to Shareholders
Tax-exempt net investment income is declared monthly as a dividend. Generally,
payment is made or reinvestment is credited to shareholder accounts on the first
business day after month end. Net realized capital gains and/or market discount
from investment transactions are distributed to shareholders not less frequently
than annually. Furthermore, capital gains are distributed only to the extent
they exceed available capital loss carryforwards.
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount, 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. Accordingly, temporary over-
distributions as a result of these differences may occur and will be classified
as either distributions in excess of net investment income, distributions in
excess of net realized gains and/or distributions in excess of net ordinary
taxable income from investment transactions, where applicable.
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in one or more series. The dividend rate
may change every seven days, as set by the Auction Agent. The number of shares
outstanding, by series and in total, for each Fund is as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPC) (NCL) (NCU) (NAC) (NVX) (NZH)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M -- -- 1,720 -- 2,200 3,740
Series T 1,800 1,900 -- -- -- --
Series Th -- 1,900 -- 3,500 -- 3,740
Series F -- -- -- 3,500 2,200 --
---------------------------------------------------------------------------------------------------------
Total 1,800 3,800 1,720 7,000 4,400 7,480
=========================================================================================================
Effective November 16, 2001, California Dividend Advantage 3 (NZH) issued 3,740
Series M and 3,740 Series Th $25,000 stated value Preferred shares.
Insurance
Insured California Premium Income (NPC) and Insured California Premium Income 2
(NCL) invest in municipal securities which are either covered by insurance or
are backed by an escrow or trust account containing sufficient U.S. Government
or U.S. Government agency securities, both of which ensure the timely payment of
principal and interest. Each insured municipal security is covered by Original
Issue Insurance, Secondary Market Insurance or Portfolio Insurance. Such
insurance does not guarantee the market value of the municipal securities or the
value of the Funds' shares. Original Issue Insurance and Secondary Market
Insurance remain in effect as long as the municipal securities covered thereby
remain outstanding and the insurer remains in business, regardless of whether
the Funds ultimately dispose of such municipal securities. Consequently, the
market value of the municipal securities covered by Original Issue Insurance or
Secondary Market Insurance may reflect value attributable to the insurance.
Portfolio Insurance is effective only while the municipal securities are held by
the Funds. Accordingly, neither the prices used in determining the market value
of the underlying municipal securities nor the net asset value of the Funds'
shares include value, if any, attributable to the Portfolio Insurance. Each
policy of the Portfolio Insurance does, however, give the Funds the right to
obtain permanent insurance with respect to the municipal security covered by the
Portfolio Insurance policy at the time of its sale.
36
Derivative Financial Instruments
The Funds may invest in transactions 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 period ended February 28, 2002.
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 has agreed to pay all offering costs (other than the sales
load) that exceed $.03 per Common share for California Dividend Advantage 2
(NVX) and California Dividend Advantage 3 (NZH). California Dividend Advantage
2's (NVX) and California Dividend Advantage 3's (NZH) share of offering costs
($443,400 and $723,000, respectively) were recorded as a reduction of the
proceeds from the sale of Common shares.
Costs incurred by California Dividend Advantage 2 (NVX) and California Dividend
Advantage 3 (NZH) in connection with their offering of Preferred shares
($1,296,000 and 2,116,250, respectively) were recorded as a reduction of the
proceeds from the sale of the Preferred shares.
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 from operations during the reporting period. Actual
results may differ from those estimates.
Change in Accounting Policy
As required, effective September 1, 2001, the Funds have adopted the provisions
of the new AICPA Audit and Accounting Guide for Investment Companies and began
accreting taxable market discount on debt securities. Prior to September 1,
2001, the Funds did not accrete taxable market discount on debt securities until
they were sold. The cumulative effect of this accounting change had no impact on
the total net assets or the net asset values of the Funds, but resulted in an
increase in the cost of securities and a corresponding decrease in unrealized
appreciation based on securities held by the Funds on September 1, 2001, as
follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE ADVANTAGE 2
(NPC) (NCL) (NCU) (NAC) (NVX)
--------------------------------------------------------------------------------
$893,472 $87,380 $102,039 $-- $6,523
================================================================================
The effect of this change for the period ended February 28, 2002, was to
increase investment income with a corresponding decrease in net unrealized
appreciation as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE ADVANTAGE 2
(NPC) (NCL) (NCU) (NAC) (NVX)
--------------------------------------------------------------------------------
$64,110 $6,101 $7,016 $-- $7,998
================================================================================
The Statement of Changes in Net Assets and Financial Highlights for the prior
periods have not been restated to reflect this change in presentation.
37
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) PREMIUM INCOME (NCU)
------------------------ ------------------------ ------------------------
SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED SIX MONTHS YEAR ENDED
ENDED 2/28/02 8/31/01 ENDED 2/28/02 8/31/01 ENDED 2/28/02 8/31/01
---------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- -- -- --
Shares issued to shareholders
due to reinvestment
of distributions 7,876 -- 7,433 3,745 2,696 7,867
---------------------------------------------------------------------------------------------------------
7,876 -- 7,433 3,745 2,696 7,867
=========================================================================================================
Preferred shares sold -- -- -- -- -- --
=========================================================================================================
CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND
ADVANTAGE (NAC) ADVANTAGE 2 (NVX) ADVANTAGE 3 (NZH)
------------------------ -------------------------- --------------------
FOR THE FOR THE
PERIOD 3/27/01 PERIOD 9/25/01
(COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) OF OPERATIONS)
SIX MONTHS YEAR ENDED SIX MONTHS THROUGH THROUGH
ENDED 2/28/02 8/31/01 ENDED 2/28/02 8/31/01 2/28/02
---------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- 14,780,000 24,100,000
Shares issued to shareholders
due to reinvestment
of distributions 5,665 3,990 3,644 16 1,129
---------------------------------------------------------------------------------------------------------
5,665 3,990 3,644 14,780,016 24,101,129
=========================================================================================================
Preferred shares sold -- -- -- 4,400 7,480
=========================================================================================================
38
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid April 1, 2002, to shareholders of record on
March 15, 2002, as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPC) (NCL) (NCU) (NAC) (NVX) (NZH)
---------------------------------------------------------------------------------------------------------
Dividend per share $.0725 $.0700 $.0690 $.0725 $.0730 $.0720
=========================================================================================================
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities during the six months ended
February 28, 2002, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPC) (NCL) (NCU) (NAC) (NVX) (NZH)*
---------------------------------------------------------------------------------------------------------
Purchases:
Long-term municipal
securities $23,123,402 $12,748,050 $3,321,639 $75,268,647 $37,434,087 $669,497,733
Short-term municipal
securities -- -- 3,130,000 -- -- 57,340,000
Sales and maturities:
Long-term municipal
securities 23,162,913 12,140,319 3,397,390 72,425,740 36,053,802 105,592,960
Short-term municipal
securities -- -- 1,990,000 100,000 -- 57,340,000
=========================================================================================================
* For the period September 25, 2001 (commencement of operations) through
February 28, 2002.
At February 28, 2002, the cost of investments owned for federal income tax
purposes were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPC) (NCL) (NCU) (NAC) (NVX) (NZH)
---------------------------------------------------------------------------------------------------------
$133,252,042 $260,707,146 $117,741,356 $498,861,491 $317,244,793 $560,974,307
=========================================================================================================
39
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
At August 31, 2001, the Funds' last fiscal year end, 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:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
---------------------------------------------------------------------------------------------------------
Expiration year:
2003 $ -- $ 323,810 $1,039,028 $ --
2004 -- 4,345,091 2,742,449 --
2005 165,897 1,283,948 1,049,994 --
2006 -- -- -- --
2007 -- -- -- 1,099,956
2008 681,230 -- -- 1,589,298
2009 1,592,883 2,185,870 -- 4,892,139
---------------------------------------------------------------------------------------------------------
Total $2,440,010 $8,138,719 $4,831,471 $7,581,393
=========================================================================================================
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
for federal income tax purposes at February 28, 2002, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND DIVIDEND DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NPC) (NCL) (NCU) (NAC) (NVX) (NZH)
---------------------------------------------------------------------------------------------------------
Gross unrealized:
appreciation $11,190,343 $19,047,900 $6,447,887 $19,985,994 $ 9,282,161 $ 2,974,788
depreciation (100,796) (795,359) (761,893) (545,666) (3,272,688) (2,761,642)
---------------------------------------------------------------------------------------------------------
Net unrealized appreciation $11,089,547 $18,252,541 $5,685,994 $19,440,328 $ 6,009,473 $ 213,146
=========================================================================================================
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under Insured California Premium Income's (NPC), Insured California Premium
Income 2's (NCL) and California Premium Income's (NCU) 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 of each Fund as follows:
AVERAGE DAILY NET ASSETS MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For the next $3 billion .5875 of 1
For net assets over $5 billion .5750 of 1
================================================================================
40
Under California Dividend Advantage's (NAC), California Dividend Advantage 2's
(NVX) and California Dividend Advantage 3's (NZH) 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 of each Fund as follows:
AVERAGE DAILY NET ASSETS MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For net assets over $2 billion .5750 of 1
================================================================================
The Adviser has agreed to waive part of its management fees or reimburse certain
expenses of California Dividend Advantage (NAC) in an amount equal to .30% of
the average daily net assets for the period May 26, 1999 (commencement of
operations) through July 31, 2004, .25% of the average daily net assets for the
year ended July 31, 2005, .20% of the average daily net assets for the year
ended July 31, 2006, .15% of the average daily net assets for the year ended
July 31, 2007, .10% of the average daily net assets for the year ended July 31,
2008, and .05% of the average daily net assets for the year ended July 31, 2009.
The Adviser has not agreed to reimburse California Dividend Advantage (NAC) for
any portion of its fees and expenses beyond July 31, 2009.
The Adviser has agreed to waive part of its management fees or reimburse certain
expenses of California Dividend Advantage 2 (NVX) in an amount equal to .30% of
the average daily net assets for the period March 27, 2001 (commencement of
operations) through March 31, 2006, .25% of the average daily net assets for the
year ended March 31, 2007, .20% of the average daily net assets for the year
ended March 31, 2008, .15% of the average daily net assets for the year ended
March 31, 2009, .10% of the average daily net assets for the year ended March
31, 2010, and .05% of the average daily net assets for the year ended March 31,
2011. The Adviser has not agreed to reimburse California Dividend Advantage 2
(NVX) for any portion of its fees and expenses beyond March 31, 2011.
The Adviser has agreed to waive part of its management fees or reimburse certain
expenses of California Dividend Advantage 3 (NZH) in an amount equal to .30% of
the average daily net assets for the period September 25, 2001 (commencement of
operations) through September 30, 2006, .25% of the average daily net assets for
the year ended September 30, 2007, .20% of the average daily net assets for the
year ended September 30, 2008, .15% of the average daily net assets for the year
ended September 30, 2009, .10% of the average daily net assets for the year
ended September 30, 2010, and .05% of the average daily net assets for the year
ended September 30, 2011. The Adviser has not agreed to reimburse California
Dividend Advantage 3 (NZH) for any portion of its fees and expenses beyond
September 30, 2011.
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
41
Financial
HIGHLIGHTS (Unaudited)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------- ---------------------------------------------------------------
From and From and
in Excess in Excess
of Net of Net
Net Investment Investment Capital Capital
Realized/ Income to Income to Gains to Gains to
Beginning Net Unrealized Common Preferred Common Preferred
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) Total holders holders+ holders holders+ Total
------------------------------------------------------------------------------------------------------------------------------------
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) $16.04 $ .53 $ (.29) $ .24 $(.43) $(.05) $-- $-- $ (.48)
2001 15.08 1.04 .99 2.03 (.86) (.21) -- -- (1.07)
2000 14.81 1.09 .30 1.39 (.88) (.24) -- -- (1.12)
1999 16.31 1.09 (1.56) (.47) (.83) (.20) -- -- (1.03)
1998 15.39 1.03 .92 1.95 (.81) (.22) -- -- (1.03)
1997 14.46 1.04 .93 1.97 (.81) (.23) -- -- (1.04)
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 15.01 .50 (.23) .27 (.41) (.05) -- -- (.46)
2001 14.09 1.01 .91 1.92 (.78) (.22) -- -- (1.00)
2000 13.70 1.02 .41 1.43 (.80) (.24) -- -- (1.04)
1999 14.82 1.01 (1.14) (.13) (.78) (.21) -- -- (.99)
1998 14.06 .98 .77 1.75 (.75) (.24) -- -- (.99)
1997 13.27 .99 .77 1.76 (.74) (.23) -- -- (.97)
CALIFORNIA PREMIUM
INCOME (NCU)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 14.22 .50 (.13) .37 (.40) (.06) -- -- (.46)
2001 13.34 1.00 .90 1.90 (.79) (.23) -- -- (1.02)
2000 13.19 1.03 .14 1.17 (.79) (.23) -- -- (1.02)
1999 14.30 1.00 (1.13) (.13) (.77) (.21) -- -- (.98)
1998 13.60 .98 .70 1.68 (.74) (.24) -- -- (.98)
1997 12.70 .99 .89 1.88 (.74) (.24) -- -- (.98)
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 15.13 .54 (.30) .24 (.42) (.06) -- -- (.48)
2001 13.82 1.07 1.28 2.35 (.81) (.23) -- -- (1.04)
2000 13.33 1.07 .52 1.59 (.84) (.26) -- -- (1.10)
1999(a) 14.33 .20 (.92) (.72) (.14) (.03) -- -- (.17)
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 15.11 .53 (.48) .05 (.43) (.06) -- -- (.49)
2001(b) 14.33 .34 .90 1.24 (.29) (.05) -- -- (.34)
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(c) 14.33 .33 (.11) .22 (.29) (.03) -- -- (.32)
====================================================================================================================================
Total Returns
---------------------------
Offering
Costs and Based
Preferred Ending Based on
Share Net Ending on Net
Underwriting Asset Market Market Asset
Discounts Value Value Value** Value**
-----------------------------------------------------------------------------------------------------------------
INSURED CALIFORNIA PREMIUM
INCOME (NPC)
----------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) $-- $15.80 $15.9000 4.12% 1.20%
2001 -- 16.04 15.6900 14.12 12.43
2000 -- 15.08 14.5625 .84 8.34
1999 -- 14.81 15.3750 1.62 (4.35)
1998 -- 16.31 15.9375 15.85 11.51
1997 -- 15.39 14.5000 10.69 12.30
INSURED CALIFORNIA PREMIUM
INCOME 2 (NCL)
---------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) -- 14.82 14.8000 2.58 1.48
2001 -- 15.01 14.8300 11.99 12.45
2000 -- 14.09 14.0000 3.58 9.21
1999 -- 13.70 14.3750 2.27 (2.50)
1998 -- 14.82 14.8125 15.70 10.95
1997 -- 14.06 13.5000 14.36 11.82
CALIFORNIA PREMIUM
INCOME (NCU)
---------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) -- 14.13 13.9400 1.27 2.23
2001 -- 14.22 14.1700 12.84 12.92
2000 -- 13.34 13.3125 5.93 7.63
1999 -- 13.19 13.3750 .81 (2.57)
1998 -- 14.30 14.0000 12.54 10.83
1997 -- 13.60 13.1250 17.16 13.20
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
---------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) -- 14.89 14.3800 (.60) 1.25
2001 -- 15.13 14.8900 15.06 15.85
2000 -- 13.82 13.7500 (2.18) 10.80
1999(a) (.11) 13.33 15.0000 .96 (5.99)
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
---------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) -- 14.67 14.3900 (2.54) (.02)
2001(b) (.12) 15.11 15.2100 3.40 7.55
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
---------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(c) (.12) 14.11 13.8400 (5.82) .51
===============================================================================================================
Ratios/Supplemental Data
------------------------------------------------------------------------------------
Before Credit/Reimbursement
------------------------------------------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Expenses Income to Expenses Income to
to Average Average to Average Average
Ending Net Assets Net Assets Total Total
Net Applicable Applicable Net Assets Net Assets
Assets to Common to Common Including Including
(000) Shares++ Shares++ Preferred++ Preferred++
-----------------------------------------------------------------------------------------------------------------------
INSURED CALIFORNIA PREMIUM
INCOME (NPC)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) $146,682 1.21%* 6.76%* .84%* 4.68%*
2001 148,068 1.22 6.77 .84 4.65
2000 141,903 1.25 7.65 .84 5.13
1999 140,091 1.22 6.81 .85 4.74
1998 149,478 1.22 6.49 .85 4.50
1997 143,571 1.25 6.96 .85 4.74
INSURED CALIFORNIA PREMIUM
INCOME 2 (NCL)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 282,268 1.24* 6.85* .82* 4.54*
2001 284,633 1.24 7.01 .82 4.60
2000 272,977 1.28 7.65 .81 4.88
1999 267,833 1.24 6.86 .82 4.53
1998 281,399 1.25 6.79 .82 4.46
1997 271,883 1.28 7.24 .83 4.67
CALIFORNIA PREMIUM INCOME (NCU)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 124,585 1.29* 7.11* .84* 4.65*
2001 125,067 1.32 7.36 .85 4.75
2000 119,878 1.38 8.09 .87 5.10
1999 118,877 1.30 7.08 .85 4.62
1998 125,066 1.32 7.02 .86 4.57
1997 120,995 1.34 7.47 .86 4.76
CALIFORNIA DIVIDEND ADVANTAGE (NAC)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 523,621 1.17* 6.80* .78* 4.53*
2001 529,197 1.19 7.03 .78 4.61
2000 498,326 1.24 7.93 .78 4.99
1999(a) 486,367 .93* 5.06* .73* 3.99*
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 326,939 1.16* 6.80* .77* 4.51*
2001(b) 333,440 1.05* 5.23* .77* 3.85*
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(c) 527,141 1.02* 5.15* .74* 3.74*
=======================================================================================================================
Ratios/Supplemental Data
-------------------------------------------------------------------- Municipal Auction Rate Cumulative
After Credit/Reimbursement*** Preferred Stock at End of Period
----------------------------------------------------- -------------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Expenses Income to Expenses Income to
to Average Average to Average Average
Net Assets Net Assets Total Total Aggregate Liquidation
Applicable Applicable Net Assets Net Assets Portfolio Amount and Market Asset
to Common to Common Including Including Turnover Outstanding Value Coverage
Shares++ Shares++ Preferred++ Preferred++ Rate (000) Per Share Per Share
------------------------------------------------------------------------------------------------------------------------------------
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 1.20%* 6.77%* .83%* 4.69%* 16% $45,000 $25,000 $81,490
2001 1.21 6.79 .83 4.66 21 45,000 25,000 82,260
2000 1.24 7.66 .83 5.13 27 45,000 25,000 78,835
1999 1.22 6.82 .85 4.74 50 45,000 25,000 77,828
1998 1.22 6.49 .85 4.50 2 45,000 25,000 83,043
1997 1.25 6.96 .85 4.74 9 45,000 25,000 79,762
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 1.23* 6.86* .82* 4.55* 4 95,000 25,000 74,281
2001 1.24 7.02 .81 4.61 18 95,000 25,000 74,903
2000 1.26 7.66 .81 4.89 26 95,000 25,000 71,836
1999 1.24 6.86 .82 4.53 35 95,000 25,000 70,482
1998 1.25 6.79 .82 4.46 13 95,000 25,000 74,052
1997 1.28 7.24 .83 4.67 24 95,000 25,000 71,548
CALIFORNIA PREMIUM
INCOME (NCU)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) 1.27* 7.13* .83* 4.66* 3 43,000 25,000 72,433
2001 1.30 7.38 .84 4.76 18 43,000 25,000 72,714
2000 1.36 8.10 .86 5.10 19 43,000 25,000 69,696
1999 1.30 7.08 .85 4.63 36 43,000 25,000 69,115
1998 1.32 7.02 .86 4.57 21 43,000 25,000 72,713
1997 1.34 7.47 .86 4.76 44 43,000 25,000 70,346
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) .71* 7.26* .48* 4.83* 14 175,000 25,000 74,803
2001 .72 7.50 .47 4.92 17 175,000 25,000 75,600
2000 .75 8.43 .47 5.30 25 175,000 25,000 71,189
1999(a) .55* 5.45* .43* 4.29* 8 175,000 25,000 69,481
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(d) .70* 7.26* .46* 4.82* 11 110,000 25,000 74,304
2001(b) .62* 5.65* .46* 4.16* 40 110,000 25,000 75,782
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2002(c) .61* 5.57* .44* 4.05* 26 187,000 25,000 70,473
====================================================================================================================================
* 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 Net Asset Value is the
combination of reinvested dividend income, reinvested capital gains
distributions, if any, and changes in 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 May 26, 1999 (commencement of operations) through August 31,
1999.
(b) For the period March 27, 2001 (commencement of operations) through August
31, 2001.
(c) For the period September 25, 2001 (commencement of operations) through
February 28, 2002.
(d) For the six months ended February 28, 2002.
See accompanying notes to financial statements.
42-43 [SPREAD]
Build Your Wealth
AUTOMATICALLY
[Sidebar text]
NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR
REINVESTMENT ACCOUNT.
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen 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.
44
Fund
INFORMATION
BOARD OF DIRECTORS/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, TRANSFER AGENT
AND SHAREHOLDER SERVICES
JPMorgan Chase Bank
P.O. Box 660086
Dallas, TX 75266-0086
(800) 257-8787
LEGAL COUNSEL
Morgan, Lewis &
Bockius LLP
Washington, D.C.
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
POLICY NOTICE:
Nuveen California Dividend Advantage Municipal Fund
Nuveen California Dividend Advantage Municipal Fund 2
Nuveen California Dividend Advantage Municipal Fund 3
These Funds may not invest, under normal circumstances, less than 80% of their
net assets (plus any borrowings for investment purposes) in investments the
income from which is exempt from both regular federal and California state
income taxes.
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 six-month period ended February 28, 2002. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
45
Serving Investors
FOR GENERATIONS
[PHOTO OF JOHN NUVEEN, SR.]
John Nuveen, Sr.
For over a century, generations of Americans have relied on Nuveen Investments
to help them grow and keep the money they've earned. Financial advisors,
investors and their families have associated Nuveen Investments with quality,
expertise and dependability since 1898. That is why financial advisors have
entrusted the assets of more than 1.3 million investors to Nuveen.
With the know-how that comes from a century of experience, Nuveen continues to
build upon its reputation for quality. Now, financial advisors and investors can
count on Nuveen Investments to help them design customized solutions that meet
the far-reaching financial goals unique to family wealth strategies - solutions
that can translate into legacies.
To find out more about how Nuveen Investments' products and services can help
you preserve your financial security, talk with your financial advisor, or call
us at (800) 257-8787 for more information, including a prospectus where
applicable. Please read that information carefully before you invest.
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Nuveen Investments o 333 West Wacker Drive
Chicago, IL 60606 o www.nuveen.com FSA-2-02-02