UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-6383
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Nuveen Michigan Quality Income Municipal Fund, Inc.
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: July 31
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Date of reporting period: July 31, 2004
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT July 31, 2004
Nuveen Investments
Municipal Closed-End
Exchange-Traded
Funds
NUVEEN MICHIGAN QUALITY INCOME MUNICIPAL FUND, INC.
NUM
NUVEEN MICHIGAN PREMIUM INCOME MUNICIPAL FUND, INC.
NMP
NUVEEN MICHIGAN DIVIDEND ADVANTAGE MUNICIPAL FUND
NZW
NUVEEN OHIO QUALITY INCOME MUNICIPAL FUND, INC.
NUO
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND
NXI
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NBJ
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NVJ
Photo of: Man and woman sitting on porch.
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DEPENDABLE,
TAX-FREE INCOME BECAUSE
IT'S NOT WHAT YOU EARN,
IT'S WHAT YOU KEEP.(R)
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Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Chairman's
LETTER TO SHAREHOLDERS
Once again, I am pleased to report that over the most recent reporting period
your Fund continued to provide you with tax-free monthly income and an
attractive total return. For more specific information about the performance of
your Fund, please see the Portfolio Managers' Perspective and Performance
Overview sections of this report.
With interest rates at historically low levels, many have begun to wonder
whether interest rates will rise, and whether that possibility should cause them
to adjust their holdings of fixed-income investments. No one knows what the
future will bring, which is why we think a well-balanced portfolio that is
structured and carefully monitored with the help of an investment professional
is an important component in achieving your long-term financial goals. A
well-diversified portfolio
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NO ONE KNOWS WHAT THE FUTURE WILL BRING, WHICH IS WHY WE THINK A WELL-BALANCED
PORTFOLIO ..... IS AN IMPORTANT COMPONENT IN ACHIEVING YOUR LONG-TERM FINANCIAL
GOALS.
--------------------------------------------------------------------------------
may actually help to reduce your overall investment risk, and we believe that
municipal bond investments like your Nuveen Fund can be important building
blocks in a portfolio crafted to perform well through a variety of market
conditions.
I'd also like to direct your attention to the inside front cover of this report,
which explains the quick and easy process to begin receiving Fund reports like
this via e-mail and the internet. Thousands of Nuveen Fund shareholders already
have signed-up, and they are getting their Fund information faster and more
conveniently than ever. I urge you to consider joining them.
Since 1898, Nuveen Investments has offered financial products and solutions that
incorporate careful research, diversification, and the application of
conservative risk-management principles. We are grateful that you have chosen us
as a partner as you pursue your financial goals. We look forward to continuing
to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
September 15, 2004
Nuveen Investments Municipal Closed-End Exchange-Traded Funds
(NUM, NMP, NZW, NUO, NXI, NBJ, NVJ)
Portfolio Managers'
PERSPECTIVE
Portfolio managers Dan Solender and Cathryn Steeves discuss the market
environment, key investment strategies and the annual performance of the
Michigan and Ohio Funds. With 12 years of investment experience, including eight
at Nuveen, Dan assumed portfolio management responsibility for these Funds in
November 2003. After the end of this reporting period, in August 2004, Cathryn
assumed responsibility for the four Ohio Funds (NUO, NXI, NBJ, and NVJ). Cathryn
has been a research analyst and portfolio manager with Nuveen since 1996.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE FISCAL
YEAR ENDED JULY 31, 2004?
During much of this reporting period, the U.S. economy demonstrated signs of
improvement, as increased capital spending and a rise in consumer confidence
helped fuel strong growth in the overall gross domestic product. However, toward
the end of the 12-month period, higher energy costs and the improving employment
picture began to raise fears of a potential pick-up in inflation. This
combination of inflation concerns and general economic momentum--plus continued
geopolitical uncertainty--served as a catalyst for heightened volatility in the
fixed-income markets. Although interest rates remained at or near historical
lows through much of this 12-month period, yields in the long-term bond markets,
including the municipal market, were increasingly driven by expectations that
the Federal Reserve would raise short-term interest rates and by speculation
over the timing and extent of those rate hikes.
As an example of this interest rate volatility, the Bond Buyer 25 Revenue Bond
Index, a widely followed municipal market benchmark, began this 12-month
reporting period with a yield of 5.41%. After briefly touching 5.50%, the yield
fell steadily to 4.73% by mid-March 2004. From there, the Index's yield rose
back to 5.31% by July 31, 2004.
On June 30, 2004, the Fed moved to increase the fed funds rate by 25 basis
points to 1.25%, the first increase in four years, noting that it anticipated
taking a "measured" approach to further tightening to avoid potential derailment
of the economic recovery. (On August 10, 2004, following the close of this
reporting period, the Fed added another 25 basis points, bringing the target
rate to 1.50%.)
In general, municipal supply nationwide remained relatively strong over the
entire 12-month reporting period. About $366.5 billion in new bonds came to
market during
4
this period, down 7% from the preceding 12 months. The decrease in issuance was
more evident late in the period, with $214 billion in new municipal supply for
the first seven months of 2004 compared with $239 billion for January-July 2003.
HOW ABOUT ECONOMIC AND MARKET CONDITIONS IN MICHIGAN AND OHIO?
Although challenges remain, Michigan's economy finally appeared to be on the
road to recovery. The state's business and services industries, as well as the
life sciences and high-tech sectors, experienced modest, but accelerated,
growth, and its industrial base slowly continued to diversify. Although down
significantly from the 7.5% rate in July 2003, Michigan's unemployment rate of
6.8% in July 2004 remained well above the national average of 5.5%. The state's
high cost structure and unionized workforce continued to provide impetus for
consolidations, plant shutdowns and outsourcing to countries with lower labor
costs. The state's rainy day and reserve funds were depleted in fiscal 2003, and
Michigan turned to issuing $1.2 billion in cashflow notes to balance the fiscal
2004 budget. As of July 31, 2004, state lawmakers had not agreed on a plan to
close the $1.3 billion budget shortfall for fiscal 2005, which begins October 1,
2004. However, we believe that Michigan's debt levels remain manageable, and
leave some flexibility in bond financing if revenues fail to meet projected
targets. During this 12-month reporting period, issuers in Michigan sold $8.8
billion in new municipal bonds, a decrease of 25% from the previous 12 months.
In late 2003, Moody's downgraded Michigan's general obligation debt to Aa1 from
Aaa, and Standard & Poor's also revised its rating to AA+ from AAA. Both credit
agencies maintained a stable outlook for the state based on Michigan's efforts
to overcome the decline in state revenues and achieve a balanced budget.
Ohio's economy also appeared to be gradually emerging from recession. Modest job
creation has replaced some of the massive job losses in manufacturing, and
growth in the business/professional services and education sectors provided
welcome diversity to the state economy. As of July 2004, unemployment in Ohio
was 5.9%, down from 6.3% in July 2003. Ohio's budget shortfall of $373 million
for fiscal 2005 was closed through spending cuts, including Medicaid reductions,
and the delay of a $100 million transfer to the state's budget stabilization
fund. The fiscal 2004-2005 $48.9 billion biennial budget is also reliant on a
two-year sales tax increase, which is expected to generate $1.25 billion
annually. In contrast to the national trend, municipal issuance in Ohio was up
15% over
5
the 12 months ended July 2004, with $10.9 billion in new securities. Over the
year period, the state's general obligation debt retained its ratings of Aa1
with a negative outlook from Moody's and AA+ with a stable outlook from S&P.
Moody's negative outlook reflects the state's continued shortfalls in tax
receipts and budget deficits that created pressure in 2004 and into 2005.
IN THIS ENVIRONMENT, WHAT KEY STRATEGIES WERE USED TO MANAGE THE MICHIGAN AND
OHIO FUNDS DURING THE 12 MONTHS ENDED JULY 31, 2004?
As the market continued to anticipate rising interest rates, our major focus
during this fiscal year remained on positioning our Funds in maturities with the
best expected returns, and on aligning the Funds to have more consistent
interest rate risk. Interest rate risk is the risk that the value of a Fund's
portfolio will decline if market interest rates rise (since bond prices move in
the opposite direction of interest rates). We focused primarily on the 15 to 20
year maturity range, and we also bought bonds with coupons above current market
rates to provide a degree of cushion for the Funds if rates were to rise. In
many cases, bonds in the 15 to 20 year maturity range offered yields similar to
those of longer-term bonds with less inherent interest rate risk and, we
believed, greater total return prospects. We also added some bonds in the
10-year maturity range when we found what we believed were attractive
opportunities. We think this yield curve positioning should also help the Funds
produce more consistent returns over time as interest rates rise and fall.
In keeping with this strategy, some of the bonds we purchased carried coupons
that were higher than current market rates. These "premium" bonds have the
potential to help cushion the impact on the value of the Funds' portfolios if
interest rates continue to rise. Some of these additions were financed through
the sale of bonds with longer maturities (i.e., beyond 20 years). We also
reduced our positions in pre-refunded and escrowed bonds in the three older
Funds (NUM, NMP, and NUO). In NUO, for example, we cut our pre-refunded and
escrowed holdings in half over the 12 month period, from 20% to 10%. In
addition, because healthcare bonds were performing well, certain Funds took
advantage of opportunities to sell selected bonds at attractive prices and
modestly reduce their healthcare holdings. We tried to reinvest these proceeds
in a variety of sectors to enhance the Funds' overall diversification.
6
In addition, we tried to balance the desire for quality with the need to
generate income, especially in the newer Funds. For example, while we sold some
lower-rated Puerto Rico tobacco bonds from NUO's and NBJ's portfolios, we
maintained or added to our holdings in NXI and NVJ because of the higher yields
offered by these bonds. We also added new BBB rated and sub-investment grade
rated bonds to some of the portfolios to better diversify their lower credit
quality holdings.
HOW DID THE FUNDS PERFORM?
Individual results for the Nuveen Michigan and Ohio Funds, as well as for
relevant benchmarks, are presented in the accompanying table.
TOTAL RETURNS ON NET ASSET VALUE
For periods ended 7/31/04
(Annualized)
MICHIGAN FUNDS 1-YEAR 5-YEAR 10-YEAR
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NUM 9.52% 7.14% 7.03%
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NMP 8.56% 7.18% 7.37%
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NZW 10.00% NA NA
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Lipper Michigan
Municipal Debt Funds
Average1 9.13% 7.25% 6.92%
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OHIO FUNDS
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NUO 7.87% 6.51% 7.25%
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NXI 9.54% NA NA
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NBJ 10.33% NA NA
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NVJ 9.72% NA NA
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Lipper Other States
Municipal Debt Funds
Average2 9.64% 7.01% 7.28%
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Lehman Brothers
Municipal
Bond Index3 5.79% 6.07% 6.38%
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Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the 12 months ended July 31, 2004, the total returns on net asset value
(NAV) for all seven Funds in this report outperformed the return on the Lehman
Brothers index. NUM and NZW also outperformed their Lipper Michigan peer group,
while NMP trailed this average. Among the Ohio Funds, NBJ bested the Lipper
Other States group average, NVJ and NXI performed roughly in line with this
measure, and NUO lagged its peer group.
1 The Lipper Michigan Municipal Debt Funds category average is calculated
using the returns of all leveraged and unleveraged closed-end
exchange-traded funds in this category for each period as follows: 1 year,
7 funds; 5 years, 5 funds; and 10 years, 4 funds. Fund and Lipper returns
assume reinvestment of dividends.
2 The Lipper Other States Municipal Debt Funds category average is calculated
using the returns of all leveraged and unleveraged closed-end
exchange-traded funds in this category for each period as follows: 1 year,
44 funds; 5 years, 19 funds; and 10 years, 17 funds. Fund and Lipper
returns assume reinvestment of dividends. It should be noted that the
performance of the Lipper Other States category represents the overall
average of annual returns for funds from 10 different states with a wide
variety of economic and municipal market conditions and investment
guidelines, making direct comparisons less applicable.
3 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged
national index comprising a broad range of investment-grade municipal
bonds. Results for the Lehman indexes do not reflect any expenses.
7
One of the primary factors benefiting the performance of each of these Funds
relative to that of the unleveraged Lehman index was the Funds' use of leverage.
While leveraging can add volatility to the Funds' NAVs and share prices,
especially when there are substantial shifts in interest rates, this strategy
can also provide opportunities for additional income and total returns for
common shareholders when short-term interest rates are low and long-term rates
are relatively steady or falling.
All of these Funds also benefited from their allocations of lower quality bonds,
which outperformed higher quality securities as the economy improved. In fact,
some of the differences between the returns of these Funds reflect the varying
allocations to these lower-rated securities, especially in Michigan. As of July
31, 2004, NZW had the greatest allocation (7%) of bonds rated BBB or lower among
the Michigan Funds, while NMP had the lowest (3%). Among the Ohio Funds, NBJ's
total return was enhanced by its holdings of BBB rated bonds. One example was
the strong performance of bonds issued by Ohio Higher Educational Facilities
Commission for Wittenberg University.
The healthcare sector, and particularly lower-rated hospital credits, also was a
strong performer over the 12 month period. All seven Funds had sizeable
allocations to this sector, ranging from 17% in NUO to 16% in NBJ, 15% in NVJ,
14% in NXI, 13% in NUM, 12% in NMP, and 11% in NZW. For at least part of this
reporting period, all three Michigan Funds held positions in Ba3 rated bonds
issued for Detroit Medical Center, which helped to boost their performance.
Similarly, all four Ohio Funds held Baa1 rated Summa Health System bonds issued
by the Akron, Bath and Copley Joint Township Hospital District for at least part
of the period.
Also making a positive contribution to the Ohio Funds' total returns were BBB
rated bonds issued by Puerto Rico and backed by revenues from the 1998 master
tobacco settlement agreement. These bonds had the largest impact on NVJ.
Among the Funds' holdings that did not perform as well during this period were
pre-refunded bonds, which underperformed the market as a whole, as measured by
the Lehman index. Among the Michigan Funds, NMP had the heaviest weighting of
8
U.S. Guaranteed bonds, while NUO had the highest exposure among the Ohio Funds.
We worked to reduce our positions in these bonds over the 12 month period.
HOW ABOUT THE FUNDS' DIVIDENDS AND SHARE PRICES?
With short-term interest rates remaining at historically low levels during this
reporting period, the leveraged structures of these seven Funds continued to
support their dividend-paying capabilities. The extent of this benefit is tied
in part to the short-term rates the Funds pay their MuniPreferred(R)
shareholders. During periods of low short-term rates, the Funds generally pay
relatively lower dividends to their MuniPreferred shareholders, which can leave
more earnings to support common share dividends. During this reporting period,
this strategy enabled us to implement two dividend increases in NBJ and one
increase in NUM and NXI, while helping to maintain the dividends of NMP, NZW,
NUO and NVJ throughout the period. In addition, due to capital gains generated
by trading activity as part of our yield curve positioning strategy, common
shareholders of NUM, NMP, NUO, NXI and NVJ received substantial capital gains
and net ordinary income distributions at the end of December 2003.
All of these Funds seek to pay stable dividends at rates that reflect each
Fund's past results and projected future performance. During certain periods,
each Fund may pay dividends at a rate that may be more or less than the amount
of net investment income actually earned by the Fund during the period. If a
Fund has cumulatively earned more than it has paid in dividends, it holds the
excess in reserve as undistributed net investment income (UNII) as part of the
Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of
its earnings, the excess constitutes negative UNII that is likewise reflected in
the Fund's NAV. Each Fund will, over time, pay all of its net investment income
as dividends to shareholders. As of July 31, 2004, all seven of the Funds in
this report had positive UNII balances.
As of the end of this reporting period, NUO was trading at a premium to its NAV,
while the other six Funds were trading at discounts. As of July 31, 2004, all of
the Funds were trading at smaller premiums or larger discounts than their
average premium or discount over the course of the entire 12 month fiscal year.
9
HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF
JULY 31, 2004?
Given the current geopolitical and economic climate, we continued to believe
that maintaining strong credit quality was an important requirement. As of the
end of July 2004, these seven Funds continued to offer excellent credit quality,
with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from 90% in
NMP to 89% in NUM, 86% in NZW, 84% in NUO, 77% in NVJ, 75% in NBJ and 71% in
NXI.
As of July 31, 2004, potential call exposure for these Funds during 2004-2005
ranged from zero in NZW and NVJ to 2% in NBJ, 6% in NUM, 10% in NXI, 12% in NUO
and 13% in NMP. The number of actual bond calls in all of the Funds will depend
largely on market interest rates.
10
Nuveen Michigan Quality Income Municipal Fund, Inc.
NUM
Performance
OVERVIEW As of July 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 77%
AA 12%
A 6%
BBB 3%
NR 1%
BB or Lower 1%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Aug 0.078
Sep 0.079
Oct 0.079
Nov 0.079
Dec 0.079
Jan 0.079
Feb 0.079
Mar 0.079
Apr 0.079
May 0.079
Jun 0.079
Jul 0.079
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
8/1/03 15.26
15.21
15.23
15.07
15.18
15.28
15.05
15.43
15.51
15.87
15.77
15.83
15.9
16
16.15
16.15
16.25
15.96
15.92
16.47
16.11
16.38
16.5
16.34
16.37
16.37
16.39
16.4
16.53
16.59
16.55
16.43
16.05
15.65
15.22
15.25
15.16
14.7
14.55
14.44
14.77
14.84
14.89
14.75
14.63
14.9
15
15.05
15.07
7/31/04 15.2
FUND SNAPSHOT
------------------------------------
Share Price $15.20
------------------------------------
Common Share
Net Asset Value $15.51
------------------------------------
Premium/(Discount) to NAV -2.00%
------------------------------------
Market Yield 6.24%
------------------------------------
Taxable-Equivalent Yield1 9.04%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $181,114
------------------------------------
Average Effective
Maturity (Years) 17.00
------------------------------------
Leverage-Adjusted Duration 9.31
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 10/17/91)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 5.17% 9.52%
------------------------------------
5-Year 4.78% 7.14%
------------------------------------
10-Year 6.58% 7.03%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 29%
------------------------------------
U.S. Guaranteed 15%
------------------------------------
Tax Obligation/Limited 15%
------------------------------------
Healthcare 13%
------------------------------------
Utilities 9%
------------------------------------
Water and Sewer 6%
------------------------------------
Education and
Civic Organizations 6%
------------------------------------
Other 7%
------------------------------------
1 Taxable equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31%. For investments that generate qualified dividend income, the
taxable equivalent yield is lower.
2 The Fund also paid shareholders a capital gains and net ordinary income
distributions in December 2003 of $0.1083 per share.
11
Nuveen Michigan Premium Income Municipal Fund, Inc.
NMP
Performance
OVERVIEW As of July 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 70%
AA 20%
A 7%
BBB 1%
BB or Lower 2%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Aug 0.077
Sep 0.077
Oct 0.077
Nov 0.077
Dec 0.077
Jan 0.077
Feb 0.077
Mar 0.077
Apr 0.077
May 0.077
Jun 0.077
Jul 0.077
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
8/1/03 14.71
15.05
14.91
14.6
14.55
14.72
14.83
15.03
15.06
15.5
15.5
15.42
15.55
15.9
15.86
15.89
15.88
15.9
15.53
16.02
15.73
16
16.15
15.97
15.97
15.81
15.88
15.95
16.03
16.1
16.1
16.05
15.75
15.7
15.1
14.26
14.6
14.4
13.85
13.9
14.03
14.08
14.04
14.1
13.82
14.17
14.4
14.5
14.3
7/31/04 14.37
FUND SNAPSHOT
------------------------------------
Share Price $14.37
------------------------------------
Common Share
Net Asset Value $15.19
------------------------------------
Premium/(Discount) to NAV -5.40%
------------------------------------
Market Yield 6.43%
------------------------------------
Taxable-Equivalent Yield1 9.32%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $117,529
------------------------------------
Average Effective
Maturity (Years) 16.52
------------------------------------
Leverage-Adjusted Duration 7.77
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 12/17/92)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 5.46% 8.56%
------------------------------------
5-Year 5.75% 7.18%
------------------------------------
10-Year 7.91% 7.37%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 24%
------------------------------------
Tax Obligation/Limited 19%
------------------------------------
U.S. Guaranteed 17%
------------------------------------
Healthcare 12%
------------------------------------
Utilities 11%
------------------------------------
Education and
Civic Organizations 6%
------------------------------------
Water and Sewer 5%
------------------------------------
Housing/Multifamily 5%
------------------------------------
Other 1%
------------------------------------
1 Taxable equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31%. For investments that generate qualified dividend income, the
taxable equivalent yield is lower.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2003 of $0.4099 per share.
12
Nuveen Michigan Dividend Advantage Municipal Fund
NZW
Performance
OVERVIEW As of July 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 68%
AA 18%
A 9%
BBB 3%
BB or Lower 2%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Aug 0.0745
Sep 0.0745
Oct 0.0745
Nov 0.0745
Dec 0.0745
Jan 0.0745
Feb 0.0745
Mar 0.0745
Apr 0.0745
May 0.0745
Jun 0.0745
Jul 0.0745
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
8/1/03 15.1
14.98
14.66
14.5
14.45
14.55
14.66
14.8
14.65
15.02
14.98
15.12
15.18
15.06
15.12
15.23
15.25
15.35
15.2
15.6
15.42
15.59
15.84
15.66
15.7
15.79
15.8
15.83
16.07
15.73
15.9
15.96
15.89
14.8
14.2
13.97
14.35
14.1
14.26
13.76
13.97
13.81
13.74
13.65
13.52
13.7
14.01
14.08
14.35
7/31/04 14.65
FUND SNAPSHOT
------------------------------------
Share Price $14.65
------------------------------------
Common Share
Net Asset Value $14.82
------------------------------------
Premium/(Discount) to NAV -1.15%
------------------------------------
Market Yield 6.10%
------------------------------------
Taxable-Equivalent Yield1 8.84%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $30,538
------------------------------------
Average Effective
Maturity (Years) 19.75
------------------------------------
Leverage-Adjusted Duration 6.66
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 2.99% 10.00%
------------------------------------
Since Inception 4.93% 7.08%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 31%
------------------------------------
Tax Obligation/Limited 19%
------------------------------------
Healthcare 11%
------------------------------------
Utilities 10%
------------------------------------
U.S. Guaranteed 8%
------------------------------------
Water and Sewer 8%
------------------------------------
Education and
Civic Organizations 5%
------------------------------------
Other 8%
------------------------------------
1 Taxable equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 31%. For investments that generate qualified dividend income, the
taxable equivalent yield is lower.
13
Nuveen Ohio Quality Income Municipal Fund, Inc.
NUO
Performance
OVERVIEW As of July 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 65%
AA 19%
A 9%
BBB 5%
NR 1%
BB or Lower 1%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Aug 0.0835
Sep 0.0835
Oct 0.0835
Nov 0.0835
Dec 0.0835
Jan 0.0835
Feb 0.0835
Mar 0.0835
Apr 0.0835
May 0.0835
Jun 0.0835
Jul 0.0835
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
8/1/03 17
16.84
16.17
16.14
16.36
16.5
16.65
16.72
16.75
16.74
16.65
16.83
16.92
17.27
17.52
17.2
17.36
17.57
17.73
18.35
18.16
18.18
18.45
18.31
18.1
18.08
18.06
18.35
18.4
18.49
18.73
18.78
18.3
17.78
17.3
16.55
16
15.8
15.31
15.53
15.93
16.09
16.05
15.62
15.72
16.03
16.58
16.62
16.64
7/31/04 16.3
FUND SNAPSHOT
------------------------------------
Share Price $16.30
------------------------------------
Common Share
Net Asset Value $16.21
------------------------------------
Premium/(Discount) to NAV 0.56%
------------------------------------
Market Yield 6.15%
------------------------------------
Taxable-Equivalent Yield1 9.18%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $156,634
------------------------------------
Average Effective
Maturity (Years) 17.45
------------------------------------
Leverage-Adjusted Duration 8.38
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 10/17/91)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 2.59% 7.87%
------------------------------------
5-Year 4.06% 6.51%
------------------------------------
10-Year 6.86% 7.25%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 31%
------------------------------------
Healthcare 17%
------------------------------------
U.S. Guaranteed 10%
------------------------------------
Water and Sewer 8%
------------------------------------
Utilities 7%
------------------------------------
Housing/Multifamily 6%
------------------------------------
Education and
Civic Organizations 6%
------------------------------------
Transportation 5%
------------------------------------
Other 10%
------------------------------------
1 Taxable equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 33%. For investments that generate qualified dividend income, the
taxable equivalent yield is lower.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2003 of $0.2139 per share.
14
Nuveen Ohio Dividend Advantage Municipal Fund
NXI
Performance
OVERVIEW As of July 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 50%
AA 21%
A 13%
BBB 13%
NR 1%
BB or Lower 2%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Aug 0.0785
Sep 0.081
Oct 0.081
Nov 0.081
Dec 0.081
Jan 0.081
Feb 0.081
Mar 0.081
Apr 0.081
May 0.081
Jun 0.081
Jul 0.081
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
8/1/03 14.2
14.53
14.36
14.45
14.33
14.51
14.4
14.85
14.64
15.09
14.75
14.87
15.12
15.4
15.38
15.4
15.4
16
15.51
16.15
16.25
16.3
16.5
16
16.2
16.9
16.49
16.75
16.95
16.85
16.96
16.92
16.3
15.89
15.1
15.05
14.65
14.19
14.36
14.48
14.56
14.17
14.31
14.44
14.57
14.6
14.81
15
14.86
7/31/04 14.8
FUND SNAPSHOT
------------------------------------
Share Price $14.80
------------------------------------
Common Share
Net Asset Value $15.05
------------------------------------
Premium/(Discount) to NAV -1.66%
------------------------------------
Market Yield 6.57%
------------------------------------
Taxable-Equivalent Yield1 9.81%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $63,642
------------------------------------
Average Effective
Maturity (Years) 17.89
------------------------------------
Leverage-Adjusted Duration 8.42
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/27/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 10.70% 9.54%
------------------------------------
Since Inception 5.58% 7.74%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 27%
------------------------------------
Education and
Civic Organizations 17%
------------------------------------
Healthcare 14%
------------------------------------
Tax Obligation/Limited 10%
------------------------------------
Utilities 9%
------------------------------------
Water and Sewer 7%
------------------------------------
Housing/Multifamily 5%
------------------------------------
Housing/Single Family 4%
------------------------------------
Other 7%
------------------------------------
1 Taxable equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 33%. For investments that generate qualified dividend income, the
taxable equivalent yield is lower.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2003 of $0.0170 per share.
15
Nuveen Ohio Dividend Advantage Municipal Fund 2
NBJ
Performance
OVERVIEW As of July 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 63%
AA 12%
A 11%
BBB 11%
NR 3%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Aug 0.075
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.077
Jan 0.077
Feb 0.077
Mar 0.077
Apr 0.077
May 0.077
Jun 0.077
Jul 0.077
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
8/1/03 14.3
14.59
14.37
13.98
13.91
14.07
14.2
14.45
14.65
14.81
14.56
14.7
14.81
15.11
15.2
15.11
15.17
15.09
15.2
15.64
15.75
16.59
16.15
16.21
16.14
16
15.92
15.97
16.09
15.95
16.11
16.42
15.8
15.12
14.6
14.3
14.05
14.15
13.95
14
14.05
13.76
13.7
13.8
13.77
14.01
14.13
14.62
14.62
7/31/04 14.7
FUND SNAPSHOT
------------------------------------
Share Price $14.70
------------------------------------
Common Share
Net Asset Value $14.85
------------------------------------
Premium/(Discount) to NAV -1.01%
------------------------------------
Market Yield 6.29%
------------------------------------
Taxable-Equivalent Yield1 9.39%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $46,268
------------------------------------
Average Effective
Maturity (Years) 17.67
------------------------------------
Leverage-Adjusted Duration 9.11
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 9/25/01)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 9.60% 10.33%
------------------------------------
Since Inception 5.10% 7.23%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 39%
------------------------------------
Healthcare 16%
------------------------------------
Tax Obligation/Limited 11%
------------------------------------
Utilities 9%
------------------------------------
Consumer Staples 6%
------------------------------------
Transportation 5%
------------------------------------
Water and Sewer 5%
------------------------------------
Other 9%
------------------------------------
1 Taxable equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 33%. For investments that generate qualified dividend income, the
taxable equivalent yield is lower.
16
Nuveen Ohio Dividend Advantage Municipal Fund 3
NVJ
Performance
OVERVIEW As of July 31, 2004
Pie Chart:
CREDIT QUALITY
(as a % of total investments)
AAA/U.S. Guaranteed 57%
AA 20%
A 16%
BBB 7%
Bar Chart:
2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Aug 0.073
Sep 0.073
Oct 0.073
Nov 0.073
Dec 0.073
Jan 0.073
Feb 0.073
Mar 0.073
Apr 0.073
May 0.073
Jun 0.073
Jul 0.073
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
8/1/03 14.44
14.21
13.99
13.86
13.71
13.95
14.01
14.2
14.1
14.6
14.38
14.41
14.35
14.6
14.5
14.61
14.74
15.2
15.28
15.95
16.01
15.98
15.92
15.74
16.1
15.99
16.25
16.43
15.95
16.06
16.6
16.55
15.89
15.05
14.6
14.05
13.8
13.35
13.1
13.41
13.6
13.74
13.65
13.26
13.41
13.61
14
14.5
14.2
7/31/04 14.3
FUND SNAPSHOT
------------------------------------
Share Price $14.30
------------------------------------
Common Share
Net Asset Value $14.93
------------------------------------
Premium/(Discount) to NAV -4.22%
------------------------------------
Market Yield 6.13%
------------------------------------
Taxable-Equivalent Yield1 9.15%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $32,208
------------------------------------
Average Effective
Maturity (Years) 17.29
------------------------------------
Leverage-Adjusted Duration 10.27
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/25/02)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 5.86% 9.72%
------------------------------------
Since Inception 3.98% 7.93%
------------------------------------
SECTORS
(as a % of total investments)
------------------------------------
Tax Obligation/General 32%
------------------------------------
Tax Obligation/Limited 15%
------------------------------------
Healthcare 15%
------------------------------------
Education and
Civic Organizations 9%
------------------------------------
Water and Sewer 9%
------------------------------------
Transportation 6%
------------------------------------
Housing/Single Family 4%
------------------------------------
Other 10%
------------------------------------
1 Taxable equivalent yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a combined federal and state income tax
rate of 33%. For investments that generate qualified dividend income, the
taxable equivalent yield is lower.
2 The Fund also paid shareholders a net ordinary income distribution in
December 2003 of $0.0677 per share.
17
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARDS OF DIRECTORS, TRUSTEES AND SHAREHOLDERS
NUVEEN MICHIGAN QUALITY INCOME MUNICIPAL FUND, INC.
NUVEEN MICHIGAN PREMIUM INCOME MUNICIPAL FUND, INC.
NUVEEN MICHIGAN DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN OHIO QUALITY INCOME MUNICIPAL FUND, INC.
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN OHIO DIVIDEND ADVANTAGE MUNICIPAL FUND 3
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Michigan Quality Income Municipal Fund,
Inc., Nuveen Michigan Premium Income Municipal Fund, Inc., Nuveen Michigan
Dividend Advantage Municipal Fund, Nuveen Ohio Quality Income Municipal Fund,
Inc., Nuveen Ohio Dividend Advantage Municipal Fund, Nuveen Ohio Dividend
Advantage Municipal Fund 2 and Nuveen Ohio Dividend Advantage Municipal Fund 3
as of July 31, 2004, and the related statements of operations, changes in net
assets and the financial highlights for the periods indicated therein. These
financial statements and financial highlights are the responsibility of the
Funds' management. Our responsibility is to express an opinion on these
financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements and financial highlights. Our procedures
included confirmation of investments owned as of July 31, 2004, by
correspondence with the custodian and brokers or by other appropriate auditing
procedures where replies from brokers were not received. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Michigan Quality Income Municipal Fund, Inc., Nuveen Michigan Premium
Income Municipal Fund, Inc., Nuveen Michigan Dividend Advantage Municipal Fund,
Nuveen Ohio Quality Income Municipal Fund, Inc., Nuveen Ohio Dividend Advantage
Municipal Fund, Nuveen Ohio Dividend Advantage Municipal Fund 2 and Nuveen Ohio
Dividend Advantage Municipal Fund 3 at July 31, 2004, and the results of their
operations, changes in their net assets and the financial highlights for the
periods indicated therein in conformity with U.S. generally accepted accounting
principles.
/s/ Ernst & Young LLP
Chicago, Illinois
September 15, 2004
18
Nuveen Michigan Quality Income Municipal Fund, Inc. (NUM)
Portfolio of
INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 9.1%
$ 1,720 Ferris State College, Michigan, General Revenue Bonds, 4/08 at 100.00 AAA $ 1,739,402
Series 1998, 5.000%, 10/01/23 - AMBAC Insured
1,685 Michigan Higher Education Facilities Authority, Limited 9/11 at 100.00 Aaa 1,852,641
Obligation Revenue Refunding Bonds, Kettering University,
Series 2001, 5.500%, 9/01/17 - AMBAC Insured
1,500 Michigan Higher Education Student Loan Authority, Revenue No Opt. Call AAA 1,607,880
Bonds, Series 2000 XII-T, 5.300%, 9/01/10 (Alternative
Minimum Tax) - AMBAC Insured
1,000 Michigan Higher Education Student Loan Authority, Revenue 9/12 at 100.00 AAA 1,029,470
Bonds, Series 2002 XVII-G, 5.200%, 9/01/20 (Alternative
Minimum Tax) - AMBAC Insured
Michigan Technological University, General Revenue Bonds,
Series 2004A:
1,060 5.000%, 10/01/21 - MBIA Insured 10/13 at 100.00 AAA 1,098,181
1,115 5.000%, 10/01/22 - MBIA Insured 10/13 at 100.00 AAA 1,148,405
1,170 5.000%, 10/01/23 - MBIA Insured 10/13 at 100.00 AAA 1,198,899
1,000 Oakland University, Michigan, General Revenue Bonds, 5/05 at 102.00 AAA 1,048,030
Series 1995, 5.750%, 5/15/15 - MBIA Insured
Wayne State University, Michigan, General Revenue Bonds,
Series 1999:
3,430 5.250%, 11/15/19 - FGIC Insured 11/09 at 101.00 AAA 3,672,981
1,000 5.125%, 11/15/29 - FGIC Insured 11/09 at 101.00 AAA 1,011,330
1,000 Western Michigan University, General Revenue Refunding 11/13 at 100.00 AAA 1,042,580
Bonds, Series 2003, 5.000%, 11/15/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 18.8%
2,900 Dearborn Hospital Finance Authority, Michigan, Economic 11/05 at 102.00 AAA 3,077,567
Development Corporation, Hospital Revenue Bonds,
Oakwood Obligated Group, Series 1995A,
5.875%, 11/15/25 - FGIC Insured
1,235 Hancock Hospital Finance Authority, Michigan, FHA-Insured 8/08 at 100.00 AAA 1,249,931
Mortgage Hospital Revenue Bonds, Portage Health
System, Inc., Series 1998, 5.450%, 8/01/47 - MBIA Insured
3,500 Kent Hospital Finance Authority, Michigan, Revenue Bonds, 7/11 at 101.00 AA 3,592,610
Spectrum Health, Series 2001A, 5.250%, 1/15/21
2,052 Michigan State Hospital Finance Authority, Collateralized No Opt. Call Baa2 2,060,289
Loan, Detroit Medical Center, Series 2001, 7.360%, 4/01/07
1,500 Michigan State Hospital Finance Authority, Hospital 3/13 at 100.00 A1 1,581,315
Revenue Refunding Bonds, Henry Ford Health System,
Series 2003A, 5.625%, 3/01/17
1,000 Michigan State Hospital Finance Authority, Revenue Refunding 11/09 at 101.00 A 1,063,950
Bonds, OSF Healthcare System, Series 1999, 6.125%, 11/15/19
1,700 Michigan State Hospital Finance Authority, Revenue 8/09 at 101.00 AAA 1,857,709
Refunding Bonds, Mercy Health Services Obligated Group,
Series 1999X, 5.750%, 8/15/19 - MBIA Insured
Michigan State Hospital Finance Authority, Hospital Revenue
Refunding Bonds, Mercy Mount Clemens Corporation Obligated
Group, Series 1999A:
3,385 5.750%, 5/15/17 - MBIA Insured 5/09 at 101.00 AAA 3,690,090
500 5.750%, 5/15/29 - MBIA Insured 5/09 at 101.00 AAA 525,765
2,700 Michigan State Hospital Finance Authority, Hospital 8/08 at 101.00 Ba3 1,890,702
Revenue Bonds, Detroit Medical Center Obligated Group,
Series 1998A, 5.250%, 8/15/28
1,000 Michigan State Hospital Finance Authority, Revenue Refunding 11/09 at 101.00 BBB 1,005,250
Bonds, Memorial Healthcare Center Obligated Group,
Series 1999, 5.875%, 11/15/21
5,000 Michigan State Hospital Finance Authority, Hospital Revenue 11/09 at 101.00 A1 5,231,250
Bonds, Henry Ford Health System, Series 1999A,
6.000%, 11/15/24
5,500 Royal Oak Hospital Finance Authority, Michigan, Hospital 11/11 at 100.00 AAA 5,559,290
Revenue Bonds, William Beaumont Hospital, Series 2001M,
5.250%, 11/15/31 - MBIA Insured
2,195 University of Michigan, Medical Service Plan Revenue Bonds, No Opt. Call AA 1,731,592
Series 1991, 0.000%, 12/01/10
19
Nuveen Michigan Quality Income Municipal Fund, Inc. (NUM) (continued)
Portfolio of INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.6%
$ 2,675 Michigan Housing Development Authority, FNMA Limited 12/20 at 101.00 AAA $ 2,787,430
Obligation Multifamily Housing Revenue Bonds, Parkview
Place Apartments, Series 2002A, 5.550%, 12/01/34
(Alternative Minimum Tax)
1,800 Michigan Housing Development Authority, FNMA Enhanced 9/15 at 100.00 Aaa 1,811,070
Limited Obligation Multifamily Revenue Bonds, Renaissance
Apartments, Series 2002, 5.500%, 8/01/35 (Alternative
Minimum Tax)
3,550 Michigan Housing Development Authority, Rental Housing 6/05 at 102.00 AAA 3,661,825
Revenue Bonds, Series 1995B, 6.150%, 10/01/15 -
MBIA Insured
3,595 Michigan Housing Development Authority, Rental Housing 4/09 at 101.00 AAA 3,618,583
Revenue Bonds, Series 1999A, 5.300%, 10/01/37 (Alternative
Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.6%
1,000 Michigan Housing Development Authority, Single Family 1/11 at 100.00 AAA 1,043,060
Mortgage Revenue Bonds, Series 2001, 5.300%, 12/01/16
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.8%
3,300 Michigan State Hospital Finance Authority, Revenue 1/07 at 102.00 N/R 2,999,370
Bonds, Presbyterian Villages of Michigan Obligated Group,
Series 1997, 6.375%, 1/01/25
200 Michigan Strategic Fund, Limited Obligation Revenue 7/08 at 101.00 BBB+ 191,686
Refunding Bonds, Porter Hills Presbyterian Village,
Series 1998, 5.375%, 7/01/28
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 43.3%
Allegan County Public School District, Michigan, General
Obligation Bonds, Series 2000:
1,850 5.600%, 5/01/20 - FSA Insured 5/10 at 100.00 AAA 2,025,509
1,435 5.750%, 5/01/30 - FSA Insured 5/10 at 100.00 AAA 1,541,305
Anchor Bay School District, Macomb and St. Clair Counties,
Michigan, Unlimited Tax General Obligation Refunding
Bonds, Series 2001:
2,500 5.000%, 5/01/21 5/11 at 100.00 AA+ 2,563,875
4,200 5.000%, 5/01/29 5/11 at 100.00 AA+ 4,205,628
1,000 Anchor Bay School District, Macomb and St. Clair Counties, 5/12 at 100.00 AA+ 1,011,130
Michigan, General Obligation Refunding Bonds, Series 2002,
5.000%, 5/01/25
1,000 Belding School District, Ionia, Kent and Montcalm Counties, 5/08 at 100.00 AAA 1,003,820
Michigan, General Obligation Refunding Bonds, Series 1998,
5.000%, 5/01/26 - AMBAC Insured
1,200 Birmingham, Michigan, General Obligation Bonds, 10/12 at 100.50 AAA 1,254,348
Series 2002, 5.000%, 10/01/20
1,320 Bridgeport Spaulding Community School District, Saginaw 5/12 at 100.00 AA+ 1,457,729
County, Michigan, General Obligation Bonds, Series 2002,
5.500%, 5/01/16
2,110 Caledonia Community Schools, Kent, Allegan and Barry 5/13 at 100.00 AA+ 2,247,656
Counties, Michigan, General Obligation Bonds, Series 2003,
5.250%, 5/01/20
1,000 Charlotte Public School District, Easton County, Michigan, 5/09 at 100.00 AAA 1,028,940
General Obligation Unlimited Tax School Building and Site
Bonds, Series 1999, 5.250%, 5/01/25 - FGIC Insured
2,000 Clarkston Community Schools, Michigan, General Obligation 5/07 at 100.00 AAA 2,086,120
Bonds, School Bond Loan Fund - QSBLF, Series 1997,
5.250%, 5/01/23 - MBIA Insured
2,000 Detroit City School District, Wayne County, Michigan, No Opt. Call AAA 2,372,060
General Obligation Bonds, Series 2002A, 6.000%, 5/01/19 -
FGIC Insured
1,000 East China School District, St. Clair County, Michigan, 11/11 at 100.00 AA+ 1,087,260
General Obligation Bonds, Series 2001, 5.500%, 5/01/20
1,085 Freeland Community School District, Saginaw, Midland, 5/10 at 100.00 AA+ 1,157,684
and Bay Counties, Michigan, General Obligation Bonds,
Series 2000, 5.250%, 5/01/19
3,300 Grand Ledge Public Schools, Eaton, Clinton and Ionia 5/05 at 102.00 AAA 3,432,099
Counties, Michigan, General Obligation Refunding Bonds,
Series 1995, 5.375%, 5/01/24 - MBIA Insured
Grand Rapids and Kent County Joint Building Authority, Michigan,
Limited Tax General Obligation Bonds, Devos Place Project,
Series 2001:
8,900 0.000%, 12/01/25 No Opt. Call AAA 2,831,713
3,000 0.000%, 12/01/26 No Opt. Call AAA 889,020
1,400 Howell Public Schools, Livingston County, Michigan, 11/13 at 100.00 AA+ 1,448,650
General Obligation Bonds, Series 2003, 5.000%, 5/01/21
20
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,500 Huron Valley School District, Oakland and Livingston Counties, 11/11 at 100.00 AA+ $ 1,650,255
Michigan, General Obligation Bonds, Series 2001,
5.500%, 5/01/17
2,000 Lake Fenton Community Schools, Genesee County, Michigan, 5/12 at 100.00 AA+ 2,028,720
General Obligation Bonds, Series 2002, 5.000%, 5/01/24
725 Lake Orion Community School District, Oakland County, 5/05 at 101.00 AAA 748,410
Michigan, Unlimited Tax General Obligation Refunding
Bonds, Series 1995, 5.500%, 5/01/20 - AMBAC Insured
1,790 Lansing Building Authority, Michigan, General Obligation 6/13 at 100.00 AAA 1,804,517
Bonds, Series 2003A, 5.000%, 6/01/26 - MBIA Insured
1,785 Livonia Public Schools, Wayne County, Michigan, General 5/14 at 100.00 AAA 1,852,562
Obligation Bonds, Series 2004A, 5.000%, 5/01/21 -
MBIA Insured
4,000 Michigan, General Obligation Bonds, Environmental 5/13 at 100.00 AA+ 4,291,080
Protection Program, Series 2003A, 5.250%, 5/01/20
4,300 Montcalm County Building Authority, Michigan, Correctional 5/10 at 100.00 AAA 4,436,267
Facility Improvement General Obligation Bonds, Series 2000,
5.250%, 5/01/25 - AMBAC Insured
2,500 Montrose School District, Michigan, School Building and No Opt. Call AAA 2,939,725
Site Bonds, Series 1997, 6.000%, 5/01/22 - MBIA Insured
1,255 Morenci Area Schools, Lenawee County, Michigan, General 5/12 at 100.00 AAA 1,339,123
Obligation Bonds, Series 2002, 5.250%, 5/01/19 -
MBIA Insured
1,000 Muskegon Heights Public Schools, Muskegon County, 5/09 at 100.00 AAA 1,001,810
Michigan, Unlimited Tax General Obligation School Building
and Site Bonds, Series 1999, 5.000%, 5/01/29 - MBIA Insured
1,625 Northville Public Schools, Wayne County, Michigan, General 11/11 at 100.00 AA+ 1,757,763
Obligation Bonds, Series 2001, 5.375%, 5/01/18
1,000 Oakland County Building Authority, Michigan, General 9/11 at 100.00 AAA 1,032,440
Obligation Bonds, Series 2002, 5.125%, 9/01/22
1,225 Paw Paw Public School District, Van Buren, Michigan, No Opt. Call AAA 1,301,648
General Obligation Refunding Bonds, Series 1998,
5.000%, 5/01/21 - FGIC Insured
4,000 Pinckney Community Schools, Livingston and Washtenaw 5/07 at 100.00 AAA 4,182,600
Counties, Michigan, Unlimited Tax General Obligation
School Building and Site Bonds, Series 1997,
5.500%, 5/01/27 - FGIC Insured
4,200 Puerto Rico, Public Improvement General Obligation Refunding No Opt. Call AAA 4,784,346
Bonds, Series 2001A, 5.500%, 7/01/20 - MBIA Insured
685 Reeths-Puffer Schools, Muskegon County, Michigan, School 5/05 at 101.00 AAA 710,249
Building and Site Refunding Bonds, Series 1995,
5.750%, 5/01/15 - FGIC Insured
2,500 Taylor Building Authority, Wayne, Michigan, Limited Tax 3/10 at 100.00 AAA 2,656,950
General Obligation Bonds, Series 2000, 5.125%, 3/01/17 -
AMBAC Insured
1,050 Warren Consolidated School District, Macomb and Oakland 11/11 at 100.00 AAA 1,133,055
Counties, Michigan, General Obligation Bonds, Series 2001,
5.375%, 5/01/19 - FSA Insured
1,980 Washtenaw County Building Authority, Michigan, Limited 9/07 at 100.00 AAA 2,124,104
Tax General Obligation Bonds, Series 1999, 5.400%, 9/01/17 -
FGIC Insured
1,125 Whitehall District Schools, Muskegon County, Michigan, 11/11 at 100.00 AA+ 1,237,691
General Obligation Bonds, Series 2001, 5.500%, 5/01/17
1,725 Williamston Community School District, Michigan, Unlimited No Opt. Call AAA 1,893,205
Tax General Obligation QSBLF Bonds, Series 1996,
5.500%, 5/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 22.9%
1,800 Dearborn Heights Tax Increment Financing Authority, 10/10 at 100.00 AAA 1,810,782
Wayne County, Michigan, Limited Tax General Obligation
Bonds, Police and Courthouse Facility Project, Series 2001A,
5.000%, 10/01/26 - MBIA Insured
1,000 Grand Rapids Building Authority, Kent County, Michigan, No Opt. Call AA 1,083,240
Limited Tax General Obligation Bonds, Series 1998,
5.000%, 4/01/16
1,145 Grand Rapids Building Authority, Kent County, Michigan, 10/11 at 100.00 AAA 1,164,351
Limited Tax General Obligation Bonds, Series 2001,
5.125%, 10/01/26 - MBIA Insured
21
Nuveen Michigan Quality Income Municipal Fund, Inc. (NUM) (continued)
Portfolio of INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,100 Michigan Municipal Bond Authority, Clean Water Revolving 10/12 at 100.00 AAA $ 1,186,053
Fund Revenue Refunding Bonds, Series 2002,
5.250%, 10/01/18
75 Michigan Municipal Bond Authority, Local Government Loan 11/04 at 100.00 A 75,308
Program Revenue Sharing Bonds, Series 1992D,
6.650%, 5/01/12
4,210 Michigan Municipal Bond Authority, Clean Water Revolving 10/14 at 100.00 AAA 4,448,665
Fund Revenue Bonds, Series 2004, 5.000%, 10/01/19
750 Michigan State Building Authority, Revenue Refunding 10/09 at 100.00 AA 739,800
Bonds, Facilities Program, Series 1998-I, 4.750%, 10/15/21
Michigan State Building Authority, Revenue Refunding Bonds,
Facilities Program, Series 2003-II:
5,100 5.000%, 10/15/22 - MBIA Insured 10/13 at 100.00 AAA 5,253,306
5,000 5.000%, 10/15/23 - MBIA Insured 10/13 at 100.00 AAA 5,123,900
Michigan State, Certificates of Participation, Series 2000:
2,000 5.500%, 6/01/19 - AMBAC Insured 6/10 at 100.00 AAA 2,185,540
2,000 5.500%, 6/01/27 - AMBAC Insured 6/10 at 100.00 AAA 2,092,540
1,000 Michigan State Trunk Line, Trunk Line Fund Bonds, 11/11 at 100.00 AAA 1,011,750
Series 2001A, 5.000%, 11/01/25
3,500 Michigan State Trunk Line, Refunding Bonds, Series 2002, 10/12 at 100.00 AAA 3,698,415
5.250%, 10/01/21 - FSA Insured
1,100 Muskegon County, Michigan, Limited Tax General Obligation 7/11 at 100.00 AAA 1,107,304
Revenue Bonds, Wastewater Management System 2,
Series 2002, 5.000%, 7/01/26 - FGIC Insured
4,100 Puerto Rico Highway and Transportation Authority, 7/16 at 100.00 A 4,264,287
Highway Revenue Bonds, Series 1996Y, 5.500%, 7/01/36
915 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call BBB+ 1,030,336
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26
5,000 Wayne County, Michigan, Limited Tax General Obligation 12/11 at 101.00 AAA 5,142,100
Airport Hotel Revenue Bonds, Detroit Metropolitan Wayne
County Airport, Series 2001A, 5.000%, 12/01/21 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.2%
1,000 Capital Region Airport Authority, Michigan, Revenue 7/12 at 100.00 AAA 1,030,310
Refunding Bonds, Series 2002, 5.250%, 7/01/21
(Alternative Minimum Tax) - MBIA Insured
1,195 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 1,196,864
Metropolitan Airport, Series 1998B, 4.875%, 12/01/23 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 22.5%
2,190 Anchor Bay School District, Macomb and St. Clair Counties, 5/09 at 100.00 AAA 2,483,876
Michigan, General Obligation Bonds, Series 1999I,
6.000%, 5/01/29 (Pre-refunded to 5/01/09) - FGIC Insured
250 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 270,890
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded to 7/01/10)
1,000 Detroit, Michigan, Sewerage Disposal System Revenue 1/10 at 101.00 AAA 1,142,400
Bonds, Series 1999A, 5.875%, 7/01/27 (Pre-refunded
to 1/01/10) - FGIC Insured
Detroit, Michigan, Sewerage Disposal System Revenue Bonds,
Series 1997A:
950 5.500%, 7/01/20 (Pre-refunded to 7/01/07) - MBIA Insured 7/07 at 101.00 AAA 1,042,958
2,050 5.500%, 7/01/20 (Pre-refunded to 7/01/07) - MBIA Insured 7/07 at 101.00 AAA 2,250,593
2,000 Detroit, Michigan, Water Supply System Senior Lien Revenue 1/10 at 101.00 AAA 2,272,440
Bonds, Series 1999A, 5.750%, 7/01/26 (Pre-refunded to
1/01/10) - FGIC Insured
Detroit, Michigan, Water Supply System Senior Lien Revenue
Bonds, Series 2001A:
3,400 5.750%, 7/01/28 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 101.00 AAA 3,906,702
770 5.250%, 7/01/33 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 855,147
2,000 East Grand Rapids Public Schools, Kent County, Michigan, 5/09 at 100.00 AAA 2,268,380
Unlimited Tax General Obligation School Building and Site
Bonds, Series 2000, 6.000%, 5/01/29 (Pre-refunded
to 5/01/09) - FSA Insured
2,000 Grand Rapids Township Economic Development Corporation, 7/09 at 101.00 BBB+*** 2,231,520
Michigan, Limited Obligation Revenue Bonds, Porter Hills
Obligated Group, Cook Valley Estate Project, Series 1999,
5.450%, 7/01/29 (Pre-refunded to 7/01/09)
1,000 Mancelona Public School District, Michigan, General 5/06 at 100.00 AAA 1,056,810
Obligation Bonds, Antrim and Kalkaska Counties,
Series 1997, 5.200%, 5/01/17 (Pre-refunded to
5/01/06) - FGIC Insured
22
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (continued)
$ 1,000 Michigan State, Certificates of Participation, New Center 9/11 at 100.00 AAA $ 1,120,200
Development Inc., Series 2001, 5.375%, 9/01/21
(Pre-refunded to 9/01/11) - MBIA Insured
Michigan State Hospital Finance Authority, Revenue Bonds,
Ascension Health Credit Group, Series 1999A:
1,000 6.125%, 11/15/23 (Pre-refunded to 11/15/09) - MBIA Insured 11/09 at 101.00 AAA 1,153,970
2,500 6.125%, 11/15/26 (Pre-refunded to 11/15/09) 11/09 at 101.00 AAA 2,884,925
3,460 Michigan State Hospital Finance Authority, Revenue 5/08 at 101.00 AAA 3,494,323
Refunding Bonds, St. John's Health System, Series 1998A,
5.000%, 5/15/28 - AMBAC Insured
1,100 Michigan Strategic Fund, Limited Obligation Revenue 7/08 at 101.00 BBB+*** 1,215,808
Refunding Bonds, Porter Hills Presbyterian Village,
Series 1998, 5.375%, 7/01/28 (Pre-refunded to 7/01/08)
2,875 Milan Area Schools, Washtenaw and Monroe Counties, 5/10 at 100.00 AAA 3,258,554
Michigan, General Obligation Bonds, Series 2000A,
5.750%, 5/01/24 (Pre-refunded to 5/01/10) - FGIC Insured
1,125 Puerto Rico Highway and Transportation Authority, 7/10 at 101.00 A*** 1,301,940
Highway Revenue Bonds, Series 2000B, 6.000%, 7/01/39
(Pre-refunded to 7/01/10)
85 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call BBB+*** 96,326
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26
1,000 Rochester Community School District, Oakland and Macomb 5/10 at 100.00 AAA 1,133,410
Counties, Michigan, General Obligation Bonds, Series 2000I,
5.750%, 5/01/19 (Pre-refunded to 5/01/10) - FGIC Insured
2,100 Romulus Community Schools, Wayne County, Michigan, 5/09 at 100.00 AAA 2,358,678
Unlimited Tax General Obligation School Building and Site
Bonds, Series 1999, 5.750%, 5/01/25 (Pre-refunded
to 5/01/09) - FGIC Insured
2,600 West Bloomfield School District, Oakland County, Michigan, 5/10 at 100.00 AAA 2,967,224
Unlimited Tax General Obligation School Building and
Site Bonds, Series 2000, 5.900%, 5/01/18 (Pre-refunded
to 5/01/10) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 13.4%
3,000 Michigan Public Power Agency, Revenue Bonds, Combustion 1/12 at 100.00 AAA 3,089,910
Turbine 1 Project, Series 2001A, 5.250%, 1/01/27 -
AMBAC Insured
4,475 Michigan South Central Power Agency, Power Supply No Opt. Call Baa1 4,865,623
System Revenue Bonds, Series 2000, 6.000%, 5/01/12
3,630 Michigan Strategic Fund, Limited Obligation Refunding No Opt. Call AAA 4,646,944
Revenue Bonds, Detroit Edison Company, Series 1991BB,
7.000%, 5/01/21 - AMBAC Insured
2,000 Michigan Strategic Fund, Limited Obligation Remarketed No Opt. Call Aaa 2,127,020
Revenue Refunding Bonds, Detroit Edison Company,
Series 1995CC, 4.850%, 9/01/30 (Mandatory put 9/01/11)
4,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/11 at 100.00 A- 4,043,080
Pollution Control Revenue Refunding Bonds, Detroit Edison
Company, Series 2001C, 5.450%, 9/01/29
3,000 Michigan Strategic Fund, Limited Obligation Revenue 12/12 at 100.00 AAA 3,058,560
Refunding Bonds, Detroit Edison Company, Series 2002C,
5.450%, 12/15/32 (Alternative Minimum Tax) - XLCA Insured
1,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 1,028,230
Pollution Control Revenue Refunding Bonds, Detroit Edison
Company, Series 1999A, 5.550%, 9/01/29 (Alternative
Minimum Tax) - MBIA Insured
400 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/10 at 101.00 AAA 412,972
Series 2000HH, 5.250%, 7/01/29 - FSA Insured
1,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/05 at 100.00 A- 1,021,840
Series 1995X, 5.500%, 7/01/25
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 9.5%
1,500 Detroit, Michigan, Sewerage Disposal System Revenue 7/05 at 101.00 AAA 1,549,245
Refunding Bonds, Series 1995B, 5.250%, 7/01/21 -
MBIA Insured
1,730 Detroit, Michigan, Sewerage Disposal System Revenue Bonds, 7/07 at 101.00 AAA 1,762,299
Series 1997A, 5.000%, 7/01/22 - MBIA Insured
1,500 Detroit, Michigan, Senior Lien Sewerage Disposal System No Opt. Call AAA 1,634,340
Revenue Bonds, Series 2001B, 5.500%, 7/01/29 -
FGIC Insured
2,000 Detroit, Michigan, Senior Lien Sewerage Disposal System 7/13 at 100.00 AAA 2,108,040
Revenue Refunding Bonds, Series 2003A, 5.000%, 7/01/17 -
FSA Insured
23
Nuveen Michigan Quality Income Municipal Fund, Inc. (NUM) (continued)
Portfolio of INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER (continued)
Detroit, Michigan, Water Supply System Senior Lien
Revenue Bonds, Series 2003A:
$ 4,025 5.000%, 7/01/24 - MBIA Insured 7/13 at 100.00 AAA $ 4,081,229
3,000 5.000%, 7/01/25 - MBIA Insured 7/13 at 100.00 AAA 3,031,080
730 Detroit, Michigan, Water Supply System Senior Lien Revenue 7/11 at 100.00 AAA 743,308
Bonds, Series 2001A, 5.250%, 7/01/33 - FGIC Insured
Muskegon Heights, Muskegon County, Michigan, Water
Supply System Revenue Bonds, Series 2000A:
1,040 5.625%, 11/01/25 - MBIA Insured 11/10 at 100.00 Aaa 1,114,246
1,160 5.625%, 11/01/30 - MBIA Insured 11/10 at 100.00 Aaa 1,229,634
------------------------------------------------------------------------------------------------------------------------------------
$ 265,872 Total Long-Term Investments (cost $256,161,806) - 149.7% 271,190,724
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.2% 3,923,381
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.9)% (94,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 181,114,105
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
24
Nuveen Michigan Premium Income Municipal Fund, Inc. (NMP)
Portfolio of
INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 9.0%
Eastern Michigan University, General Revenue Bonds,
Series 2003:
$ 1,000 5.000%, 6/01/28 - FGIC Insured 6/13 at 100.00 AAA $ 1,004,540
2,950 5.000%, 6/01/33 - FGIC Insured 6/13 at 100.00 AAA 2,950,856
2,000 Michigan Higher Education Student Loan Authority, Revenue 9/12 at 100.00 AAA 2,058,940
Bonds, Series 2002 XVII-G, 5.200%, 9/01/20 (Alternative
Minimum Tax) - AMBAC Insured
1,000 Saginaw Valley State University, Michigan, General Revenue 7/09 at 100.00 Aaa 1,059,830
Bonds, Series 1999, 5.625%, 7/01/29 - AMBAC Insured
3,500 Wayne State University, Michigan, General Revenue Bonds, 11/09 at 101.00 AAA 3,539,655
Series 1999, 5.125%, 11/15/29 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 17.0%
2,050 Dearborn Hospital Finance Authority, Michigan, Economic 11/05 at 102.00 AAA 2,175,522
Development Corporation, Hospital Revenue Bonds,
Oakwood Obligated Group, Series 1995A,
5.875%, 11/15/25 - FGIC Insured
2,200 Hancock Hospital Finance Authority, Michigan, FHA-Insured 8/08 at 100.00 AAA 2,226,598
Mortgage Hospital Revenue Bonds, Portage Health
System, Inc., Series 1998, 5.450%, 8/01/47 - MBIA Insured
Michigan State Hospital Finance Authority, Revenue Refunding
Bonds, Detroit Medical Center Obligated Group, Series 1993A:
2,000 6.250%, 8/15/13 8/04 at 101.00 Ba3 1,754,280
1,200 6.500%, 8/15/18 8/04 at 101.00 Ba3 1,040,640
1,500 Michigan State Hospital Finance Authority, Hospital Revenue 3/13 at 100.00 A1 1,581,315
Refunding Bonds, Henry Ford Health System, Series 2003A,
5.625%, 3/01/17
2,000 Michigan State Hospital Finance Authority, Hospital Revenue 1/05 at 102.00 AA- 2,049,540
Refunding Bonds, Otsego Memorial Hospital, Series 1995,
6.250%, 1/01/20
4,000 Michigan State Hospital Finance Authority, Hospital Revenue 5/09 at 101.00 AAA 4,206,120
Refunding Bonds, Mercy Mount Clemens Corporation
Obligated Group, Series 1999A, 5.750%, 5/15/29 -
MBIA Insured
500 Michigan State Hospital Finance Authority, Hospital Revenue 11/11 at 101.00 A1 505,565
Refunding Bonds, Sparrow Obligated Group, Series 2001,
5.625%, 11/15/31
4,300 Michigan State Hospital Finance Authority, Hospital Revenue 11/09 at 101.00 A1 4,498,875
Bonds, Henry Ford Health System, Series 1999A,
6.000%, 11/15/24
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.8%
1,000 Michigan Housing Development Authority, GNMA 4/12 at 102.00 Aaa 1,017,090
Collateralized Limited Obligation Multifamily Housing
Revenue Bonds, Burkshire Pointe Apartments, Series 2002A,
5.400%, 10/20/32 (Alternative Minimum Tax)
500 Michigan Housing Development Authority, FNMA Enhanced 9/15 at 100.00 Aaa 513,945
Limited Obligation Multifamily Revenue Bonds, Renaissance
Apartments, Series 2002, 5.350%, 8/01/22 (Alternative
Minimum Tax)
2,400 Michigan Housing Development Authority, Limited Obligation 10/04 at 103.00 AAA 2,473,344
Revenue Bonds, Walled Lake Villa Project, Series 1993,
6.000%, 4/15/18 - FSA Insured
1,500 Michigan Housing Development Authority, Limited Obligation 10/04 at 102.00 AAA 1,529,610
Revenue Bonds, Breton Village Green Project, Series 1993,
5.625%, 10/15/18 - FSA Insured
Mount Clemens Housing Corporation, Michigan, FHA-Insured Section
8 Multifamily Housing Revenue Refunding Bonds, Clinton Place
Project, Series 1992A:
925 6.600%, 6/01/13 12/04 at 101.00 AAA 935,332
1,500 6.600%, 6/01/22 12/04 at 101.00 AAA 1,515,255
25
Nuveen Michigan Premium Income Municipal Fund, Inc. (NMP) (continued)
Portfolio of INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 33.0%
$ 2,500 Anchor Bay School District, Macomb and St. Clair Counties, 5/11 at 100.00 AA+ $ 2,563,875
Michigan, Unlimited Tax General Obligation Refunding
Bonds, Series 2001, 5.000%, 5/01/21
1,475 Anchor Bay School District, Macomb and St. Clair Counties, 11/13 at 100.00 AA+ 1,526,256
Michigan, General Obligation Bonds, Series 2003,
5.000%, 5/01/21
1,000 Central Montcalm Public Schools, Montcalm and Ionia 5/09 at 100.00 AAA 1,091,630
Counties, Michigan, General Obligation Unlimited Tax
School Building and Site Bonds, Series 1999,
5.750%, 5/01/24 - MBIA Insured
1,375 Chippewa Valley Schools, Macomb County, Michigan, 5/11 at 100.00 AA+ 1,382,329
General Obligation Bonds, Series 2001, 5.000%, 5/01/26
Detroit City School District, Wayne County, Michigan, General
Obligation Bonds, Series 2002A:
1,815 6.000%, 5/01/20 - FGIC Insured No Opt. Call AAA 2,154,931
750 6.000%, 5/01/21 - FGIC Insured No Opt. Call AAA 889,643
2,500 Detroit City School District, Wayne County, Michigan, 5/13 at 100.00 AAA 2,555,825
General Obligation Bonds, Series 2003B, 5.000%, 5/01/23 -
FGIC Insured
500 Detroit City School District, Wayne County, Michigan, 5/12 at 100.00 AAA 542,425
Unlimited Tax School Building and Site Improvement Bonds,
Series 2001A, 5.500%, 5/01/21 - FSA Insured
3,815 East Lansing Building Authority, Ingham and Clinton 4/11 at 100.00 AA 3,975,116
Counties, Michigan, Unlimited Tax General Obligation
Building Authority Bonds, Series 2000, 5.375%, 4/01/25
2,000 Howell Public Schools, Livingston County, Michigan, 11/13 at 100.00 AA+ 2,057,320
General Obligation Bonds, Series 2003, 5.000%, 5/01/22
1,000 Lansing School District, Ingham County, Michigan, General 5/14 at 100.00 AA+ 1,029,890
Obligation Bonds, Series 2004, 5.000%, 5/01/22
1,000 Livonia Public Schools, Wayne County, Michigan, General 5/14 at 100.00 AAA 1,037,850
Obligation Bonds, Series 2004A, 5.000%, 5/01/21 -
MBIA Insured
Michigan, General Obligation Bonds, Environmental Protection
Program, Series 2003A:
1,000 5.250%, 5/01/20 5/13 at 100.00 AA+ 1,072,770
2,000 5.250%, 5/01/21 5/13 at 100.00 AA+ 2,134,980
2,515 Plainwell Community Schools, Allegan County, Michigan, 11/12 at 100.00 AA+ 2,522,897
General Obligation Bonds, Series 2002, 5.000%, 5/01/28
380 Reeths-Puffer Schools, Muskegon County, Michigan, School 5/05 at 101.00 AAA 394,007
Building and Site Refunding Bonds, Series 1995,
5.750%, 5/01/15 - FGIC Insured
South Lyon Community Schools, Oakland, Washtenaw
and Livingston Counties, Michigan, General
Obligation Bonds, Series 2003:
2,350 5.250%, 5/01/19 - FGIC Insured 11/12 at 100.00 AAA 2,507,779
1,575 5.250%, 5/01/22 - FGIC Insured 11/12 at 100.00 AAA 1,656,128
1,425 Walled Lake Consolidated School District, Oakland County, 5/14 at 100.00 AAA 1,528,883
Michigan, General Obligation Bonds, Series 2004,
5.250%, 5/01/20 - MBIA Insured
2,830 Warren Consolidated School District, Macomb and Oakland 5/13 at 100.00 AA+ 3,014,629
Counties, Michigan, General Obligation Refunding Bonds,
Series 2003, 5.250%, 5/01/20
2,950 West Bloomfield School District, Oakland County, Michigan, 5/14 at 100.00 AAA 3,042,866
General Obligation Bonds, Series 2004, 5.000%, 5/01/22
(WI, settling 8/12/04) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 28.7%
7,000 Detroit-Wayne County Stadium Authority, Michigan, 2/07 at 102.00 AAA 7,135,870
Limited Tax General Obligation Building Authority Stadium
Bonds, Series 1997, 5.250%, 2/01/27 - FGIC Insured
1,500 Michigan State Building Authority, Revenue Bonds, Facilities 10/10 at 100.00 AA 1,613,760
Program, Series 2000-I, 5.375%, 10/15/20
Michigan State Building Authority, Revenue Refunding Bonds,
Facilities Program, Series 2001-I:
2,570 5.500%, 10/15/19 10/11 at 100.00 AA 2,815,409
6,500 5.000%, 10/15/24 10/11 at 100.00 AA 6,587,815
Michigan State Building Authority, Revenue Refunding Bonds,
Facilities Program, Series 2003-II:
5,000 5.000%, 10/15/22 - MBIA Insured 10/13 at 100.00 AAA 5,150,300
2,480 5.000%, 10/15/23 - MBIA Insured 10/13 at 100.00 AAA 2,541,454
26
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,500 Michigan State, Comprehensive Transportation Revenue 11/11 at 100.00 AAA $ 1,559,040
Refunding Bonds, Series 2001A, 5.000%, 11/01/19 -
FSA Insured
Wayne County, Michigan, Limited Tax General Obligation Airport
Hotel Revenue Bonds, Detroit Metropolitan Wayne County Airport,
Series 2001A:
1,500 5.500%, 12/01/18 - MBIA Insured 12/11 at 101.00 AAA 1,629,525
4,670 5.000%, 12/01/30 - MBIA Insured 12/11 at 101.00 AAA 4,680,741
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.4%
1,000 Puerto Rico Ports Authority, Special Facilities Revenue 12/04 at 101.00 CCC 672,790
Bonds, American Airlines Inc., Series 1993A,
6.300%, 6/01/23 (Alternative Minimum Tax)
1,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 1,001,560
Metropolitan Airport, Series 1998B, 4.875%, 12/01/23 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 25.6%
355 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 384,664
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded to 7/01/10)
2,000 Detroit, Michigan, Sewerage Disposal System Revenue 1/10 at 101.00 AAA 2,284,800
Bonds, Series 1999A, 5.875%, 7/01/27 (Pre-refunded
to 1/01/10) - FGIC Insured
1,370 Detroit, Michigan, Sewerage Disposal System Revenue 7/07 at 101.00 AAA 1,504,055
Bonds, Series 1997A, 5.500%, 7/01/20 (Pre-refunded
to 7/01/07) - MBIA Insured
1,385 Detroit, Michigan, Water Supply System Senior Lien Revenue 7/11 at 100.00 AAA 1,538,153
Bonds, Series 2001A, 5.250%, 7/01/33 (Pre-refunded
to 7/01/11) - FGIC Insured
4,000 Detroit, Michigan, Water Supply System Senior Lien Revenue 1/10 at 101.00 AAA 4,544,880
Bonds, Series 1999A, 5.750%, 7/01/26 (Pre-refunded
to 1/01/10) - FGIC Insured
2,500 Kalamazoo Hospital Finance Authority, Michigan, Hospital 5/06 at 102.00 AAA 2,714,950
Revenue Refunding and Improvement Bonds, Bronson
Methodist Hospital, Series 1996, 5.750%, 5/15/16
(Pre-refunded to 5/15/06) - MBIA Insured
2,000 Michigan Municipal Bond Authority, Drinking Water 10/09 at 101.00 AAA 2,252,280
Revolving Fund Revenue Bonds, Series 1999,
5.500%, 10/01/21 (Pre-refunded to 10/01/09)
1,000 Michigan State, Certificates of Participation, New Center 9/11 at 100.00 AAA 1,120,200
Development Inc., Series 2001, 5.375%, 9/01/21
(Pre-refunded to 9/01/11) - MBIA Insured
3,000 Michigan State Hospital Finance Authority, Hospital 10/04 at 101.00 AAA 3,154,470
Revenue Refunding Bonds, St. John's Hospital,
Series 1993A, 6.000%, 5/15/13 - AMBAC Insured
2,500 Michigan State Hospital Finance Authority, Revenue Bonds, 11/09 at 101.00 AAA 2,884,925
Ascension Health Credit Group, Series 1999A,
6.125%, 11/15/26 (Pre-refunded to 11/15/09)
1,240 Milan Area Schools, Washtenaw and Monroe Counties, 5/10 at 100.00 AAA 1,397,344
Michigan, General Obligation Bonds, Series 2000A,
5.625%, 5/01/16 (Pre-refunded to 5/01/10) - FGIC Insured
620 Reeths-Puffer Schools, Muskegon County, Michigan, 5/05 at 101.00 AAA 645,935
School Building and Site Refunding Bonds, Series 1995,
5.750%, 5/01/15 (Pre-refunded to 5/01/05) - FGIC Insured
1,000 Rochester Community School District, Oakland and Macomb 5/10 at 100.00 AAA 1,133,410
Counties, Michigan, General Obligation Bonds, Series 2000I,
5.750%, 5/01/19 (Pre-refunded to 5/01/10) - FGIC Insured
1,500 Romulus Community Schools, Wayne County, Michigan, 5/09 at 100.00 AAA 1,684,770
Unlimited Tax General Obligation School Building
and Site Bonds, Series 1999, 5.750%, 5/01/25 (Pre-refunded
to 5/01/09) - FGIC Insured
2,500 West Bloomfield School District, Oakland County, Michigan, 5/10 at 100.00 AAA 2,840,050
Unlimited Tax General Obligation School Building and Site
Bonds, Series 2000, 5.800%, 5/01/17 (Pre-refunded
to 5/01/10) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 16.7%
1,000 Michigan Public Power Agency, Revenue Bonds, Combustion 1/12 at 100.00 AAA 1,029,970
Turbine 1 Project, Series 2001A, 5.250%, 1/01/27 -
AMBAC Insured
1,000 Michigan South Central Power Agency, Power Supply System No Opt. Call Baa1 1,087,290
Revenue Bonds, Series 2000, 6.000%, 5/01/12
3,500 Michigan Strategic Fund, Collateralized Limited Obligation 12/04 at 101.00 AAA 3,547,495
Revenue Refunding Bonds, Consumers Power Company
Project, Series 1993B, 5.800%, 6/15/10 - CAPMAC Insured
27
Nuveen Michigan Premium Income Municipal Fund, Inc. (NMP) (continued)
Portfolio of INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 3,000 Michigan Strategic Fund, Limited Obligation Remarketed No Opt. Call Aaa $ 3,190,530
Revenue Refunding Bonds, Detroit Edison Company,
Series 1995CC, 4.850%, 9/01/30 (Mandatory put 9/01/11)
5,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/11 at 100.00 A- 5,053,850
Pollution Control Revenue Refunding Bonds, Detroit Edison
Company, Series 2001C, 5.450%, 9/01/29
3,000 Michigan Strategic Fund, Limited Obligation Revenue 12/12 at 100.00 AAA 3,058,560
Refunding Bonds, Detroit Edison Company, Series 2002C,
5.450%, 12/15/32 (Alternative Minimum Tax) - XLCA Insured
1,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 1,028,230
Pollution Control Revenue Refunding Bonds, Detroit Edison
Company, Series 1999A, 5.550%, 9/01/29 (Alternative
Minimum Tax) - MBIA Insured
1,500 Wyandotte, Michigan, Electric Revenue Refunding Bonds, 10/08 at 101.00 AAA 1,630,575
Series 2002, 5.375%, 10/01/17 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 7.0%
1,500 Detroit, Michigan, Senior Lien Sewerage Disposal System Revenue No Opt. Call AAA 1,634,340
Bonds, Series 2001B, 5.500%, 7/01/29 - FGIC Insured
4,960 Detroit, Michigan, Senior Lien Sewerage Disposal System Revenue 7/13 at 100.00 AAA 5,227,939
Refunding Bonds, Series 2003A, 5.000%, 7/01/17 - FSA Insured
1,315 Detroit, Michigan, Water Supply System Senior Lien Revenue Bonds, 7/11 at 100.00 AAA 1,338,971
Series 2001A, 5.250%, 7/01/33 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 163,245 Total Long-Term Investments (cost $162,995,762) - 145.2% 170,619,781
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 2.3%
2,700 Puerto Rico Government Development Bank, Adjustable Refunding A-1 2,700,000
Bonds, Variable Rate Demand Obligations, Series 1985,
1.020%, 12/01/15 - MBIA Insured+
------------------------------------------------------------------------------------------------------------------------------------
$ 2,700 Total Short-Term Investments (cost $2,700,000) 2,700,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $165,695,762) - 147.5% 173,319,781
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.1% 209,093
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (47.6)% (56,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 117,528,874
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
(WI) Security purchased on a when-issued basis.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that
currently in effect. This rate changes periodically
based on market conditions or a specified market index.
See accompanying notes to financial statements.
28
Nuveen Michigan Dividend Advantage Municipal Fund (NZW)
Portfolio of
INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 7.2%
$ 1,150 Michigan Higher Education Facilities Authority, Limited 9/11 at 100.00 Aaa $ 1,157,797
Obligation Revenue Refunding Bonds, Kettering University,
Series 2001, 5.000%, 9/01/26 - AMBAC Insured
1,010 Michigan Technological University, General Revenue Bonds, 10/13 at 100.00 AAA 1,052,551
Series 2004A, 5.000%, 10/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 16.9%
1,000 Kent Hospital Finance Authority, Michigan, Revenue Bonds, 7/11 at 101.00 AA 1,026,460
Spectrum Health, Series 2001A, 5.250%, 1/15/21
1,200 Michigan State Hospital Finance Authority, Hospital Revenue 1/06 at 102.00 Ba3 1,061,472
Refunding Bonds, Sinai Hospital, Series 1995, 6.625%, 1/01/16
500 Michigan State Hospital Finance Authority, Hospital Revenue 5/06 at 102.00 A1 503,970
Refunding Bonds, Henry Ford Health System, Series 1995A,
5.250%, 11/15/20
750 Michigan State Hospital Finance Authority, Hospital Revenue 11/11 at 101.00 A1 758,348
Refunding Bonds, Sparrow Obligated Group, Series 2001,
5.625%, 11/15/31
1,800 Royal Oak Hospital Finance Authority, Michigan, Hospital 11/11 at 100.00 AAA 1,819,404
Revenue Bonds, William Beaumont Hospital, Series 2001M,
5.250%, 11/15/31 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 5.7%
1,700 Michigan Housing Development Authority, GNMA 8/12 at 102.00 Aaa 1,735,258
Collateralized Limited Obligation Multifamily Housing
Revenue Bonds, Cranbrook Apartments, Series 2001A,
5.400%, 2/20/31 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 4.3%
1,250 Michigan Housing Development Authority, Single 1/11 at 100.00 AAA 1,303,825
Family Mortgage Revenue Bonds, Series 2001,
5.300% 12/01/16 (Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.6%
500 Michigan Strategic Fund, Limited Obligation Revenue Bonds, No Opt. Call BBB+ 477,220
Republic Services Inc., Series 2001, 4.250%, 8/01/31
(Alternative Minimum Tax) (Mandatory put 4/01/14)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 46.1%
1,000 Detroit City School District, Wayne County, Michigan, 5/13 at 100.00 AAA 1,054,880
General Obligation Bonds, Series 2002A, 5.375%, 5/01/24 -
FGIC Insured
1,000 Detroit City School District, Wayne County, Michigan, 5/12 at 100.00 AAA 1,084,850
Unlimited Tax School Building and Site Improvement Bonds,
Series 2001A, 5.500%, 5/01/21 - FSA Insured
1,000 Durand Area Schools, Shiawasee County, Michigan, General 5/07 at 100.00 AAA 1,055,580
Obligation Bonds, Series 1997, 5.375%, 5/01/23 - FGIC Insured
1,000 Garden City School District, Wayne County, Michigan, General 5/11 at 100.00 AA+ 1,005,330
Obligation Refunding Bonds, Series 2001, 5.000%, 5/01/26
2,200 Huron School District, Wayne and Monroe Counties, Michigan, 5/11 at 100.00 AAA 2,282,962
General Obligation Bonds, Series 2001, 5.375%, 5/01/26 -
FSA Insured
1,500 Huron Valley School District, Oakland and Livingston Counties, 11/11 at 100.00 AA+ 1,507,410
Michigan, General Obligation Bonds, Series 2001,
5.000%, 5/01/27
1,050 Lawton Community Schools, Van Buren County, Michigan, 11/11 at 100.00 AA+ 1,136,488
General Obligation Bonds, Series 2001, 5.500%, 5/01/21
1,000 Oxford Area Community Schools, Oakland and Lapeer 11/11 at 100.00 AA+ 1,100,170
Counties, Michigan, General Obligation Bonds, Series 2001,
5.500%, 5/01/17
665 Puerto Rico, Public Improvement General Obligation Bonds, 7/11 at 100.00 Baa1 665,160
Series 2001A, 5.125%, 7/01/31
500 Warren Building Authority, Michigan, Limited Tax General 11/10 at 100.00 AAA 518,805
Obligation Bonds, Series 2001, 5.150%, 11/01/22 -
FGIC Insured
29
Nuveen Michigan Dividend Advantage Municipal Fund (NZW) (continued)
Portfolio of INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
Washtenaw County, Michigan, Limited Tax General Obligation
Bonds, Sylvan Township Water and Wastewater System, Series 2001:
$ 500 5.000%, 5/01/19 - MBIA Insured 5/09 at 100.50 AAA $ 518,500
800 5.000%, 5/01/20 - MBIA Insured 5/09 at 100.50 AAA 826,256
1,300 Willow Run Community Schools, Washtenaw County, 5/11 at 100.00 AA+ 1,333,215
Michigan, General Obligation Bonds, Series 2001,
5.000%, 5/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 28.5%
1,300 Grand Rapids Building Authority, Kent County, Michigan, 10/11 at 100.00 AAA 1,321,970
Limited Tax General Obligation Bonds, Series 2001,
5.125%, 10/01/26 - MBIA Insured
1,205 Michigan State Building Authority, Revenue Refunding Bonds, 10/11 at 100.00 AA 1,221,280
Facilities Program, Series 2001-I, 5.000%, 10/15/24
2,000 Michigan State Trunk Line, Trunk Line Fund Bonds, 11/11 at 100.00 AAA 2,023,500
Series 2001A, 5.000%, 11/01/25
1,450 Muskegon County, Michigan, Limited Tax General Obligation 7/11 at 100.00 AAA 1,459,628
Wastewater Management System 2 Revenue Bonds,
Series 2002, 5.000%, 7/01/26 - FGIC Insured
915 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call BBB+ 1,030,336
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26
1,650 Wayne County, Michigan, Limited Tax General Obligation 12/11 at 101.00 AAA 1,653,795
Airport Hotel Revenue Bonds, Detroit Metropolitan Wayne
County Airport, Series 2001A, 5.000%, 12/01/30 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 12.4%
515 Detroit, Michigan, Water Supply System Senior Lien Revenue 7/11 at 100.00 AAA 571,949
Bonds, Series 2001A, 5.250%, 7/01/33 (Pre-refunded
to 7/01/11) - FGIC Insured
1,000 Michigan Municipal Bond Authority, Drinking Water Revolving 10/10 at 101.00 AAA 1,154,730
Fund Revenue Bonds, Series 2000, 5.875%, 10/01/17
(Pre-refunded to 10/01/10)
335 Puerto Rico, Public Improvement General Obligation Bonds, 7/11 at 100.00 Aaa 370,356
Series 2001A, 5.125%, 7/01/31 (Pre-refunded to 7/01/11)
500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 528,590
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
85 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call BBB+*** 96,326
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26
1,000 Rochester Community School District, Oakland and 11/11 at 100.00 AA+*** 1,066,640
Macomb Counties, Michigan General Obligation Bonds,
Series 2001II, 5.500%, 5/01/22 (Pre-refunded to 11/01/11)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 15.3%
1,115 Lansing Board of Water and Light, Michigan, Steam and 7/13 at 100.00 AAA 1,154,304
Electric Utility System Revenue Bonds, Series 2003A,
5.000%, 7/01/21 - FSA Insured
1,235 Michigan Public Power Agency, Revenue Bonds, Combustion 1/12 at 100.00 AAA 1,282,177
Turbine 1 Project, Series 2001A, 5.250%, 1/01/24 -
AMBAC Insured
2,215 Michigan Strategic Fund, Collateralized Limited Obligation 9/11 at 100.00 A- 2,235,444
Pollution Control Revenue Refunding Bonds, Fixed Rate
Conversion, Detroit Edison Company, Series 1999C,
5.650%, 9/01/29 (Alternative Minimum Tax)
30
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.9%
$ 1,000 Detroit, Michigan, Senior Lien Sewerage Disposal System No Opt. Call AAA $ 1,089,560
Revenue Bonds, Series 2001B, 5.500%, 7/01/29 - FGIC Insured
1,000 Detroit, Michigan, Senior Lien Sewerage Disposal System 7/13 at 100.00 AAA 1,054,020
Revenue Refunding Bonds, Series 2003A, 5.000%, 7/01/17 -
FSA Insured
Detroit, Michigan, Water Supply System Senior Lien Revenue
Bonds, Series 2001A:
1,000 5.000%, 7/01/30 - FGIC Insured 7/11 at 100.00 AAA 997,800
485 5.250%, 7/01/33 - FGIC Insured 7/11 at 100.00 AAA 493,841
------------------------------------------------------------------------------------------------------------------------------------
$ 44,380 Total Long-Term Investments (cost $44,626,861) - 149.9% 45,792,157
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.5% 746,287
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.4)% (16,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 30,538,444
====================================================================================================================
FORWARD SWAP CONTRACTS OUTSTANDING AT JULY 31, 2004:
SWAP UNREALIZED
NOTIONAL EFFECTIVE TERMINATION APPRECIATION
AMOUNT DATE(2) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Agreement with JPMorgan dated July 28, 2004, to pay quarterly
the notional amount multiplied by 4.495% and receive quarterly
the notional amount multiplied by the one-week BMA Municipal
Swap Index. $1,100,000 12/13/04 12/13/24 $(18,311)
Agreement with Morgan Stanley dated July 15, 2004, to pay
semi-annually the notional amount multiplied by 5.717% and
receive quarterly the notional amount multiplied by the
three-month USD-LIBOR. 1,200,000 1/14/05 1/14/35 (7,276)
Agreement with JPMorgan dated July 1, 2004, to pay semi-annually
the notional amount multiplied by 5.805% and receive quarterly
the notional amount multiplied by the three-month USD-LIBOR. 2,100,000 2/02/05 2/02/25 (39,041)
------------------------------------------------------------------------------------------------------------------------------------
$(64,628)
====================================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
(2) Effective date represents the date on which both the
Fund and counterparty commence interest settlements on
each forward swap contract.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
See accompanying notes to financial statements.
31
Nuveen Ohio Quality Income Municipal Fund, Inc. (NUO)
Portfolio of
INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.6%
$ 2,815 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB $ 2,458,959
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 8.8%
2,225 Ohio State Education Student Loan Revenue Bonds, 6/07 at 102.00 AAA 2,324,992
Supplemental Student Loan Program, Series 1997A-1,
5.850%, 12/01/19 (Alternative Minimum Tax) -
AMBAC Insured
1,000 Ohio Higher Education Facilities Commission, Revenue Bonds, 12/04 at 102.00 AAA 1,034,310
University of Dayton Project, Series 1994,
5.800%, 12/01/14 - FGIC Insured
1,200 Ohio Higher Educational Facilities Commission, Revenue 9/06 at 101.00 Ba1 1,204,932
Bonds, University of Findlay, Series 1996, 6.125%, 9/01/16
1,415 Ohio Higher Educational Facilities Commission, Revenue 11/14 at 100.00 AA 1,456,092
Bonds, Denison University, Series 2004, 5.000%, 11/01/21
1,750 Ohio Higher Education Facilities Commission, General Revenue 10/13 at 100.00 AA 1,795,325
Bonds, Oberlin College, Series 2003, 5.125%, 10/01/24
1,200 Ohio State University, General Receipts Bonds, 12/12 at 100.00 AA 1,215,588
Series 2002A, 5.125%, 12/01/31
3,000 Ohio State University, General Receipts Bonds, 6/13 at 100.00 AA 3,159,000
Series 2003B, 5.250%, 6/01/22
1,510 University of Akron, Ohio, General Receipts Bonds, 1/13 at 100.00 AAA 1,565,055
Series 2003A, 5.000%, 1/01/21 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 24.6%
2,000 Akron, Bath and Copley Joint Township Hospital District, 11/09 at 101.00 Baa1 1,942,120
Ohio, Hospital Facilities Revenue Bonds, Summa Health
System Project, Series 1998A, 5.375%, 11/15/24
1,000 Cuyahoga County, Ohio, Hospital Improvement and Revenue 2/07 at 102.00 AAA 1,084,960
Refunding Bonds, MetroHealth System Project, Series 1997,
5.625%, 2/15/17 - MBIA Insured
2,000 Cuyahoga County, Ohio, Revenue Refunding Bonds, 7/13 at 100.00 A1 2,118,060
Cleveland Clinic Health System, Series 2003A,
6.000%, 1/01/32
4,500 Erie County, Ohio, Hospital Facilities Revenue Bonds, 8/12 at 101.00 A 4,509,360
Firelands Regional Medical Center, Series 2002A,
5.625%, 8/15/32
1,700 Franklin County, Ohio, Hospital Revenue Bonds, OhioHealth 5/13 at 100.00 AAA 1,681,946
Corporation, Series 2003C, 5.000%, 5/15/33 - MBIA Insured
Franklin County, Ohio, Hospital Revenue Refunding and
Improvement Bonds, Children's Hospital Project, Series 1996A:
1,000 5.750%, 11/01/20 11/06 at 101.00 Aa2 1,030,180
1,500 5.875%, 11/01/25 11/06 at 101.00 Aa2 1,536,780
2,455 Hamilton County, Ohio, Revenue Bonds, Children's Hospital 5/14 at 100.00 AAA 2,649,804
Medical Center, Series 2004J, 5.250%, 5/15/16 - FGIC Insured
2,500 Marion County, Ohio, Hospital Revenue Refunding and 5/06 at 102.00 BBB+ 2,624,950
Improvement Bonds, The Community Hospital, Series 1996,
6.375%, 5/15/11
2,405 Miami County, Ohio, Hospital Facilities Revenue Refunding 5/06 at 102.00 BBB+ 2,493,191
and Improvement Bonds, Upper Valley Medical Center,
Series 1996A, 6.250%, 5/15/16
1,500 Montgomery County, Ohio, Hospital Facilities Revenue 4/06 at 102.00 AAA 1,602,330
Refunding and Improvement Bonds, Kettering Medical
Center, Series 1996, 5.625%, 4/01/16 - MBIA Insured
3,000 Montgomery County, Ohio, Hospital Facilities Revenue 4/10 at 101.00 A3 3,287,370
Bonds, Kettering Medical Center, Series 1999,
6.750%, 4/01/18
6,000 Parma Community General Hospital Association, Ohio, 11/08 at 101.00 A- 5,950,320
Hospital Revenue Refunding and Improvement Bonds,
Series 1998, 5.375%, 11/01/29
2,500 Richland County, Ohio, Hospital Facilities Revenue 11/10 at 101.00 A- 2,623,700
Improvement Bonds, MedCentral Health System
Obligated Group, Series 2000B, 6.375%, 11/15/30
32
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE (continued)
$ 1,500 Steubenville, Ohio, Hospital Facilities Revenue Refunding 10/10 at 100.00 A3 $ 1,601,235
and Improvement Bonds, Trinity Health System, Series 2000,
6.375%, 10/01/20
1,705 Tuscarawas County, Ohio, Hospital Facilities Revenue Bonds, 10/11 at 101.00 AA 1,828,220
Union Hospital Project, Series 2001, 5.750%, 10/01/21 -
RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 9.5%
1,385 Clermont County, Ohio, GNMA Collateralized Mortgage 8/04 at 102.00 Aaa 1,407,700
Revenue Bonds, S.E.M. Villa II Project, Series 1994A,
5.950%, 2/20/30
1,000 Cuyahoga County, Ohio, GNMA Collateralized Mortgage 9/10 at 102.00 Aaa 1,008,000
Revenue Bonds, West Tech Apartments Project,
Series 2002A, 5.350%, 3/20/33 (Alternative Minimum Tax)
1,435 Cuyahoga County, Ohio, GNMA Collateralized Loan 6/08 at 105.00 Aaa 1,515,374
Multifamily Housing Revenue Bonds, Water Street
Associates Project, Series 1997, 6.150%, 12/20/26
(Alternative Minimum Tax)
Cuyahoga County, Ohio, GNMA Collateralized Multifamily Housing
Mortgage Revenue Bonds, Longwood Phase One Associates LP
Project, Series 2001A:
2,475 5.350%, 1/20/21 (Alternative Minimum Tax) 7/11 at 102.00 Aaa 2,561,402
2,250 5.450%, 1/20/31 (Alternative Minimum Tax) 7/11 at 102.00 Aaa 2,293,268
1,000 Cuyahoga County, Ohio, GNMA Collateralized Multifamily 9/12 at 102.00 Aaa 1,016,600
Housing Revenue Bonds, Livingston Park, Series 2002A,
5.350%, 9/20/27 (Alternative Minimum Tax)
985 Franklin County, Ohio, FHA-Insured Multifamily Housing 1/05 at 103.00 Aa 997,500
Mortgage Revenue Bonds, Hamilton Creek Apartments
Project, Series 1994A, 5.550%, 7/01/24 (Alternative
Minimum Tax)
4,060 Lucas Northgate Housing Development Corporation, Ohio, 1/05 at 101.00 Aaa 4,114,769
FHA-Insured Mortgage Revenue Refunding Bonds, Northgate
Apartments Section 8 Assisted Project, Series 1999A, 6.000%,
7/01/24 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 6.4%
135 Ohio Housing Finance Agency, GNMA Mortgage-Backed 9/09 at 100.00 Aaa 135,541
Securities Program, Residential Mortgage Revenue Bonds,
Series 2000A-1, 6.350%, 9/01/31 (Alternative Minimum Tax)
2,025 Ohio Housing Finance Agency, GNMA Mortgage-Backed 9/07 at 102.00 Aaa 2,076,374
Securities Program, Residential Mortgage Revenue Bonds,
Series 1996B-3, 5.750%, 9/01/28 (Alternative Minimum Tax)
3,665 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/08 at 101.50 AAA 3,763,992
Securities Program, Residential Mortgage Revenue Bonds,
Series 1998A-1, 5.300%, 9/01/19 (Alternative Minimum
Tax) - FSA Insured
3,260 Ohio Housing Finance Agency, GNMA Mortgage-Backed 9/08 at 102.00 Aaa 3,301,467
Securities Program, Residential Mortgage Revenue Bonds,
Series 1997B, 5.400%, 9/01/29 (Alternative Minimum Tax)
705 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/12 at 100.00 Aaa 716,668
Securities Program, Residential Mortgage Revenue Bonds,
Series 2002D, 5.400%, 9/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.3%
1,000 Hamilton County, Ohio, Healthcare Facilities Improvement 10/08 at 102.00 BBB 960,700
Revenue Bonds, Twin Towers, Series 1999A, 5.800%, 10/01/23
1,000 Marion County, Ohio, Healthcare Facilities Revenue 11/04 at 101.00 BBB- 1,009,130
Refunding and Improvement Bonds, United Church Homes
Inc., Series 1993, 6.300%, 11/15/15
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 44.7%
1,000 Ansonia Local School District, Darke County, Ohio, General 12/10 at 102.00 Aaa 1,088,370
Obligation Bonds, Series 2000, 5.500%, 12/01/22 -
MBIA Insured
1,000 Bay Village City School District, Ohio, General Obligation 12/10 at 100.00 Aa2 1,009,930
Unlimited Tax School Improvement Bonds, Series 2001,
5.000%, 12/01/25
270 Berea City School District, Ohio, General Obligation Unlimited 12/04 at 101.00 AAA 276,739
Tax School Improvement Bonds, Series 1993,
7.500%, 12/15/06 - AMBAC Insured
Butler County, Ohio, General Obligation Judgment Bonds, Series 2002:
2,030 5.250%, 12/01/21 12/12 at 101.00 Aa3 2,160,022
2,140 5.250%, 12/01/22 12/12 at 101.00 Aa3 2,263,628
Butler County, Ohio, General Obligation Bonds, Series 2002:
1,345 5.000%, 12/01/21 - MBIA Insured 12/12 at 100.00 Aaa 1,398,329
1,200 5.000%, 12/01/22 - MBIA Insured 12/12 at 101.00 Aaa 1,240,164
33
Nuveen Ohio Quality Income Municipal Fund, Inc. (NUO) (continued)
Portfolio of INVESTMENTS July 31,2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,560 Canal Winchester Local School District, Franklin and Fairfield 12/11 at 100.00 Aaa $ 1,566,365
Counties, Ohio, School Facilities Construction and
Improvement Bonds, Series 2001B, 5.000%, 12/01/28 -
FGIC Insured
1,000 Central Ohio Solid Waste Authority, General Obligation Bonds, 6/14 at 100.00 AAA 1,073,450
Series 2004A, 5.000%, 12/01/15 - AMBAC Insured
1,000 Cincinnati City School District, Hamilton County, Ohio, 12/11 at 100.00 AAA 1,094,600
General Obligation Bonds, Series 2001, 5.375%, 12/01/15 -
MBIA Insured
2,600 Cincinnati City School District, Hamilton County, Ohio, 12/12 at 100.00 AAA 2,753,608
General Obligation Bonds, Series 2002, 5.250%, 6/01/21 -
FSA Insured
1,000 Dayton, Ohio, General Obligation Bonds, Series 2004, 6/14 at 100.00 AAA 1,080,070
5.250%, 12/01/19 - AMBAC Insured
1,000 Dublin, Ohio, Unlimited Tax Various Purpose Improvement 12/10 at 100.00 Aaa 1,033,870
Bonds, Series 2000A, 5.000%, 12/01/20
1,000 Dublin City School District, Franklin, Delaware and Union 12/13 at 100.00 AAA 1,033,470
Counties, Ohio, General Obligation Bonds, Series 2003,
5.000%, 12/01/22 - FSA Insured
1,300 Franklin County, Ohio, Limited Tax General Obligation 12/08 at 102.00 AAA 1,417,429
Refunding Bonds, Series 1993, 5.375%, 12/01/20
2,000 Garfield Heights City School District, Cuyahoga County, 12/11 at 100.00 Aaa 2,016,460
Ohio, General Obligation School Improvement Bonds,
Series 2001, 5.000%, 12/15/26 - MBIA Insured
1,000 Hilliard School District, Ohio, General Obligation School 12/10 at 101.00 AAA 1,093,480
Improvement Bonds, Series 2000, 5.750%, 12/01/24 -
FGIC Insured
1,160 Kenston Local School District, Geauga County, Ohio, General 6/13 at 100.00 Aaa 1,197,132
Obligation Bonds, Series 2003, 5.000%, 12/01/22 -
MBIA Insured
2,000 Lakota Local School District, Butler County, Ohio, 6/11 at 100.00 Aaa 2,034,800
Unlimited Tax General Obligation School Improvement and
Refunding Bonds, Series 2001, 5.125%, 12/01/26 -
FGIC Insured
1,750 London City School District, Ohio, General Obligation School 12/11 at 100.00 Aaa 1,756,808
Facilities Construction and Improvement Bonds, Series 2001,
5.000%, 12/01/29 - FGIC Insured
2,500 Louisville City School District, Ohio, General Obligation 12/11 at 100.00 Aaa 2,509,725
Bonds, Series 2001, 5.000%, 12/01/29 - FGIC Insured
1,515 Massillon City School District, Ohio, General Obligation Bonds, 12/12 at 100.00 Aaa 1,604,506
Series 2003, 5.250%, 12/01/21 - MBIA Insured
2,335 Milford Exempted Village School District, Ohio, General 12/11 at 100.00 Aaa 2,365,168
Obligation Bonds, Series 2001, 5.125%, 12/01/30 -
FSA Insured
1,260 Morgan Local School District, Morgan, Muskingum and 12/10 at 101.00 AA- 1,404,648
Washington Counties, Ohio, Unlimited Tax General
Obligation School Improvement Bonds, Series 2000,
5.750%, 12/01/22
715 North Canton City School District, Ohio, Unlimited Tax General No Opt. Call AAA 734,755
Obligation School Improvement Bonds, Series 1994,
9.700%, 12/01/04 - AMBAC Insured
3,000 Ohio, General Obligation Bonds, Infrastructure Improvements, 2/13 at 100.00 AA+ 3,072,000
Series 2003F, 5.000%, 2/01/23
Olentangy Local School District, Deleware and Franklin Counties,
Ohio, General Obligation Bonds, Series 2004A:
1,315 5.250%, 12/01/23 - FGIC Insured 6/14 at 100.00 AAA 1,387,785
3,380 5.250%, 12/01/24 - FGIC Insured 6/14 at 100.00 AAA 3,542,477
1,155 Perry Local School District, Allen County, Ohio, General 12/11 at 101.00 AAA 1,209,678
Obligation Bonds, Series 2001, 5.250%, 12/01/25 -
AMBAC Insured
2,720 Pickerington Local School District, Fairfield and Franklin 12/11 at 100.00 AAA 2,731,098
Counties, Ohio, General Obligation School Facilities
Construction and Improvement Bonds, Series 2001,
5.000%, 12/01/28 - FGIC Insured
1,100 Plain Local School District, Franklin and Licking Counties, 6/12 at 100.00 Aaa 1,217,788
Ohio, General Obligation Bonds, Series 2002,
5.500%, 12/01/17 - FGIC Insured
280 Plain Local School District, Franklin and Licking Counties, 6/11 at 100.00 Aaa 318,027
Ohio, General Obligation Bonds, Series 2000,
6.000%, 12/01/20 - FGIC Insured
1,445 Portage County, Ohio, General Obligation Bonds, Series 2001, 12/11 at 100.00 AAA 1,453,988
5.000%, 12/01/27 - FGIC Insured
1,825 Princeton City School District, Butler County, Ohio, General 12/13 at 100.00 AAA 1,832,318
Obligation Bonds, Series 2003, 5.000%, 12/01/30 -
MBIA Insured
34
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 2,830 Springfield Township, Hamilton County, Ohio, Various Purpose 12/11 at 100.00 Aa3 $ 2,910,061
Limited Tax General Obligation Bonds, Series 2002,
5.250%, 12/01/27
2,000 Strongsville, Ohio, General Obligation Bonds, Series 2001, 12/11 at 100.00 Aaa 2,064,920
5.000%, 12/01/21 - FGIC Insured
70 Strongsville, Ohio, Limited Tax General Obligation Various 12/06 at 102.00 Aa2 76,308
Purpose Improvement Bonds, Series 1996, 5.950%, 12/01/21
2,000 Sugarcreek Local School District, Athens County, Ohio, General 12/13 at 100.00 Aaa 2,068,920
Obligation Bonds, Series 2003, 5.250%, 12/01/27 -
MBIA Insured
1,000 Upper Arlington City School District, Ohio, General Obligation 12/06 at 101.00 AAA 1,051,100
Improvement Bonds, Series 1996, 5.250%, 12/01/22 -
MBIA Insured
Warren City School District, Trumbull County, Ohio, General
Obligation Bonds, Series 2004:
2,515 5.000%, 12/01/20 - FGIC Insured 6/14 at 100.00 AAA 2,635,318
1,170 5.000%, 12/01/22 - FGIC Insured 6/14 at 100.00 AAA 1,210,833
1,000 West Chester Township, Butler County, Ohio, General 12/13 at 100.00 Aaa 1,004,970
Obligation Bonds, Series 2003, 5.000%, 12/01/28 -
MBIA Insured
2,000 Westerville City School District, Franklin and Delaware 6/11 at 100.00 AAA 2,011,720
Counties, Ohio, Various Purpose General Obligation Bonds,
Series 2001, 5.000%, 12/01/27 - MBIA Insured
1,000 Westlake, Ohio, Various Purpose General Obligation 12/08 at 101.00 Aaa 1,104,690
Improvement and Refunding Bonds, Series 1997,
5.550%, 12/01/17
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 5.4%
1,210 Columbus, Ohio, Tax Increment Financing Bonds, Easton 6/09 at 101.00 AAA 1,210,532
Project, Series 1999, 4.875%, 12/01/24 - AMBAC Insured
1,585 Hamilton County Convention Facilities Authority, Ohio, First 6/14 at 100.00 AAA 1,672,492
Lien Revenue Bonds, Series 2004, 5.000%, 12/01/18 -
FGIC Insured
New Albany Community Authority, Ohio, Community Facilities
Revenue Refunding Bonds, Series 2001B:
1,000 5.500%, 10/01/15 - AMBAC Insured 4/12 at 100.00 AAA 1,108,620
1,000 5.500%, 10/01/17 - AMBAC Insured 4/12 at 100.00 AAA 1,105,120
2,645 Ohio Building Authority, State Facilities Bonds, Adult 4/14 at 100.00 AAA 2,895,614
Correctional Building Fund Project, Series 2004A,
5.250%, 4/01/15 - MBIA Insured
400 Ohio Department of Transportation, Certificates of 10/04 at 100.00 AA 400,488
Participation, Rickenbacker International Airport
Improvements, Series 1996, 6.125%, 4/15/15 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 7.8%
1,780 Cleveland, Ohio, Airport System Revenue Bonds, Series 2000A, 1/10 at 101.00 AAA 1,903,639
5.250%, 1/01/16 - FSA Insured
3,430 Cleveland, Ohio, Parking Facilities Revenue Refunding Bonds, 9/06 at 102.00 AAA 3,676,823
Series 1996, 5.500%, 9/15/22 - MBIA Insured
3,000 Dayton, Ohio, Airport Revenue Bonds, James M. Cox 12/13 at 100.00 AA 3,020,700
International Airport, Series 2003C, 5.250%, 12/01/23
(Alternative Minimum Tax) - RAAI Insured
1,500 Dayton, Ohio, Special Facilities Revenue Refunding Bonds, 2/08 at 102.00 BB+ 1,368,105
Emery Air Freight Corporation and Emery Worldwide
Airlines Inc. - Guarantors, Series 1998A, 5.625%, 2/01/18
2,000 Ohio Turnpike Commission, Revenue Bonds, Series 1998A, No Opt. Call AAA 2,263,080
5.500%, 2/15/18 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 15.4%
2,295 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 7/10 at 100.00 AAA 2,486,770
Asset-Backed Bonds, Series 2000, 5.750%, 7/01/20
(Pre-refunded to 7/01/10)
2,000 Cleveland, Ohio, Public Power System First Mortgage 11/04 at 102.00 AAA 2,072,840
Revenue Bonds, Series 1994A, 7.000%, 11/15/24
(Pre-refunded to 11/15/04) - MBIA Insured
1,710 Franklin County, Ohio, First Mortgage Revenue, OCLC Inc. 12/04 at 100.00 AAA 1,901,777
Project, Series 1979, 7.500%, 6/01/09
2,100 Lakota Local School District, Butler County, Ohio, Unlimited 12/05 at 100.00 AAA 2,226,441
Tax General Obligation School Improvement Bonds,
Series 1994, 6.250%, 12/01/14 (Pre-refunded
to 12/01/05) - AMBAC Insured
4,315 Ohio Capital Corporation for Housing, FHA-Insured 2/09 at 102.00 N/R*** 4,912,671
Section 8 Mortgage Loan Revenue Refunding Bonds,
Series 1999G, 5.950%, 2/01/24 (Pre-refunded to 2/01/09)
1,000 Ohio Water Development Authority, Fresh Water Loan 6/05 at 102.00 AAA 1,056,190
Revenue Bonds, Series 1995, 5.900%, 12/01/21
(Pre-refunded to 6/01/05) - AMBAC Insured
35
Nuveen Ohio Quality Income Municipal Fund, Inc. (NUO) (continued)
Portfolio of INVESTMENTS July 31,2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED (continued)
$ 1,220 Plain Local School District, Franklin and Licking Counties, 6/11 at 100.00 Aaa $ 1,409,076
Ohio, General Obligation Bonds, Series 2000,
6.000%, 12/01/20 (Pre-refunded to 6/01/11) -
FGIC Insured
2,000 Southwest Regional Ohio Water District, Waterworks 12/05 at 101.00 AAA 2,133,400
System Revenue Bonds, Series 1995, 6.000%, 12/01/20
(Pre-refunded to 12/01/05) - MBIA Insured
500 Sylvania City School District, Ohio, Unlimited Tax General 12/05 at 101.00 AAA 532,035
Obligation Bonds, Series 1995, 5.800%, 12/01/15
(Pre-refunded to 12/01/05) - FGIC Insured
2,000 Wayne Local School District, Warren County, Ohio, 12/06 at 101.00 AAA 2,204,680
Unlimited Tax General Obligation School Improvement
Bonds, Series 1996, 6.100%, 12/01/24 (Pre-refunded
to 12/01/06) - AMBAC Insured
3,000 West Clermont Local School District, Clermont County, Ohio, 12/05 at 100.00 AAA 3,170,760
Unlimited Tax General Obligation School Improvement
Bonds, Series 1995, 6.000%, 12/01/18 (Pre-refunded
to 12/01/05) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 9.7%
4,000 Wadsworth, Ohio, Electric System Improvement Revenue 2/12 at 100.00 Aaa 4,112,440
Bonds, American Municipal Power Ohio Inc., Series 2002,
5.000%, 2/15/22 - MBIA Insured
Ohio Air Quality Development Authority, Revenue Refunding Bonds,
JMG Funding Limited Partnership Project, Series 1994:
2,000 6.375%, 1/01/29 (Alternative Minimum Tax) - AMBAC Insured 10/04 at 102.00 AAA 2,053,680
4,000 6.375%, 4/01/29 (Alternative Minimum Tax) - AMBAC Insured 10/04 at 102.00 AAA 4,107,360
3,000 Ohio Air Quality Development Authority, Revenue Bonds, 4/07 at 102.00 AAA 3,148,080
JMG Funding Limited Partnership Project, Series 1997,
5.625%, 1/01/23 (Alternative Minimum Tax) -
AMBAC Insured
1,900 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 1,772,433
Revenue Bonds, Bay Shore Power, Series 1998A,
5.875%, 9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.5%
Cincinnati, Ohio, Water System Revenue Bonds, Series 2001:
1,000 5.500%, 12/01/17 6/11 at 100.00 AA+ 1,096,400
6,010 5.000%, 12/01/18 6/11 at 100.00 AA+ 6,286,640
3,000 5.000%, 12/01/19 6/11 at 100.00 AA+ 3,117,660
1,000 5.000%, 12/01/20 6/11 at 100.00 AA+ 1,032,650
2,000 Cincinnati, Ohio, Water System Revenue Bonds, 6/11 at 100.00 AA+ 2,043,400
Series 2003, 5.000%, 12/01/22
1,000 Cleveland, Ohio, Waterworks First Mortgage Revenue No Opt. Call AAA 1,119,500
Refunding and Improvement Bonds, Series 1993G,
5.500%, 1/01/21 - MBIA Insured
1,000 Cleveland, Ohio, Waterworks Revenue Refunding and 1/08 at 101.00 AAA 1,004,670
Improvement Bonds, Series 1998I, 5.000%, 1/01/28 -
FSA Insured
40 Cleveland, Ohio, Waterworks First Mortgage Revenue 1/06 at 102.00 AAA 42,294
Refunding and Improvement Bonds, Series 1996H,
5.750%, 1/01/26 - MBIA Insured
2,110 Hamilton County, Ohio, Sewer System Revenue and 6/10 at 101.00 AAA 2,292,092
Improvement Bonds, Metropolitan Sewer District of Greater
Cincinnati, Series 2000A, 5.750%, 12/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 220,995 Total Long-Term Investments (cost $221,294,176) - 146.7% 229,729,941
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.5% 3,904,166
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (49.2)% (77,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 156,634,107
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of
principal and interest. Such securities are normally
considered to be equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
36
Nuveen Ohio Dividend Advantage Municipal Fund (NXI)
Portfolio of
INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 1.5%
$ 1,125 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB $ 982,710
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 25.1%
1,000 Ohio Higher Educational Facilities Commission, Revenue 12/10 at 101.00 AAA 1,059,590
Bonds, University of Dayton, Series 2000, 5.500%, 12/01/25 -
AMBAC Insured
2,000 Ohio Higher Educational Facilities Commission, Revenue 11/11 at 101.00 AA 2,055,760
Bonds, Denison University, Series 2001, 5.200%, 11/01/26
2,650 Ohio Higher Education Facilities Commission, Revenue Bonds, 5/12 at 100.00 A2 2,678,647
Ohio Northern University Project, Series 2002,
5.000%, 5/01/22
1,760 Ohio University at Athens, Subordinate Lien General Receipts 6/14 at 100.00 AAA 1,839,904
Bonds, Series 2004, 5.000%, 12/01/20 - MBIA Insured
3,150 Student Loan Funding Corporation, Cincinnati, Ohio, Student 1/05 at 100.00 A 3,158,694
Loan Subordinated Revenue Refunding Bonds, Series 1992D,
6.600%, 7/01/05 (Alternative Minimum Tax)
2,000 University of Cincinnati, Ohio, General Receipts Bonds, 6/11 at 101.00 AAA 2,250,780
Series 2001A, 5.750%, 6/01/17 - FGIC Insured
2,735 University of Cincinnati, Ohio, General Receipts Bonds, 6/12 at 100.00 AA- 2,933,370
Series 2002F, 5.375%, 6/01/19
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 19.8%
1,100 Cuyahoga County, Ohio, Revenue Refunding Bonds, Cleveland 7/13 at 100.00 A1 1,164,933
Clinic Health System, Series 2003A, 6.000%, 1/01/32
1,950 Lucas County, Ohio, Hospital Revenue Bonds, ProMedica 11/09 at 101.00 AAA 1,984,535
Healthcare Obligated Group, Series 1999, 5.375%, 11/15/29 -
AMBAC Insured
2,500 Miami County, Ohio, Hospital Facilities Revenue Refunding 5/06 at 102.00 BBB+ 2,554,425
and Improvement Bonds, Upper Valley Medical Center,
Series 1996A, 6.375%, 5/15/26
Parma Community General Hospital Association, Ohio, Hospital
Revenue Refunding and Improvement Bonds, Series 1998:
2,250 5.250%, 11/01/13 11/08 at 101.00 A- 2,345,535
2,000 5.375%, 11/01/29 11/08 at 101.00 A- 1,983,440
1,000 Richland County, Ohio, Hospital Facilities Revenue 11/10 at 101.00 A- 1,049,480
Improvement Bonds, MedCentral Health System Obligated
Group, Series 2000B, 6.375%, 11/15/30
1,500 Tuscarawas County, Ohio, Hospital Facilities Revenue Bonds, 10/04 at 101.00 Baa1 1,515,735
Union Hospital Project, Series 1993A, 6.500%, 10/01/21
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.5%
1,790 Lucas Northgate Housing Development Corporation, 1/05 at 101.00 Aaa 1,816,761
Ohio, FHA-Insured Mortgage Revenue Refunding Bonds,
Northgate Apartments Section 8 Assisted Project,
Series 1999A, 5.950%, 7/01/19 - MBIA Insured
2,885 Ohio Housing Finance Agency, FHA-Insured Mortgage Revenue 4/11 at 102.00 Aa2 2,957,673
Bonds, Asbury Woods Project, Series 2001A, 5.450%, 4/01/26
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 5.6%
1,060 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 1,104,117
Securities Program, Residential Mortgage Revenue Bonds,
Series 2000C, 6.050%, 3/01/32 (Alternative Minimum Tax)
1,615 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 1,620,814
Securities Program, Residential Mortgage Revenue Bonds,
Series 2000D, 5.450%, 9/01/31 (Alternative Minimum Tax)
490 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 521,497
Securities Program, Residential Mortgage Revenue Bonds,
Series 2000F, 5.625%, 9/01/16
37
Nuveen Ohio Dividend Advantage Municipal Fund (NXI) (continued)
Portfolio of INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY (continued)
$ 285 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/12 at 100.00 Aaa $ 289,717
Securities Program, Residential Mortgage Revenue Bonds,
Series 2002D, 5.400%, 9/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 4.0%
1,000 Franklin County, Ohio, Healthcare Facilities Revenue Bonds, 7/11 at 101.00 BBB 1,055,870
Ohio Presbyterian Retirement Services, Series 2001A,
7.125%, 7/01/29
1,470 Hamilton County, Ohio, Healthcare Facilities Improvement 10/08 at 102.00 BBB 1,470,470
Revenue Bonds, Twin Towers, Series 1999A,
5.750%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 39.2%
1,000 Bay Village City School District, Ohio, General Obligation 12/10 at 100.00 Aa2 1,009,930
Unlimited Tax School Improvement Bonds, Series 2001,
5.000%, 12/01/25
1,000 Centerville, Ohio, General Obligation Limited Tax Bonds, 12/11 at 100.00 Aa3 1,016,620
Capital Facilities Improvement, Series 2001,
5.125%, 12/01/26
1,000 Columbus City School District, Franklin County, Ohio, General 12/14 at 100.00 AAA 1,127,270
Obligation Bonds, Series 2004, 5.500%, 12/01/15 -
FSA Insured
Jackson City School District, Jackson County, Ohio, Unlimited
Tax General Obligation School Improvement Bonds, Series 2001:
880 5.500%, 12/01/22 - MBIA Insured 6/11 at 100.00 Aaa 961,242
935 5.500%, 12/01/23 - MBIA Insured 6/11 at 100.00 Aaa 1,015,485
1,000 Lakewood City School District, Cuyahoga County, Ohio, 12/14 at 100.00 AAA 1,100,030
General Obligation Bonds, Series 2004, 5.250%, 12/01/16 -
FSA Insured
2,000 Lakota Local School District, Butler County, Ohio, Unlimited 6/11 at 100.00 Aaa 2,034,800
Tax General Obligation School Improvement and Refunding
Bonds, Series 2001, 5.125%, 12/01/26 - FGIC Insured
2,000 Medina City School District, Medina County, Ohio, Unlimited 12/09 at 100.00 AAA 2,034,920
Tax General Obligation School Building Construction Bonds,
Series 1999, 5.250%, 12/01/28 - FGIC Insured
1,000 Nordonia Hills City School District, Ohio, School Improvement 12/10 at 101.00 AAA 1,053,460
Bonds, Series 2000, 5.450%, 12/01/25 - AMBAC Insured
1,900 Olentangy Local School District, Deleware and Franklin 6/14 at 100.00 AAA 2,005,165
Counties, Ohio, General Obligation Bonds, Series 2004A,
5.250%, 12/01/23 - FGIC Insured
1,850 Swanton Local School District, Fulton County, Ohio, General 12/11 at 101.00 AAA 1,918,746
Obligation Bonds, Series 2001, 5.250%, 12/01/25 -
FGIC Insured
1,275 Sycamore Community School District, Hamilton County, 12/09 at 101.00 AAA 1,298,473
Ohio, Unlimited Tax General Obligation School Improvement
Bonds, Series 1999, 5.000%, 12/01/23 - MBIA Insured
1,485 West Chester Township, Butler County, Ohio, Various Purpose 11/11 at 101.00 Aaa 1,627,709
Limited Tax General Obligation Refunding Bonds, Series 2001,
5.500%, 12/01/17 - AMBAC Insured
1,000 West Holmes Local School District, Ohio, School Improvement 6/07 at 101.00 AAA 1,059,410
Bonds, Series 1997, 5.375%, 12/01/23 - MBIA Insured
2,500 Westerville City School District, Franklin and Delaware 6/11 at 100.00 AAA 2,514,650
Counties, Ohio, Various Purpose General Obligation Bonds,
Series 2001, 5.000%, 12/01/27 - MBIA Insured
2,965 Franklin County, Worthington, Ohio, Various Purpose Unlimited 12/11 at 100.00 AA+ 3,178,569
Tax General Obligation Bonds, Series 2001, 5.375%, 12/01/21
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 15.1%
1,415 Hamilton County Convention Facilities Authority, Ohio, First 6/14 at 100.00 AAA 1,467,794
Lien Revenue Bonds, Series 2004, 5.000%, 12/01/21 -
FGIC Insured
2,000 Ohio, Higher Education Capital Facilities, Appropriation Bonds, 2/11 at 100.00 AA+ 2,062,660
Series II-2001A, 5.000%, 2/01/20
4,000 Puerto Rico Municipal Finance Agency, Series 1999A, 8/09 at 101.00 AAA 4,532,640
6.000%, 8/01/16 - FSA Insured
1,400 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/10 at 101.00 BBB 1,567,426
Loan Notes, Series 1999A, 6.375%, 10/01/19
38
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 5.0%
$ 2,000 Ohio Turnpike Commission, Revenue Bonds, Series 2001A, 2/11 at 100.00 AA $ 2,097,780
5.500%, 2/15/26
1,000 Toledo-Lucas County Port Authority, Ohio, Revenue Refunding No Opt. Call Baa2 1,105,000
Bonds, CSX Transportation Inc., Series 1992, 6.450%, 12/15/21
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 13.4%
1,440 Wadsworth, Ohio, Electric System Improvement Revenue Bonds, 2/12 at 100.00 Aaa 1,548,893
American Municipal Power Ohio Inc., Series 2002,
5.250%, 2/15/17 - MBIA Insured
910 Lebanon, Ohio, Electric System Mortgage Revenue Bonds, 12/10 at 101.00 AAA 1,002,583
Series 2001, 5.500%, 12/01/18 - AMBAC Insured
1,500 Ohio Air Quality Development Authority, Revenue Refunding 9/05 at 102.00 Ba1 1,477,574
Bonds, Dayton Power and Light Company Project, Series 1995,
6.100%, 9/01/30
2,000 Ohio Air Quality Development Authority, Revenue Refunding 5/09 at 101.00 AAA 2,038,780
Bonds, Ohio Power Company Project, Series 1999C,
5.150%, 5/01/26 - AMBAC Insured
1,500 Ohio Air Quality Development Authority, Pollution Control 12/04 at 100.00 Baa2 1,515,750
Revenue Refunding Bonds, Ohio Edison Company Project,
Series 1999C, 5.800%, 6/01/16 (Mandatory put 12/01/04)
1,000 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 932,860
Revenue Bonds, Bay Shore Power, Series 1998A,
5.875%, 9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 10.0%
2,000 Akron, Ohio, Sanitary Sewer System Revenue Refunding 12/06 at 101.00 AAA 2,153,200
Bonds, Series 1997, 5.550%, 12/01/16 - MBIA Insured
1,700 Cincinnati, Ohio, Water System Revenue Bonds, 6/11 at 100.00 AA+ 1,770,550
Series 2001, 5.125%, 12/01/21
2,375 Ohio Water Development Authority, Revenue Bonds, 12/13 at 100.00 Aaa 2,436,321
Water Development Community Assistance Program,
Series 2003, 5.000%, 12/01/23 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 89,345 Total Long-Term Investments (cost $89,994,014) - 146.2% 93,060,747
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.5% 1,580,770
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (48.7)% (31,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 63,641,517
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
39
Nuveen Ohio Dividend Advantage Municipal Fund 2 (NBJ)
Portfolio of
INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 8.4%
$ 980 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB $ 856,050
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
3,000 Ohio State Sewage and Solid Waste Disposal Facilities, 11/11 at 100.00 A+ 3,027,750
Revenue Bonds, Anheuser-Busch Project, Series 2001,
5.500%, 11/01/35 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 4.7%
2,050 Ohio Higher Educational Facilities Commission, Revenue 12/11 at 100.00 Baa1 2,186,633
Bonds, Wittenberg University, Series 2001, 5.500%, 12/01/15
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 23.0%
1,685 Akron, Bath and Copley Joint Township Hospital District, No Opt. Call Baa1 1,747,648
Ohio, Hospital Facilities Revenue Bonds, Summa Health
System Project, Series 1998A, 5.000%, 11/15/08
1,000 Erie County, Ohio, Hospital Facilities Revenue Bonds, 8/12 at 101.00 A 1,008,830
Firelands Regional Medical Center, Series 2002A,
5.500%, 8/15/22
1,850 Lorain County, Ohio, Hospital Revenue Refunding and 10/11 at 101.00 AA- 1,914,362
Improvement Bonds, Catholic Healthcare Partners,
Series 2001A, 5.400%, 10/01/21
2,000 Richland County, Ohio, Hospital Facilities Revenue 11/10 at 101.00 A- 2,098,960
Improvement Bonds, MedCentral Health System
Obligated Group, Series 2000B, 6.375%, 11/15/30
3,670 Tuscarawas County, Ohio, Hospital Facilities Revenue Bonds, 10/11 at 101.00 AA 3,880,071
Union Hospital Project, Series 2001, 5.750%, 10/01/26 -
RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 2.3%
1,000 Franklin County, Ohio, GNMA Collateralized Multifamily 5/12 at 102.00 Aaa 1,047,120
Housing Mortgage Revenue Bonds, Agler Project,
Series 2002A, 5.550%, 5/20/22 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 4.1%
1,605 Ohio Housing Finance Agency, GNMA Mortgage-Backed 9/10 at 100.00 Aaa 1,630,182
Securities Program Residential Mortgage Revenue Bonds,
Series 2001A, 5.500%, 9/01/34 (Alternative Minimum Tax)
240 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/12 at 100.00 Aaa 243,972
Securities Program Residential Mortgage Revenue Bonds,
Series 2002D, 5.400%, 9/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.1%
1,000 Hamilton County, Ohio, Healthcare Facilities Improvement 10/08 at 102.00 BBB 960,700
Revenue Bonds, Twin Towers, Series 1999A,
5.800%, 10/01/23
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 58.3%
1,000 Cleveland, Ohio, General Obligation Bonds, Series 2003, 8/13 at 100.00 AAA 1,079,210
5.250%, 8/01/18 - FGIC Insured
1,000 Cleveland Municipal School District, Cuyahoga County, Ohio, 6/14 at 100.00 AAA 1,075,970
General Obligation Bonds, Series 2004, 5.000%, 12/01/15 -
FSA Insured
2,605 Columbus City School District, Franklin County, Ohio, General 12/14 at 100.00 AAA 2,936,538
Obligation Bonds, Series 2004, 5.500%, 12/01/15 - FSA Insured
1,750 Fairfield City School District, Ohio, General Obligation 12/11 at 100.00 AAA 1,892,223
Refunding Bonds, Series 2001, 5.375%, 12/01/19 - FGIC Insured
1,000 Greater Cleveland Regional Transit Authority, Ohio, General 12/11 at 100.00 Aaa 1,041,540
Obligation Capital Improvement Bonds, Series 2001A,
5.125%, 12/01/21 - MBIA Insured
1,065 Lakewood City School District, Cuyahoga County, Ohio, General 12/14 at 100.00 AAA 1,171,532
Obligation Bonds, Series 2004, 5.250%, 12/01/16 - FSA Insured
4,000 Lebanon City School District, Warren County, Ohio, General 12/11 at 100.00 AAA 4,346,720
Obligation Bonds, Series 2001, 5.500%, 12/01/21 - FSA Insured
40
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 2,420 Lorain County, Ohio, Limited Tax General Obligation Justice 12/12 at 100.00 Aaa $ 2,606,558
Center Bonds, Series 2002, 5.500%, 12/01/22 - FGIC Insured
1,000 Medina City School District, Medina County, Ohio, Unlimited 12/09 at 100.00 AAA 1,017,460
Tax General Obligation School Building Construction Bonds,
Series 1999, 5.250%, 12/01/28 - FGIC Insured
3,000 Milford Exempted Village School District, Ohio, General 12/11 at 100.00 Aaa 3,038,760
Obligation Bonds, Series 2001, 5.125%, 12/01/30 - FSA Insured
1,000 Ohio, Common Schools Capital Facilities, General Obligation 9/11 at 100.00 AA+ 1,027,380
Bonds, Series 2001B, 5.000%, 9/15/21
1,050 Olentangy Local School District, Deleware and Franklin 6/14 at 100.00 AAA 1,178,342
Counties, Ohio, General Obligation Bonds, Series 2004A,
5.500%, 12/01/15 - FGIC Insured
1,960 Portage County, Ohio, General Obligation Bonds, Series 2001, 12/11 at 100.00 AAA 1,982,070
5.000%, 12/01/25 - FGIC Insured
1,000 Powell, Ohio, General Obligation Bonds, Series 2002, 12/12 at 100.00 AAA 1,064,160
5.500%, 12/01/25 - FGIC Insured
1,500 Strongsville, Ohio, General Obligation Bonds, Series 2001, 12/11 at 100.00 Aaa 1,548,690
5.000%, 12/01/21 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 16.9%
1,700 Hamilton, Butler County, Ohio, Limited Tax General Obligation 11/11 at 101.00 Aaa 1,715,317
Bonds, One Renaissance Center Acquisition, Series 2001,
5.000%, 11/01/26 - AMBAC Insured
1,095 Ohio, State Appropriation Lease Bonds, Parks and Recreation 12/13 at 100.00 AA 1,153,802
Capital Facilities, Series 2004A-II, 5.000%, 12/01/18
2,500 Ohio, State Appropriation Lease Bonds, Higher Education No Opt. Call AAA 2,789,625
Capital Facilities, Series 2002A-II, 5.500%, 12/01/09 -
MBIA Insured
1,000 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 A 1,086,000
Revenue Refunding Bonds, Series 2002E, 5.750%, 7/01/24
1,000 Summit County Port Authority, Ohio, Revenue Bonds, 12/11 at 100.00 AAA 1,055,750
Civic Theatre Project, Series 2001, 5.500%, 12/01/26 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 8.0%
3,495 Cleveland, Ohio, Airport System Revenue Bonds, Series 2000A, 1/10 at 101.00 AAA 3,714,032
5.250%, 1/01/18 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 12.6%
2,500 Ohio Air Quality Development Authority, Revenue Refunding 5/09 at 101.00 AAA 2,548,474
Bonds, Ohio Power Company Project, Series 1999C,
5.150%, 5/01/26 - AMBAC Insured
1,500 Ohio Air Quality Development Authority, Pollution Control 12/04 at 100.00 Baa2 1,515,750
Revenue Refunding Bonds, Ohio Edison Company Project,
Series 1999C, 5.800%, 6/01/16 (Mandatory put 12/01/04)
1,900 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 1,772,433
Revenue Bonds, Bay Shore Power, Series 1998A,
5.875%, 9/01/20 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 8.0%
2,000 Akron, Ohio, Sanitary Sewer System Revenue Refunding 12/06 at 101.00 AAA 2,153,200
Bonds, Series 1997, 5.550%, 12/01/16 - MBIA Insured
1,500 Ohio Water Development Authority, Revenue Bonds, 12/11 at 100.00 AAA 1,542,074
Fresh Water Development, Series 2001A, 5.000%, 12/01/21 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 65,620 Total Long-Term Investments (cost $66,968,945) - 148.4% 68,655,888
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.5% 1,612,589
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.9)% (24,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 46,268,477
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
41
Nuveen Ohio Dividend Advantage Municipal Fund 3 (NVJ)
Portfolio of
INVESTMENTS July 31, 2004
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.7%
$ 2,105 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB $ 1,838,760
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 13.9%
1,125 Ohio Higher Education Facilities Commission, Revenue Bonds, 5/12 at 100.00 A2 1,238,513
Ohio Northern University Project, Series 2002, 5.750%, 5/01/16
2,000 Ohio Higher Education Facilities Commission, Revenue Bonds, 10/12 at 100.00 AA 2,148,760
Case Western Reserve University Project, Series 2002B,
5.500%, 10/01/22
1,000 Ohio State University, General Receipts Bonds, 12/09 at 101.00 AA 1,075,430
Series 1999A, 5.800%, 12/01/29
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 22.8%
845 Akron, Bath, and Copley Joint Township Hospital District, No Opt. Call Baa1 876,417
Ohio, Hospital Facilities Revenue Bonds, Summa Health
System Project, Series 1998A, 5.000%, 11/15/08
1,750 Erie County, Ohio, Hospital Facilities Revenue Bonds, 8/12 at 101.00 A 1,765,453
Firelands Regional Medical Center, Series 2002A,
5.500%, 8/15/22
1,425 Montgomery County, Ohio, Hospital Facilities Revenue Bonds, 4/10 at 101.00 A3 1,561,501
Kettering Medical Center, Series 1999, 6.750%, 4/01/18
1,000 Montgomery County, Ohio, Revenue Bonds, Catholic Health 9/11 at 100.00 AA 1,090,950
Initiatives, Series 2001, 5.500%, 9/01/12
1,000 Parma Community General Hospital Association, Ohio, 11/08 at 101.00 A- 991,720
Hospital Revenue Refunding and Improvement Bonds,
Series 1998, 5.375%, 11/01/29
1,000 Richland County, Ohio, Hospital Facilities Revenue Improvement 11/10 at 101.00 A- 1,049,480
Bonds, MedCentral Health System Obligated Group,
Series 2000B, 6.375%, 11/15/30
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 6.3%
515 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 536,434
Securities Program, Residential Mortgage Revenue Bonds,
Series 2000C, 6.050%, 3/01/32 (Alternative Minimum Tax)
985 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 988,546
Securities Program, Residential Mortgage Revenue Bonds,
Series 2000D, 5.450%, 9/01/31 (Alternative Minimum Tax)
475 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 505,533
Securities Program, Residential Mortgage Revenue Bonds,
Series 2000F, 5.625%, 9/01/16
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.6%
500 Hamilton County, Ohio, Healthcare Facilities Improvement 10/08 at 102.00 BBB 500,160
Revenue Bonds, Twin Towers, Series 1999A, 5.750%, 10/01/19
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 47.6%
2,000 Canal Winchester Local School District, Franklin and Fairfield 12/08 at 102.00 AAA 2,071,180
Counties, Ohio, Unlimited Tax General Obligation School
Improvement Bonds, Series 1998, 5.300%, 12/01/25 -
FGIC Insured
1,475 Eaton City School District, Preble County, Ohio, General 12/12 at 101.00 Aaa 1,646,277
Obligation Bonds, Series 2002, 5.750%, 12/01/21 -
FGIC Insured
2,000 Granville Exempt Village School District, Ohio, General 12/11 at 100.00 Aa3 2,092,880
Obligation Bonds, Series 2001, 5.500%, 12/01/28
1,000 Hilliard, Ohio, General Obligation Bonds, Series 2002, 12/12 at 100.00 AA- 1,066,280
5.375%, 12/01/22
1,000 Kenston Local School District, Geauga County, Ohio, General 6/13 at 100.00 Aaa 1,032,010
Obligation Bonds, Series 2003, 5.000%, 12/01/22 -
MBIA Insured
1,270 Lorain, Ohio, General Obligation Bonds, Series 2002, 12/12 at 100.00 Aaa 1,296,073
5.125%, 12/01/26 - AMBAC Insured
1,190 Miami East Local School District, Miami County, Ohio, 12/12 at 100.00 AAA 1,203,697
General Obligation Bonds, Series 2002, 5.125%, 12/01/29 -
FSA Insured
42
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 1,000 Ohio, Common Schools Capital Facilities, General Obligation 9/11 at 100.00 AA+ $ 1,033,830
Bonds, Series 2001B, 5.000%, 9/15/20
1,000 Olentangy Local School District, Deleware and Franklin 6/14 at 100.00 AAA 1,067,620
Counties, Ohio, General Obligation Bonds, Series 2004A,
5.250%, 12/01/21 - FGIC Insured
1,535 Pickerington Local School District, Fairfield and Franklin 12/11 at 100.00 AAA 1,632,380
Counties, Ohio, General Obligation Bonds, School Facilities
Construction and Improvement, Series 2001,
5.250%, 12/01/20 - FGIC Insured
1,130 Solon, Ohio, General Obligation Refunding and Improvement 12/12 at 100.00 AA+ 1,188,500
Bonds, Series 2002, 5.000%, 12/01/18
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 22.9%
500 Hamilton County Convention Facilities Authority, Ohio, 6/14 at 100.00 AAA 527,600
First Lien Revenue Bonds, Series 2004, 5.000%, 12/01/18 -
FGIC Insured
1,000 Midview Local School District, Lorain County, Ohio, Certificates 5/13 at 100.00 A 978,460
of Participation, Series 2003, 5.000%, 11/01/30
2,000 Ohio, State Appropriation Lease Bonds, Higher Education No Opt. Call AAA 2,231,700
Capital Facilities, Series 2002A-II, 5.500%, 12/01/09 -
MBIA Insured
1,250 Ohio Building Authority, State Facilities Bonds, Administrative 4/12 at 100.00 AAA 1,372,888
Building Fund Projects, Series 2002A, 5.500%, 4/01/18 -
FSA Insured
2,000 Puerto Rico Public Buildings Authority, Guaranteed Government No Opt. Call AAA 2,269,500
Facilities Revenue Bonds, Series 1993L, 5.500%, 7/01/21 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 9.3%
1,140 Columbus Municipal Airport Authority, Ohio, Airport No Opt. Call AAA 1,247,605
Improvement Revenue Bonds, Port Columbus International
Airport Project, Series 1998B, 5.250%, 1/01/11 -
AMBAC Insured
1,550 Ohio Turnpike Commission, Revenue Bonds, Series 1998A, No Opt. Call AAA 1,753,887
5.500%, 2/15/18 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 5.0%
1,500 Wadsworth, Ohio, Electric System Improvement Revenue 2/12 at 100.00 Aaa 1,613,430
Bonds, American Municipal Power Ohio Inc., Series 2002,
5.250%, 2/15/17 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 13.1%
1,000 Akron, Ohio, Sanitary Sewer System Revenue Refunding 12/06 at 101.00 AAA 1,076,600
Bonds, Series 1997, 5.550%, 12/01/16 - MBIA Insured
1,500 Hamilton County, Ohio, Sewer System Revenue Refunding 12/11 at 100.00 AAA 1,611,600
and Improvement Bonds, Metropolitan Sewer District of
Greater Cincinnati, Series 2001A, 5.250%, 12/01/18 -
MBIA Insured
1,500 Ohio Water Development Authority, Revenue Bonds, Fresh 12/11 at 100.00 AAA 1,542,073
Water Development, Series 2001A, 5.000%, 12/01/21 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 45,265 Total Long-Term Investments (cost $46,232,184) - 148.2% 47,723,727
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.0% 984,525
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.2)% (16,500,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 32,208,252
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments
are based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent registered public accounting firm): Dates
(month and year) and prices of the earliest optional
call or redemption. There may be other call provisions
at varying prices at later dates.
** Ratings (not covered by the report of independent
registered public accounting firm): Using the higher of
Standard & Poor's or Moody's rating.
See accompanying notes to financial statements.
43
Statement of
ASSETS AND LIABILITIES July 31, 2004
MICHIGAN MICHIGAN MICHIGAN
QUALITY PREMIUM DIVIDEND
INCOME INCOME ADVANTAGE
(NUM) (NMP) (NZW)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $256,161,806, $165,695,762
and $44,626,861, respectively) $271,190,724 $173,319,781 $45,792,157
Cash 936,082 1,209,431 299,308
Receivables:
Interest 3,184,645 2,210,055 552,887
Investments sold -- -- --
Other assets 12,204 4,660 95
------------------------------------------------------------------------------------------------------------------------------------
Total assets 275,323,655 176,743,927 46,644,447
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased -- 3,043,751 --
Forward swaps, at value -- -- 64,628
Accrued expenses:
Management fees 149,330 94,851 13,771
Other 56,874 72,915 26,225
Preferred share dividends payable 3,346 3,536 1,379
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 209,550 3,215,053 106,003
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 94,000,000 56,000,000 16,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $181,114,105 $117,528,874 $30,538,444
====================================================================================================================================
Common shares outstanding 11,674,873 7,736,663 2,059,945
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common shares,
divided by Common shares outstanding) $ 15.51 $ 15.19 $ 14.82
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 116,749 $ 77,367 $ 20,599
Paid-in surplus 163,295,195 108,168,938 29,152,921
Undistributed net investment income 1,934,690 1,390,724 347,437
Accumulated net realized gain (loss) from investments 738,553 267,826 (83,181)
Net unrealized appreciation (depreciation) of investments and
forward swap transactions 15,028,918 7,624,019 1,100,668
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $181,114,105 $117,528,874 $30,538,444
====================================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 Unlimited
Preferred 1,000,000 1,000,000 Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
44
OHIO OHIO OHIO OHIO
QUALITY DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NUO) (NXI) (NBJ) (NVJ)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $221,294,176, $89,994,014
$66,968,945 and $46,232,184, respectively) $229,729,941 $93,060,747 $68,655,888 $47,723,727
Cash 320,862 420,036 897,796 400,748
Receivables:
Interest 2,838,029 1,200,834 763,686 605,163
Investments sold 975,674 -- -- --
Other assets 12,328 7,412 145 7,245
------------------------------------------------------------------------------------------------------------------------------------
Total assets 233,876,834 94,689,029 70,317,515 48,736,883
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased -- -- -- --
Forward swaps, at value -- -- -- --
Accrued expenses:
Management fees 127,221 28,007 20,793 14,405
Other 109,959 16,832 24,304 12,272
Preferred share dividends payable 5,547 2,673 3,941 1,954
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 242,727 47,512 49,038 28,631
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 77,000,000 31,000,000 24,000,000 16,500,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $156,634,107 $63,641,517 $46,268,477 $32,208,252
====================================================================================================================================
Common shares outstanding 9,662,870 4,228,284 3,115,497 2,157,564
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common shares,
divided by Common shares outstanding) $ 16.21 $ 15.05 $ 14.85 $ 14.93
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 96,629 $ 42,283 $ 31,155 $ 21,576
Paid-in surplus 146,390,733 60,002,631 44,146,538 30,527,270
Undistributed net investment income 1,561,039 680,530 451,940 125,984
Accumulated net realized gain (loss) from investments 149,941 (150,660) (48,099) 41,879
Net unrealized appreciation (depreciation) of investments and
forward swap transactions 8,435,765 3,066,733 1,686,943 1,491,543
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $156,634,107 $63,641,517 $46,268,477 $32,208,252
====================================================================================================================================
Authorized shares:
Common 200,000,000 Unlimited Unlimited Unlimited
Preferred 1,000,000 Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
45
Statement of
OPERATIONS Year Ended July 31, 2004
MICHIGAN MICHIGAN MICHIGAN
QUALITY PREMIUM DIVIDEND
INCOME INCOME ADVANTAGE
(NUM) (NMP) (NZW)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $14,028,366 $8,938,840 $2,280,369
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,778,400 1,134,184 303,892
Preferred shares - auction fees 235,758 140,451 40,223
Preferred shares - dividend disbursing agent fees 20,053 20,053 10,028
Shareholders' servicing agent fees and expenses 31,071 21,001 757
Custodian's fees and expenses 62,655 44,958 10,719
Directors'/Trustees' fees and expenses 4,526 4,523 922
Professional fees 19,525 15,732 10,176
Shareholders' reports - printing and mailing expenses 34,422 20,687 3,913
Stock exchange listing fees 12,999 11,021 181
Investor relations expense 11,883 6,998 4,133
Other expenses 24,606 11,807 9,584
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 2,235,898 1,431,415 394,528
Custodian fee credit (9,564) (15,217) (5,024)
Expense reimbursement -- -- (140,258)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 2,226,334 1,416,198 249,246
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 11,802,032 7,522,642 2,031,123
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss) from investments 1,180,195 1,871,869 51,975
Change in net unrealized appreciation (depreciation)
of investments 4,399,778 1,053,906 1,008,797
Change in net unrealized appreciation (depreciation)
of forward swap transactions -- -- (64,628)
------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 5,579,973 2,925,775 996,144
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (724,631) (313,219) (111,533)
From accumulated net realized gains from investments (95,441) (220,148) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (820,072) (533,367) (111,533)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from operations $16,561,933 $9,915,050 $2,915,734
====================================================================================================================================
See accompanying notes to financial statements.
46
OHIO OHIO OHIO OHIO
QUALITY DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NUO) (NXI) (NBJ) (NVJ)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $12,180,335 $4,871,907 $3,437,470 $2,328,521
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 1,519,417 617,748 458,482 318,944
Preferred shares - auction fees 193,121 77,932 60,193 41,382
Preferred shares - dividend disbursing agent fees 30,082 10,028 10,028 10,028
Shareholders' servicing agent fees and expenses 32,997 1,474 1,223 1,132
Custodian's fees and expenses 57,086 22,197 15,941 12,092
Directors'/Trustees' fees and expenses 4,401 2,130 1,680 1,250
Professional fees 16,780 11,963 11,556 10,147
Shareholders' reports - printing and mailing expenses 17,897 3,807 7,419 9,004
Stock exchange listing fees 11,184 371 274 190
Investor relations expense 10,152 7,509 6,172 4,335
Other expenses 15,524 10,988 10,730 8,916
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and
expense reimbursement 1,908,641 766,147 583,698 417,420
Custodian fee credit (16,996) (3,826) (6,637) (5,476)
Expense reimbursement -- (285,114) (211,607) (147,205)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,891,645 477,207 365,454 264,739
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 10,288,690 4,394,700 3,072,016 2,063,782
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN
(LOSS) FROM INVESTMENTS
Net realized gain (loss) from investments 2,207,042 (170,963) (16,409) 41,914
Change in net unrealized appreciation (depreciation)
of investments 246,313 1,850,624 1,654,989 1,025,170
Change in net unrealized appreciation (depreciation)
of forward swap transactions -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 2,453,355 1,679,661 1,638,580 1,067,084
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (535,383) (255,016) (181,912) (124,399)
From accumulated net realized gains from investments (141,268) (5,304) -- (10,818)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (676,651) (260,320) (181,912) (135,217)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from operations $12,065,394 $5,814,041 $4,528,684 $2,995,649
====================================================================================================================================
See accompanying notes to financial statements.
47
Statement of
CHANGES IN NET ASSETS
MICHIGAN MICHIGAN MICHIGAN
QUALITY INCOME (NUM) PREMIUM INCOME (NMP) DIVIDEND ADVANTAGE (NZW)
----------------------------- ----------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
7/31/04 7/31/03 7/31/04 7/31/03 7/31/04 7/31/03
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 11,802,032 $ 12,090,435 $ 7,522,642 $ 7,932,887 $ 2,031,123 $ 2,041,873
Net realized gain (loss)
from investments 1,180,195 1,537,864 1,871,869 1,797,104 51,975 43,512
Change in net unrealized
appreciation (depreciation)
of investments 4,399,778 (4,630,793) 1,053,906 (4,692,253) 1,008,797 (463,571)
Change in net unrealized
appreciation (depreciation)
of forward swap
transactions -- -- -- -- (64,628) --
Distributions to Preferred Shareholders:
From net investment income (724,631) (882,566) (313,219) (551,440) (111,533) (141,482)
From accumulated net
realized gains
from investments (95,441) (128,818) (220,148) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common
shares from operations 16,561,933 7,986,122 9,915,050 4,486,298 2,915,734 1,480,332
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (11,067,332) (10,738,262) (7,285,471) (6,995,623) (1,841,125) (1,770,278)
From accumulated net
realized gains
from investments (1,232,780) (1,195,839) (3,007,816) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets
applicable to
Common shares
from distributions
to Common shareholders (12,300,112) (11,934,101) (10,293,287) (6,995,623) (1,841,125) (1,770,278)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions 666,222 503,555 488,732 108,017 22,217 3,344
Preferred shares offering costs -- -- -- -- (1,870) 50,657
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions 666,222 503,555 488,732 108,017 20,347 54,001
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets
applicable to Common shares 4,928,043 (3,444,424) 110,495 (2,401,308) 1,094,956 (235,945)
Net assets applicable to
Common shares at
the beginning of year 176,186,062 179,630,486 117,418,379 119,819,687 29,443,488 29,679,433
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $181,114,105 $176,186,062 $117,528,874 $117,418,379 $30,538,444 $29,443,488
====================================================================================================================================
Undistributed net investment
income at the end of year $ 1,934,690 $ 1,925,191 $ 1,390,724 $ 1,483,435 $ 347,437 $ 269,088
====================================================================================================================================
See accompanying notes to financial statements.
48
OHIO OHIO OHIO
QUALITY INCOME (NUO) DIVIDEND ADVANTAGE (NXI) DIVIDEND ADVANTAGE 2 (NBJ)
----------------------------- ----------------------------- ----------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
7/31/04 7/31/03 7/31/04 7/31/03 7/31/04 7/31/03
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 10,288,690 $ 10,568,139 $ 4,394,700 $ 4,444,153 $ 3,072,016 $ 3,127,428
Net realized gain (loss)
from investments 2,207,042 742,663 (170,963) 156,618 (16,409) 393,224
Change in net unrealized
appreciation (depreciation)
of investments 246,313 (3,005,456) 1,850,624 (1,154,603) 1,654,989 (1,127,584)
Change in net unrealized appreciation
(depreciation) of forward swap
transactions -- -- -- -- -- --
Distributions to Preferred Shareholders:
From net investment income (535,383) (735,656) (255,016) (307,940) (181,912) (236,527)
From accumulated net
realized gains
from investments (141,268) -- (5,304) (5,459) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to
Common shares from operations 12,065,394 7,569,690 5,814,041 3,132,769 4,528,684 2,156,541
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (9,681,971) (9,454,399) (4,096,876) (3,865,874) (2,862,473) (2,710,843)
From accumulated net
realized gains
from investments (2,044,035) -- (71,806) (43,462) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (11,726,006) (9,454,399) (4,168,682) (3,909,336) (2,862,473) (2,710,843)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions 883,014 945,060 74,236 115,397 26,498 13,374
Preferred shares offering costs -- -- (1,664) 36,823 (1,870) 45,457
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions 883,014 945,060 72,572 152,220 24,628 58,831
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 1,222,402 (939,649) 1,717,931 (624,347) 1,690,839 (495,471)
Net assets applicable to
Common shares at the
beginning of year 155,411,705 156,351,354 61,923,586 62,547,933 44,577,638 45,073,109
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $156,634,107 $155,411,705 $63,641,517 $61,923,586 $46,268,477 $44,577,638
====================================================================================================================================
Undistributed net investment
income at the end of year $ 1,561,039 $ 1,508,224 $ 680,530 $ 658,025 $ 451,940 $ 425,175
====================================================================================================================================
See accompanying notes to financial statements.
49
Statement of
CHANGES IN NET ASSETS (continued)
OHIO
DIVIDEND ADVANTAGE 3 (NVJ)
---------------------------
YEAR ENDED YEAR ENDED
7/31/04 7/31/03
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 2,063,782 $ 2,083,454
Net realized gain (loss) from investments 41,914 305,202
Change in net unrealized appreciation
(depreciation) of investments 1,025,170 (942,414)
Change in net unrealized appreciation
(depreciation) of forward swap
transactions -- --
Distributions to Preferred Shareholders:
From net investment income (124,399) (149,564)
From accumulated net realized gains
from investments (10,818) (15,641)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to
Common shares from operations 2,995,649 1,281,037
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (1,889,890) (1,889,785)
From accumulated net realized gains
from investments (146,047) (121,348)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (2,035,937) (2,011,133)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions 4,762 3,539
Preferred shares offering costs (1,408) (23,189)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares from
capital share transactions 3,354 (19,650)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares 963,066 (749,746)
Net assets applicable to Common
shares at the beginning of year 31,245,186 31,994,932
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of year $32,208,252 $31,245,186
====================================================================================================================================
Undistributed net investment
income at the end of year $ 125,984 $ 76,532
====================================================================================================================================
See accompanying notes to financial statements.
50
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The state Funds (the "Funds") covered in this report and their corresponding
Common share stock exchange symbols are Nuveen Michigan Quality Income Municipal
Fund, Inc. (NUM), Nuveen Michigan Premium Income Municipal Fund, Inc. (NMP),
Nuveen Michigan Dividend Advantage Municipal Fund (NZW), Nuveen Ohio Quality
Income Municipal Fund, Inc. (NUO), Nuveen Ohio Dividend Advantage Municipal Fund
(NXI), Nuveen Ohio Dividend Advantage Municipal Fund 2 (NBJ) and Nuveen Ohio
Dividend Advantage Municipal Fund 3 (NVJ). Common shares of Michigan Quality
Income (NUM), Michigan Premium Income (NMP), and Ohio Quality Income (NUO) are
traded on the New York Stock Exchange while Common shares of Michigan Dividend
Advantage (NZW), Ohio Dividend Advantage (NXI), Ohio Dividend Advantage 2 (NBJ)
and Ohio Dividend Advantage 3 (NVJ) are traded on the American Stock Exchange.
The Funds are registered under the Investment Company Act of 1940, as amended,
as closed-end management investment companies.
Each Fund seeks to provide current income exempt from both regular federal and
designated state income taxes by investing primarily in a diversified portfolio
of municipal obligations issued by state and local government authorities within
a single state.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with U.S.
generally accepted accounting principles.
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, evaluations
of anticipated cash flows or collateral 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, or its designee, may establish a
fair value for the security. Temporary investments in securities that have
variable rate and demand features qualifying them as short-term securities are
valued at amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets with a current value at least equal to the amount of the
when-issued and delayed delivery purchase commitments. At July 31, 2004,
Michigan Premium Income (NMP) had an outstanding when-issued purchase commitment
of $3,043,751. There were no such outstanding purchase commitments in any of the
other Funds.
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute all income and capital gains to shareholders and to
otherwise comply with the requirements of Subchapter M of the Internal Revenue
Code applicable to regulated investment companies. Therefore, no federal income
tax provision is required. Furthermore, each Fund intends to satisfy conditions
which will enable interest from municipal securities, which is exempt from
regular federal and applicable state taxes, to retain such tax-exempt status
when distributed to shareholders of the Funds. All monthly tax-exempt income
dividends paid during the fiscal year ended July 31, 2004, have been designated
Exempt Interest Dividends. Net realized capital gains and ordinary income
distributions made by the Funds are subject to federal taxation.
51
Notes to
FINANCIAL STATEMENTS (continued)
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares as a
means of effecting financial leverage. Each Fund's Preferred shares are issued
in one or more Series. The dividend rate on each Series may change every seven
days, as set pursuant to a dutch auction process by the auction agent, and is
payable at or near the end of each rate period. The number of Preferred shares
outstanding, by Series and in total, for each Fund is as follows:
MICHIGAN MICHIGAN MICHIGAN
QUALITY PREMIUM DIVIDEND
INCOME INCOME ADVANTAGE
(NUM) (NMP) (NZW)
--------------------------------------------------------------------------------
Number of shares:
Series M -- 840 --
Series W -- -- 640
Series TH 3,200 1,400 --
Series F 560 -- --
--------------------------------------------------------------------------------
Total 3,760 2,240 640
================================================================================
OHIO OHIO OHIO OHIO
QUALITY DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NUO) (NXI) (NBJ) (NVJ)
--------------------------------------------------------------------------------
Number of shares:
Series M 680 -- -- --
Series T -- -- -- 660
Series W -- 1,240 -- --
Series TH 1,400 -- -- --
Series TH2 1,000 -- -- --
Series F -- -- 960 --
--------------------------------------------------------------------------------
Total 3,080 1,240 960 660
================================================================================
52
Forward Swap Transactions
The Funds may invest in certain derivative financial instruments. The Funds use
of forward interest rate swap transactions is intended to mitigate the negative
impact that an increase in long-term interest rates could have on Common share
net earnings. Forward interest rate swap transactions involve each Fund's
agreement with the counterparty to pay, in the future, a fixed rate payment in
exchange for the counterparty paying the Fund a variable rate payment. The
payment obligation is based on the notional or nominal amount of the forward
swap contract. The Funds may close out a contract prior to the effective date.
Forward swaps do not involve the delivery of securities or other underlying
assets or principal, but rather are settled in cash. Accordingly, the risk of
loss with respect to the swap counterparty on such transactions is limited to
the credit risk associated with a counterparty failing to honor its commitment.
To minimize such credit risk, all counterparties are required to segregate
collateral daily (based on the daily valuation of each swap) on behalf of each
Fund with a value approximately equal to the amount of any unrealized gain.
Reciprocally, when any of the Funds have an unrealized loss on a swap contract,
the Funds have instructed the custodian to segregate assets of the Funds as
collateral with a value approximately equal to the amount of the unrealized
loss. The Funds help reduce the credit risks associated with forward swap
transactions by entering into agreements only with counterparties the Adviser
believes have the financial resources to honor their obligations and by having
the Adviser continually monitor the financial stability of the swap
counterparties.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Offering Costs
Nuveen Investments, LLC has agreed to pay all Common share offering costs (other
than the sales load) that exceed $.03 per Common share for Michigan Dividend
Advantage (NZW), Ohio Dividend Advantage (NXI), Ohio Dividend Advantage 2 (NBJ)
and Ohio Dividend Advantage 3 (NVJ). Michigan Dividend Advantage's (NZW), Ohio
Dividend Advantage's (NXI), Ohio Dividend Advantage 2's (NBJ) and Ohio Dividend
Advantage 3's (NVJ) total share of Common share offering costs ($61,530,
$126,237, $93,150 and $64,500, respectively) were recorded as a reduction of the
proceeds from the sales of Common shares.
Total costs incurred by Michigan Dividend Advantage (NZW), Ohio Dividend
Advantage (NXI), Ohio Dividend Advantage 2 (NBJ) and Ohio Dividend Advantage
Fund 3 (NVJ) in connection with their offering of Preferred shares ($275,343,
$415,427, $362,543 and $294,515, respectively) were recorded as a reduction to
paid-in surplus.
Indemnifications
Under the Fund's organizational documents, its Officers and Directors/Trustees
are indemnified against certain liabilities arising out of the performance of
their duties to the Funds. In addition, in the normal course of business, the
Funds enter into contracts that provide general indemnifications to other
parties. The Funds' maximum exposure under these arrangements is unknown as this
would involve future claims that may be made against the Funds that have not yet
occurred. However, the Funds have not had prior claims or losses pursuant to
these contracts and expect the risk of loss to be remote.
Use of Estimates
The preparation of financial statements in conformity with U.S. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
53
Notes to
FINANCIAL STATEMENTS (continued)
2. FUND SHARES
Transactions in Common shares were as follows:
MICHIGAN QUALITY MICHIGAN PREMIUM MICHIGAN DIVIDEND
INCOME (NUM) INCOME (NMP) ADVANTAGE (NZW)
---------------------- ---------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
7/31/04 7/31/03 7/31/04 7/31/03 7/31/04 7/31/03
---------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due
to reinvestment
of distributions 40,867 30,579 30,749 6,562 1,185 217
=========================================================================================================
OHIO QUALITY OHIO DIVIDEND OHIO DIVIDEND
INCOME (NUO) ADVANTAGE (NXI) ADVANTAGE 2 (NBJ)
---------------------- ---------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
7/31/04 7/31/03 7/31/04 7/31/03 7/31/04 7/31/03
---------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due
to reinvestment
of distributions 49,919 54,111 4,481 7,470 1,437 872
=========================================================================================================
OHIO DIVIDEND
ADVANTAGE 3 (NVJ)
-------------------------
YEAR ENDED YEAR ENDED
7/31/04 7/31/03
---------------------------------------------------------------------------------------------------------
Common shares issued to
shareholders due to
reinvestment of distributions 299 230
=========================================================================================================
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities for the fiscal year ended July 31, 2004, were as follows:
MICHIGAN MICHIGAN MICHIGAN
QUALITY PREMIUM DIVIDEND
INCOME INCOME ADVANTAGE
(NUM) (NMP) (NZW)
--------------------------------------------------------------------------------
Purchases $41,307,936 $47,786,785 $5,889,666
Sales and maturities 40,237,647 50,369,632 4,171,285
================================================================================
OHIO OHIO OHIO OHIO
QUALITY DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NUO) (NXI) (NBJ) (NVJ)
--------------------------------------------------------------------------------
Purchases $71,993,376 $9,973,168 $10,602,668 $4,170,740
Sales and maturities 71,756,732 8,905,530 10,189,908 3,719,910
================================================================================
54
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing income on taxable market
discount securities and timing differences in recognizing certain gains and
losses on security transactions.
At July 31, 2004, the cost of investments were as follows:
MICHIGAN MICHIGAN MICHIGAN
QUALITY PREMIUM DIVIDEND
INCOME INCOME ADVANTAGE
(NUM) (NMP) (NZW)
--------------------------------------------------------------------------------
Cost of investments $256,245,678 $165,614,999 $44,624,941
================================================================================
OHIO OHIO OHIO OHIO
QUALITY DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NUO) (NXI) (NBJ) (NVJ)
--------------------------------------------------------------------------------
Cost of investments $221,248,768 $89,938,918 $66,954,676 $46,225,873
================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at July 31, 2004, were as follows:
MICHIGAN MICHIGAN MICHIGAN
QUALITY PREMIUM DIVIDEND
INCOME INCOME ADVANTAGE
(NUM) (NMP) (NZW)
-----------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $16,076,874 $8,500,128 $1,376,031
Depreciation (1,131,828) (795,346) (208,815)
-----------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments $14,945,046 $7,704,782 $1,167,216
===========================================================================================================
OHIO OHIO OHIO OHIO
QUALITY DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NUO) (NXI) (NBJ) (NVJ)
-----------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $9,047,358 $3,402,882 $1,923,670 $1,728,609
Depreciation (566,185) (281,053) (222,458) (230,755)
-----------------------------------------------------------------------------------------------------------
Net unrealized appreciation of investments $8,481,173 $3,121,829 $1,701,212 $1,497,854
===========================================================================================================
55
Notes to
FINANCIAL STATEMENTS (continued)
The tax components of undistributed net investment income and net realized gains
at July 31, 2004, were as follows:
MICHIGAN MICHIGAN MICHIGAN
QUALITY PREMIUM DIVIDEND
INCOME INCOME ADVANTAGE
(NUM) (NMP) (NZW)
---------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income $2,706,496 $1,894,851 $500,325
Undistributed net ordinary income * 60,807 14,373 --
Undistributed net long-term capital gains 915,473 267,823 --
=========================================================================================================
OHIO OHIO OHIO OHIO
QUALITY DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NUO) (NXI) (NBJ) (NVJ)
---------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income $2,328,022 $960,391 $681,157 $279,127
Undistributed net ordinary income * 54,254 10,211 349 --
Undistributed net long-term capital gains 95,687 -- -- 41,879
=========================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
The tax character of distributions paid during the fiscal years ended July 31,
2004 and July 31, 2003, was designated for purposes of the dividends paid
deduction as follows:
MICHIGAN MICHIGAN MICHIGAN
QUALITY PREMIUM DIVIDEND
INCOME INCOME ADVANTAGE
2004 (NUM) (NMP) (NZW)
---------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $11,754,459 $7,435,769 $1,951,436
Distributions from net ordinary income * 30,661 161,074 --
Distributions from net long-term capital gains 1,328,221 3,227,967 --
=========================================================================================================
OHIO OHIO OHIO OHIO
QUALITY DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2004 (NUO) (NXI) (NBJ) (NVJ)
---------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $10,199,299 $4,338,961 $3,036,212 $2,013,038
Distributions from net ordinary income * 18,197 1,707 -- 156,865
Distributions from net long-term capital gains 2,185,303 75,417 -- --
=========================================================================================================
56
MICHIGAN MICHIGAN MICHIGAN
QUALITY PREMIUM DIVIDEND
INCOME INCOME ADVANTAGE
2003 (NUM) (NMP) (NZW)
---------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $11,597,039 $7,524,815 $1,902,369
Distributions from net ordinary income * -- -- --
Distributions from net long-term capital gains 1,324,657 -- --
=========================================================================================================
OHIO OHIO OHIO OHIO
QUALITY DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
2003 (NUO) (NXI) (NBJ) (NVJ)
---------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $10,147,481 $4,155,416 $2,926,588 $2,038,899
Distributions from net ordinary income * -- -- -- 137,104
Distributions from net long-term capital gains -- 48,921 -- --
=========================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
At July 31, 2004, 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:
MICHIGAN OHIO OHIO
DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE ADVANTAGE 2
(NZW) (NXI) (NBJ)
---------------------------------------------------------------------------------------------------------
Expiration year:
2011 $83,181 $ -- $21,436
2012 -- 23,743 3,575
---------------------------------------------------------------------------------------------------------
Total $83,181 $23,743 $25,011
=========================================================================================================
The following Funds elected to defer net realized losses from investments
incurred from November 1, 2003 through July 31, 2004 ("post-October losses") in
accordance with Federal income tax regulations. The following post-October
losses are treated as having arisen on the first day of the following fiscal
year:
OHIO OHIO
DIVIDEND DIVIDEND
ADVANTAGE ADVANTAGE 2
(NXI) (NBJ)
---------------------------------------------------------------------------------------------------------
$126,917 $23,088
=========================================================================================================
57
Notes to
FINANCIAL STATEMENTS (continued)
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc., each
Fund paid through July 31, 2004, an annual management fee, payable monthly, at
the rates set forth below, which were based upon the average daily net assets
(including net assets attributable to Preferred shares) of each Fund as follows:
MICHIGAN QUALITY INCOME (NUM)
MICHIGAN PREMIUM INCOME (NMP)
AVERAGE DAILY NET ASSETS (INCLUDING OHIO QUALITY INCOME (NUO)
NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For the next $3 billion .5875
For net assets over $5 billion .5750
================================================================================
MICHIGAN DIVIDEND ADVANTAGE (NZW)
OHIO DIVIDEND ADVANTAGE (NXI)
OHIO DIVIDEND ADVANTAGE 2 (NBJ)
AVERAGE DAILY NET ASSETS (INCLUDING OHIO DIVIDEND ADVANTAGE 3 (NVJ)
NET ASSETS ATTRIBUTABLE TOPREFERRED SHARES) MANAGEMENT FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For net assets over $2 billion .5750
================================================================================
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser or its affiliates. The Board of
Directors/Trustees has adopted a deferred compensation plan for independent
Directors/Trustees that enables Directors/Trustees to elect to defer receipt of
all or a portion of the annual compensation they are entitled to receive from
certain Nuveen advised Funds. Under the plan, deferred amounts are treated as
though equal dollar amounts had been invested in shares of select Nuveen advised
Funds.
58
As approved by the Board of Directors/Trustees, a complex-wide management fee
structure has been adopted by all funds sponsored by the Adviser and its
affiliates effective August 1, 2004. This structure separates each fund's
management fee into two components - a complex-level component, based on the
aggregate amount of all fund assets managed by the Adviser and its affiliates,
and a specific fund-level component, based only on the amount of assets managed
within each individual fund. This pricing structure enables Nuveen fund
shareholders to benefit from growth in the assets within each individual fund as
well as from growth in the amount of complex-wide assets managed by the Adviser
and its affiliates. Under no circumstances will this pricing structure result in
a fund paying management fees at a rate higher than would otherwise have been
applicable had the complex-wide management fee structure not been implemented.
As a consequence of this new management fee structure, the funds' effective
management fees were reduced by approximately .004% starting August 1, 2004.
The complex-level fee schedule for all funds in the Nuveen fund complex is as
follows:
COMPLEX-LEVEL
COMPLEX-LEVEL ASSETS (1) FEE RATE
--------------------------------------------------------------------------------
For the first $55 billion .2000%
For the next $1 billion .1800
For the next $1 billion .1600
For the next $3 billion .1425
For the next $3 billion .1325
For the next $3 billion 1250
For the next $5 billion .1200
For the next $5 billion .1175
For the next $15 billion .1150
For Managed Assets over $91 billion (2) .1400
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets (which includes assets
attributable to leverage used in the Nuveen fund complex) of all funds
sponsored by the Adviser or by its affiliates.
(2) With respect to the complex-wide Managed Assets over $91 billion, the funds
(via their Board of Directors/Trustees) and the Adviser intend that the
parties will meet, prior to the time when complex-wide Managed Assets reach
that level, to consider and negotiate the fee rate or rates that will apply
to such assets. The parties agree that, in the unlikely event that
complex-wide Managed Assets reach $91 billion prior to the parties reaching
an agreement as to the complex-level fee rate or rates to be applied to
Managed Assets in excess of $91 billion, the complex-level fee rate for
such complex-wide Managed Assets shall be .1400% until such time as the
parties agree to a different rate or rates.
For each of the Funds, the fund-level fee, which is additive to the
complex-level fee, is based upon the average daily Managed Assets of each Fund
as follows:
MICHIGAN QUALITY INCOME (NUM)
MICHIGAN PREMIUM INCOME (NMP)
OHIO QUALITY INCOME (NUO)
AVERAGE DAILY MANAGED ASSETS FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For the next $3 billion .3875
For Managed Assets over $5 billion .3750
================================================================================
MICHIGAN DIVIDEND ADVANTAGE (NZW)
OHIO DIVIDEND ADVANTAGE (NXI)
OHIO DIVIDEND ADVANTAGE 2 (NBJ)
OHIO DIVIDEND ADVANTAGE 3 (NVJ)
AVERAGE DAILY MANAGED ASSETS FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .4500%
For the next $125 million .4375
For the next $250 million .4250
For the next $500 million .4125
For the next $1 billion .4000
For Managed Assets over $2 billion .3750
================================================================================
59
Notes to
FINANCIAL STATEMENTS (continued)
For the first ten years of Ohio Dividend Advantage's (NXI) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Ohio Dividend Advantage (NXI) for any
portion of its fees and expenses beyond March 31, 2011.
For the first ten years of Michigan Dividend Advantage's (NZW) and Ohio Dividend
Advantage 2's (NBJ) operations, the Adviser has agreed to reimburse the Funds,
as a percentage of average daily net assets (including net assets attributable
to Preferred shares), for fees and expenses in the amounts and for the time
periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Michigan Dividend Advantage (NZW) and
Ohio Dividend Advantage 2 (NBJ) for any portion of their fees and expenses
beyond September 30, 2011.
For the first ten years of Ohio Dividend Advantage 3's (NVJ) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2002* .30% 2008 .25%
2003 .30 2009 .20
2004 .30 2010 .15
2005 .30 2011 .10
2006 .30 2012 .05
2007 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Ohio Dividend Advantage 3 (NVJ) for any
portion of its fees and expenses beyond March 31, 2012.
60
6. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on September 1, 2004, to shareholders of
record on August 15, 2004, as follows:
MICHIGAN MICHIGAN MICHIGAN
QUALITY PREMIUM DIVIDEND
INCOME INCOME ADVANTAGE
(NUM) (NMP) (NZW)
--------------------------------------------------------------------------------
Dividend per share $.0790 $.0770 $.0745
================================================================================
OHIO OHIO OHIO OHIO
QUALITY DIVIDEND DIVIDEND DIVIDEND
INCOME ADVANTAGE ADVANTAGE 2 ADVANTAGE 3
(NUO) (NXI) (NBJ) (NVJ)
--------------------------------------------------------------------------------
Dividend per share $.0835 $.0810 $.0770 $.0730
================================================================================
61
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- ------------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
MICHIGAN QUALITY
INCOME (NUM)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 $15.14 $1.01 $ .49 $(.06) $(.01) $1.43 $(.95) $(.11) $(1.06)
2003 15.48 1.04 (.27) (.08) (.01) .68 (.92) (.10) (1.02)
2002 15.32 1.11 .15 (.11) (.02) 1.13 (.90) (.07) (.97)
2001 14.54 1.16 .82 (.29) (.01) 1.68 (.88) (.02) (.90)
2000 15.20 1.19 (.53) (.30) (.02) .34 (.92) (.08) (1.00)
MICHIGAN PREMIUM
INCOME (NMP)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 15.24 .97 .38 (.04) (.03) 1.28 (.94) (.39) (1.33)
2003 15.56 1.03 (.37) (.07) -- .59 (.91) -- (.91)
2002 15.31 1.05 .16 (.11) -- 1.10 (.85) -- (.85)
2001 14.24 1.07 1.07 (.25) -- 1.89 (.82) -- (.82)
2000 14.68 1.07 (.41) (.27) -- .39 (.83) -- (.83)
MICHIGAN DIVIDEND
ADVANTAGE (NZW)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 14.30 .99 .47 (.05) -- 1.41 (.89) -- (.89)
2003 14.42 .99 (.20) (.07) -- .72 (.86) -- (.86)
2002(a) 14.33 .76 .22 (.07) -- .91 (.63) -- (.63)
====================================================================================================================================
Total Returns
--------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
===========================================================================================
MICHIGAN QUALITY
INCOME (NUM)
-------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 $ -- $15.51 $15.2000 5.17% 9.52%
2003 -- 15.14 15.4500 2.40 4.35
2002 -- 15.48 16.1000 11.18 7.68
2001 -- 15.32 15.4200 17.11 11.90
2000 -- 14.54 14.0000 (9.92) 2.51
MICHIGAN PREMIUM
INCOME (NMP)
-------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 -- 15.19 14.3700 5.46 8.56
2003 -- 15.24 14.8500 2.64 3.71
2002 -- 15.56 15.3500 10.52 7.40
2001 -- 15.31 14.7100 17.81 13.61
2000 -- 14.24 13.2500 (6.16) 2.95
MICHIGAN DIVIDEND
ADVANTAGE (NZW)
-------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 -- 14.82 14.6500 2.99 10.00
2003 .02 14.30 15.1000 9.19 5.01
2002(a) (.19) 14.42 14.6500 2.00 5.21
===========================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
----------------------------- ------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
===========================================================================================================================
MICHIGAN QUALITY
INCOME (NUM)
---------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 $181,114 1.22% 6.44% 1.22% 6.45% 15%
2003 176,186 1.24 6.56 1.24 6.57 15
2002 179,630 1.28 7.29 1.27 7.29 19
2001 176,664 1.30 7.79 1.29 7.80 20
2000 167,429 1.29 8.29 1.27 8.31 25
MICHIGAN PREMIUM
INCOME (NMP)
---------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 117,529 1.20 6.28 1.19 6.30 28
2003 117,418 1.21 6.49 1.20 6.50 18
2002 119,820 1.25 6.82 1.24 6.83 9
2001 117,784 1.24 7.24 1.23 7.25 15
2000 109,565 1.29 7.73 1.28 7.74 34
MICHIGAN DIVIDEND
ADVANTAGE (NZW)
---------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 30,538 1.28 6.13 .81 6.60 9
2003 29,443 1.29 6.15 .82 6.61 2
2002(a) 29,679 1.35* 6.00* .90* 6.45* 21
===========================================================================================================================
Preferred Shares at End of Period
---------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
=================================================================
MICHIGAN QUALITY
INCOME (NUM)
-----------------------------------------------------------------
Year Ended 7/31:
2004 $94,000 $25,000 $73,169
2003 94,000 25,000 71,858
2002 94,000 25,000 72,774
2001 94,000 25,000 71,985
2000 94,000 25,000 69,529
MICHIGAN PREMIUM
INCOME (NMP)
-----------------------------------------------------------------
Year Ended 7/31:
2004 56,000 25,000 77,468
2003 56,000 25,000 77,419
2002 56,000 25,000 78,491
2001 56,000 25,000 77,582
2000 56,000 25,000 73,913
MICHIGAN DIVIDEND
ADVANTAGE (NZW)
-----------------------------------------------------------------
Year Ended 7/31:
2004 16,000 25,000 72,716
2003 16,000 25,000 71,005
2002(a) 16,000 25,000 71,374
=================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Common Share Net Asset
Value is the combination of reinvested dividend income at net asset value,
reinvested capital gains distributions at net asset value, if any, and
changes in Common share net asset value per share. Total returns are not
annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period September 25, 2001 (commencement of operations) through July
31, 2002.
See accompanying notes to financial statements.
62-63 SPREAD
Financial HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
--------------------------------------------------------------- ------------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
OHIO QUALITY
INCOME (NUO)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 $16.17 $1.07 $ .25 $(.06) $(.01) $1.25 $(1.00) $(.21) $(1.21)
2003 16.36 1.10 (.22) (.08) -- .80 (.99) -- (.99)
2002 16.10 1.14 .18 (.13) -- 1.19 (.93) -- (.93)
2001 15.52 1.20 .56 (.27) -- 1.49 (.91) -- (.91)
2000 16.13 1.21 (.56) (.29) -- .36 (.97) -- (.97)
OHIO DIVIDEND
ADVANTAGE (NXI)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 14.66 1.04 .40 (.06) -- 1.38 (.97) (.02) (.99)
2003 14.83 1.05 (.23) (.07) -- .75 (.92) (.01) (.93)
2002 14.57 1.06 .19 (.12) -- 1.13 (.87) -- (.87)
2001(a) 14.33 .29 .35 (.04) -- .60 (.22) -- (.22)
OHIO DIVIDEND
ADVANTAGE 2 (NBJ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 14.31 .99 .53 (.06) -- 1.46 (.92) -- (.92)
2003 14.48 1.00 (.23) (.08) -- .69 (.87) -- (.87)
2002(b) 14.33 .78 .23 (.08) -- .93 (.62) -- (.62)
OHIO DIVIDEND
ADVANTAGE 3 (NVJ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 14.48 .96 .51 (.06) (.01) 1.40 (.88) (.07) (.95)
2003 14.83 .97 (.29) (.07) (.01) .60 (.88) (.06) (.94)
2002(c) 14.33 .25 .65 (.02) -- .88 (.22) -- (.22)
====================================================================================================================================
Total Returns
--------------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
===========================================================================================
OHIO QUALITY
INCOME (NUO)
-------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 $ -- $16.21 $16.3000 2.59% 7.87%
2003 -- 16.17 17.0400 (3.15) 4.84
2002 -- 16.36 18.6200 17.00 7.63
2001 -- 16.10 16.8000 6.86 9.85
2000 -- 15.52 16.6250 (1.80) 2.50
OHIO DIVIDEND
ADVANTAGE (NXI)
-------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 -- 15.05 14.8000 10.70 9.54
2003 .01 14.66 14.2600 (.04) 5.09
2002 -- 14.83 15.1500 4.48 8.02
2001(a) (.14) 14.57 15.3500 3.77 3.21
OHIO DIVIDEND
ADVANTAGE 2 (NBJ)
-------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 -- 14.85 14.7000 9.60 10.33
2003 .01 14.31 14.2600 3.17 4.74
2002(b) (.16) 14.48 14.6500 1.91 5.58
OHIO DIVIDEND
ADVANTAGE 3 (NVJ)
-------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 -- 14.93 14.3000 5.86 9.72
2003 (.01) 14.48 14.4000 .09 3.81
2002(c) (.16) 14.83 15.3000 3.47 5.05
===========================================================================================
Ratios/Supplemental Data
-----------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
----------------------------- ------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
==========================================================================================================================
OHIO QUALITY
INCOME (NUO)
--------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 $156,634 1.20% 6.46% 1.19% 6.47% 31%
2003 155,412 1.22 6.59 1.22 6.60 12
2002 156,351 1.26 7.10 1.24 7.12 26
2001 153,164 1.32 7.58 1.30 7.60 15
2000 147,045 1.31 7.88 1.29 7.89 11
OHIO DIVIDEND
ADVANTAGE (NXI)
--------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 63,642 1.20 6.41 .75 6.86 10
2003 61,924 1.23 6.52 .78 6.97 6
2002 62,548 1.24 6.79 .78 7.25 18
2001(a) 61,424 1.15* 5.58* .71* 6.02* 4
OHIO DIVIDEND
ADVANTAGE 2 (NBJ)
--------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 46,268 1.25 6.13 .79 6.60 15
2003 44,578 1.27 6.26 .81 6.72 15
2002(b) 45,073 1.25* 6.12* .80* 6.57* 39
OHIO DIVIDEND
ADVANTAGE 3 (NVJ)
--------------------------------------------------------------------------------------------------------------------------
Year Ended 7/31:
2004 32,208 1.28 5.87 .81 6.34 8
2003 31,245 1.28 5.89 .82 6.35 16
2002(c) 31,995 1.22* 4.72* .80* 5.15* 7
==========================================================================================================================
Preferred Shares at End of Period
---------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
=================================================================
OHIO QUALITY
INCOME (NUO)
-----------------------------------------------------------------
Year Ended 7/31:
2004 $77,000 $25,000 $75,855
2003 77,000 25,000 75,458
2002 77,000 25,000 75,763
2001 77,000 25,000 74,729
2000 77,000 25,000 72,742
OHIO DIVIDEND
ADVANTAGE (NXI)
-----------------------------------------------------------------
Year Ended 7/31:
2004 31,000 25,000 76,324
2003 31,000 25,000 74,938
2002 31,000 25,000 75,442
2001(a) 31,000 25,000 74,535
OHIO DIVIDEND
ADVANTAGE 2 (NBJ)
-----------------------------------------------------------------
Year Ended 7/31:
2004 24,000 25,000 73,196
2003 24,000 25,000 71,435
2002(b) 24,000 25,000 71,951
OHIO DIVIDEND
ADVANTAGE 3 (NVJ)
-----------------------------------------------------------------
Year Ended 7/31:
2004 16,500 25,000 73,800
2003 16,500 25,000 72,341
2002(c) 16,500 25,000 73,477
=================================================================
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Common Share Net Asset
Value is the combination of reinvested dividend income at net asset value,
reinvested capital gains distributions at net asset value, if any, and
changes in Common share net asset value per share. Total returns are not
annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period March 27, 2001 (commencement of operations) through July 31,
2001.
(b) For the period September 25, 2001 (commencement of operations) through July
31, 2002.
(c) For the period March 25, 2002 (commencement of operations) through July 31,
2002.
See accompanying notes to financial statements.
64-65 SPREAD
Board Members
AND OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Funds is currently set
at seven. None of the board members who are not "interested" persons of the
Funds has ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and officers
of the Funds, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger (1) Chairman of 1994 Chairman and Director (since 1996) of Nuveen Investments, 145
3/28/49 the Board Inc. and Nuveen Investments, LLC; Director (since 1992) and
333 W. Wacker Drive and Trustee Chairman (since 1996) of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.; Chairman and Director (since
1997) of Nuveen Asset Management, Inc.; Director (since
1996) of Institutional Capital Corporation; Chairman and
Director (since 1999) of Rittenhouse Asset Management, Inc.;
Chairman of Nuveen Investments Advisers Inc. (since 2002).
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Board member 1997 Private Investor and Management Consultant. 145
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Board member 1993 Retired (1989) as Senior Vice President of The Northern 145
7/29/34 Trust Company; Director, Community Advisory Board for
333 W. Wacker Drive Highland Park and Highwood, United Way of the North
Chicago, IL 60606 Shore (since 2002).
------------------------------------------------------------------------------------------------------------------------------------
Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 145
10/22/48 corporation (since 1996); Director and Vice Chairman, United
333 W. Wacker Drive Fire & Casualty Company; formerly Director, Federal Reserve
Chicago, IL 60606 Bank of Chicago; formerly, President and Chief Operating
Officer, SCI Financial Group, Inc., a regional financial
services firm.
------------------------------------------------------------------------------------------------------------------------------------
William C. Hunter Board member 2004 Dean and Distinguished Professor of Finance, School of 145
3/16/48 Business at the University of Connecticut (since 2003);
333 W. Wacker Drive previously Senior Vice President and Director of Research
Chicago, IL 60606 at the Federal Reserve Bank of Chicago (1995-2003);
Director, Credit Research Center at Georgetown University;
Director of Xerox Corporation (since 2004).
66
NUMBER OF
PORTFOLIOS IN
POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS BOARD MEMBER
------------------------------------------------------------------------------------------------------------------------------------
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider Board member 1997 Senior Partner and Chief Operating Officer, Miller-Valentine 145
9/24/44 Group, Vice President, Miller-Valentine Realty, a construction
333 W. Wacker Drive company; Chair, Miami Valley Hospital; Chair, Dayton
Chicago, IL 60606 Development Coalition; formerly, Member, Community
Advisory Board, National City Bank, Dayton, Ohio and
Business Advisory Council, Cleveland Federal Reserve Bank.
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale Board member 1997 Executive Director, Gaylord and Dorothy Donnelley 145
12/29/47 Foundation (since 1994); prior thereto, Executive Director,
333 W. Wacker Drive Great Lakes Protection Fund (from 1990 to 1994)
Chicago, IL 60606
NUMBER OF
PORTFOLIOS
IN FUND
POSITION(S) YEAR FIRST COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 145
9/9/56 Administrative Associate General Counsel, formerly, Vice President and
333 W. Wacker Drive Officer Assistant General Counsel of Nuveen Investments, LLC;
Chicago, IL 60606 Managing Director (since 2002), General Counsel and
Assistant Secretary, formerly, Vice President of Nuveen
Advisory Corp. and Nuveen Institutional Advisory Corp.;
Managing Director (since 2002), Assistant Secretary and
Associate General Counsel, formerly, Vice President (since
2000), of Nuveen Asset Management, Inc. Assistant
Secretary of Nuveen Investments, Inc. (since 1994); Assistant
Secretary of NWQ Investment Management Company, LLC
(since 2002); Vice President and Assistant Secretary of
Nuveen Investments Advisers Inc. (since 2002); Managing
Director, Associate General Counsel and Assistant Secretary
of Rittenhouse Asset Management, Inc. (since 2003);
Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 145
2/3/66 and Assistant President (since 2000), previously, Associate of Nuveen
333 W. Wacker Drive Secretary Investments, LLC.
Chicago, IL 60606
67
Board Members
AND OFFICERS (CONTINUED)
NUMBER OF
PORTFOLIOS
IN FUND
POSITION(S) YEAR FIRST COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999), 145
11/28/67 and Treasurer prior thereto, Assistant Vice President (since 1997); Vice
333 W. Wacker Drive President and Treasurer of Nuveen Investments, Inc. (since
Chicago, IL 60606 1999); Vice President and Treasurer of Nuveen Advisory Corp.
and Nuveen Institutional Advisory Corp (since 1999); Vice
President and Treasurer of Nuveen Asset Management, Inc.
(since 2002) and of Nuveen Investments Advisers Inc. (since
2002); Assistant Treasurer of NWQ Investment Management
Company, LLC (since 2002); Vice President and Treasurer of
Nuveen Rittenhouse Asset Management, Inc. (since 2003);
Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 2000 Vice President (since 2002) and Assistant General Counsel 145
9/24/64 and Secretary (since 1998); formerly, Assistant Vice President (since 1998)
333 W. Wacker Drive of Nuveen Investments, LLC; Vice President (since 2002)
Chicago, IL 60606 and Assistant Secretary (since 1998), formerly Assistant
Vice President of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Managing Director (since 2004) formerly, Vice President of 145
10/24/45 Nuveen Investments, LLC; Managing Director (since 2004)
333 W. Wacker Drive formerly, Vice President (since 1998) of Nuveen Advisory
Chicago, IL 60606 Corp. and Nuveen Institutional Advisory Corp.
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 145
3/2/64 LLC; Managing Director (since 2001), formerly Vice President
333 W. Wacker Drive of Nuveen Advisory Corp. and Nuveen Institutional Advisory
Chicago, IL 60606 Corp. (since 1995); Managing Director of Nuveen Asset
Management, Inc. (since 2001); Vice President of Nuveen
Investment Advisers Inc. (since 2002); Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 1998) 145
5/31/54 and Controller of Nuveen Investments, LLC and Vice President and Funds
333 W. Wacker Drive Controller (since 1998) of Nuveen Investments, Inc.;
Chicago, IL 60606 Certified Public Accountant.
68
NUMBER OF
PORTFOLIOS
IN FUND
POSITION(S) YEAR FIRST COMPLEX
NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY
AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 145
3/22/63 LLC, previously Assistant Vice President (since 1999);
333 W. Wacker Drive prior thereto, Associate of Nuveen Investments, LLC;
Chicago, IL 60606 Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant Vice 145
8/27/61 President (since 1993) of Nuveen Investments, LLC.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 145
7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and
333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp.; Assistant Secretary of Nuveen
Investments, Inc. and (since 1997) Nuveen Asset Management,
Inc.; Vice President (since 2000), Assistant Secretary and
Assistant General Counsel (since 1998) of Rittenhouse Asset
Management, Inc.; Vice President and Assistant Secretary of
Nuveen Investments Advisers Inc. (since 2002); Assistant
Secretary of NWQ Investment Management Company, LLC
(since 2002).
------------------------------------------------------------------------------------------------------------------------------------
Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, LLC; 145
7/7/65 Managing Director (since 1997), formerly Vice President
333 W. Wacker Drive (since 1996) of Nuveen Advisory Corp. and Nuveen Institutional
Chicago, IL 60606 Advisory Corp.; Managing Director of Nuveen Asset Management,
Inc. (since 1999). Chartered Financial Analyst.
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and board member
of the Adviser.
(2) Board members serve an indefinite term until his/her successor is elected.
The year first elected or appointed represents the year in which the board
member was first elected or appointed to any fund in the Nuveen Complex.
(3) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
69
Reinvest Automatically
EASILY AND CONVENIENTLY
SIDEBAR TEXT: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS
DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
the shares may increase before purchases are completed, the average purchase
price per share may exceed the market price at the time of valuation, resulting
in the acquisition of fewer shares than if the dividend or distribution had been
paid in shares issued by the Fund. A pro rata portion of any applicable
brokerage commissions on open market purchases will be paid by Plan
participants. These commissions usually will be lower than those charged on
individual transactions.
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
70
Other Useful
INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's quarterly portfolio of investments and information regarding how the
Funds voted proxies relating to portfolio securities held during the most recent
12-month period ended June 30, 2004, are available without charge, upon request,
by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's web
site at www.nuveen.com.
You may also obtain this and other Fund information directly from the Securities
and Exchange Commission ("SEC"). The SEC may charge a copying fee for this
information. Visit the SEC on-line at http://www.sec.gov or in person at the
SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
GLOSSARY OF TERMS USED IN THIS REPORT
AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return (including change in NAV and reinvested dividends) that
would have been necessary on an annual basis to equal the investment's actual
performance over the time period being considered.
AVERAGE EFFECTIVE MATURITY: The average of all the maturities of the bonds in a
fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
LEVERAGE-ADJUSTED DURATION: Duration is a measure of a bond or bond fund's
sensitivity to changes in interest rates. Generally, the longer a bond or fund's
duration, the more the price of the bond or fund will change as interest rates
change. Leverage-adjusted duration takes into account the leveraging process for
a Fund and therefore is generally longer than the duration of the actual
portfolio of individual bonds that make up the Fund.
MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's
current annualized dividend divided by its current market price.
NET ASSET VALUE (NAV): A fund's NAV is calculated by subtracting the liabilities
of the fund from its total assets and then dividing the remainder by the number
of shares outstanding. Fund NAVs are calculated at the end of each business day.
TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
BOARD OF
DIRECTORS/TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Jack B. Evans
William C. Hunter
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
Ernst & Young LLP
Chicago, IL
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the fiscal year ended July 31, 2004. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
71
Nuveen Investments:
SERVING Investors
For GENERATIONS
Photo of: 2 women looking at a photo album.
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS.
Managing $100 billion in assets, Nuveen Investments offers access to a number of
different asset classes and investing solutions through a variety of products.
Nuveen Investments markets its capabilities under four distinct brands: Nuveen,
a leader in tax-free investments; NWQ, a leader in value-style equities;
Rittenhouse, a leader in growth-style equities; and Symphony, a leading
institutional manager of market-neutral alternative investment portfolios.
FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information carefully before you invest.
Be sure to obtain a prospectus, where applicable. Investors should consider the
investment objective and policies, risk considerations, charges and expenses of
the Fund carefully before investing. The prospectus contains this and other
information relevant to an investment in the Fund. For a prospectus, please
contact your securities representative or Nuveen Investments, 333 W. Wacker Dr.,
Chicago, IL 60606. Please read the prospectus carefully before you invest or
send money.
Learn more
about Nuveen Funds at
WWW.NUVEEN.COM/ETF
o Share prices
o Fund details
o Daily financial news
o Investor education
o Interactive planning tools
Logo: NUVEEN Investments
EAN-B-0704D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The registrant has posted such code of
ethics on its website at www.nuveen.com/etf.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's board of directors determined that the registrant had at least
one "audit committee financial expert" (as defined in Item 3 of Form N-CSR)
serving on its Audit Committee. The registrant's audit committee financial
expert was William E. Bennett, who was "independent" for purposes of Item 3 of
Form N-CSR.
Although Mr. Bennett served as the audit committee financial expert during the
reporting period, he unexpectedly resigned from the Board effective April 30,
2004. Since that time, the Audit Committee determined that Jack B. Evans, the
Chairman of the Audit Committee, qualifies as an audit committee financial
expert and recommended to the full Board that he be designated as such. On July
26, 2004, the full Board voted to so designate Mr. Evans. Accordingly for this
reporting period, the registrant did not have a designated "audit committee
financial expert" from April 30, 2004 to July 26, 2004. Mr. Evans, who is
independent for purposes of Item 3 of Form N-CSR, served as the registrant's
audit committee financial expert from July 26, 2004 to the end of the reporting
period on July 31, 2004.
Mr. Bennett was formerly Executive Vice President and Chief Credit Officer of
First Chicago Corporation and its principal subsidiary, The First National Bank
of Chicago. As part of his role as Chief Credit Officer, Mr. Bennett set policy
as to accrual of assets/loans; designated performing/non-performing assets; set
the level of reserves against the credit portfolo; and determined the carrying
value of credit related assets and exposure. Among other things, Mr. Bennett was
also responsible for the oversight of the internal analysis function including
setting ground rules for the review and preparation of financial analysis and
financial statements for use in making credit and risk decisions for clients.
Mr. Bennett has significant experience reviewing, analyzing and evaluating
financial statements of domestic and international companies in a variety of
industries with complex accounting issues.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
NUVEEN MICHIGAN QUALITY INCOME MUNICIPAL FUND, INC.
The following tables show the amount of fees that Ernst & Young LLP, the Fund's
auditor, billed to the Fund during the Fund's last two full fiscal years. For
engagements with Ernst & Young LLP entered into on or after May 6, 2003, the
Audit Committee approved in advance all audit services and non-audit services
that Ernst & Young LLP provided to the Fund, except for those non-audit services
that were subject to the pre-approval exception under Rule 2-01 of Regulation
S-X (the "pre-approval exception"). The pre-approval exception for services
provided directly to the Fund waives the pre-approval requirement for services
other than audit, review or attest services if: (A) the aggregate amount of all
such services provided constitutes no more than 5% of the total amount of
revenues paid by the Fund during the fiscal year in which the services are
provided; (B) the Fund did not recognize the services as non-audit services at
the time of the engagement; and (C) the services are promptly brought to the
Audit Committee's attention, and the Committee (or its delegate) approves the
services before the audit is completed.
The Audit Committee has delegated certain pre-approval responsibilities to its
Chairman (or, in his absence, any other member of the Audit Committee).
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES
FISCAL YEAR ENDED TO FUND BILLED TO FUND BILLED TO FUND BILLED TO FUND
------------------------------------------------------------------------------------------------------------------------------------
July 31, 2004 $ 11,608 $ 0 $ 409 $ 2,500
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved N/A 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
July 31, 2003 $ 10,265 $ 0 $ 360 $ 2,300
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved N/A 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
The above "Tax Fees" were billed for professional services for tax advice, tax
compliance and tax planning.
SERVICES THAT THE FUND'S AUDITOR BILLED TO THE
ADVISER AND AFFILIATED FUND SERVICE PROVIDERS
The following tables show the amount of fees billed by Ernst & Young LLP to
Nuveen Advisory Corp. ("NAC" or the "Adviser"), and any entity controlling,
controlled by or under common control with NAC ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The table also shows the percentage of fees subject to the pre-approval
exception. The pre-approval exception for services provided to the Adviser and
any Affiliated Fund Service Provider (other than audit, review or attest
services) waives the pre-approval requirement if: (A) the aggregate amount of
all such services provided constitutes no more than 5% of the total amount of
revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund
Service Providers during the fiscal year in which the services are provided that
would have to be pre-approved by the Audit Committee; (B) the Fund did not
recognize the services as non-audit services at the time of the engagement; and
(C) the services are promptly brought to the Audit Committee's attention, and
the Committee (or its delegate) approves the services before the Fund's audit is
completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES
BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER
AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND
SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS
------------------------------------------------------------------------------------------------------------------------------------
July 31, 2004 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
July 31, 2003 $ 0 $ 0 $ 0
------------------------------------------------------------------------------------------------------------------------------------
Percentage approved N/A N/A N/A
pursuant to
pre-approval
exception
------------------------------------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES
The following table shows the amount of fees that Ernst & Young LLP billed
during the Fund's last two full fiscal years for non-audit services. For
engagements entered into on or after May 6, 2003, the Audit Committee is
required to pre-approve non-audit services that Ernst & Young LLP provides to
the Adviser and any Affiliated Fund Services Provider, if the engagement related
directly to the Fund's operations and financial reporting (except for those
subject to the de minimis exception described above). The Audit Committee
requested and received information from Ernst & Young LLP about any non-audit
services that Ernst & Young LLP rendered during the Fund's last fiscal year to
the Adviser and any Affiliated Fund Service Provider. The Committee considered
this information in evaluating Ernst & Young LLP independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES
BILLED TO ADVISER AND
AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES
PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND
RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE
TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
------------------------------------------------------------------------------------------------------------------------------------
July 31, 2004 $ 2,909 $ 0 $ 0 $ 2,909
July 31, 2003 $ 2,660 $ 0 $ 0 $ 2,660
Audit Committee Pre-Approval Policies and Procedures. Generally, the audit
committee must approve (i) all non-audit services to be performed for the Fund
by the Fund's independent accountants and (ii) all audit and non-audit services
to be performed by the Fund's independent accountants for the Affiliated Fund
Service Providers with respect to operations and financial reporting of the
Fund. Regarding tax and research projects conducted by the independent
accountants for the Fund and Affiliated Fund Service Providers (with respect to
operations and financial reports of the Fund) such engagements will be (i)
pre-approved by the audit committee if they are expected to be for amounts
greater than $10,000; (ii) reported to the audit committee chairman for his
verbal approval prior to engagement if they are expected to be for amounts under
$10,000 but greater than $5,000; and (iii) reported to the audit committee at
the next audit committee meeting if they are expected to be for an amount under
$5,000.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. SCHEDULE OF INVESTMENTS.
Not applicable at this time.
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES.
In the rare event that a municipal issuer held by the Fund were to issue a proxy
or that the Fund were to receive a proxy issued by a cash management security,
the Adviser would either engage an independent third party to determine how the
proxy should be voted or vote the proxy with the consent, or based on the
instructions, of the Fund's Board of Directors or Trustees or its
representative. In the case of a conflict of interest, the proxy would be
submitted to the applicable Fund's Board to determine how the proxy should be
voted. A member of the Adviser's legal department would oversee the
administration of the voting, and ensure that records were maintained in
accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17
CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the
results were provided to the Board of Directors or Trustees and made available
to shareholders as required by applicable rules.
ITEM 8. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT
COMPANY AND AFFILIATED PURCHASERS.
Not applicable to this registrant.
ITEM 9. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
In the event of a vacancy on the Board, the nominating and governance committee
receives suggestions from various sources, including shareholders, as to
suitable candidates. Suggestions should be sent in writing to Lorna Ferguson,
Vice President for Board Relations, Nuveen Investments, 333 West Wacker Drive,
Chicago, IL 60606. The nominating and governance committee sets appropriate
standards and requirements for nominations for new directors and reserves the
right to interview all candidates and to make the final selection of any new
directors.
ITEM 10. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR
270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities
Exchange Act of 1934, as amended (the "Exchange Act")(17 CFR
240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's last
fiscal half-year (the registrant's second fiscal half-year in the case
of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 11. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because posted on registrant's website at www.nuveen.com/etf.
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(a)(3) Any written solicitation to purchase securities under Rule 23c-1 under
the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the
report by or on behalf of the registrant to 10 or more persons. Not applicable
at this time.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR
270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Michigan Quality Income Municipal Fund, Inc.
-----------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: October 8, 2004
-------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(Principal Executive Officer)
Date: October 8, 2004
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(Principal Financial Officer)
Date: October 8, 2004
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.