SEMIANNUAL REPORT February 28, 2001
LOGO: NUVEEN Investments
Municipal Closed-End Exchange-Traded Funds
Dependable, tax-free income to help you keep more of what you earn.
CALIFORNIA
NPC
NCL
NCU
INVEST WELL.
LOOK AHEAD.
LEAVE YOUR MARK.(SM)
2 PHOTOS.
Credit Quality
HIGHLIGHTS As of February 28, 2001
CONTENTS
1 Dear Shareholder
3 Portfolio Managers' Comments
7 NPC Performance Overview
8 NCL Performance Overview
9 NCU Performance Overview
10 Shareholder Meeting Report
12 Portfolio of Investments
20 Statement of Net Assets
21 Statement of Operations
22 Statement of Changes in Net Assets
23 Notes to Financial Statements
29 Financial Highlights
32 Build Your Wealth Automatically
33 Fund Information
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC. (NPC)
Insured 82%
U.S. Guaranteed 18%
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC. (NCL)
Insured 92%
Insured and U.S. Guaranteed 5%
U.S. Guaranteed 3%
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND (NCU)
AAA/U.S. Guaranteed 60%
AA 6%
A 9%
BBB 7%
NR 16%
Other 2%
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COMPOUND YOUR WEALTH - AUTOMATICALLY
All Nuveen Municipal Closed-End ETFs let you reinvest dividends and capital
gains directly into additional shares of your Fund. This is a great way to see
your investment grow through the power of compounding.
For more information about Dividend Reinvestment, see the last page of this
report or speak with your financial advisor.
--------------------------------------------------------------------------------
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sidebar text: "A WELL-BALANCED PORTFOLIO CAN HELP YOU REDUCE YOUR INVESTMENT
RISKS."
Dear
SHAREHOLDER
One of the primary goals of your Nuveen California Fund is to provide you with
attractive, dependable income from a quality portfolio that is free from federal
and California state income taxes. I am pleased to report that over the period
covered by this report your Fund has continued to meet these objectives. I urge
you to read the Portfolio Managers' Comments and Performance Overview pages
included in this report, which provide more details about Fund results, how they
were achieved, and how the Funds are trying to position themselves for the
future.
The uncertain markets of this past reporting period also remind us of another
important reason for investing in Nuveen Funds. In times such as these, your
Nuveen Fund can help bring a measure of diversification to your overall
portfolio and serve as a useful counterbalance to other holdings. A
well-balanced portfolio can help you reduce your investment risks and provide
one of the keys to strong long-term performance.
Invest Well. Look Ahead. Leave Your Mark.
At Nuveen, we believe that investors should focus not only on investments that
can help them accumulate wealth, but also on the plans and services that can
help preserve that wealth and pass it along to future generations. This
long-term perspective is an integral part of our portfolio management
strategies, our insistence on quality, and our desire to provide investments
that can withstand the test of time.
In establishing a program tailored to your needs, the sound ongoing advice and
disciplined focus provided by a trusted financial advisor can be an invaluable
resource, enabling you
Sidebar text:
"IN ESTABLISHING A PROGRAM TAILORED TO YOUR NEEDS, THE SOUND ONGOING ADVICE AND
DISCIPLINED FOCUS PROVIDED BY A TRUSTED FINANCIAL ADVISOR CAN BE AN INVALUABLE
RESOURCE."
to make wise investment decisions and build a program that can result in a
lasting legacy.
For more than a century, Nuveen has offered quality investments to those who
recognize and embrace the need for building, preserving and managing wealth. All
of us at Nuveen are dedicated to working with you and your financial advisor to
provide the services, products, perspectives, and solutions that can help you
meet your personal and family financial goals, now and for years to come. We
thank you for your continued confidence.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
April 16, 2001
Nuveen California Premium Income Closed-End Exchange-Traded Funds
NPC, NCL, NCU
Portfolio Managers'
COMMENTS
Portfolio managers Mike Davern and Bill Fitzgerald review national and state
economic conditions, key investment strategies, and the recent performance of
the Nuveen California Premium Income Closed-End Exchange-Traded Funds. Mike has
managed NPC and NCL since 1998, and Bill assumed portfolio management
responsibility for NCU in 1998.
WHAT MAJOR FACTORS AFFECTED THE U.S. ECONOMY AND THE MUNICIPAL MARKET DURING
THIS REPORTING PERIOD?
The major factor affecting the national economy and the fixed-income markets has
been the Federal Reserve's interest rate policy. During the last half of 2000,
the Fed maintained the federal funds target rate at 6.50%, the highest level in
almost a decade. As evidence grew that the economy was beginning to slow, the
Fed announced two 50 basis point interest rate cuts in January 2001. (Following
the close of the period covered in this report, the Fed moved to cut rates by an
additional 50 basis points on March 20, bringing the federal funds rate to
5.00%.)
The consensus among many market observers is that the Fed may continue to ease
as long as signs of a significant economic slowdown remain.
In the municipal market, indications of economic slowing and a relatively tight
supply of new issues helped many bonds perform well. For the 12 months ended
February 28, 2001, new issuance of municipal bonds totaled approximately $211
billion nationwide, down 2% from the previous 12-month period (March 1999
through February 2000). Some of the tightness in supply stemmed from higher rate
concerns during much of this period, which made it less attractive for many
issuers to offer bonds. In addition, generally favorable economic conditions in
most cities and states over the past decade enabled many issuers to use
pay-as-you-go funding for necessary projects, rather than financing obtained
through new issuance.
At the same time, demand for municipal bonds continued to be strong from
individual investors looking for diversification, income, and an alternative to
a volatile stock market. As a result, municipal bond prices were generally
higher, and yields were correspondingly lower, at the end of February 2001 than
they were 12 months earlier. Even at current prices, we believe municipals
continue to represent good value. As of February 28, 2001, long-term municipal
yields were 103% of 30-year Treasury yields, compared with 101% in February 2000
and the historical average of 86% for the period 1986-1999.
WHAT ABOUT THE OVERALL ECONOMIC AND MARKET ENVIRONMENT IN CALIFORNIA?
New municipal supply in California remained tight throughout 2000. However, the
Fed's January 2001 interest rate cuts created a more favorable environment for
refundings, which helped to boost municipal issuance in the state. In January
and February 2001, new issuance in California totaled $4.6 billion, up 156% over
the first two months of 2000 and nearly three times the 57% increase in national
municipal supply over this period. We anticipate a continued strong pattern of
California new issue supply, as well as growth in the number of issuers that use
the California market to raise funds. We think this will be driven in part by
refundings and in part by the slowing economy, which will decrease tax revenues
and create a greater need for municipalities to borrow.
Given California's high marginal income tax rate, demand from individual
investors continued to be very strong over the past 12 months. We expect this
strong demand to continue, especially as investors look for ways to rebalance
their holdings and reduce overall portfolio risk.
Looking at the economic environment, California's growth continued to outpace
the U.S. averages over the past 12 months. While volatility in the technology
sector and lower infusions of venture capital pose
serious downside risks for the California economy going forward, steady job
growth in economic sectors continued and overall unemployment in the state
remained below the national average.
HOW DO YOU THINK THE STATE'S ENERGY PROBLEMS WILL AFFECT THE CALIFORNIA ECONOMY?
Currently, a main focus of attention in California is the state's energy
situation and its two largest investor-owned utilities, Pacific Gas & Electric
Company and Southern California Edison. By early 2001, adequate energy supply
was a day-to-day worry, PG&E and SoCalEd had amassed more than $14 billion of
debt, and the state had spent about half of its $8.5 billion budget surplus for
electricity.
(In late March, after the close of the Funds' reporting period, California
authorities approved an immediate increase of up to 46% in electric rates for
PG&E and SoCalEd. In addition, plans were announced to issue $14 billion of
revenue bonds in May to fund future power purchases. Despite these efforts, PG&E
filed for bankruptcy protection in early April and California's overall energy
picture remained cloudy at the time this report was prepared.)
Given California's energy situation, it is important to note that all three
major rating agencies - Moody's Investor Services, Standard & Poor's, and Fitch
- have maintained their credit ratings for California's general obligation bonds
at Aa2/AA/AA, respectively. As of the printing of this report, both Moody's and
Fitch also have maintained their state economic outlooks at stable, with Fitch
specifically citing California's favorable economy and financial operations. S&P
has placed the state on credit watch, which often is a first step to a possible
rating change. We continue to watch the unfolding situation carefully and are
prepared to act quickly to protect the best interests of Fund shareholders.
DID THIS ENERGY SITUATION HAVE ANY IMPACT ON THE NUVEEN CALIFORNIA CLOSED-END
EXCHANGE-TRADED FUNDS?
None of the Funds covered in this report hold bonds backed by PG&E. NPC, NCL and
NCU all hold some bonds backed by SoCalEd, but since these bonds are insured we
have few concerns about the continued timely payment of interest and principal.
As of mid-April, we had seen no impact on the Funds' NAVs or share prices as a
result of these SoCalEd holdings. As noted, we will continue to monitor the
situation very carefully and take any appropriate actions in a timely fashion to
help protect Fund shareholders.
HOW DID THE NUVEEN CALIFORNIA PREMIUM INCOME FUNDS PERFORM OVER THE TWELVE
MONTHS ENDED FEBRUARY 28, 2001?
For the twelve months ended February 28, 2001, the Nuveen California Premium
Income Closed-End Exchange-Traded Funds produced total returns on net asset
value (NAV) as shown in the accompanying table. The annual returns for the
appropriate Lehman Brothers California Tax-Exempt Bond Index1 and Lipper
California Peer Group2 are also presented.
LEHMAN LIPPER
CALIFORNIA CALIFORNIA
TOTAL RETURN BOND FUND
MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2
--------------------------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
2/28/01 EQUIVALENT3 2/28/01 2/28/01 2/28/01
--------------------------------------------------------------------------------
NPC 5.53% 8.85% 17.93% 13.64% 16.61%
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NCL 5.41% 8.66% 17.77% 13.64% 16.61%
--------------------------------------------------------------------------------
NCU 5.49% 8.78% 17.32% 12.69% 16.70%
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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.
In early 2000, as the Fed's interest rate hikes pushed yields higher, municipal
bond prices took a corresponding drop. Over the summer, however, the tight
supply of new municipal issues and generally favorable technical conditions
helped prompt a shift in market outlook, leading to a rally in the municipal
market and boosting the prices of many bonds. The Funds' participation in the
recovery of the municipal market is reflected in the total returns on NAV listed
in the previous table, which show substantial improvement over the performance
results presented in the Funds' annual report for the period ended August 31,
2000.
During the 12 months ended February 28, 2001, the yield on the Bond Buyer 25
Revenue Bond Index fell from 6.26% to 5.47%. In this environment of falling
yields (and rising bond values), funds with longer durations4 would be expected
to perform well. As of February 28, 2001, the durations of the insured NPC and
NCL were 11.53 and 9.65, respectively, compared with 8.73 for the Lehman
Brothers California Insured Tax-Exempt Bond Index. NCU's duration was 12.06,
which compares with 7.97 for the unleveraged Lehman California Tax-Exempt Bond
Index.
1 The performances of NPC and NCL are compared with that of the Lehman
Brothers California Insured Tax-Exempt Bond Index, an unleveraged index
comprising a broad range of insured California municipal bonds, and NCU's
performance is compared with that of the Lehman California Tax-Exempt Bond
Index, an unleveraged index comprising a broad range of investment-grade
California municipal bonds. Results for the Lehman indexes do not reflect
any expenses.
2 The total returns of NPC and NCL are compared with the average annualized
return of the 10 funds in the Lipper California Insured Municipal Debt
Funds category, and NCU's total return is compared with the average
annualized return of the 19 funds in the Lipper California Municipal Debt
Funds category. Fund and Lipper returns assume reinvestment of dividends.
3 The taxable-equivalent yield represents the yield that must be earned on a
taxable investment in order to equal the yield of the Nuveen Fund on an
after-tax basis. The taxable-equivalent yield is based on the Fund's market
yield on the indicated date and a combined federal and state income tax
rate of 37.5%.
4 Duration is a measure of a Fund's NAV volatility in reaction to interest
rate movements. Fund duration, also known as leverage-adjusted duration,
takes into account the leveraging process for a Fund and therefore is
generally longer than the duration of the actual portfolio of individual
bonds that make up the Fund. References to duration in this commentary are
intended to indicate Fund duration, unless otherwise noted.
WERE THE FUNDS' DIVIDENDS AFFECTED BY THE MARKET ENVIRONMENT?
Changes in the interest rate environment over the past 12 months had an impact
on the dividends of all three Nuveen California Premium Income Funds. Each of
these Funds uses leverage as a way to potentially enhance the dividends paid to
common shareholders. The extent of this benefit is tied in part to the
short-term rates that the Funds pay their MuniPreferred shareholders. When
short-term rates rise, the Funds must pay out more income to preferred
shareholders, decreasing the amount of income available for common shareholders.
As the Federal Reserve raised short-term rates between June 1999 and May 2000,
these increases had a corresponding impact on short-term municipal rates. The
increase in short-term municipal rates was sufficient to cause a decrease in the
common share dividend of each of these Funds in June 2000. Despite these
dividend adjustments, the Nuveen California Premium Income Funds continued to
provide competitive market yields, as shown in the earlier table.
Recently, the Fed's interest rate cuts has contributed to a steepening of the
slope in the municipal yield curve. The lower rates offered by municipal
securities with shorter maturities could potentially have beneficial effects on
the dividend stability of these leveraged Funds by reducing the amount the Funds
pay their MuniPreferred shareholders. However, this benefit could be offset to
some degree by the effect of bond calls on the higher-yielding bonds held by
these portfolios. The level of short-term rates, the amount and timing of bond
calls, and the interest rates at which we can reinvest the proceeds of any calls
all will influence the dividends of the Nuveen California Premium Income Funds
over the next twelve months.
WHAT ABOUT THE FUNDS' SHARE PRICE PERFORMANCE?
During the first half of 2000, uncertainties about interest rates, along with
investors' focus on equity market performance, tended to dampen interest in most
fixed-income products. The lack of demand put pressure on the prices of many
municipal bond investments. However, as the bond market recovered and the stock
market continued to be volatile, many investors again appeared to be considering
tax-free fixed-income alternatives. As a result, the share prices of these Funds
improved in late 2000 and early 2001 (see the charts on the individual
Performance Overview pages).
As investors recognized this opportunity, robust demand for the Nuveen
California Premium Income Funds caused the discounts (share price below NAV) on
NPC and NCL to narrow, and the premium (share price above NAV) on NCU widened
over the twelve months ended February 28, 2001. Since the market prices of NPC
and NCL continue to be below the actual value of the bonds in their portfolios,
shareholders may want to consider taking advantage of this opportunity to add to
their holdings of these Nuveen Funds.
WHAT KEY STRATEGIES WERE USED TO MANAGE THE NUVEEN CALIFORNIA PREMIUM INCOME
FUNDS DURING THE TWELVE MONTHS ENDED FEBRUARY 28, 2001?
Despite a slow start, the twelve months ended February 28, 2001, turned out to
be generally positive for municipal bonds. Given this positive market
environment and the tight supply of new issuance during most of this period, we
found relatively fewer opportunities to make trades that we believed would
substantially enhance the Funds' holdings. Guiding the transactions we did make
were the desire to strengthen long-term dividend-paying capabilities, enhance
call protection, and purchase bonds with the potential to add value and
diversification to the Funds' portfolios.
Because the California economy is so large and diverse, in many ways it behaves
like a national economy. This means it has a wide variety of industry sectors
that, at any given time, may be in or out of favor with the market. One of the
ways we sought to add value was by closely watching market cycles within the
state, assessing sector opportunities and issuance from a macroeconomic
perspective, and trying to stay ahead of the opportunity curve. For example,
during the twelve months ended February 28, 2001, NPC added to its holdings of
insured general obligation bonds issued by the state of California in order to
take advantage of attractive prices and yields brought on by the evolving energy
situation. While state resources may be under pressure for some time, we believe
California will come through this crisis on a sound financial footing, and these
insured bonds offered excellent value to the portfolio.
Looking at NCL as well as NPC, both Funds benefited during the reporting period
from their holdings in the water and sewer sector. This area, which represented
one of the largest concentrations for both funds, was among the top performers
in the California market over the past twelve months.
In NCU, the transportation sector provided several opportunities to purchase
higher-rated bonds from issuers such as the Airport Commission of the city and
county of San Francisco - San Francisco International Airport, which further
enhanced the credit quality of the Fund. In addition, because transportation
bonds are among the most frequently traded issues in the California marketplace,
they provide a high degree of liquidity that enables us to stay fully invested,
yet positioned to take advantage of opportunities as they arose.
NCU also continued to offer excellent credit quality, with 66% of the Fund's
assets invested in bonds rated AAA/U.S. guaranteed and AA as of February 28,
2001. In addition, the Fund had a 23% allocation of BBB and non-rated bonds,
which generally provided higher yields during 2000. These lower-rated bonds also
helped NCU's total return performance as credit spreads narrowed in January and
February 2001. Both NPC and NCL are 100% invested in insured and/or U.S.
guaranteed bonds, which means that credit quality
is not an issue.
WHAT IS YOUR OUTLOOK FOR THE NUVEEN CALIFORNIA PREMIUM INCOME FUNDS?
In general, our outlook for the fixed-income markets over the next year is
positive. Current projections call for continued strong demand for municipal
bonds. Although we are seeing the pace of refundings pick up as interest rates
decline, new municipal issuance nationwide in 2001 is expected to remain around
$200 billion. Thus, supply and demand dynamics should continue to provide
support for the municipal market and municipal bond prices. We will, of course,
continue to closely monitor the economy, the progress of federal income tax
reduction proposals and any further actions by the Federal Reserve in order to
be prepared to respond appropriately to any developing situations.
Looking specifically at the Nuveen Funds, all offer excellent levels of call
protection for the remainder of 2001, with call exposures of less than 2% in NPC
and NCL and approximately 7% in NCU. In 2002, NCL and NCU will continue to offer
low levels of call exposure. However, NPC, which reaches its 10th anniversary in
November 2002, is entering the part a period when call exposure typically
increases. During 2002, this Fund could see approximately 16% of its portfolio
affected by bond calls, depending on market interest rates during that time. We
will continue to work to reduce this exposure and foresee no problems in
managing these positions.
While we cannot control the direction of interest rates, we will continue to
work to reduce the Funds' call exposure and to actively manage the Funds to
mitigate the longer-term effects of the bond call process. These strategies
include selling bonds with short call dates and pre-refunded bonds with short
maturities. At the present time, we anticipate holding older bonds with higher
yields until six months to a year before their call dates and then selling these
bonds and reinvesting the proceeds in the longer end of the primary market. In
this way, we can keep the principal gains achieved over the past 12 months while
maximizing tax-exempt income.
In addition to bond calls, we plan to continue to focus on keeping the Funds
fully invested and working for shareholders and on strengthening the Funds'
dividend-payment capabilities as market conditions allow. As value-oriented
investors, we will continue to look for areas of the market that can add value
for our shareholders. We believe the Nuveen California Premium Income Funds will
continue to serve as a dependable source of tax-free income and portfolio
diversification, two essential elements of a comprehensive investment strategy.
Nuveen Insured California Premium Income Municipal Fund, Inc.
Performance
OVERVIEW As of February 28, 2001
NPC
PORTFOLIO STATISTICS
--------------------------------------------------
Inception Date 11/92
--------------------------------------------------
Share Price $15.07
--------------------------------------------------
Net Asset Value $15.54
--------------------------------------------------
Market Yield 5.53%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.01%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.85%
--------------------------------------------------
Fund Net Assets ($000) $144,836
--------------------------------------------------
Average Effective Maturity (Years) 20.54
--------------------------------------------------
Leverage-Adjusted Duration 11.53
--------------------------------------------------
ANNUALIZED TOTAL RETURN
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 18.42% 17.93%
--------------------------------------------------
5-Year 7.80% 5.92%
--------------------------------------------------
Since Inception 5.91% 6.93%
--------------------------------------------------
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
--------------------------------------------------
Tax Obligation/Limited 19%
--------------------------------------------------
U.S.Guaranteed 18%
--------------------------------------------------
Water and Sewer 17%
--------------------------------------------------
Tax Obligation/General 13%
--------------------------------------------------
Healthcare 10%
--------------------------------------------------
BAR CHART:
2000-2001 Monthly Tax-Free Dividends Per Share2
3/00 0.0715
4/00 0.0715
5/00 0.0715
6/00 0.0695
7/00 0.0695
8/00 0.0695
9/00 0.0695
10/00 0.0695
11/00 0.0695
12/00 0.0695
1/01 0.0695
2/01 0.0695
LINE CHART:
Share Price Performance
3/03/00 13.38
13.5
14.13
14.31
14.13
13.88
13.69
13.88
14.19
14.13
14.13
13.94
13.94
14
14
14.13
14.25
14.5
14.44
14.5
14.38
14.44
14.69
14.75
14.69
14.63
14.63
14.94
14.75
14.69
14.56
14.56
14.38
14.06
14.19
14.56
14.25
14.44
14.44
14.31
14.44
14.5
14.75
14.75
15.19
15.38
15.25
15.3
15.02
15.2
2/28/01 15.2
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using the current market yield and a federal income tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state income taxes. It is based on
a combined federal and state income tax rate of 37.5%.
2 The Fund also paid shareholders a net ordinary income distribution in
December 2000 of $0.0222 per share.
Nuveen Insured California Premium Income Municipal Fund 2, Inc.
Performance
OVERVIEW As of February 28, 2001
NCL
PORTFOLIO STATISTICS
--------------------------------------------------
Inception Date 3/93
--------------------------------------------------
Share Price $14.30
--------------------------------------------------
Net Asset Value $14.53
--------------------------------------------------
Market Yield 5.41%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.84%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.66%
--------------------------------------------------
Fund Net Assets ($000) $278,587
--------------------------------------------------
Average Effective Maturity (Years) 18.99
--------------------------------------------------
Leverage-Adjusted Duration 9.65
--------------------------------------------------
ANNUALIZED TOTAL RETURN
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 21.17% 17.77%
--------------------------------------------------
5-Year 8.48% 6.70%
--------------------------------------------------
Since Inception 5.24% 6.11%
--------------------------------------------------
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
--------------------------------------------------
Tax Obligation/Limited 43%
--------------------------------------------------
Tax Obligation/General 11%
--------------------------------------------------
Water and Sewer 8%
--------------------------------------------------
U.S.Guaranteed 8%
--------------------------------------------------
Utilities 7%
--------------------------------------------------
BAR CHART:
2000-2001 Monthly Tax-Free Dividends Per Share2
3/00 0.065
4/00 0.065
5/00 0.065
6/00 0.0645
7/00 0.0645
8/00 0.0645
9/00 0.0645
10/00 0.0645
11/00 0.0645
12/00 0.0645
1/01 0.0645
2/01 0.0645
LINE CHART:
Share Price Performance
3/03/00 12.44
12.06
12.25
12.38
12.88
13.19
13.25
13.25
13.25
13.06
12.81
12.56
12.75
12.81
12.88
12.88
12.81
13.13
13.38
13.5
13.38
13.38
13.69
13.63
13.69
13.75
13.94
14
13.88
13.75
13.75
13.38
13.31
13.38
13.25
13.25
13.31
13.13
13.25
13.19
13.38
13.69
13.81
14
14.69
14.88
14.56
14.67
14.51
14.45
2/28/01 14.35
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using the current market yield and a federal income tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state income taxes. It is based on
a combined federal and state income tax rate of 37.5%.
2 The Fund also paid shareholders a net ordinary income distribution in
December 2000 of $0.0012 per share.
Nuveen California Premium Income Municipal Fund
Performance
OVERVIEW As of February 28, 2001
NCU
PORTFOLIO STATISTICS
--------------------------------------------------
Inception Date 6/93
--------------------------------------------------
Share Price $14
--------------------------------------------------
Net Asset Value $13.70
--------------------------------------------------
Market Yield 5.49%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 7.96%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 8.78%
--------------------------------------------------
Fund Net Assets ($000) $122,036
--------------------------------------------------
Average Effective Maturity (Years) 17.81
--------------------------------------------------
Leverage-Adjusted Duration 12.06
--------------------------------------------------
ANNUALIZED TOTAL RETURN
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 19.00% 17.32%
--------------------------------------------------
5-Year 8.59% 6.58%
--------------------------------------------------
Since Inception 5.15% 5.56%
--------------------------------------------------
TOP FIVE SECTORS (AS A % OF TOTAL INVESTMENTS)
--------------------------------------------------
Tax Obligation/Limited 23%
--------------------------------------------------
Healthcare 16%
--------------------------------------------------
Tax Obligation/General 14%
--------------------------------------------------
Housing Multifamily 13%
--------------------------------------------------
U.S.Guaranteed 10%
--------------------------------------------------
BAR CHART:
2000-2001 Monthly Tax-Free Dividends Per Share2
3/00 0.067
4/00 0.067
5/00 0.067
6/00 0.064
7/00 0.064
8/00 0.064
9/00 0.064
10/00 0.064
11/00 0.064
12/00 0.064
1/01 0.064
2/01 0.064
LINE CHART:
Share Price Performance
3/03/00 12.44
12.44
12.44
12.44
12.63
12.69
12.56
12.38
12.38
12.25
12.38
12.31
12.19
12.5
12.56
12.56
12.69
12.75
13
13.06
13
13
13.13
13.13
13.19
13.19
13.31
13.38
13.31
13.13
13.19
13
12.88
12.5
12.5
12.81
12.94
12.81
12.94
13.06
13
13.06
13.19
13.69
13.88
13.94
14.06
14.08
13.97
14
2/28/01 14
Weekly Closing Price
Past performance is not predictive of future results.
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It
is calculated using the current market yield and a federal income tax rate
of 31%. The rate shown for federal and state highlights the added value of
owning shares that are also exempt from state income taxes. It is based on
a combined federal and state income tax rate of 37.5%.
2 The Fund also paid shareholders a net ordinary income distribution in
December 2000 of $0.0151 per share.
Shareholder
MEETING REPORT
The annual shareholder meeting was held in Chicago, Illinois on November 16,
2000.
NPC NCL
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE DIRECTORS WAS REACHED AS FOLLOWS:
Preferred Preferred Preferred
Common Shares Common Shares Shares
Shares Series-T Shares Series-T Series-TH
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner
For 5,825,019 1,795 11,667,530 1,887 1,891
Withhold 70,821 1 67,106 1 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,840 1,796 11,734,636 1,888 1,891
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown
For 5,824,219 1,795 11,667,530 1,887 1,891
Withhold 71,621 1 67,106 1 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,840 1,796 11,734,636 1,888 1,891
------------------------------------------------------------------------------------------------------------------------------------
Anne E. Impellizzeri
For 5,821,244 1,795 11,667,530 1,887 1,891
Withhold 74,596 1 67,106 1 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,840 1,796 11,734,636 1,888 1,891
------------------------------------------------------------------------------------------------------------------------------------
Peter R. Sawers
For 5,822,844 1,795 11,666,772 1,887 1,891
Withhold 72,996 1 67,864 1 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,840 1,796 11,734,636 1,888 1,891
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale
For 5,821,744 1,795 11,665,201 1,887 1,891
Withhold 74,096 1 69,435 1 --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,840 1,796 11,734,636 1,888 1,891
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider
For -- 1,795 -- 1,887 1,891
Withhold -- 1 -- 1 --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,796 -- 1,888 1,891
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger
For -- 1,795 -- 1,887 1,891
Withhold -- 1 -- 1 --
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,796 -- 1,888 1,891
------------------------------------------------------------------------------------------------------------------------------------
RATIFICATION OF AUDITORS WAS REACHED AS FOLLOWS:
For 5,800,663 1,795 11,614,171 1,886 1,891
Against 24,221 -- 31,561 2 --
Abstain 70,956 1 88,904 -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 5,895,840 1,796 11,734,636 1,888 1,891
------------------------------------------------------------------------------------------------------------------------------------
NCU
------------------------------------------------------------------------------------------------------------------------------------
APPROVAL OF THE TRUSTEES WAS REACHED AS FOLLOWS:
Preferred
Common Shares
Shares Series-M
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner
For 5,458,279 1,710
Withhold 45,218 10
------------------------------------------------------------------------------------------------------------------------------------
Total 5,503,497 1,720
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown
For 5,459,506 1,710
Withhold 43,991 10
------------------------------------------------------------------------------------------------------------------------------------
Total 5,503,497 1,720
------------------------------------------------------------------------------------------------------------------------------------
Anne E. Impellizzeri
For 5,459,409 1,709
Withhold 44,088 11
------------------------------------------------------------------------------------------------------------------------------------
Total 5,503,497 1,720
------------------------------------------------------------------------------------------------------------------------------------
Peter R. Sawers
For 5,459,117 1,710
Withhold 44,380 10
------------------------------------------------------------------------------------------------------------------------------------
Total 5,503,497 1,720
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale
For 5,457,943 1,709
Withhold 45,554 11
------------------------------------------------------------------------------------------------------------------------------------
Total 5,503,497 1,720
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider
For -- 1,710
Withhold -- 10
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,720
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger
For -- 1,710
Withhold -- 10
------------------------------------------------------------------------------------------------------------------------------------
Total -- 1,720
------------------------------------------------------------------------------------------------------------------------------------
RATIFICATION OF AUDITORS WAS REACHED AS FOLLOWS:
For 5,422,929 1,706
Against 22,097 --
Abstain 58,471 14
------------------------------------------------------------------------------------------------------------------------------------
Total 5,503,497 1,720
------------------------------------------------------------------------------------------------------------------------------------
Nuveen Insured California Premium Income Municipal Fund, Inc. (NPC)
Portfolio of
INVESTMENTS February 28, 2001 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS -- 2.1%
$ 1,000 California Educational Facilities Authority, Revenue Bonds (University 11/08 at 101 Aaa $ 987,240
of the Pacific), Series 1998, 5.000%, 11/01/23
2,000 California Educational Facilities Authority, Revenue Bonds (Santa Clara 9/06 at 102 AAA 2,106,360
University), Series 1996, 5.750%, 9/01/26
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 9.5%
3,000 California Health Facilities Financing Authority, Insured Revenue Bonds 8/08 at 101 AAA 3,057,870
(Sutter Health), Series 1998A, 5.375%, 8/15/30
California Statewide Communities Development Authority, Sutter Health
Obligated Group, Certificates of Participation:
1,500 5.500%, 8/15/19 8/09 at 101 AAA 1,565,745
4,000 6.125%, 8/15/22 8/02 at 102 AAA 4,150,400
4,800 The Regents of the University of California, Hospital Revenue Bonds 7/06 at 101 AAA 5,018,352
(UC Davis Medical Center), Series 1996, 5.750%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.1%
1,000 ABAG Finance Authority for Nonprofit Corporations, Multifamily 9/09 at 100 AAA 1,037,210
Housing Revenue Bonds (Civic Center Drive Apartments Project),
1999 Series A, 5.800%, 9/01/20 (Alternative Minimum Tax)
3,650 California Housing Finance Agency, Multi-Unit Rental Housing 2/03 at 102 Aa2 3,746,433
Revenue Bonds, Series 1992A-II, 6.625%, 2/01/24 (Alternative
Minimum Tax)
4,000 The City of Los Angeles, California, Tax-Exempt Mortgage Revenue 7/02 at 102 AAA 4,082,760
Refunding Bonds, Series 1993A (FHA-Insured Mortgage Loans -
Section 8 Assisted Projects), 6.300%, 1/01/25
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 6.4%
1,920 California Housing Finance Agency, Single Family Mortgage Bonds II, 2/07 at 102 AAA 2,026,291
1997 Series A-1, 6.000%, 8/01/20 (Alternative Minimum Tax)
California Housing Finance Agency, Home Mortgage Revenue Bonds,
Series 1998E:
2,690 5.150%, 8/01/19 2/09 at 101 1/2 AAA 2,701,083
1,500 5.250%, 2/01/33 (Alternative Minimum Tax) 2/09 at 101 1/2 AAA 1,479,360
3,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 8/08 at 101 AAA 3,044,400
Series 1998Q, 5.050%, 8/01/17
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 13.2%
State of California, Various Purpose General Obligation Bonds:
7,995 5.750%, 3/01/22 3/10 at 101 AAA 8,551,692
2,000 5.750%, 3/01/27 3/10 at 101 AAA 2,130,280
1,000 5.250%, 9/01/30 (DD, settling 3/02/01) 9/10 at 100 AAA 1,009,310
1,225 Fresno Unified School District (Fresno County, California), 1998 General 2/13 at 103 AAA 1,454,271
Obligation Refunding Bonds, Series A, 6.550%, 8/01/20
2,000 Los Angeles Unified School District, California, General Obligation 7/08 at 102 AAA 1,985,980
Bonds, 1997 Series A, 5.000%, 7/01/21
500 Los Angeles Unified School District, California, General Obligation 7/10 at 100 AAA 512,885
Bonds, Election of 1997, 2000 Series D, 5.375%, 7/01/25
3,000 Pomona Unified School District, General Obligation Refunding Bonds, 8/11 at 103 AAA 3,481,410
Series 1997-A, 6.500%, 8/01/19
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 18.7%
4,000 Anaheim Public Financing Authority, Subordinate Lease Revenue No Opt. Call AAA 1,262,280
Bonds (Anaheim Public Improvements Project), 1997 Series C,
0.000%, 9/01/22
2,000 State Public Works Board of California, Lease Revenue Bonds (California 11/09 at 101 AAA 2,134,140
Department of Health Services), 1999 Series A (Richmond Laboratory
Project), 5.750%, 11/01/24
4,000 Los Angeles County Metropolitan Transportation Authority, California, 7/03 at 100 AAA 3,951,960
Proposition A Sales Tax Revenue Refunding Bonds, Series 1993-A,
5.000%, 7/01/21
4,000 Norco Redevelopment Agency, 1992 Refunding Tax Allocation Bonds 3/02 at 102 AAA 4,174,240
(Norco Redevelopment Project Area No. One), 6.250%, 3/01/19
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 750 Puerto Rico Highway and Transportation Authority, Transportation 7/10 at 101 AAA $ 811,508
Revenue Bonds, Series B, 5.875%, 7/01/35
2,135 City of San Buenaventura, California, 1993 Refunding Certificates 1/03 at 100 AAA 2,164,463
of Participation (Capital Improvements Project), 5.500%, 1/01/17
9,500 Redevelopment Agency of the City of San Jose, Tax Allocation Bonds 2/04 at 102 AAA 8,955,175
(Merged Area Redevelopment Project), Series 1993, 4.750%, 8/01/24
3,600 Santa Clara County Financing Authority, Lease Revenue Bonds (VMC 11/07 at 102 AAA 3,564,432
Facility Replacement Project), 1994 Series A, 5.000%, 11/15/22
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 1.1%
1,545 Airports Commission of the City and County of San Francisco, 5/03 at 102 AAA 1,615,514
California, San Francisco International Airport, Second Series
Refunding Revenue Bonds, Issue 4, 6.200%, 5/01/20 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 18.2%
6,000 Huntington Park Redevelopment Agency, Single Family Residential No Opt. Call AAA 8,196,240
Mortgage Revenue Refunding Bonds, 1986 Series A, 8.000%, 12/01/19
5,135 Community Redevelopment Agency of the City of Palmdale, California, No Opt. Call AAA 6,861,901
Single Family Mortgage Revenue Bonds, Series 1986A Restructured,
8.000%, 3/01/16 (Alternative Minimum Tax)
6,220 County of Riverside, California, Single Family Mortgage Revenue No Opt. Call AAA 9,145,950
Bonds (GNMA Mortgage-Backed Securities Program), Issue A
of 1987, 9.000%, 5/01/21 (Alternative Minimum Tax)
1,485 City of San Jose, California, Single Family Mortgage Revenue No Opt. Call AAA 2,210,170
Bonds, 1985 Series A, 9.500%, 10/01/13
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.0%
4,000 California Pollution Control Financing Authority, Pollution Control 12/02 at 102 AAA 4,075,920
Revenue Bonds (Southern California Edison Company), 1992 Series B,
6.400%, 12/01/24 (Alternative Minimum Tax)
4,000 City of Chula Vista, Industrial Development Revenue Bonds (San 12/02 at 102 AA- 3,970,120
Diego Gas and Electric Company), 1992 Series A,
6.400%, 12/01/27 (Alternative Minimum Tax)
2,000 Sacramento Municipal Utility District, California, Electric Revenue 8/02 at 100 AAA 2,041,400
Refunding Bonds, 1992 Series A, 5.750%, 8/15/13
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 16.9%
2,000 Cucamonga County Water District (San Bernardino County, California), 9/01 at 102 AAA 2,067,320
Certificates of Participation (1992 Water Facilities Refinancing),
6.300%, 9/01/12
1,000 Cucamonga County Water District, California, Certificates of 9/11 at 101 AAA 992,310
Participation, 2000 Water Shares Purchase, 5.125%, 9/01/35
(WI, settling 3/06/01)
1,000 East Bay Municipal Utility District (Alameda and Contra Costa 6/08 at 101 AAA 934,880
Counties, California), Water System Subordinated Revenue
Bonds, Series 1998, 4.750%, 6/01/28
7,000 The City of Los Angeles, California, Wastewater System Revenue 11/03 at 102 AAA 6,727,630
Bonds, Series 1993D, 4.700%, 11/01/19
3,400 Public Facilities Financing Authority of the City of San Diego, 5/07 at 101 AAA 3,450,694
California, Sewer Revenue Bonds, Series 1997A, 5.250%, 5/15/22
1,390 City of Santa Monica, Wastewater Enterprise Revenue Bonds 1/04 at 102 AAA 1,372,305
(Hyperion Project), 1993 Refunding Series, 4.500%, 1/01/15
5,000 Wheeler Ridge-Maricopa Water Storage District (Kern County, 11/06 at 102 AAA 5,391,900
California), 1996 Water Refunding Bonds, 5.700%, 11/01/15
3,425 City of Woodland (Yolo County, California), Certificates of 3/03 at 100 AAA 3,471,990
Participation (1992 Wastewater System Refunding Project),
5.500%, 3/01/18
------------------------------------------------------------------------------------------------------------------------------------
$ 136,365 Total Investments (cost $130,485,439) - 99.2% 143,673,774
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.8% 1,162,467
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 144,836,241
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
* Optional Call Provisions: Dates (month and year) and prices
of the earliest optional call or redemption. There may be
other call provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
(DD) Security purchased on a delayed delivery basis.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL)
Portfolio of
INVESTMENTS February 28, 2001 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 5.3%
California Educational Facilities Authority, Revenue Bonds (Santa Clara
University), Series 1996:
$ 2,400 5.750%, 9/01/21 9/06 at 102 AAA $ 2,538,432
3,000 5.750%, 9/01/26 9/06 at 102 AAA 3,159,540
2,000 California Educational Facilities Authority, Revenue Bonds (University 11/10 at 100 Aaa 2,165,500
of the Pacific), Series 2000, 5.875%, 11/01/20
California Infrastructure and Economic Development Bank, Revenue
Bonds (Asian Art Museum of San Francisco Project), Series 2000:
1,295 5.500%, 6/01/19 6/10 at 101 AAA 1,358,960
1,000 5.500%, 6/01/20 6/10 at 101 AAA 1,045,590
2,500 5.250%, 6/01/30 6/07 at 101 AAA 2,513,925
1,900 The Regents of the University of California, University of California 11/03 at 102 AAA 1,955,366
Housing System Revenue Bonds, Series A, 5.500%, 11/01/18
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 4.2%
2,000 California Health Facilities Financing Authority, Revenue Bonds 6/08 at 102 AAA 1,952,820
(Kaiser Permanente), Series 1998A, 5.000%, 6/01/24
1,450 California Health Facilities Financing Authority, Insured Health 7/06 at 102 AAA 1,596,494
Facility Refunding Revenue Bonds (Mark Twain/St. Joseph's
Healthcare), 1996 Series A, 6.000%, 7/01/19
5,000 California Health Facilities Financing Authority, Insured Health 7/06 at 102 AAA 5,353,350
Facility Refunding Revenue Bonds (Catholic Healthcare West),
1996 Series A, 6.000%, 7/01/25
2,500 City of Oakland, California, Insured Revenue Bonds (1800 Harrison 1/10 at 100 AAA 2,707,350
Foundation - Kaiser Permanente), Series 1999A, 6.000%, 1/01/29
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 6.4%
ABAG Finance Authority for Nonprofit Corporations, Multifamily
Housing Revenue Bonds (Civic Center Drive Apartments Project),
1999 Series A:
4,000 5.800%, 9/01/20 (Alternative Minimum Tax) 9/09 at 100 AAA 4,148,840
1,370 5.875%, 3/01/32 (Alternative Minimum Tax) 9/09 at 100 AAA 1,407,333
4,085 The Community Redevelopment Agency of the City of Los Angeles, 6/05 at 105 AAA 4,511,311
California, Multifamily Housing Revenue Refunding Bonds (Angelus
Plaza Project), 1995 Series A, 7.400%, 6/15/10
7,400 Housing Authority of the County of Santa Cruz, Tax-Exempt 5/03 at 102 Aaa 7,627,772
Multifamily Housing Revenue Refunding Bonds (GNMA
Collateralized - Meadowview Apartments), Series 1993A,
6.125%, 5/20/28
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 4.1%
5,115 California Housing Finance Agency, Single Family Mortgage 8/07 at 101 1/2 AAA 5,287,989
Bonds II, 1997 Series C-2, 5.625%, 8/01/20 (Alternative
Minimum Tax)
1,395 California Housing Finance Agency, Home Mortgage Revenue 2/06 at 102 AAA 1,461,932
Bonds, 1996 Series E, 6.150%, 8/01/25 (Alternative Minimum Tax)
2,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 2/09 at 101 AAA 1,982,400
Series 1998N, 5.250%, 8/01/29
15,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 2/09 at 32 1/8 AAA 2,682,750
Series 1999B, 0.000%, 2/01/30 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 11.3%
1,460 ABC Unified School District (Los Angeles County, California), 8/10 at 101 AAA 1,605,518
General Obligation Bonds, Election of 1997, Series B,
5.750%, 8/01/16
485 State of California, General Obligation Veterans Welfare Bonds, 12/03 at 102 AAA 489,089
Series 1997BH, 5.500%, 12/01/24 (Alternative Minimum Tax)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
State of California, Various Purpose General Obligation Bonds:
$ 7,995 5.750%, 3/01/22 3/10 at 101 AAA $ 8,551,692
2,500 5.500%, 9/01/24 9/09 at 101 AAA 2,592,700
2,000 5.750%, 3/01/27 3/10 at 101 AAA 2,130,280
1,000 5.250%, 9/01/30 (DD, settling 3/02/01) 9/10 at 100 AAA 1,009,310
2,575 Calipatria Unified School District (Imperial County, California), 8/06 at 102 AAA 2,781,283
General Obligation Bonds, 1996 Series A, 5.625%, 8/01/13
3,000 Escondido Union High School District (San Diego County, California), 11/06 at 102 AAA 3,289,110
General Obligation Bonds, Election of 1996, 5.700%, 11/01/10
1,500 Hacienda La Puente Unified School District (Los Angeles County, 8/10 at 101 AAA 1,520,985
California), General Obligation Bonds, Election of 2000,
Series A, 5.250%, 8/01/25
1,750 Lake Tahoe Unified School District (El Dorado County, California), 8/09 at 100 AAA 1,771,910
General Obligation Bonds, Election of 1999, Series A,
5.250%, 8/01/24
2,000 Los Angeles Unified School District, California, General Obligation 7/08 at 102 AAA 1,985,980
Bonds, 1997 Series A, 5.000%, 7/01/21
4,950 Murrieta Valley Unified School District (Riverside County, California) No Opt. Call AAA 1,661,319
General Obligation Bonds, 1998 Series A, 0.000%, 9/01/21
1,850 Sacramento City Unified School District (Sacramento County, California), 7/09 at 102 Aaa 2,009,766
General Obligation Bonds, 2000 Series A, 5.750%, 7/01/18
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 42.8%
3,705 Alameda County Public Facilities Corporation, California, 9/06 at 102 AAA 3,990,915
Certificates of Participation (1991 Financing Project),
6.000%, 9/01/21
6,985 County of Alameda, California, 1993 Refunding Certificates 12/03 at 102 AAA 7,482,542
of Participation (Santa Rita Jail Project), 5.700%, 12/01/14
Anaheim Public Financing Authority, Subordinate Lease Revenue
Bonds (Anaheim Public Improvements Project), 1997 Series C:
5,130 0.000%, 9/01/18 No Opt. Call AAA 2,068,724
8,000 0.000%, 9/01/21 No Opt. Call AAA 2,674,320
1,500 0.000%, 9/01/22 No Opt. Call AAA 473,355
1,800 California Public School District Financing Authority, Lease Revenue 9/06 at 102 AAA 1,936,170
Bonds (Richgrove Elementary School District Projects),
Series 1996B, 5.800%, 9/01/16
5,250 State Public Works Board of California, Lease Revenue Bonds 1/06 at 100 AAA 5,299,823
(Department of Corrections), 1996 Series A (California Substance
Abuse Treatment Facility and State Prison at Corcoran and
Corcoran II), 5.250%, 1/01/21
3,450 State Public Works Board of California, Lease Revenue Bonds 11/09 at 101 AAA 3,681,391
(California Department of Health Services), 1999 Series A
(Richmond Laboratory Project), 5.750%, 11/01/24
5,000 Community Redevelopment Agency of the City of Compton, 8/05 at 102 AAA 5,606,700
California, Refunding Tax Allocation Bonds (Compton Redevelopment
Project), Series 1995A (Project Tax Revenues, Subventions and
Housing Tax Revenues), 6.500%, 8/01/13
4,000 County of Contra Costa, California, Certificates of Participation 11/07 at 102 AAA 4,137,640
(Merrithew Memorial Hospital Replacement Project), Refunding
Series of 1997, 5.500%, 11/01/22
3,000 Galt Schools Joint Powers Authority (Sacramento County, 11/07 at 102 AAA 3,220,890
California), 1997 Refunding Revenue Bonds (High School and
Elementary School Facilities), Series A, 5.875%, 11/01/24
5,000 Kern County Board of Education, California, Refunding Certificates 5/08 at 102 AAA 5,019,550
of Participation, 1998 Series A, 5.200%, 5/01/28
5,000 La Quinta Redevelopment Agency, California, Tax Allocation 9/07 at 102 AAA 5,011,900
Refunding Bonds (La Quinta Redevelopment Project Area No. 1),
Series 1998, 5.200%, 9/01/28
2,500 Lancaster Housing Authority, California, Lease Refunding Revenue 4/08 at 102 AAA 2,381,475
Bonds (Brierwood Mobilehome Park Project), Issue of 1999,
5.000%, 4/01/24
3,865 Los Angeles County Metropolitan Transportation Authority, 7/10 at 101 AAA 3,909,332
California, Proposition C Sales Tax Revenue Bonds, Second Senior
Lien Series 2000A, 5.250%, 7/01/30
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL) (continued)
Portfolio of INVESTMENTS February 28, 2001 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 3,585 Los Angeles County Transportation Commission, California, Sales 7/01 at 102 AAA $ 3,691,797
Tax Revenue Refunding Bonds, Series 1991-B, 6.500%, 7/01/13
2,060 Menifee Union School District (Riverside County, California), 9/06 at 102 AAA 2,226,118
Certificates of Participation (1996 School Project), 6.125%, 9/01/24
2,690 Norwalk Community Facilities Financing Authority (Los Angeles 9/05 at 102 AAA 2,909,047
County, California), Tax Allocation Refunding Revenue Bonds,
1995 Series A, 6.000%, 9/01/15
4,000 Oakland State Building Authority, Lease Revenue Bonds 4/08 at 101 AAA 3,949,760
(Elihu M. Harris State Office Building), 1998 Series A, 5.000%, 4/01/23
2,000 Poway Redevelopment Agency, Tax Allocation Refunding Bonds 12/10 at 102 AAA 2,138,740
(Paguay Redevelopment Project), Series 2000, 5.750%, 6/15/33
3,000 Puerto Rico Highway and Transportation Authority, Highway Revenue 7/03 at 101 1/2 AAA 2,978,400
Bonds, Series X, 5.000%, 7/01/22
1,500 Puerto Rico Highway and Transportation Authority, Transportation 7/10 at 101 AAA 1,623,015
Revenue Bonds, Series B, 5.875%, 7/01/35
9,000 City of Redlands, California, Certificates of Participation (1993 9/03 at 102 AAA 9,405,990
Refunding of 1986 and 1987 Projects), 5.800%, 9/01/17
5,000 San Bernardino Joint Powers Financing Authority, California, 9/09 at 102 AAA 5,233,650
Refunding Certificates of Participation (Police Station, SouthValle
Refundings and 201 Building Projects), 5.500%, 9/01/20
3,500 San Francisco Bay Area Rapid Transit District, California, Sales Tax 7/09 at 101 AAA 3,619,315
Revenue Bonds, Series 1999, 5.500%, 7/01/34
1,930 Santa Margarita/Dana Point Authority, Orange County, California, No Opt. Call AAA 2,215,293
Revenue Bonds (1994 Improvement Districts Nos. 1, 2, 2A and 8
General Obligation Bond Refinancing), Series A, 7.250%, 8/01/05
South Orange County Public Financing Authority, California,
Special Tax Revenue Bonds, 1994 Series C (Foothill Area):
3,000 8.000%, 8/15/08 No Opt. Call AAA 3,777,630
6,830 8.000%, 8/15/09 No Opt. Call AAA 8,755,309
3,855 Redevelopment Agency of the City of Suisun (County of Solano, 10/03 at 102 AAA 4,024,312
California), 1993 Tax Allocation Refunding Bonds (Suisun City
Redevelopment Project), 5.900%, 10/01/23
5,450 Visalia Public Finance Authority, California, Refunding Certificates 12/06 at 102 AAA 5,560,308
of Participation (Motor Vehicle License Fee Enhancement),
Series 1996A, 5.375%, 12/01/26
2,400 Yorba Linda Redevelopment Agency (Orange County, California), No Opt. Call AAA 546,072
1998 Tax Allocation Parity Refunding Bonds (Yorba Linda
Redevelopment Project), Series A, 0.000%, 9/01/28
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 2.3%
6,500 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 65 5/16 AAA 2,587,910
Toll Road Refunding Revenue Bonds, Series 1999, 0.000%, 1/15/18
3,750 City of San Jose, California, Airport Revenue Bonds, Series of 1993, 3/03 at 102 AAA 3,842,625
5.700%, 3/01/18 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 7.5%
3,000 Central Unified School District (Fresno County, California), General 3/03 at 102 AAA 3,185,370
Obligation Bonds, Election of 1992, 5.625%, 3/01/18
(Pre-refunded to 3/01/03)
4,320 County of Riverside, California, Single Family Mortgage No Opt. Call AAA 6,071,501
Revenue Bonds (GNMA Mortgage-Backed Securities Program),
Issue B of 1987, 8.625%, 5/01/16 (Alternative Minimum Tax)
9,000 Airports Commission of the City and County of San Francisco, 5/04 at 101 AAA 9,803,610
California, San Francisco International Airport, Second Series
Revenue Bonds, Issue 8B, 6.100%, 5/01/20 (Pre-refunded to 5/01/04)
1,570 City of Torrance, Floating Rate Demand Hospital Revenue Bonds 12/05 at 100 AAA 1,703,780
(Little Company of Mary Hospital), 1985 Series A, 7.100%, 12/01/15
(Pre-refunded to 12/01/05)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 7.0%
$ 3,740 California Pollution Control Financing Authority, Pollution Control 9/09 at 101 AAA $ 3,750,360
Refunding Revenue Bonds (Southern California Edison Company),
1999 Series C, 5.450%, 9/01/29
3,215 Modesto Irrigation District Financing Authority, Refunding Revenue 10/06 at 102 AAA 3,516,953
Bonds, Series A, 6.000%, 10/01/15
1,790 Sacramento City Financing Authority, California, 1999 Capital 12/09 at 102 AAA 1,936,547
Improvement Revenue Bonds (Solid Waste and Redevelopment
Projects), 5.800%, 12/01/19
3,500 Sacramento Municipal Utility District, California, Electric Revenue 8/06 at 102 AAA 3,638,005
Bonds, 1996 Series J, 5.600%, 8/15/24
6,650 Turlock Irrigation District, California, Revenue Refunding Bonds, 7/02 at 100 AAA 6,736,251
Series 1992-A, 5.750%, 1/01/18
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 8.2%
3,530 Castaic Lake Water Agency, California, Refunding Revenue No Opt. Call AAA 4,036,555
Certificates of Participation (Water System Improvement
Projects), Series 1994A, 8.000%, 8/01/04
2,975 Chino Basin Regional Financing Authority, Revenue Bonds 8/04 at 102 AAA 3,220,021
(Chino Basin Municipal Water District Sewer System Project),
Series 1994, 6.000%, 8/01/16
1,000 Cucamonga County Water District, California, Certificates 9/11 at 101 AAA 992,310
of Participation, 2000 Water Shares Purchase, 5.125%, 9/01/35
(WI, settling 3/06/01)
2,775 Pomona Public Financing Authority, California, 1999 Revenue 5/09 at 101 AAA 2,878,785
Bonds (Water Facilities Project), Series AC, 5.500%, 5/01/29
1,000 Sacramento County Sanitation Districts Financing Authority, 6/10 at 101 AAA 1,049,200
Revenue Bonds (Sacramento Regional County Sanitation District),
Series 2000A, 5.500%, 12/01/20
2,900 City and County of San Francisco, Sewer Revenue Refunding 10/02 at 102 AAA 2,981,025
Bonds, Series 1992, 5.500%, 10/01/15
2,000 South San Joaquin Irrigation District (San Joaquin County, 1/03 at 102 AAA 2,068,640
California), 1993 Refunding Revenue Certificates of Participation
(1987 Project and 1992 Project), 5.500%, 1/01/15
5,410 City of Tulare, California, 1996 Sewer Revenue Bonds, 5.750%, 11/15/21 11/06 at 102 AAA 5,728,700
------------------------------------------------------------------------------------------------------------------------------------
$ 291,085 Total Investments (cost $259,682,835) - 99.1% 276,134,227
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.9% 2,453,223
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 278,587,450
====================================================================================================================
All of the bonds in the portfolio are either covered by
Original Issue Insurance, Secondary Market Insurance or
Portfolio Insurance, or are backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities, any of which ensure the timely payment of
principal and interest.
* Optional Call Provisions: Dates (month and year) and prices
of the earliest optional call or redemption. There may be
other call provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
(DD) Security purchased on a delayed delivery basis.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
Nuveen California Premium Income Municipal Fund (NCU)
Portfolio of
INVESTMENTS February 28, 2001 (Unaudited)
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 15.7%
$ 5,150 California Health Facilities Financing Authority, Hospital Revenue 5/03 at 102 BBB+ $ 4,964,600
Bonds (Downey Community Hospital), Series 1993, 5.750%, 5/15/15
4,000 California Statewide Communities Development Authority, Hospital 8/02 at 102 A2 4,245,440
Revenue Certificates of Participation (Cedars-Sinai Medical Center),
Series 1992, 6.500%, 8/01/15
8,100 California Statewide Community Development Authority, Revenue No Opt. Call AAA 8,062,740
Refunding Bonds (Sherman Oaks Project), Series 1998A,
5.000%, 8/01/22
2,000 City of Loma Linda, California, Hospital Revenue Bonds (Loma 12/03 at 102 N/R 1,881,040
Linda University Medical Center Project), Series 1993-A,
6.000%, 12/01/06
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 13.1%
2,000 California Statewide Communities Development Authority, 7/08 at 101 BBB 2,007,180
Apartment Development Revenue Refunding Bonds (Irvine
Apartment Communities, L.P.), Series 1998A, 5.250%, 5/15/25
(Mandatory put 5/15/13)
7,325 The Community Redevelopment Agency of the City of Los Angeles, 6/05 at 105 AAA 8,089,437
California, Multifamily Housing Revenue Refunding Bonds (Angelus
Plaza Project), 1995 Series A, 7.400%, 6/15/10
3,935 City of Stanton, Multifamily Housing Revenue Bonds (Continental 8/07 at 102 AAA 4,091,259
Gardens Apartments), Series 1997, 5.625%, 8/01/29 (Alternative
Minimum Tax) (Mandatory put 8/01/09)
2,000 City of Vista, California, Mobile Home Park Subordinate Revenue 3/09 at 102 N/R 1,807,520
Bonds (Vista Manor Mobile Home Park Project), Series 1999B,
5.750%, 3/15/29
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 7.9%
3,580 California Housing Finance Agency, Single Family Mortgage Bonds II, 2/07 at 102 AAA 3,778,189
1997 Series A-1, 6.000%, 8/01/20 (Alternative Minimum Tax)
1,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 8/04 at 102 Aa 1,056,840
1994 Series A, 6.550%, 8/01/26
1,000 California Housing Finance Agency, Home Mortgage Revenue Bonds, 8/05 at 102 AAA 1,028,250
1994 Series F-3, 6.100%, 8/01/15 (Alternative Minimum Tax)
2,000 California Housing Finance Agency, Home Mortgage Revenue 2/07 at 102 AAA 2,134,840
Bonds, 1997 Series B, 6.000%, 8/01/16 (Alternative Minimum Tax)
1,470 California Rural Home Mortgage Finance Authority, Single Family No Opt. Call AAA 1,698,894
Mortgage Revenue Bonds (Mortgage-Backed Securities Program),
1996 Series C, 7.500%, 8/01/27 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 14.2%
4,000 State of California, General Obligation Veterans Welfare Bonds, 6/04 at 101 AA 3,887,560
Series BR, 5.300%, 12/01/29 (Alternative Minimum Tax)
3,000 Pomona Unified School District, General Obligation Refunding 8/11 at 103 AAA 3,465,030
Bonds, Series 1997-A, 6.150%, 8/01/15
6,500 Commonwealth of Puerto Rico, General Obligation Public 7/10 at 100 AAA 6,977,750
Improvement Bonds of 2000, 5.750%, 7/01/21
3,000 San Diego Unified School District, California, 2000 General Obligation 7/10 at 100 AAA 3,010,830
Bonds, Election of 1998, Series B, 5.125%, 7/01/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 23.1%
4,500 Bonita Canyon Public Facilities Financing Authority, California, 3/01 at 103 N/R 4,129,065
Community Facilities District No. 98-1 Special Tax Bonds,
Series 1998, 5.375%, 9/01/28
5,920 State Public Works Board of California, Lease Revenue Bonds 11/09 at 101 AAA 6,278,219
(Department of Veterans Affairs of the State of California, Southern
California Veterans Home - Chula Vista Facility), 1999
Series A, 5.600%, 11/01/19
2,500 City of Carlsbad, California, Assessment District No. 96-1 3/01 at 102 N/R 2,379,375
Limited Obligation Improvement Bonds (Rancho Carillo),
5.500%, 9/02/28
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 1,000 Carson Redevelopment Agency, California, Redevelopment Project 10/03 at 102 BBB $ 1,044,910
Area No. 2, Refunding TaxAllocation Bonds, Series 1993,
5.875%, 10/01/09
2,160 Community Redevelopment Financing Authority of the Community 6/03 at 102 BB 2,056,644
Redevelopment Agency of the City of Los Angeles, California, Grand
Central Square Multifamily Housing Bonds, 1993 Series A,
5.750%, 12/01/13 (Alternative Minimum Tax)
1,000 Community Facilities District No. 88-1 of the City of Poway, 8/08 at 102 N/R 1,094,160
California (Parkway Business Center), Special Tax Refunding Bonds,
Series 1998, 6.500%, 8/15/09
1,200 City of Richmond, Limited Obligation Refunding Improvement Bonds, 3/01 at 103 N/R 1,240,896
Reassessment District No. 855 (Atlas Road West and Interchange),
6.600%, 9/02/19
6,200 Sacramento City Finance Authority, Lease Revenue Refunding Bonds, No Opt. Call A+ 6,440,560
Series 1993B, 5.400%, 11/01/20
San Marcos Public Facilities Authority, California, Refunding Revenue
Bonds, Series 1998:
1,500 5.800%, 9/01/18 9/08 at 101 N/R 1,487,790
2,000 5.800%, 9/01/27 9/08 at 101 N/R 1,940,780
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.1%
2,750 Airports Commission of the City and County of San Francisco, 5/04 at 102 AAA 2,981,165
California, San Francisco International Airport, Second Series
Revenue Bonds, Issue 5, 6.500%, 5/01/24 (Alternative Minimum Tax)
2,000 Airports Commission of the City and County of San Francisco, 5/06 at 102 AAA 2,063,200
California, San Francisco International Airport, Second Series
Revenue Bonds, Issue 10A, 5.700%, 5/01/26 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 10.2%
1,500 ABAG Finance Authority for Nonprofit Corporations, California, No Opt. Call AAA 1,547,460
Certificates of Participation (Stanford University Hospital),
Series 1993, 5.250%, 11/01/20
3,200 State Public Works Board of the State of California, Lease 10/04 at 102 AA-*** 3,569,536
Revenue Bonds (The Trustees of the California State University),
1994 Series A (Various California State University Projects),
6.375%, 10/01/14 (Pre-refunded to 10/01/04)
4,100 Imperial Irrigation District, California, Certificates of Participation 11/04 at 102 AAA 4,535,297
(1994 Electric System Project), 6.000%, 11/01/15 (Pre-refunded
to 11/01/04)
2,565 City of Torrance, Floating Rate Demand Hospital Revenue Bonds 12/05 at 100 AAA 2,783,564
(Little Company of Mary Hospital), 1985 Series A,
7.100%, 12/01/15 (Pre-refunded to 12/01/05)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.2%
1,000 California Pollution Control Financing Authority, Pollution Control 12/02 at 102 AAA 1,018,980
Revenue Bonds (Southern California Edison Company),
1992 Series B, 6.400%, 12/01/24 (Alternative Minimum Tax)
3,000 Merced Irrigation District, California, 2001 Electric System 9/05 at 102 N/R 2,890,860
Refunding Revenue Bonds (Electric System Project), 6.500%, 9/01/22
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 7.5%
5,000 City of Culver, California, Wastewater Facilities Refunding 9/09 at 102 AAA 5,305,650
Revenue Bonds, 1999 Series A, 5.700%, 9/01/29
1,000 Eastern Municipal Water District (Riverside County, California), 7/01 at 101 AAA 1,017,500
Water and Sewer Revenue Refunding Certificates of Participation,
Series 1991A, 6.300%, 7/01/20
1,750 The Metropolitan Water District of Southern California, Water 1/08 at 101 AA 1,686,912
Revenue Bonds (1997 Authorization), Series A, 5.000%, 7/01/37
1,000 Sacramento County Sanitation Districts Financing Authority, No Opt. Call AA 1,133,300
Revenue Bonds (Sacramento Regional County Sanitation District),
Series 2000A, 5.750%, 12/01/09
------------------------------------------------------------------------------------------------------------------------------------
$ 116,905 Total Investments (cost $116,779,899) - 99.0% 120,813,222
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.0% 1,222,980
--------------------------------------------------------------------------------------------------------------------
Net Assets - 100% $ 122,036,202
====================================================================================================================
* Optional Call Provisions: Dates (month and year) and prices
of the earliest optional call or redemption. There may be
other call provisions at varying prices at later dates.
** Ratings: Using the higher of Standard & Poor's or Moody's
rating.
*** Securities are backed by an escrow or trust containing
sufficient U.S. Government or U.S. Government agency
securities which ensures the timely payment of principal and
interest. Securities are normally considered to be
equivalent to AAA rated securities.
N/R Investment is not rated.
See accompanying notes to financial statements.
Statement of
NET ASSETS February 28, 2001 (Unaudited)
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM
INCOME INCOME 2 INCOME
(NPC) (NCL) (NCU)
-----------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments in municipal securities, at market value $143,673,774 $276,134,227 $120,813,222
Cash 1,665,833 1,258,375 --
Receivables:
Interest 2,091,673 4,245,278 1,761,789
Investments sold -- -- 723,677
Other assets 17,905 35,449 604
-----------------------------------------------------------------------------------------------------------------------------------
Total assets 147,449,185 281,673,329 123,299,292
-----------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- -- 698,805
Payable for investments purchased 1,993,446 1,993,446 --
Accrued expenses:
Management fees 72,279 138,177 60,909
Other 96,855 116,838 126,682
Preferred share dividends payable 3,388 22,715 7,424
Common share dividends payable 446,976 814,703 369,270
-----------------------------------------------------------------------------------------------------------------------------------
Total liabilities 2,612,944 3,085,879 1,263,090
-----------------------------------------------------------------------------------------------------------------------------------
Net assets $144,836,241 $278,587,450 $122,036,202
===================================================================================================================================
Preferred shares, at liquidation value $ 45,000,000 $ 95,000,000 $ 43,000,000
===================================================================================================================================
Preferred shares outstanding 1,800 3,800 1,720
===================================================================================================================================
Common shares outstanding 6,425,832 12,631,158 5,770,142
===================================================================================================================================
Net asset value per Common share outstanding (net assets less
Preferred shares at liquidation value,
divided by Common shares outstanding) $ 15.54 $ 14.53 $ 13.70
===================================================================================================================================
See accompanying notes to financial statements.
Statement of
OPERATIONS Six Months Ended February 28, 2001 (Unaudited)
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM
INCOME INCOME 2 INCOME
(NPC) (NCL) (NCU)
-----------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $3,955,385 $ 7,486,837 $3,384,172
-----------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 460,985 875,991 389,041
Preferred shares - auction fees 55,788 117,773 53,308
Preferred shares - dividend disbursing agent fees 4,959 9,917 4,959
Shareholders' servicing agent fees and expenses 4,687 6,933 3,318
Custodian's fees and expenses 24,252 31,731 22,017
Directors'/Trustees' fees and expenses 992 1,157 514
Professional fees 7,651 11,511 25,653
Shareholders' reports - printing and mailing expenses 13,886 28,466 12,795
Stock exchange listing fees 8,018 12,031 2,661
Investor relations expense 8,064 14,884 6,845
Portfolio insurance expense 6,655 501 --
Other expenses 6,106 9,931 3,285
-----------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit 602,043 1,120,826 524,396
Custodian fee credit (7,048) (9,487) (5,519)
-----------------------------------------------------------------------------------------------------------------------------------
Net expenses 594,995 1,111,339 518,877
-----------------------------------------------------------------------------------------------------------------------------------
Net investment income 3,360,390 6,375,498 2,865,295
-----------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investment transactions (44,994) (357,136) 187,337
Change in net unrealized appreciation (depreciation) of investments 3,202,947 5,987,783 2,076,094
-----------------------------------------------------------------------------------------------------------------------------------
Net gain from investments 3,157,953 5,630,647 2,263,431
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets from operations $6,518,343 $12,006,145 $5,128,726
===================================================================================================================================
See accompanying notes to financial statements.
Statement of
CHANGES IN NET ASSETS (Unaudited)
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) PREMIUM INCOME (NCU)
--------------------------------- --------------------------------- --------------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
2/28/01 8/31/00 2/28/01 8/31/00 2/28/01 8/31/00
-----------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 3,360,390 $ 7,008,059 $ 6,375,498 $ 12,853,838 $ 2,865,295 $ 5,927,918
Net realized gain (loss) from
investment transactions (44,994) (2,371,822) (357,136) (491,139) 187,337 156,785
Change in net unrealized
appreciation (depreciation)
of investments 3,202,947 4,320,269 5,987,783 5,822,864 2,076,094 686,745
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
from operations 6,518,343 8,956,506 12,006,145 18,185,563 5,128,726 6,771,448
-----------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS
From undistributed net
investment income:
Common shareholders (2,822,223) (5,683,474) (4,902,210) (10,102,279) (2,302,017) (4,561,523)
Preferred shareholders (762,418) (1,550,742) (1,547,767) (3,064,024) (755,756) (1,340,162)
-----------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets from
distributions to shareholders (3,584,641) (7,234,216) (6,449,977) (13,166,303) (3,057,773) (5,901,685)
-----------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Net proceeds from Common shares
issued to shareholders due to
reinvestment of distributions -- 89,174 54,529 124,695 87,570 130,708
-----------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets 2,933,702 1,811,464 5,610,697 5,143,955 2,158,523 1,000,471
Net assets at the
beginning of period 141,902,539 140,091,075 272,976,753 267,832,798 119,877,679 118,877,208
-----------------------------------------------------------------------------------------------------------------------------------
Net assets at the
end of period $144,836,241 $141,902,539 $278,587,450 $272,976,753 $122,036,202 $119,877,679
===================================================================================================================================
Balance of undistributed net
investment income
at the end of period $ 275,616 $ 499,867 $ 351,015 $ 425,494 $ 193,067 $ 385,545
===================================================================================================================================
See accompanying notes to financial statements.
Notes to
FINANCIAL STATEMENTS (Unaudited)
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The California Funds (the "Funds") covered in this report and their
corresponding stock exchange symbols are Nuveen Insured California Premium
Income Municipal Fund, Inc. (NPC), Nuveen Insured California Premium Income
Municipal Fund 2, Inc. (NCL) and Nuveen California Premium Income Municipal Fund
(NCU). Insured California Premium Income (NPC) and Insured California Premium
Income 2 (NCL) are traded on the New York Stock Exchange while California
Premium Income (NCU) is traded on the American Stock Exchange.
Each Fund seeks to provide current income exempt from both regular federal and
California state income taxes by investing primarily in a diversified portfolio
of municipal obligations issued by state and local government authorities within
the state of California. The Funds are registered under the Investment Company
Act of 1940 as closed-end, diversified management investment companies.
The following is a summary of significant accounting policies followed by the
Funds in the preparation of their financial statements in accordance with
accounting principles generally accepted in the United States.
SECURITIES VALUATION
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
price quotes are not readily available (which is usually the case for municipal
securities), the pricing service establishes fair market value based on yields
or prices of municipal bonds of comparable quality, type of issue, coupon,
maturity and rating, indications of value from securities dealers and general
market conditions. Temporary investments in securities that have variable rate
and demand features qualifying them as short-term securities are valued at
amortized cost, which approximates market value.
SECURITIES TRANSACTIONS
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets in a separate account with a current value at least equal to
the amount of the when-issued and delayed delivery purchase commitments. At
February 28, 2001, Insured California Premium Income (NPC) and Insured
California Premium Income 2 (NCL) each had outstanding delayed delivery and
when-issued purchase commitments of $1,993,446. There were no such outstanding
purchase commitments in California Premium Income (NCU).
INVESTMENT INCOME
Interest income is determined on the basis of interest accrued, adjusted for
amortization of premiums and accretion of discounts on long-term debt
securities.
INCOME TAXES
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to comply with the requirements of the Internal Revenue Code applicable
to regulated investment companies and to distribute all of its net investment
income to its shareholders. Therefore, no federal income tax provision is
required. Furthermore, each Fund intends to satisfy conditions which will enable
interest from municipal securities, which is exempt from regular federal and
California state income taxes, to retain such tax-exempt status when distributed
to shareholders of the Funds.
DIVIDENDS AND DISTRIBUTIONS TO SHAREHOLDERS
Tax-exempt net investment income is declared monthly as a dividend and payment
is made or reinvestment is credited to shareholder accounts on the first
business day after month end. Net realized capital gains and/or market discount
from investment transactions are distributed to shareholders not less frequently
than annually. Furthermore, capital gains are distributed only to the extent
they exceed available capital loss carryforwards.
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
Distributions to shareholders of tax-exempt net investment income, net realized
capital gains and/or market discount, if any, are recorded on the ex-dividend
date. The amount and timing of distributions are determined in accordance with
federal income tax regulations, which may differ from accounting principles
generally accepted in the United States. Accordingly, temporary over-
distributions as a result of these differences may occur and will be classified
as either distributions in excess of net investment income, distributions in
excess of net realized gains and/or distributions in excess of net ordinary
taxable income from investment transactions, where applicable.
PREFERRED SHARES
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in one or more Series. The dividend rate
may change every seven days, as set by the Auction Agent. The number of shares
outstanding, by Series and in total, for each Fund is as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM
INCOME INCOME 2 INCOME
(NPC) (NCL) (NCU)
--------------------------------------------------------------------------------
Number of shares:
Series M -- -- 1,720
Series T 1,800 1,900 --
Series Th -- 1,900 --
--------------------------------------------------------------------------------
Total 1,800 3,800 1,720
================================================================================
INSURANCE
Insured California Premium Income (NPC) and Insured California Premium Income 2
(NCL) invest in municipal securities which are either covered by insurance or
are backed by an escrow or trust account containing sufficient U.S. Government
or U.S. Government agency securities, both of which ensure the timely payment of
principal and interest. Each insured municipal security is covered by Original
Issue Insurance, Secondary Market Insurance or Portfolio Insurance. Such
insurance does not guarantee the market value of the municipal securities or the
value of the Funds' shares. Original Issue Insurance and Secondary Market
Insurance remain in effect as long as the municipal securities covered thereby
remain outstanding and the insurer remains in business, regardless of whether
the Funds ultimately dispose of such municipal securities. Consequently, the
market value of the municipal securities covered by Original Issue Insurance or
Secondary Market Insurance may reflect value attributable to the insurance.
Portfolio Insurance is effective only while the municipal securities are held by
the Funds. Accordingly, neither the prices used in determining the market value
of the underlying municipal securities nor the net asset value of the Funds'
shares include value, if any, attributable to the Portfolio Insurance. Each
policy of the Portfolio Insurance does, however, give the Funds the right to
obtain permanent insurance with respect to the municipal security covered by the
Portfolio Insurance policy at the time of its sale.
DERIVATIVE FINANCIAL INSTRUMENTS
The Funds may invest in transactions in certain derivative financial instruments
including futures, forward, swap and option contracts, and other financial
instruments with similar characteristics. Although the Funds are authorized to
invest in such financial instruments, and may do so in the future, they did not
make any such investments during the six months ended February 28, 2001.
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.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets from operations during the reporting period. Actual
results may differ from those estimates.
AUDIT GUIDE
In November 2000, the American Institute of Certified Public Accountants (AICPA)
issued a revised version of the AICPA Audit and Accounting Guide for Investment
Companies (the "Guide"). The Guide is effective for annual financial statements
issued for fiscal years beginning after December 15, 2000. It is not anticipated
that the adoption of the Guide will have a significant effect on the financial
statements.
2. FUND SHARES
Transactions in Common shares were as follows:
INSURED CALIFORNIA INSURED CALIFORNIA
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL)
---------------------------- -----------------------------
SIX MONTHS ENDED YEAR ENDED SIX MONTHS ENDED YEAR ENDED
2/28/01 8/31/00 2/28/01 8/31/00
----------------------------------------------------------------------------------------------------------------
Shares issued to shareholders
due to reinvestment
of distributions -- 6,092 3,745 13,473
----------------------------------------------------------------------------------------------------------------
CALIFORNIA
PREMIUM INCOME (NCU)
-----------------------------
SIX MONTHS ENDED YEAR ENDED
2/28/01 8/31/00
----------------------------------------------------------------------------------------------------------------
Shares issued to shareholders
due to reinvestment
of distributions 6,489 10,118
----------------------------------------------------------------------------------------------------------------
3. DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid April 2, 2001, to shareholders of record on
March 15, 2001, as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM
INCOME INCOME 2 INCOME
(NPC) (NCL) (NCU)
--------------------------------------------------------------------------------
Dividend per share $.0695 $.0645 $.0640
================================================================================
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
4. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities and short-term municipal securities during the six months ended
February 28, 2001, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM
INCOME INCOME 2 INCOME
(NPC) (NCL) (NCU)
--------------------------------------------------------------------------------
Purchases:
Long-term municipal securities $10,658,974 $25,710,780 $12,355,963
Short-term municipal securities -- 1,300,000 --
Sales and maturities:
Long-term municipal securities 10,689,043 25,957,585 11,728,134
Short-term municipal securities -- 1,300,000 --
================================================================================
At February 28, 2001, the identified cost of investments owned for federal
income tax purposes were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM
INCOME INCOME 2 INCOME
(NPC) (NCL) (NCU)
--------------------------------------------------------------------------------
$132,176,031 $261,883,087 $116,779,899
================================================================================
At February 28, 2001, the Funds' last fiscal year end, the Funds had unused
capital loss carryforwards available for federal income tax purposes to be
applied against future capital gains, if any. If not applied, the carryforwards
will expire as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM
INCOME INCOME 2 INCOME
(NPC) (NCL) (NCU)
--------------------------------------------------------------------------------
Expiration year:
2003 $ -- $ 323,810 $1,766,975
2004 -- 4,345,091 2,742,449
2005 165,897 1,283,948 1,049,994
2006 -- -- --
2007 -- -- --
2008 681,230 -- --
--------------------------------------------------------------------------------
Total $847,127 $5,952,849 $5,559,418
================================================================================
5. UNREALIZED APPRECIATION (DEPRECIATION)
Gross unrealized appreciation and gross unrealized depreciation of investments
for federal income tax purposes at February 28, 2001, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM
INCOME INCOME 2 INCOME
(NPC) (NCL) (NCU)
--------------------------------------------------------------------------------
Gross unrealized:
appreciation $13,303,963 $17,174,076 $5,337,609
depreciation (1,806,220) (2,922,936) (1,304,286)
--------------------------------------------------------------------------------
Net unrealized appreciation $11,497,743 $14,251,140 $4,033,323
================================================================================
6. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under the Funds' investment management agreements with Nuveen Advisory Corp.
(the "Adviser"), a wholly owned subsidiary of The John Nuveen Company, each Fund
pays an annual management fee, payable monthly, at the rates set forth below,
which are based upon the average daily net assets of each Fund as follows:
AVERAGE DAILY NET ASSETS MANAGEMENT FEE
-------------------------------------------------------------------------------
For the first $125 million .6500 of 1%
For the next $125 million .6375 of 1
For the next $250 million .6250 of 1
For the next $500 million .6125 of 1
For the next $1 billion .6000 of 1
For net assets over $2 billion .5875 of 1
================================================================================
The fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its 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.
Notes to
FINANCIAL STATEMENTS (Unaudited) (continued)
7. COMPOSITION OF NET ASSETS
At February 28, 2001, net assets consisted of:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM
INCOME INCOME 2 INCOME
(NPC) (NCL) (NCU)
-------------------------------------------------------------------------------------------------------------
Preferred shares, $25,000 stated value per share,
at liquidation value $ 45,000,000 $ 95,000,000 $ 43,000,000
Common shares, $.01 par value per share 64,258 126,312 57,701
Paid-in surplus 88,890,745 175,168,968 80,124,192
Balance of undistributed net investment income 275,616 351,015 193,067
Accumulated net realized gain (loss) from investment transactions (2,582,713) (8,510,237) (5,372,081)
Net unrealized appreciation of investments 13,188,335 16,451,392 4,033,323
-------------------------------------------------------------------------------------------------------------
Net assets $144,836,241 $278,587,450 $122,036,202
-------------------------------------------------------------------------------------------------------------
Authorized shares:
Common 200,000,000 200,000,000 Unlimited
Preferred 1,000,000 1,000,000 Unlimited
=============================================================================================================
Financial
HIGHLIGHTS (Unaudited)
Selected data for a Common share outstanding throughout each period:
INVESTMENT OPERATIONS LESS DISTRIBUTIONS
------------------------------------ -----------------------------------------------------------
NET NET
NET INVESTMENT INVESTMENT CAPITAL CAPITAL
REALIZED/ INCOME TO INCOME TO GAINS TO GAINS TO
BEGINNING NET UNREALIZED COMMON PREFERRED COMMON PREFERRED
NET ASSET INVESTMENT INVESTMENT SHARE- SHARE- SHARE- SHARE-
VALUE INCOME GAIN (LOSS) TOTAL HOLDERS HOLDERS+ HOLDERS HOLDERS+ TOTAL
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
YEAR ENDED 8/31:
2001(a) $15.08 $ .52 $ .50 $1.02 $(.44) $(.12) $-- $-- $ (.56)
2000 14.81 1.09 .30 1.39 (.88) (.24) -- -- (1.12)
1999 16.31 1.09 (1.56) (.47) (.83) (.20) -- -- (1.03)
1998 15.39 1.03 .92 1.95 (.81) (.22) -- -- (1.03)
1997 14.46 1.04 .93 1.97 (.81) (.23) -- -- (1.04)
1996 14.41 1.05 .02 1.07 (.79) (.23) -- -- (1.02)
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
YEAR ENDED 8/31:
2001(a) 14.09 .50 .45 .95 (.39) (.12) -- -- (.51)
2000 13.70 1.02 .41 1.43 (.80) (.24) -- -- (1.04)
1999 14.82 1.01 (1.14) (.13) (.78) (.21) -- -- (.99)
1998 14.06 .98 .77 1.75 (.75) (.24) -- -- (.99)
1997 13.27 .99 .77 1.76 (.74) (.23) -- -- (.97)
1996 13.01 1.00 .24 1.24 (.74) (.24) -- -- (.98)
CALIFORNIA PREMIUM
INCOME (NCU)
YEAR ENDED 8/31:
2001(a) 13.34 .50 .39 .89 (.40) (.13) -- -- (.53)
2000 13.19 1.03 .14 1.17 (.79) (.23) -- -- (1.02)
1999 14.30 1.00 (1.13) (.13) (.77) (.21) -- -- (.98)
1998 13.60 .98 .70 1.68 (.74) (.24) -- -- (.98)
1997 12.70 .99 .89 1.88 (.74) (.24) -- -- (.98)
1996 12.43 .98 .27 1.25 (.74) (.24) -- -- (.98)
TOTAL RETURNS
-------------------
BASED
ENDING BASED ON
NET ENDING ON NET
ASSET MARKET MARKET ASSET
VALUE VALUE VALUE** VALUE**
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
YEAR ENDED 8/31:
2001(a) $15.54 $15.0700 6.62% 6.03%
2000 15.08 14.5625 .84 8.34
1999 14.81 15.3750 1.62 (4.35)
1998 16.31 15.9375 15.85 11.51
1997 15.39 14.5000 10.69 12.30
1996 14.46 13.8750 15.39 5.83
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
YEAR ENDED 8/31:
2001(a) 14.53 14.3000 5.05 5.96
2000 14.09 14.0000 3.58 9.21
1999 13.70 14.3750 2.27 (2.50)
1998 14.82 14.8125 15.70 10.95
1997 14.06 13.5000 14.36 11.82
1996 13.27 12.5000 15.36 7.76
CALIFORNIA PREMIUM INCOME (NCU)
YEAR ENDED 8/31:
2001(a) 13.70 14.0000 8.35 5.77%
2000 13.34 13.3125 5.93 7.63
1999 13.19 13.3750 .81 (2.57)
1998 14.30 14.0000 12.54 10.83
1997 13.60 13.1250 17.16 13.20
1996 12.70 11.8750 17.51 8.15
RATIOS/SUPPLEMENTAL DATA
-------------------------------------------------------------------
BEFORE CREDIT
-------------------------------------------------------
RATIO OF NET RATIO OF NET
RATIO OF INVESTMENT RATIO OF INVESTMENT
EXPENSES INCOME TO EXPENSES INCOME TO
TO AVERAGE AVERAGE TO AVERAGE AVERAGE
ENDING NET ASSETS NET ASSETS TOTAL TOTAL
NET APPLICABLE APPLICABLE NET ASSETS NET ASSETS
ASSETS TO COMMON TO COMMON INCLUDING INCLUDING
(000) SHARES++ SHARES++ PREFERRED++ PREFERRED++
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
YEAR ENDED 8/31:
2001(a) $144,836 1.23%* 6.88%* .85%* 4.72%*
2000 141,903 1.25 7.65 .84 5.13
1999 140,091 1.22 6.81 .85 4.74
1998 149,478 1.22 6.49 .85 4.50
1997 143,571 1.25 6.96 .85 4.74
1996 137,610 1.26 7.08 .85 4.81
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
YEAR ENDED 8/31:
2001(a) 278,587 1.25* 7.13* .82* 4.67*
2000 272,977 1.28 7.65 .81 4.88
1999 267,833 1.24 6.86 .82 4.53
1998 281,399 1.25 6.79 .82 4.46
1997 271,883 1.28 7.24 .83 4.67
1996 261,851 1.29 7.39 .83 4.73
CALIFORNIA PREMIUM
INCOME (NCU)
YEAR ENDED 8/31:
2001(a) 122,036 1.36* 7.42* .88* 4.78*
2000 119,878 1.38 8.09 .87 5.10
1999 118,877 1.30 7.08 .85 4.62
1998 125,066 1.32 7.02 .86 4.57
1997 120,995 1.34 7.47 .86 4.76
1996 115,869 1.39 7.63 .88 4.83
RATIOS/SUPPLEMENTAL DATA
----------------------------------------------------------------------
AFTER CREDIT***
-------------------------------------------------------
RATIO OF NET RATIO OF NET
RATIO OF INVESTMENT RATIO OF INVESTMENT
EXPENSES INCOME TO EXPENSES INCOME TO
TO AVERAGE AVERAGE TO AVERAGE AVERAGE
NET ASSETS NET ASSETS TOTAL TOTAL
APPLICABLE APPLICABLE NET ASSETS NET ASSETS PORTFOLIO
TO COMMON TO COMMON INCLUDING INCLUDING TURNOVER
SHARES++ SHARES++ PREFERRED++ PREFERRED++ RATE
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
YEAR ENDED 8/31:
2001(a) 1.22%* 6.89%* .84%* 4.73%* 8%
2000 1.24 7.66 .83 5.13 27
1999 1.22 6.82 .85 4.74 50
1998 1.22 6.49 .85 4.50 2
1997 1.25 6.96 .85 4.74 9
1996 1.26 7.08 .85 4.81 9
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
YEAR ENDED 8/31:
2001(a) 1.24* 7.14* .81* 4.67* 9
2000 1.26 7.66 .81 4.89 26
1999 1.24 6.86 .82 4.53 35
1998 1.25 6.79 .82 4.46 13
1997 1.28 7.24 .83 4.67 24
1996 1.29 7.39 .83 4.73 27
CALIFORNIA PREMIUM
INCOME (NCU)
YEAR ENDED 8/31:
2001(a) 1.35* 7.44* .87* 4.79* 10
2000 1.36 8.10 .86 5.10 19
1999 1.30 7.08 .85 4.63 36
1998 1.32 7.02 .86 4.57 21
1997 1.34 7.47 .86 4.76 44
1996 1.39 7.63 .88 4.83 25
MUNICIPAL AUCTION RATE CUMULATIVE
PREFERRED STOCK AT END OF PERIOD
-----------------------------------------
LIQUIDATION
AGGREGATE AND
AMOUNT MARKET ASSET
OUTSTANDING VALUE COVERAGE
(000) PER SHARE PER SHARE
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
YEAR ENDED 8/31:
2001(a) $45,000 $25,000 $80,465
2000 45,000 25,000 78,835
1999 45,000 25,000 77,828
1998 45,000 25,000 83,043
1997 45,000 25,000 79,762
1996 45,000 25,000 76,450
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
YEAR ENDED 8/31:
2001(a) 95,000 25,000 73,312
2000 95,000 25,000 71,836
1999 95,000 25,000 70,482
1998 95,000 25,000 74,052
1997 95,000 25,000 71,548
1996 95,000 25,000 68,908
CALIFORNIA PREMIUM
INCOME (NCU)
YEAR ENDED 8/31:
2001(a) 43,000 25,000 70,951
2000 43,000 25,000 69,696
1999 43,000 25,000 69,115
1998 43,000 25,000 72,713
1997 43,000 25,000 70,346
1996 43,000 25,000 67,365
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Net Asset Value is the
combination of reinvested dividend income, reinvested capital gains
distributions, if any, and changes in net asset value per share. Total
returns are not annualized.
*** After custodian fee credit, 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 six months ended February 28, 2001.
See accompanying notes to financial statements.
Build Your Wealth
AUTOMATICALLY
SIDEBAR TEXT: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Exchange-Traded Fund allows you to conveniently reinvest dividends
and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the Fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBILITY
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
Fund
INFORMATION
BOARD OF DIRECTORS/TRUSTEES
Robert P. Bremner
Lawrence H. Brown
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN, TRANSFER AGENT
AND SHAREHOLDER SERVICES
J. P. Morgan Chase & Co.
4 New York Plaza
New York, NY 10004-2413
(800) 257-8787
LEGAL COUNSEL
Morgan, Lewis &
Bockius LLP
Washington, D.C.
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
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 6-month period ended February 28, 2001. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
Serving Investors
FOR GENERATIONS
PHOTO OF: John Nuveen, Sr.
For over a century, generations of Americans have relied on Nuveen Investments
to help them grow and keep the money they've earned. Financial advisors,
investors and their families have associated Nuveen Investments with quality,
expertise and dependability since 1898. That is why financial advisors have
entrusted the assets of more than 1.3 million investors to Nuveen.
With the know-how that comes from a century of experience, Nuveen continues to
build upon its reputation for quality. Now, financial advisors and investors can
count on Nuveen Investments to help them design customized solutions that meet
the far-reaching financial goals unique to family wealth strategies - solutions
that can translate into legacies.
To find out more about how Nuveen Investments' products and services can help
you preserve your financial security, talk with your financial advisor, or call
us at (800) 257-8787 for more information, including a prospectus where
applicable. Please read that information carefully before you invest.
INVEST WELL.
LOOK AHEAD.
LEAVE YOUR MARK.(SM)
LOGO: NUVEEN Investments
Nuveen Investments o 333 West Wacker Drive FSA-2-2-01
Chicago, IL 60606 o www.nuveen.com