UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number 811-21212
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Nuveen Insured California Tax-Free Advantage Municipal Fund
------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Address of principal executive offices) (Zip code)
Jessica R. Droeger
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
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(Name and address of agent for service)
Registrant's telephone number, including area code: (312) 917-7700
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Date of fiscal year end: 8/31/03
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Date of reporting period: 8/31/03
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Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
Nuveen Investments
Municipal Closed-End
Exchange-Traded
Funds
ANNUAL REPORT August 31, 2003
CALIFORNIA
NPC
NCL
NCU
NAC
NVX
NZH
NKL
NKX
Photo of: 2 men and child walking through the woods.
Photo of: 2 women and 2 children looking at seashells.
Dependable,
tax-free income
because
it's not what you earn,
it's what you keep.(R)
Logo: NUVEEN Investments
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NUVEEN FUND REPORT
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Registering is easy and only takes a few minutes (see instructions at right).
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WHAT IF I CHANGE MY MIND AND WANT TO RECEIVE INVESTOR MATERIALS THROUGH REGULAR
MAIL DELIVERY AGAIN?
If you decide you do not like receiving your reports electronically, it's a
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--------------------------------------------------------------------------------
IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS
COME FROM YOUR FINANCIAL ADVISOR OR BROKERAGE ACCOUNT,
FOLLOW THE STEPS OUTLINED BELOW:
1 Go to WWW.INVESTORDELIVERY.COM
2 Refer to the address sheet that accompanied this report. Enter the personal
13-CHARACTER ENROLLMENT NUMBER imprinted near your name.
3 You'll be taken to a page with several options. Select the NEW
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(Pick a number that's easy to remember.)
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IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS
COME DIRECTLY TO YOU FROM NUVEEN,
FOLLOW THE STEPS OUTLINED BELOW:
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Logo: NUVEEN Investments
Photo of: Timothy R. Schwertfeger
Chairman of the Board
Sidebar text: "WHILE NO ONE KNOWS WHAT THE FUTURE WILL BRING, WE THINK A
WELL-BALANCED PORTFOLIO ..... IS AN IMPORTANT COMPONENT IN ACHIEVING YOUR
LONG-TERM FINANCIAL GOALS."
Dear
SHAREHOLDER
Once again, I am pleased to report that over the most recent reporting period
your California Fund continued to provide you with attractive tax-free monthly
income and the opportunity for increased portfolio diversification. For more
specific information about the performance of your Fund, please see the
Portfolio Managers' Comments and Performance Overview sections of this report.
With interest rates at historically low levels, many investors have begun to
wonder whether interest rates will rise, and whether that possibility should
cause them to adjust their fixed-income holdings. While no one knows what the
future will bring, we think a well-balanced portfolio that is structured and
carefully monitored with the help of an investment professional is an important
component in achieving your long-term financial goals. A well-diversified
portfolio may actually help to reduce your overall investment risk. We believe
municipal bond investments like your Nuveen Fund can be important building
blocks in a portfolio crafted to perform well through a variety of market
conditions.
I'd also like to direct your attention to the inside front cover of this report,
which explains the quick and easy process to begin receiving Fund reports like
this via e-mail and the internet. Thousands of Nuveen Fund shareholders already
have signed-up, and they are getting their Fund information faster and more
conveniently than ever. I urge you to consider joining them.
Since 1898, Nuveen Investments has offered financial products and solutions that
incorporate careful research, diversification, and the application of
conservative risk-management principles. We are grateful that you have chosen us
as a partner as you pursue your financial goals. We look forward to continuing
to earn your trust in the months and years ahead.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
October 15, 2003
1
Nuveen California Municipal Closed-End Exchange-Traded Funds
(NPC, NCL, NCU, NAC, NVX, NZH, NKL, NKX)
Portfolio Managers'
COMMENTS
Portfolio managers Tom O'Shaughnessy, Bill Fitzgerald, and Scott Romans discuss
economic and market conditions, key investment strategies, and the annual
performance of the Funds. Tom, a 20-year veteran of Nuveen, assumed portfolio
management responsibility for NPC and NCL in January 2003. With 15 years of
investment experience at Nuveen, Bill has managed NCU since 1998, NAC since
1999, NVX and NZH since 2001, and NKL and NKX since their inceptions in 2002.
Scott, who has three years of investment experience at Nuveen, joined Bill in
managing these six Funds in January 2003.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE TWELVE
MONTH PERIOD ENDED AUGUST 31, 2003?
As has been the case for some time, we believe the two greatest influences on
the general economy and the municipal market continued to be historically low
interest rates and the slow pace of economic growth. In June 2003, the Federal
Reserve cut the fed funds rate to 1.0%, its lowest level since 1958. Growth
during the first half of 2003, as measured by the GDP, registered 2.3%, lagging
the 3% pace considered by many to be indicative of recovery. At the same time,
inflation remained dormant, with the 12-month advance in the core rate dropping
to 1.3% in August.
The slow rate of economic recovery, low interest rates, and lack of inflationary
pressures created conditions that helped many municipal bonds perform well
during the majority of this reporting period. However, during July 2003,
stronger-than-expected economic data precipitated a spike in bond yields and a
corresponding drop in bond prices that impacted results across all fixed-income
markets.
During the first eight months of 2003, the states and municipalities followed up
the record issuance of 2002 with continued strong supply, issuing $254 billion
in new bonds, up 12.5% over the same period in 2002.
HOW WERE ECONOMIC AND MARKET CONDITIONS IN CALIFORNIA?
Over the 12-months ended August 31, 2003, California continued to struggle with
significant budget problems and political uncertainty. On July 29, 2003, nearly
a month into its 2004 fiscal year, the state budget was finally approved,
closing a $38 billion deficit. Due to the heavy reliance on borrowing and
one-time measures to balance the fiscal 2004 budget, California is expected to
face an additional $8 billion deficit in fiscal 2005. The governor recall
election added further uncertainty to California's outlook during the reporting
period.
While employment and real estate values remained relatively stable in Southern
California, the San Francisco area continued to be the state's weak spot,
suffering from lingering effects of the technology downturn. Although some
economic data provided a glimmer of hope for the state's tech-related jobs, the
consensus was that any meaningful improvement in California's employment market,
especially technology, was not expected until 2004.
2
During the first eight months of 2003, municipal new issue supply in the state
totaled $42 billion, up 56% over the same period in 2002. However, the delays in
budget approval, the size of the deficit, and the uncertainty created by the
recall effort also led to several downgrades of California's general obligation
debt over the twelve months ended August 31, 2003. In December 2002, Standard &
Poor's cut the state's credit rating to A from A+, while Moody's followed suit
in February 2003, lowering the rating to A2. In July 2003, Moody's and S&P again
downgraded the state, to A3/BBB from A2/A, respectively.
HOW DID THE NUVEEN CALIFORNIA FUNDS PERFORM OVER THIS REPORTING PERIOD?
Individual results for these Funds, as well as for relevant benchmarks, are
presented in the accompanying table.
LEHMAN LIPPER
TOTAL RETURN CALIFORNIA CALIFORNIA
MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2
------------------------------------------------------------------------
1 YEAR 1 YEAR 1 YEAR
TAXABLE- ENDED ENDED ENDED
8/31/03 EQUIVALENT3 8/31/03 8/31/03 8/31/03
------------------------------------------------------------------------
NPC 6.05% 9.24% 2.82% 2.65% 1.88%
------------------------------------------------------------------------
NCL 6.37% 9.73% 2.71% 2.65% 1.88%
------------------------------------------------------------------------
NCU 6.73% 10.27% 0.69% 2.00% 1.14%
------------------------------------------------------------------------
NAC 6.71% 10.24% 3.37% 2.00% 1.14%
------------------------------------------------------------------------
NVX 6.80% 10.38% 2.16% 2.00% 1.14%
------------------------------------------------------------------------
NZH 6.80% 10.38% 1.68% 2.00% 1.14%
------------------------------------------------------------------------
NKL 6.51% 9.94% 2.70% 2.65% 1.88%
------------------------------------------------------------------------
NKX 6.68% 10.20% NA -- --
------------------------------------------------------------------------
Past performance is not predictive of future results.
For additional information, see the individual Performance Overview for your
Fund in this report.
For the 12-months ended August 31, 2003, all of the Funds in this report with at
least one year of performance history (with the exception of NCU) outperformed
their respective Lipper peer group averages. In addition, NPC, NCL, and NKL also
outperformed the unleveraged Lehman Brothers California Insured Tax-Exempt Bond
Index, and NAC and NVX outperformed the Lehman California index, with NZH
lagging the uninsured index by a small margin.
In general over this period, the performance of most of the Funds were helped by
longer durations.4 During periods of declining interest rates, such as that we
experienced over the majority of the past reporting period, investments with
longer durations generally would have been expected to outperform those with
shorter durations. However, as bond yields jumped higher in late June and July,
longer durations worked to hamper the Funds' performances, especially in NZH.
Another factor in the performance of these Funds in comparison with the Lehman
California indexes over this period was their use of leverage, a strategy that
can provide the opportunity for additional income for common shareholders,
especially during periods of low short-term interest rates.
In addition to duration and leverage, factors such as call exposure, portfolio
trading activity, and the price movement of specific sectors and holdings also
had an impact on the Funds' performances during this period. For example, all
four of the uninsured Funds held bonds backed by the 1998 master tobacco
settlement agreement. Over the year ended August 31, 2003, the prices of these
bonds weakened. The negative returns affected the NCU, NVX, and NZH in
particular. NAC was protected to a degree from these declines by its relatively
lower exposure to this sector. In recent months, tobacco bonds have shown some
recovery. Our strategy continues to be one of maintaining these holdings while
regularly evaluating the situation.
1 The total annual returns on common share net asset value (NAV) for the insured
NPC, NCL, and NKL are compared with the total annual return of the Lehman
Brothers California Insured Tax-Exempt Bond Index, an unleveraged, unmanaged
index comprising a broad range of insured California municipal bonds, while
annual returns for the uninsured NCU, NAC, NVX, and NZH are compared with the
total annual return of the Lehman California Tax-Exempt Bond Index, an
unleveraged, unmanaged 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 the insured California Funds are compared with the
average annualized return of the 10 funds in the Lipper California Insured
Municipal Debt Funds category, while the total returns of the uninsured
California Funds are compared with the return of the 28 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 other than an alternative investment that generates
qualified dividend income that is taxable at the maximum rate of 15%, 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 34.5%.
4 Duration is a measure of a fund's NAV volatility in reaction to interest rate
movements. Fund duration, also known as leverage-adjusted duration, takes into
account the leveraging process for a fund and therefore is generally longer
than the duration of the actual portfolio of individual bonds that make up the
fund. References to duration in this commentary are intended to indicate fund
duration unless otherwise noted.
3
NCU also held bonds issued for Downey Community Hospital, which declined
following a downgrade to BB+ from BBB+ by Standard & Poor's in February 2003 due
to poor management of managed care and physician contracts. Although the
hospital had been slow to respond to declining operations, the downgrade spurred
management to make staff changes and implement operating improvements. We
continue to hold these bonds based on our belief that the S&P rating is too low
and that the hospital has sufficient balance-sheet liquidity to provide time and
resources for a turnaround. NCU's performance over this period was also
negatively impacted by the Fund's need to reinvest called bond proceeds at
today's relatively lower interest rates.
HOW DID THE MARKET ENVIRONMENT AFFECT THE FUNDS' DIVIDENDS AND SHARE PRICES?
With short-term interest rates remaining at historically low levels, the
dividend-payment capabilities of the Funds benefited from their use of leverage.
During the 12-months ended August 31, 2003, the continued low level of
short-term rates enabled us to implement two dividend increases in NPC, NCL, and
NAC and one each in NCU and NVX. Leverage also helped to support the dividends
of NZH and NKL, which, as of August 2003, had paid shareholders dependable,
attractive dividends for 22 and 16 consecutive months, respectively. NKX, which
was introduced in November 2002, declared its first dividend in January 2003 and
continued to pay steady dividends over the course of this reporting period.
Although the share prices and net asset values of these Funds generally
performed well during much of this 12-month reporting period, increased
volatility in the fixed-income markets during the summer of 2003 as well as
continued budgetary and political turmoil in California led to an overall
weakening of prices. While we began to see some recovery in August as municipal
supply thinned somewhat, the Funds' share prices and NAVs finished this
reporting period lower than they had been at the beginning. As of August 31,
2003, all of the Funds with at least one year of history continued to trade at
discounts to their common share NAVs, while NKX had moved to trading at a slight
discount (see charts on individual Performance Overview pages).
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE FISCAL YEAR ENDED
AUGUST 31, 2003?
Over this 12-month period, we continued to place strong emphasis on diversifying
the portfolios, improving call protection, and enhancing dividend-paying
capabilities. One of our key strategies focused on managing the Funds' durations
in order to enhance our ability to mitigate interest rate risk and produce
potentially more consistent returns over time. Interest rate risk is the risk
that the value of a Fund's portfolio will decline when market interest rates
rise. The longer the duration of a Fund's portfolio, the greater its interest
rate risk. Over the course of the reporting period, we concentrated on finding
value in the intermediate part of the yield curve.
In NKL and NKX, which were introduced in 2002, we expanded our search further
out on the yield curve to find additional bonds that would help to support the
dividends of the two newest Funds. This has resulted in longer durations for
both NKL (15.13) and NKX (16.98). Over the past few months, we have been
swapping bonds with the goal of maintaining the yields of these Funds while
reducing their durations.
4
Over the six months ended August 31, 2003, another key strategy centered on
selling or purchasing California general obligation bonds (GOs) to take
advantage of general market moves. In early spring 2003, the yield differential
between California GOs and national AAA credits with similar maturities had
narrowed to 35-40 basis points. We believed this made California GOs relatively
expensive and we largely moved the Funds out of positions in California GOs. By
June 2003, as the state's budget process stalled and the recall movement
gathered strength, the yield differential had widened, and we began buying
California GOs. Following the approval of the fiscal 2004 budget at the end of
July 2003, California GOs rallied on a relative basis. As the yield spread with
national bonds once again narrowed, we began to sell some of these GO positions
at what we believed were attractive prices.
WHAT IS YOUR OUTLOOK FOR THE BOND CALLS FOR THESE FUNDS?
The five newer Funds will not experience any significant call exposure for
several years, with potential call exposure during 2003 and 2004 ranging from
zero in NVX to 5% in NKX. During this reporting period, we worked to mitigate
the call risk of the three older Funds, especially NCL and NCU, which marked
their 10-year anniversaries in 2003, a point in a Fund's life cycle often
associated with increased bond calls. As of August 31, 2003, NPC's potential
call exposure through 2004 was 12%, while NCL and NCU faced potential calls on
13% and 17% of their portfolios, respectively. The number of actual calls in
these Funds will depend largely on market interest rates in coming months.
In general, we believe that these Nuveen Funds can continue to serve as
attractive sources of tax-free income, while simultaneously offering the
potential for considerable portfolio diversification. In our opinion, these
Funds represent a quality component of a well-balanced core investment portfolio
that can continue to benefit shareholders over time.
5
Nuveen Insured California Premium Income Municipal Fund, Inc.
Performance
OVERVIEW As of August 31, 2003
NPC
Pie Chart:
CREDIT QUALITY
Insured 79%
Insured and U.S. Guaranteed 4%
U.S. Guaranteed 17%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $15.07
--------------------------------------------------
Common Share Net Asset Value $15.59
--------------------------------------------------
Market Yield 6.05%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.40%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.24%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $100,427
--------------------------------------------------
Average Effective Maturity (Years) 19.77
--------------------------------------------------
Leverage-Adjusted Duration 10.95
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 11/19/92)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 1.55% 2.82%
--------------------------------------------------
5-Year 4.86% 4.98%
--------------------------------------------------
10-Year 5.74% 6.01%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/General 21%
--------------------------------------------------
U.S. Guaranteed 21%
--------------------------------------------------
Water and Sewer 20%
--------------------------------------------------
Utilities 12%
--------------------------------------------------
Tax Obligation/Limited 11%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Sep 0.0735
Oct 0.0735
Nov 0.0735
Dec 0.0745
Jan 0.0745
Feb 0.0745
Mar 0.076
Apr 0.076
May 0.076
Jun 0.076
Jul 0.076
Aug 0.076
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/02 16.09
16.21
16.26
16.45
16.35
16.29
15.49
15
15.3
15.15
15.1
15
15
15.4
15.27
15.46
15.72
15.66
15.35
15.3
15.8
15.86
15.95
15.88
15.71
15.8
15.9
16.25
15.67
15.91
16
15.85
16.1
15.82
16.25
16.39
16.42
16.6
16.75
16.35
16.2
16.27
15.9
15.25
14.55
15.03
14.85
14.81
8/31/03 15.07
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
28%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 34.5%.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2002 of $0.1419 per share.
6
Nuveen Insured California Premium Income Municipal Fund 2, Inc.
Performance
OVERVIEW As of August 31, 2003
NCL
Pie Chart:
CREDIT QUALITY
Insured 87%
Insured and U.S. Guaranteed 10%
U.S. Guaranteed 3%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.32
--------------------------------------------------
Common Share Net Asset Value $14.60
--------------------------------------------------
Market Yield 6.37%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 8.85%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.73%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $185,181
--------------------------------------------------
Average Effective Maturity (Years) 17.32
--------------------------------------------------
Leverage-Adjusted Duration 8.99
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 3/18/93)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 2.69% 2.71%
--------------------------------------------------
5-Year 5.16% 5.50%
--------------------------------------------------
10-Year 5.62% 5.85%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 31%
--------------------------------------------------
Tax Obligation/General 15%
--------------------------------------------------
U.S. Guaranteed 13%
--------------------------------------------------
Water and Sewer 12%
--------------------------------------------------
Education and Civic Organizations 8%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Sep 0.0725
Oct 0.0725
Nov 0.0725
Dec 0.0735
Jan 0.0735
Feb 0.0735
Mar 0.076
Apr 0.076
May 0.076
Jun 0.076
Jul 0.076
Aug 0.076
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/02 15.05
15.22
15.26
15.74
15.67
15.58
15
14.48
14.43
14.71
14.52
14.55
14.51
14.73
14.55
14.62
14.99
15.21
14.93
14.86
14.91
15.03
14.93
14.9
15.25
15
15.3
15.2
14.99
15.14
15.18
15.2
15.41
15.48
15.43
15.65
15.51
15.77
16.35
15.75
15.5
15.52
15.28
14.71
14.37
14.42
14.36
14.29
8/31/03 14.32
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
28%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 34.5%.
7
Nuveen California Premium Income Municipal Fund
Performance
OVERVIEW As of August 31, 2003
NCU
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 61%
AA 6%
A 12%
BBB 10%
NR 4%
BB or lower 7%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $13.02
--------------------------------------------------
Common Share Net Asset Value $13.66
--------------------------------------------------
Market Yield 6.73%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.35%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.27%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $78,859
--------------------------------------------------
Average Effective Maturity (Years) 17.29
--------------------------------------------------
Leverage-Adjusted Duration 11.87
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 6/18/93)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -0.91% 0.69%
--------------------------------------------------
5-Year 4.59% 5.09%
--------------------------------------------------
10-Year 4.85% 5.46%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 26%
--------------------------------------------------
Healthcare 15%
--------------------------------------------------
Tax Obligation/General 12%
--------------------------------------------------
Housing/Multifamily 11%
--------------------------------------------------
Water and Sewer 8%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Sep 0.0715
Oct 0.0715
Nov 0.0715
Dec 0.0715
Jan 0.0715
Feb 0.0715
Mar 0.073
Apr 0.073
May 0.073
Jun 0.073
Jul 0.073
Aug 0.073
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/02 14.17
14.47
14.4
14.54
14.9
14.75
13.8
13.56
13.65
13.82
13.64
13.93
13.72
13.85
13.7
13.59
13.95
14.05
14.05
13.75
13.67
13.31
13.48
13.3
13.4
13.35
13.55
13.48
13.19
13.47
13.47
13.47
13.5
13.51
13.78
13.85
14.09
14.35
14.6
14.47
14.29
14.37
14.24
13.65
13.1
13.08
12.8
12.91
8/31/03 13.02
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
28%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 34.5%.
2 The Fund also paid shareholders a net ordinary income distribution in December
2002 of $0.0065 per share.
8
Nuveen California Dividend Advantage Municipal Fund
Performance
OVERVIEW As of August 31, 2003
NAC
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 52%
AA 6%
A 16%
BBB 19%
NR 7%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.30
--------------------------------------------------
Common Share Net Asset Value $14.82
--------------------------------------------------
Market Yield 6.71%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.32%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.24%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $346,918
--------------------------------------------------
Average Effective Maturity (Years) 18.97
--------------------------------------------------
Leverage-Adjusted Duration 11.03
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 5/26/99)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year 4.79% 3.37%
--------------------------------------------------
Since Inception 5.06% 6.94%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 24%
--------------------------------------------------
Tax Obligation/General 14%
--------------------------------------------------
Transportation 14%
--------------------------------------------------
Housing/Multifamily 10%
--------------------------------------------------
Healthcare 9%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Sep 0.0755
Oct 0.0755
Nov 0.0755
Dec 0.077
Jan 0.077
Feb 0.077
Mar 0.08
Apr 0.08
May 0.08
Jun 0.08
Jul 0.08
Aug 0.08
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/02 14.88
15
14.83
14.95
14.99
14.89
14.4
14.33
14.3
14.35
14.12
13.98
14.16
14.37
14.17
14.41
14.55
14.67
14.3
14.1
14.04
14.11
14.35
14.07
14.09
14.11
14.32
14.29
14.08
14.3
14.34
14.35
14.4
14.62
14.89
15.04
15.35
15.66
15.89
15.69
15.44
15.49
15.2
14.6
14.07
14.36
14.36
14.06
8/31/03 14.3
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
28%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 34.5%.
9
Nuveen California Dividend Advantage Municipal Fund 2
Performance
OVERVIEW As of August 31, 2003
NVX
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 72%
A 11%
BBB 11%
NR 6%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $13.24
--------------------------------------------------
Common Share Net Asset Value $14.18
--------------------------------------------------
Market Yield 6.80%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.44%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.38%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $209,722
--------------------------------------------------
Average Effective Maturity (Years) 20.34
--------------------------------------------------
Leverage-Adjusted Duration 12.41
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -0.95% 2.16%
--------------------------------------------------
Since Inception 0.88% 5.61%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 29%
--------------------------------------------------
Tax Obligation/General 20%
--------------------------------------------------
Education and Civic Organizations 13%
--------------------------------------------------
Water and Sewer 8%
--------------------------------------------------
Healthcare 8%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Sep 0.074
Oct 0.074
Nov 0.074
Dec 0.074
Jan 0.074
Feb 0.074
Mar 0.074
Apr 0.074
May 0.074
Jun 0.075
Jul 0.075
Aug 0.075
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/02 14.62
14.64
14.46
14.63
14.87
14.45
13.95
13.74
13.8
14.2
13.68
13.54
13.74
13.75
13.36
13.32
13.73
13.75
13.42
13.44
13.49
13.64
13.47
13.51
13.58
13.59
13.63
13.65
13.4
13.44
13.56
13.55
13.7
13.91
14.06
14.04
14.42
14.72
14.8
14.52
14.52
14.71
14.35
13.97
13.03
13.4
13.19
13.17
8/31/03 13.24
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
28%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 34.5%.
2 The Fund also paid shareholders capital gains and net ordinary income
distributions in December 2002 of $0.0291 per share.
10
Nuveen California Dividend Advantage Municipal Fund 3
Performance
OVERVIEW As of August 31, 2003
NZH
Pie Chart:
CREDIT QUALITY
AAA/U.S. Guaranteed 71%
AA 1%
A 10%
BBB 12%
NR 6%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $12.71
--------------------------------------------------
Common Share Net Asset Value $13.72
--------------------------------------------------
Market Yield 6.80%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.44%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.38%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $330,829
--------------------------------------------------
Average Effective Maturity (Years) 19.88
--------------------------------------------------
Leverage-Adjusted Duration 14.96
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/01)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -3.20% 1.68%
--------------------------------------------------
Since Inception -2.53% 3.61%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 30%
--------------------------------------------------
Tax Obligation/General 21%
--------------------------------------------------
Water and Sewer 11%
--------------------------------------------------
Healthcare 8%
--------------------------------------------------
Utilities 8%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE
Sep 0.072
Oct 0.072
Nov 0.072
Dec 0.072
Jan 0.072
Feb 0.072
Mar 0.072
Apr 0.072
May 0.072
Jun 0.072
Jul 0.072
Aug 0.072
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/02 14.13
14.23
14.08
14
14.25
13.94
13.45
13.31
13.7
13.64
13.35
13.26
13.3
13.37
13.02
13.1
13.12
13.5
13.14
13.05
13.07
13.2
13.15
13
13.04
13.14
13.07
13.18
13
13.2
13.21
13.12
13.23
13.3
13.63
13.7
13.97
14.24
14.39
13.92
14.02
14.2
14.15
13.42
12.89
13.16
12.68
12.71
8/31/03 12.71
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
28%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 34.5%.
11
Nuveen Insured California Dividend Advantage Municipal Fund
Performance
OVERVIEW As of August 31, 2003
NKL
Pie Chart:
CREDIT QUALITY
Insured 82%
AAA (uninsured) 1%
AA (uninsured) 4%
A (uninsured) 8%
BBB (uninsured) 5%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $14.00
--------------------------------------------------
Common Share Net Asset Value $14.60
--------------------------------------------------
Market Yield 6.51%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.04%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 9.94%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $222,751
--------------------------------------------------
Average Effective Maturity (Years) 22.77
--------------------------------------------------
Leverage-Adjusted Duration 15.13
--------------------------------------------------
AVERAGE ANNUAL TOTAL RETURN (Inception 3/25/02)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
1-Year -0.35% 2.70%
--------------------------------------------------
Since Inception 1.18% 7.37%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 27%
--------------------------------------------------
Tax Obligation/General 25%
--------------------------------------------------
Utilities 15%
--------------------------------------------------
Water and Sewer 12%
--------------------------------------------------
Education and Civic Organizations 7%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Sep 0.076
Oct 0.076
Nov 0.076
Dec 0.076
Jan 0.076
Feb 0.076
Mar 0.076
Apr 0.076
May 0.076
Jun 0.076
Jul 0.076
Aug 0.076
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
9/1/02 15.14
15.25
15.05
15.32
15.25
15.17
14.3
14.2
14.64
14.59
14.6
14.63
14.7
14.8
14.31
14.3
14.3
14.45
14.6
14.24
14.3
14.45
14.59
14.4
14.6
14.68
14.84
14.8
14.55
14.4
14.4
14.71
14.75
14.85
15
15
15.18
15.47
15.37
15.38
15.27
15.25
15.02
14.36
13.8
13.9
13.71
13.91
8/31/03 14
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
28%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 34.5%.
2 The Fund also paid shareholders a capital gains distribution in December 2002
of $0.0515 per share.
12
Nuveen Insured California Tax-Free Advantage Municipal Fund
Performance
OVERVIEW As of August 31, 2003
NKX
Pie Chart:
CREDIT QUALITY
Insured 84%
A (uninsured) 10%
BBB (uninsured) 6%
PORTFOLIO STATISTICS
--------------------------------------------------
Share Price $13.56
--------------------------------------------------
Common Share Net Asset Value $13.79
--------------------------------------------------
Market Yield 6.68%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal Income Tax Rate)1 9.28%
--------------------------------------------------
Taxable-Equivalent Yield
(Federal and State Income Tax Rate)1 10.20%
--------------------------------------------------
Net Assets Applicable to
Common Shares ($000) $81,141
--------------------------------------------------
Average Effective Maturity (Years) 22.97
--------------------------------------------------
Leverage-Adjusted Duration 16.98
--------------------------------------------------
CUMULATIVE TOTAL RETURN (Inception 11/21/02)
--------------------------------------------------
ON SHARE PRICE ON NAV
--------------------------------------------------
Since Inception -5.79% 0.34%
--------------------------------------------------
TOP FIVE SECTORS (as a % of total investments)
--------------------------------------------------
Tax Obligation/Limited 37%
--------------------------------------------------
Tax Obligation/General 28%
--------------------------------------------------
Transportation 14%
--------------------------------------------------
Healthcare 9%
--------------------------------------------------
Water and Sewer 6%
--------------------------------------------------
Bar Chart:
2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2
Jan 0.0755
Feb 0.0755
Mar 0.0755
Apr 0.0755
May 0.0755
Jun 0.0755
Jul 0.0755
Aug 0.0755
Line Chart:
SHARE PRICE PERFORMANCE
Weekly Closing Price
Past performance is not predictive of future results.
11/22/02 15.1
15.05
15
15
15
14.94
14.85
14.9
14.9
14.75
14.7
14.2
14.28
14.6
14.8
14.28
14.3
14.3
14.89
14.7
14.76
14.85
14.82
14.78
15.15
15.45
15.95
15.19
15.02
15.5
15.3
15.06
14.2
14.45
14.08
13.85
8/31/03 13.56
1 Taxable-equivalent yield represents the yield on a taxable investment
necessary to equal the yield of the Nuveen Fund on an after-tax basis. It is
calculated using the current market yield and a federal income tax rate of
28%. The rate shown for federal and state highlights the added value of owning
shares that are also exempt from state income taxes. It is based on a combined
federal and state income tax rate of 34.5%.
13
Report of
INDEPENDENT AUDITORS
THE BOARDS OF DIRECTORS, TRUSTEES AND SHAREHOLDERS
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND, INC.
NUVEEN INSURED CALIFORNIA PREMIUM INCOME MUNICIPAL FUND 2, INC.
NUVEEN CALIFORNIA PREMIUM INCOME MUNICIPAL FUND
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 2
NUVEEN CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND 3
NUVEEN INSURED CALIFORNIA DIVIDEND ADVANTAGE MUNICIPAL FUND
NUVEEN INSURED CALIFORNIA TAX-FREE ADVANTAGE MUNICIPAL FUND
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Insured California Premium Income
Municipal Fund, Inc., Nuveen Insured California Premium Income Municipal Fund 2,
Inc., Nuveen California Premium Income Municipal Fund, Nuveen California
Dividend Advantage Municipal Fund, Nuveen California Dividend Advantage
Municipal Fund 2, Nuveen California Dividend Advantage Municipal Fund 3, Nuveen
Insured California Dividend Advantage Municipal Fund and Nuveen Insured
California Tax-Free Advantage Municipal Fund as of August 31, 2003, and the
related statements of operations, changes in net assets and the financial
highlights for the periods indicated therein. These financial statements and
financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of investments owned as of August 31, 2003, by correspondence with
the custodian and brokers or other appropriate auditing procedures where replies
from brokers were not received. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial positions of
Nuveen Insured California Premium Income Municipal Fund, Inc., Nuveen Insured
California Premium Income Municipal Fund 2, Inc., Nuveen California Premium
Income Municipal Fund, Nuveen California Dividend Advantage Municipal Fund,
Nuveen California Dividend Advantage Municipal Fund 2, Nuveen California
Dividend Advantage Municipal Fund 3, Nuveen Insured California Dividend
Advantage Municipal Fund and Nuveen Insured California Tax-Free Advantage
Municipal Fund at August 31, 2003, and the results of their operations, changes
in their net assets and financial highlights for the periods indicated therein
in conformity with accounting principles generally accepted in the United
States.
Ernst & Young LLP
Chicago, Illinois
October 10, 2003
14
Nuveen Insured California Premium Income Municipal Fund, Inc. (NPC)
Portfolio of
INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 11.5%
$ 2,000 California Educational Facilities Authority, Revenue Bonds, 9/06 at 102.00 AAA $ 2,139,420
Santa Clara University, Series 1996, 5.750%, 9/01/26 -
MBIA Insured
5,000 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa 5,143,450
Revenue Bonds, California Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) - MBIA Insured
2,000 University of California, Revenue Bonds, Multiple Purpose 9/10 at 101.00 AAA 2,001,420
Projects, Series 2002O, 5.125%, 9/01/31 - FGIC Insured
2,350 University of California, Revenue Bonds, Multiple Purpose 5/13 at 100.00 AAA 2,312,283
Projects, Series 2003A, 5.000%, 5/15/33 (WI, settling 9/09/03) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 4.6%
3,000 California Health Facilities Financing Authority, Insured Revenue 8/08 at 101.00 AAA 3,045,120
Bonds, Sutter Health, Series 1998A, 5.375%, 8/15/30 -
MBIA Insured
1,500 California Statewide Communities Development Authority, 8/09 at 101.00 AAA 1,578,510
Certificates of Participation, Members of the Sutter Health
Obligated Group, 5.500%, 8/15/19 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.8%
1,000 ABAG Finance Authority for Nonprofit Corporations, 9/09 at 100.00 AAA 1,032,480
California, Multifamily Housing Revenue Bonds, Civic Center
Drive Apartments Project, 1999 Series A, 5.800%, 9/01/20
(Alternative Minimum Tax) - FSA Insured
3,830 Los Angeles, California, FHA-Insured Section 8 Revenue 1/04 at 100.00 AAA 3,833,064
Refunding Mortgage Loan Bonds, Series 1993A,
6.300%, 1/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.8%
815 California Housing Finance Agency, Single Family Mortgage 2/07 at 102.00 AAA 842,319
Bonds II, Series 1997A-1, 6.000%, 8/01/20 (Alternative
Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 31.8%
State of California, Various Purpose General Obligation Bonds:
7,995 5.750%, 3/01/22 - MBIA Insured 3/10 at 101.00 AAA 8,476,699
2,000 5.750%, 3/01/27 - MBIA Insured 3/10 at 101.00 AAA 2,106,320
2,000 State of California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 2,010,220
Series 2001BZ, 5.375%, 12/01/24 (Alternative Minimum
Tax) - MBIA Insured
1,225 Fresno Unified School District, Fresno County, California, 2/13 at 103.00 AAA 1,429,355
General Obligation Refunding Bonds, Series 1998A,
6.550%, 8/01/20 - MBIA Insured
2,500 Fresno Unified School District, Fresno County, California, 8/09 at 102.00 AAA 2,537,000
General Obligation Bonds, Election of 2001, Series 2001A,
5.125%, 8/01/26 - FSA Insured
2,000 Los Angeles Unified School District, California, General 7/08 at 102.00 AAA 2,018,320
Obligation Bonds, Series 1997A, 5.000%, 7/01/21 - FGIC Insured
3,000 Pomona Unified School District, California, General Obligation 8/11 at 103.00 AAA 3,453,810
Refunding Bonds, Series 1997A, 6.500%, 8/01/19 -
MBIA Insured
San Diego Unified School District, San Diego County,
California, General Obligation Bonds, Election of 1998,
Series 2001C:
1,335 5.000%, 7/01/21 - FSA Insured 7/11 at 102.00 AAA 1,350,953
3,500 5.000%, 7/01/22 - FSA Insured 7/11 at 102.00 AAA 3,520,055
4,895 5.000%, 7/01/23 - FSA Insured 7/11 at 102.00 AAA 4,904,105
15
Nuveen Insured California Premium Income Municipal Fund, Inc. (NPC) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 16.3%
$ 2,000 California State Public Works Board, Lease Revenue Bonds, 11/09 at 101.00 AAA $ 2,107,020
Department of Health Services, Richmond Laboratory Project,
Series 1999A, 5.750%, 11/01/24 - MBIA Insured
1,900 Corona-Norco Unified School District, Riverside County, 9/12 at 100.00 AAA 1,905,035
California, Special Tax Bonds, Community Facilities
District 98-1, Series 2002, 5.100%, 9/01/25 - AMBAC Insured
5,000 El Monte, California, Senior Lien Certificates of Participation, 1/11 at 100.00 AAA 5,051,200
Department of Public Services Facility - Phase II, Series 2001,
5.250%, 1/01/34 - AMBAC Insured
1,460 Pittsburg Redevelopment Agency, California, Tax Allocation No Opt. Call AAA 1,575,953
Refunding Bonds, Los Medanos Community Development
Project, Series 2003A, 5.000%, 8/01/13 - MBIA Insured
3,000 Santa Clara County Financing Authority, California, Lease 11/07 at 102.00 AAA 3,014,070
Revenue Bonds, VMC Facility Replacement Project,
Series 1994A, 5.000%, 11/15/22 - AMBAC Insured
2,805 Yucaipa-Calimesa Joint Unified School District, 10/11 at 100.00 AAA 2,748,872
San Bernardino County, California, General Obligation
Refunding Bonds, Series 2001A, 5.000%, 10/01/31 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 31.6%
6,000 Huntington Park Redevelopment Agency, California, Single No Opt. Call AAA 8,312,460
Family Residential Mortgage Revenue Refunding Bonds,
Series 1986A, 8.000%, 12/01/19
5,135 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,871,862
Single Family Restructured Mortgage Revenue Bonds,
Series 1986A, 8.000%, 3/01/16 (Alternative Minimum Tax)
6,220 Riverside County, California, Single Family Mortgage Revenue No Opt. Call AAA 9,045,684
Bonds, GNMA Mortgage-Backed Securities Program,
Series 1987A, 9.000%, 5/01/21 (Alternative Minimum Tax)
1,485 San Jose, California, Single Family Mortgage Revenue No Opt. Call AAA 2,146,657
Bonds, Series 1985A, 9.500%, 10/01/13
4,800 University of California, Hospital Revenue Bonds, Davis 7/06 at 101.00 AAA 5,368,656
Medical Center, Series 1996, 5.750%, 7/01/24 (Pre-refunded
to 7/01/06) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 18.9%
4,000 California Pollution Control Financing Authority, Pollution 12/03 at 101.00 AAA 4,095,120
Control Revenue Bonds, Southern California Edison Company,
Series 1992B, 6.400%, 12/01/24 (Alternative Minimum Tax) -
MBIA Insured
4,000 Chula Vista, California, Industrial Development Revenue 12/03 at 101.00 A+ 4,087,360
Bonds, San Diego Gas and Electric Company, Series 1992A,
6.400%, 12/01/27 (Alternative Minimum Tax)
3,600 Sacramento Municipal Utility District, California, Electric No Opt. Call AAA 3,891,636
Revenue Refunding Bonds, Series 2003S, 5.000%, 11/15/13 -
MBIA Insured
7,000 Turlock Irrigation District, California, Certificates of 1/13 at 100.00 AAA 6,888,350
Participation, Series 2003A, 5.000%, 1/01/33 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 30.7%
6,415 Coachella Water Authority, California, Water Revenue Bonds, 3/13 at 102.00 AAA 6,312,873
Series 2003, 5.000%, 3/01/33 - FSA Insured
6,000 Los Angeles, California, Wastewater System Revenue Bonds, 11/03 at 102.00 AAA 5,996,280
Series 1993D, 4.700%, 11/01/19 - FGIC Insured
7,500 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 7,346,850
of Participation, Series 2003, 5.000%, 2/01/33 (DD, settling
9/02/03) - FGIC Insured
3,400 San Diego Public Facilities Financing Authority, California, 5/07 at 101.00 AAA 3,472,318
Sewer Revenue Bonds, Series 1997A, 5.250%, 5/15/22 -
FGIC Insured
2,150 Santa Clara Valley Water District, California, Water Utility 6/10 at 100.00 AAA 2,151,032
System Revenue Bonds, Series 2000A, 5.125%, 6/01/31 -
FGIC Insured
5,000 Wheeler Ridge-Maricopa Water Storage District, Kern County, 11/06 at 102.00 AAA 5,567,149
California, Water Revenue Refunding Bonds, Series 1996,
5.700%, 11/01/15 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 140,815 Total Long-Term Investments (cost $142,252,848) - 151.0% 151,691,340
=============-----------------------------------------------------------------------------------------------------------------------
16
PRINCIPAL MARKET
AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 1.1%
$ 1,100 California Infrastructure and Economic Development Bank, A-1+ $ 1,100,000
Insured Revenue Bonds, Rand Corporation, Variable Rate
Demand Obligations, Series 2002B, 0.800%, 4/01/42 -
AMBAC Insured+
------------------------------------------------------------------------------------------------------------------------------------
$ 1,100 Total Short-Term Investments (cost $1,100,000) 1,100,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $143,352,848) - 152.1% 152,791,340
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (7.3)% (7,364,357)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (44.8)% (45,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $100,426,983
====================================================================================================================
All of the bonds in the portfolio, excluding temporary
investments in short-term municipal securities, 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.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
(DD) Security purchased on a delayed delivery basis.
(WI) Security purchased on a when-issued basis.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that currently in
effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
17
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL)
Portfolio of
INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 12.7%
California Educational Facilities Authority, Revenue Bonds,
Santa Clara University, Series 1996:
$ 2,400 5.750%, 9/01/21 - MBIA Insured 9/06 at 102.00 AAA $ 2,613,480
3,000 5.750%, 9/01/26 - MBIA Insured 9/06 at 102.00 AAA 3,209,130
2,000 California Educational Facilities Authority, Revenue Bonds, 11/10 at 100.00 Aaa 2,204,960
University of the Pacific, Series 2000, 5.875%, 11/01/20 -
MBIA Insured
6,615 California Educational Facilities Authority, Revenue Refunding No Opt. Call Aaa 1,178,925
Bonds, Loyola Marymount University, Series 2001A,
0.000%, 10/01/33 - MBIA Insured
5,000 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa 5,143,450
Revenue Bonds, California Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) - MBIA Insured
California Infrastructure and Economic Development Bank, Revenue
Bonds, Asian Art Museum of San Francisco Project, Series 2000:
1,295 5.500%, 6/01/19 - MBIA Insured 6/10 at 101.00 AAA 1,391,426
1,000 5.500%, 6/01/20 - MBIA Insured 6/10 at 101.00 AAA 1,066,770
1,900 University of California, Housing System Revenue Bonds, 11/03 at 102.00 AAA 1,952,763
Series 1993A, 5.500%, 11/01/18 (Pre-refunded to 11/01/03) -
MBIA Insured
4,750 University of California, Revenue Bonds, Multiple Purpose 5/13 at 100.00 AAA 4,673,763
Projects, Series 2003A, 5.000%, 5/15/33 (WI, settling 9/09/03) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 5.3%
1,450 California Health Facilities Financing Authority, Insured 7/06 at 102.00 AAA 1,603,019
Health Facility Revenue Refunding Bonds, Mark Twain
St. Joseph's Healthcare Corporation, Series 1996A,
6.000%, 7/01/19 - MBIA Insured
5,000 California Health Facilities Financing Authority, Insured Health 7/06 at 102.00 AAA 5,377,750
Facility Revenue Refunding Bonds, Catholic Healthcare West,
Series 1996A, 6.000%, 7/01/25 - MBIA Insured
2,500 Oakland, California, Insured Revenue Bonds, 1800 Harrison 1/10 at 100.00 AAA 2,756,325
Foundation - Kaiser Permanente, Series 1999A,
6.000%, 1/01/29 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 9.1%
ABAG Finance Authority for Nonprofit Corporations, California,
Multifamily Housing Revenue Bonds, Civic Center Drive Apartments
Project, 1999 Series A:
4,000 5.800%, 9/01/20 (Alternative Minimum Tax) - FSA Insured 9/09 at 100.00 AAA 4,129,920
1,370 5.875%, 3/01/32 (Alternative Minimum Tax) - FSA Insured 9/09 at 100.00 AAA 1,407,935
3,460 Los Angeles Community Redevelopment Agency, California, 6/05 at 105.00 AAA 3,706,456
FNMA Collateralized Multifamily Housing Revenue Refunding
Bonds, Angelus Plaza Section 8 Project, Series 1995A,
7.400%, 6/15/10
7,400 Santa Cruz County Housing Authority, California, GNMA 11/03 at 102.00 Aaa 7,522,396
Collateralized Multifamily Housing Revenue Refunding Bonds,
Meadowview Apartments, Series 1993A, 6.125%, 5/20/28
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 1.2%
2,105 California Housing Finance Agency, Single Family Mortgage 8/07 at 101.50 AAA 2,162,951
Bonds II, Series 1997C-2, 5.625%, 8/01/20 (Alternative
Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 23.3%
1,460 ABC Unified School District, Los Angeles County, California, 8/10 at 101.00 AAA 1,625,520
General Obligation Bonds, Election of 1997, Series 2000B,
5.750%, 8/01/16 - FGIC Insured
485 State of California, General Obligation Veterans Welfare 12/03 at 102.00 AAA 490,020
Bonds, Series 1997BH, 5.500%, 12/01/24 (Alternative
Minimum Tax) - FSA Insured
State of California, Various Purpose General Obligation Bonds:
7,995 5.750%, 3/01/22 - MBIA Insured 3/10 at 101.00 AAA 8,476,699
2,500 5.500%, 9/01/24 - FSA Insured 9/09 at 101.00 AAA 2,584,300
2,000 5.750%, 3/01/27 - MBIA Insured 3/10 at 101.00 AAA 2,106,320
18
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 3,000 State of California, General Obligation Veterans Welfare 6/07 at 101.00 AAA $ 3,015,330
Bonds, Series 2001BZ, 5.375%, 12/01/24 (Alternative
Minimum Tax) - MBIA Insured
5,000 State of California, General Obligation Bonds, Series 2003, 8/13 at 100.00 AAA 4,897,900
5.000%, 2/01/33 - AMBAC Insured
2,575 Calipatria Unified School District, Imperial County, California, 8/06 at 102.00 AAA 2,848,233
General Obligation Bonds, Series 1996A, 5.625%, 8/01/13 -
AMBAC Insured
Campbell Union High School District, Santa Clara County,
California, General Obligation Bonds, Series 2003:
3,520 5.000%, 8/01/27 - FGIC Insured 8/11 at 102.00 Aaa 3,482,547
4,000 5.000%, 8/01/32 - FGIC Insured 8/11 at 102.00 Aaa 3,936,720
Fresno Unified School District, Fresno County, California,
General Obligation Bonds, Election of 1995, Series 2001F:
1,065 5.125%, 8/01/21 - FSA Insured 8/09 at 102.00 AAA 1,083,989
1,160 5.125%, 8/01/22 - FSA Insured 8/09 at 102.00 AAA 1,181,309
1,220 5.125%, 8/01/23 - FSA Insured 8/09 at 102.00 AAA 1,239,947
1,500 Hacienda La Puente Unified School District, Los Angeles 8/10 at 101.00 AAA 1,523,235
County, California, General Obligation Bonds, Election
of 2000, Series 2000A, 5.250%, 8/01/25 - MBIA Insured
1,750 Lake Tahoe Unified School District, El Dorado County, 8/09 at 100.00 AAA 1,770,335
California, General Obligation Bonds, Election of 1999,
Series A, 5.250%, 8/01/24 - FGIC Insured
1,125 San Diego Unified School District, California, General No Opt. Call AAA 425,520
Obligation Bonds, Election of 1998, Series 1999A,
0.000%, 7/01/21 - FGIC Insured
2,500 San Francisco Community College District, California, 6/10 at 102.00 Aaa 2,477,975
General Obligation Bonds, Series 2002A, 5.000%, 6/15/26 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 47.6%
Anaheim Public Financing Authority, California, Subordinate
Lease Revenue Bonds, Anaheim Public Improvements Project, Series
1997C:
5,130 0.000%, 9/01/18 - FSA Insured No Opt. Call AAA 2,352,054
8,000 0.000%, 9/01/21 - FSA Insured No Opt. Call AAA 2,977,600
5,250 California State Public Works Board, Lease Revenue Bonds, 1/06 at 100.00 AAA 5,390,700
Department of Corrections, California Substance Abuse
Treatment Facility and State Prison - Corcoran II,
Series 1996A, 5.250%, 1/01/21 - AMBAC Insured
3,450 California State Public Works Board, Lease Revenue Bonds, 11/09 at 101.00 AAA 3,634,610
Department of Health Services, Richmond Laboratory
Project, Series 1999A, 5.750%, 11/01/24 - MBIA Insured
5,000 Compton Community Redevelopment Agency, California, 8/05 at 102.00 AAA 5,511,300
Tax Allocation Refunding Bonds, Merged Area Redevelopment
Projects, Series 1995A, 6.500%, 8/01/13 - FSA Insured
4,000 Contra Costa County, California, Refunding Certificates 11/07 at 102.00 AAA 4,153,400
of Participation, Merrithew Memorial Hospital Replacement
Project, Series 1997, 5.500%, 11/01/22 - MBIA Insured
1,835 Corona-Norco Unified School District, Riverside County, 9/12 at 100.00 AAA 1,831,403
California, Special Tax Bonds, Community Facilities
District 98-1, Series 2002, 5.100%, 9/01/32 -
AMBAC Insured
6,000 El Monte, California, Senior Lien Certificates of 1/11 at 100.00 AAA 6,056,460
Participation, Department of Public Services Facility -
Phase II, Series 2001, 5.000%, 1/01/21 - AMBAC Insured
3,000 Galt Schools Joint Powers Authority, Sacramento County, 11/07 at 102.00 AAA 3,272,370
California, Revenue Refunding Bonds, High School and
Elementary School Facilities, Series 1997A,
5.875%, 11/01/24 - MBIA Insured
5,000 Kern County Board of Education, California, Refunding 5/08 at 102.00 AAA 5,029,000
Certificates of Participation, Series 1998A, 5.200%, 5/01/28 -
MBIA Insured
5,000 La Quinta Redevelopment Agency, California, Tax Allocation 9/07 at 102.00 AAA 5,026,850
Refunding Bonds, Project Area 1, Series 1998,
5.200%, 9/01/28 - AMBAC Insured
3,865 Los Angeles County Metropolitan Transportation Authority, 7/10 at 101.00 AAA 3,909,254
California, Proposition C Sales Tax Revenue Bonds, Second
Senior Lien, Series 2000A, 5.250%, 7/01/30 - FGIC Insured
1,935 Menifee Union School District, Riverside County, California, 9/06 at 102.00 AAA 2,160,679
Certificates of Participation, School Project, Series 1996,
6.125%, 9/01/24 - FSA Insured
2,690 Norwalk Community Facilities Financing Authority, Los Angeles 9/05 at 102.00 AAA 2,942,645
County, California, Tax Allocation Revenue Refunding Bonds,
Series 1995A, 6.000%, 9/01/15 - FSA Insured
19
Nuveen Insured California Premium Income Municipal Fund 2, Inc. (NCL) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,780 Pittsburg Redevelopment Agency, California, Tax Allocation No Opt. Call AAA $ 3,010,434
Refunding Bonds, Los Medanos Community Development
Project, Series 2003A, 5.000%, 8/01/12 - MBIA Insured
2,000 Poway Redevelopment Agency, California, Tax Allocation 12/10 at 102.00 AAA 2,155,880
Refunding Bonds, Series 2000, 5.750%, 6/15/33 -
MBIA Insured
5,000 San Bernardino Joint Powers Financing Authority, City of 9/09 at 102.00 AAA 5,332,300
San Bernardino, California, Refunding Certificates of
Participation, Police Station Project, 5.500%, 9/01/20 -
MBIA Insured
3,500 San Francisco Bay Area Rapid Transit District, California, 7/09 at 101.00 AAA 3,634,120
Sales Tax Revenue Bonds, Series 1999, 5.500%, 7/01/34 -
FGIC Insured
1,930 Santa Margarita/Dana Point Authority, Orange County, No Opt. Call AAA 2,141,875
California, Revenue Bonds Refinancing, Improvement
Districts 1, 2, 2A and 8, Series 1994A, 7.250%, 8/01/05 -
MBIA Insured
South Orange County Public Financing Authority, California,
Special Tax Revenue Bonds, Foothill Area, Series 1994C:
3,000 8.000%, 8/15/08 - FGIC Insured No Opt. Call AAA 3,713,940
6,830 8.000%, 8/15/09 - FGIC Insured No Opt. Call AAA 8,594,530
5,450 Visalia, California, Refunding Certificates of Participation, 12/06 at 102.00 AAA 5,567,720
Motor Vehicle License Fee Enhancement, Series 1996A,
5.375%, 12/01/26 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 4.8%
6,500 Foothill-Eastern Transportation Corridor Agency, California, 1/10 at 65.32 AAA 2,976,285
Toll Road Refunding Revenue Bonds, Series 1999,
0.000%, 1/15/18 - MBIA Insured
1,000 Foothill-Eastern Transportation Corridor Agency, California, 1/10 at 100.00 AAA 977,790
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35 -
MBIA Insured
5,000 San Francisco City and County Airports Commission, 5/11 at 100.00 AAA 5,007,450
California, Revenue Refunding Bonds, San Francisco
International Airport, Second Series , Issue 27A,
5.250%, 5/01/31 (Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 20.5%
3,425 Alameda County, California, Certificates of Participation, 9/06 at 102.00 AAA 3,906,521
Alameda County Public Facilities Corporation, Series 1991,
6.000%, 9/01/21 (Pre-refunded to 9/01/06) - MBIA Insured
4,485 Alameda County, California, Certificates of Participation 12/03 at 102.00 AAA 4,628,699
Refunding, Santa Rita Jail Project, Series 1993,
5.700%, 12/01/14 (Pre-refunded to 12/01/03) - MBIA Insured
3,000 Central Unified School District, Fresno County, California, 9/03 at 102.00 AAA 3,071,430
General Obligation Bonds, Election of 1992, Series 1993,
5.625%, 3/01/18 - AMBAC Insured
3,000 Escondido Union High School District, San Diego County, 11/06 at 102.00 AAA 3,256,950
California, General Obligation Bonds, Election of 1996,
Series 1996, 5.700%, 11/01/10 - MBIA Insured
4,320 Riverside County, California, Single Family Mortgage Revenue No Opt. Call AAA 5,968,210
Bonds, GNMA Mortgage-Backed Securities Program,
Series 1987B, 8.625%, 5/01/16 (Alternative Minimum Tax)
1,850 Sacramento City Unified School District, Sacramento County, 7/09 at 102.00 Aaa 2,156,527
California, General Obligation Bonds, Series 2000A,
5.750%, 7/01/18 (Pre-refunded to 7/01/09) - FGIC Insured
3,500 Sacramento Municipal Utility District, California, Electric 8/06 at 102.00 AAA 3,946,565
Revenue Bonds, Series 1996J, 5.600%, 8/15/24 (Pre-refunded
to 8/15/06) - AMBAC Insured
9,000 San Francisco City and County Airports Commission, 5/04 at 101.00 AAA 9,399,600
California, Revenue Bonds, San Francisco International
Airport, Second Series, Issue 8B, 6.100%, 5/01/20 (Pre-refunded
to 5/01/04) - FGIC Insured
1,450 Torrance, California, Hospital Revenue Bonds, Little Company 12/05 at 100.00 AAA 1,604,860
of Mary Hospital, Series 1985A, 7.100%, 12/01/15
(Pre-refunded to 12/01/05)
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 9.8%
3,740 California Pollution Control Financing Authority, Pollution 9/09 at 101.00 AAA 3,773,772
Control Revenue Refunding Bonds, Southern California
Edison Company, Series 1999B, 5.450%, 9/01/29 -
MBIA Insured
3,215 Modesto Irrigation District, California, Revenue Refunding 10/06 at 102.00 AAA 3,606,973
Bonds, Series 1996A, 6.000%, 10/01/15 - MBIA Insured
3,000 Puerto Rico Electric Power Authority, Power Revenue Bonds, 7/12 at 101.00 AAA 3,051,300
Series 2002II, 5.125%, 7/01/26 - FSA Insured
20
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 1,790 Sacramento City Financing Authority, California, Capital 12/09 at 102.00 AAA $ 1,985,951
Improvement Revenue Bonds, Solid Waste and
Redevelopment Projects, Series 1999, 5.800%, 12/01/19 -
AMBAC Insured
3,500 Sacramento Municipal Utility District, California, Electric No Opt. Call AAA 3,778,915
Revenue Bonds, Series 2003R, 5.000%, 8/15/13 -
MBIA Insured
1,950 Salinas Valley Solid Waste Authority, California, Revenue 8/12 at 100.00 AAA 1,957,079
Bonds, Series 2002, 5.250%, 8/01/27 (Alternative
Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 18.9%
3,530 Castaic Lake Water Agency, California, Revenue Refunding No Opt. Call AAA 3,753,449
Certificates of Participation, Water System Improvement
Projects, Series 1994A, 8.000%, 8/01/04 - MBIA Insured
2,975 Chino Basin Regional Financing Authority, California, Revenue 8/04 at 102.00 AAA 3,145,825
Bonds, Chino Basin Municipal Water District Sewer System
Project, Series 1994, 6.000%, 8/01/16 - AMBAC Insured
12,000 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 11,754,960
of Participation, Series 2003, 5.000%, 2/01/33 (DD, settling
9/02/03) - FGIC Insured
2,775 Pomona Public Financing Authority, California, Revenue Bonds, 5/09 at 101.00 AAA 2,878,730
Water Facilities Project, Series 1999AC, 5.500%, 5/01/29 -
FGIC Insured
1,000 Sacramento County Sanitation Districts Financing Authority, 12/10 at 101.00 AAA 1,068,250
California, Revenue Bonds, Series 2000A, Sacramento
Regional County Sanitation District, 5.500%, 12/01/20 -
AMBAC Insured
2,000 South San Joaquin Irrigation District, San Joaquin County, 1/04 at 102.00 AAA 2,045,800
California, Revenue Refunding Certificates of Participation,
Series 1993, 5.500%, 1/01/15 - AMBAC Insured
5,410 Tulare, California, Sewer Revenue Bonds, Series 1996, 11/06 at 102.00 AAA 5,894,411
5.750%, 11/15/21 - MBIA Insured
Yorba Linda Water District, California, Certificates of
Participation, Highland Reservoir Renovation, Series 2003:
2,010 5.000%, 10/01/28 (WI, settling 9/10/03) - FGIC Insured 10/13 at 100.00 AAA 1,985,839
2,530 5.000%, 10/01/33 (WI, settling 9/10/03) - FGIC Insured 10/13 at 100.00 AAA 2,489,266
------------------------------------------------------------------------------------------------------------------------------------
$ 286,700 Total Long-Term Investments (cost $267,897,010) - 153.2% 283,737,849
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (1.9)% (3,557,189)
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (51.3)% (95,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $185,180,660
====================================================================================================================
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.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
(DD) Security purchased on a delayed delivery basis.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
21
Nuveen California Premium Income Municipal Fund (NCU)
Portfolio of
INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.3%
$ 1,500 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa2 $ 1,142,415
Settlement Asset-Backed Bonds, Alameda County Tobacco
Asset Securitization Corporation, Series 2002, 5.750%, 6/01/29
3,910 California Statewide Financing Authority, Tobacco Settlement 5/12 at 100.00 Baa2 3,048,588
Asset-Backed Bonds, Pooled Tobacco Securitization Program,
Series 2002A, 5.625%, 5/01/29
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 2.0%
1,500 University of California, Revenue Bonds, Multiple Purpose 5/13 at 100.00 AAA 1,578,420
Projects, Series 2003A, 5.125%, 5/15/17 (WI, settling
9/09/03) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 23.8%
1,500 California Health Facilities Financing Authority, Revenue 12/09 at 101.00 A3 1,578,660
Bonds, Cedars-Sinai Medical Center, Series 1999A,
6.125%, 12/01/30
5,150 California Health Facilities Financing Authority, Hospital 11/03 at 102.00 BB+ 4,484,054
Revenue Bonds, Downey Community Hospital, Series 1993,
5.750%, 5/15/15
1,500 California Infrastructure and Economic Development Bank, 8/11 at 102.00 A 1,485,420
Revenue Bonds, Kaiser Hospital Assistance I-LLC,
Series 2001A, 5.550%, 8/01/31
1,185 California Statewide Community Development Authority, 2/04 at 101.00 A3 1,200,962
Hospital Revenue Certificates of Participation, Cedars-
Sinai Medical Center, Series 1992, 6.500%, 8/01/15
8,100 California Statewide Community Development Authority, No Opt. Call AAA 8,036,091
Revenue Refunding Bonds, Sherman Oaks Project,
Series 1998A, 5.000%, 8/01/22 - AMBAC Insured
2,000 Loma Linda, California, Hospital Revenue Bonds, Loma 12/03 at 102.00 BB 1,963,400
Linda University Medical Center Project, Series 1993A,
6.000%, 12/01/06
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 16.2%
2,000 California Statewide Community Development Authority, 7/08 at 101.00 BBB 2,059,440
Revenue Refunding Bonds, Irvine Apartment Communities
Development, Series 1998A, 5.250%, 5/15/25
(Mandatory put 5/15/13)
6,205 Los Angeles Community Redevelopment Agency, California, 6/05 at 105.00 AAA 6,646,982
Multifamily Housing Revenue Refunding Bonds, Angelus
Plaza Project, Series 1995A, 7.400%, 6/15/10
3,815 Stanton, California, Multifamily Housing Revenue Bonds, 8/07 at 102.00 AAA 4,039,627
Continental Gardens Apartments, Series 1997,
5.625%, 8/01/29 (Alternative Minimum Tax) (Mandatory
put 8/01/09)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 5.8%
1,520 California Housing Finance Agency, Single Family Mortgage 2/07 at 102.00 AAA 1,570,950
Bonds II, Series 1997A-1, 6.000%, 8/01/20 (Alternative
Minimum Tax) - MBIA Insured
350 California Housing Finance Agency, Home Mortgage Revenue 8/04 at 102.00 Aa2 360,752
Bonds, Series 1994A, 6.550%, 8/01/26
1,000 California Housing Finance Agency, Home Mortgage Revenue 8/05 at 102.00 AAA 1,013,480
Bonds, Series 1994F-3, 6.100%, 8/01/15 (Alternative Minimum
Tax) - MBIA Insured
1,085 California Housing Finance Agency, Home Mortgage Revenue 2/07 at 102.00 AAA 1,124,982
Bonds, Series 1997B, 6.000%, 8/01/16 (Alternative Minimum
Tax) - MBIA Insured
435 California Rural Home Mortgage Finance Authority, Single No Opt. Call AAA 473,698
Family Mortgage Revenue Bonds, Mortgage-Backed Securities
Program, Series 1996C, 7.500%, 8/01/27 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 18.1%
4,000 State of California, General Obligation Veterans Welfare 6/04 at 101.00 A 3,926,800
Bonds, Series 1999BR, 5.300%, 12/01/29 (Alternative
Minimum Tax)
1,750 State of California, General Obligation Refunding Bonds, 4/12 at 100.00 A3 1,705,673
Series 2002, 5.250%, 4/01/32
State of California, General Obligation Bonds, Series 2003:
1,055 5.250%, 2/01/21 8/13 at 100.00 A3 1,066,753
2,000 5.000%, 2/01/33 8/13 at 100.00 A3 1,872,880
22
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 2,250 Los Angeles Unified School District, Los Angeles County, 7/13 at 100.00 AAA $ 2,262,892
California, General Obligation Bonds, Series 2003A,
5.000%, 7/01/22 - FSA Insured
3,000 Pomona Unified School District, California, General Obligation 8/11 at 103.00 AAA 3,430,560
Refunding Bonds, Series 1997A, 6.150%, 8/01/15 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 40.3%
985 Beverly Hills Public Financing Authority, California, Lease 6/13 at 100.00 Aaa 1,064,972
Revenue Refunding Bonds, Series 2003A, 5.250%, 6/01/15 -
MBIA Insured
5,920 State Public Works Board of the State of California, Lease 11/09 at 101.00 AAA 6,276,325
Revenue Bonds, Department of Veterans Affairs of the State
of California, Southern California Veterans Home - Chula
Vista Facility, 1999 Series A, 5.600%, 11/01/19 -
AMBAC Insured
2,345 Carlsbad, California, Limited Obligation Improvement Bonds, 9/03 at 101.00 N/R 2,227,539
Assessment District 96-1, Series 1998, 5.500%, 9/02/28
3,500 Livermore Redevelopment Agency, California, Tax Allocation 8/11 at 100.00 AAA 3,455,200
Revenue Bonds, Livermore Redevelopment Project Area,
Series 2001A, 5.000%, 8/01/26 - MBIA Insured
2,030 Los Angeles Community Redevelopment Agency, California, 12/03 at 102.00 BB 1,984,508
Tax Allocation Multifamily Housing Bonds, Grand Central
Square Project, Series 1993A, 5.750%, 12/01/13 (Alternative
Minimum Tax)
2,000 Oakland Redevelopment Agency, California, Subordinate Lien 3/13 at 100.00 AAA 2,202,860
Tax Allocation Bonds, Central District Redevelopment Project,
Series 2003, 5.500%, 9/01/15 - FGIC Insured
1,000 Poway Community Facilities District 88-1, California, Special 8/08 at 102.00 N/R 1,115,670
Tax Refunding Bonds, Parkway Business Centre, Series 1998,
6.500%, 8/15/09
6,570 Sacramento City Finance Authority, California, Lease Revenue No Opt. Call AA- 7,010,387
Refunding Bonds, Series 1993B, 5.400%, 11/01/20
San Marcos Public Facilities Authority, California, Revenue
Refunding Bonds, Series 1998:
1,500 5.800%, 9/01/18 9/08 at 101.00 Baa3 1,553,565
1,000 5.800%, 9/01/27 9/08 at 101.00 Baa3 1,020,440
2,050 Santa Barbara County, California, Certificates of Participation, 12/11 at 102.00 AAA 2,148,421
Series 2001, 5.250%, 12/01/19 - AMBAC Insured
2,000 Vista, California, Mobile Home Park Revenue Bonds, Vista 3/09 at 102.00 N/R 1,830,420
Manor Mobile Home Park Project, Series 1999A, 5.750%, 3/15/29
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 12.4%
3,000 California Infrastructure and Economic Development Bank, 7/13 at 100.00 AAA 3,017,190
Revenue Bonds, Bay Area Toll Bridges, First Lien,
Series 2003A, 5.000%, 7/01/22 - FSA Insured
2,000 Foothill-Eastern Transportation Corridor Agency, California, 1/10 at 100.00 BBB- 1,779,160
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35
2,750 San Francisco City and County Airports Commission, 5/04 at 102.00 AAA 2,887,363
California, Revenue Bonds, San Francisco International
Airport, Second Series, Issue 5, 6.500%, 5/01/24 (Alternative
Minimum Tax) - FGIC Insured
2,000 San Francisco City and County Airports Commission, 5/06 at 102.00 AAA 2,064,600
California, Revenue Bonds, San Francisco International
Airport, Second Series, Issue 10A, 5.700%, 5/01/26
(Alternative Minimum Tax) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 5.1%
3,500 Puerto Rico Commonwealth, Public Improvement General 7/10 at 100.00 AAA 3,996,790
Obligation Bonds, Series 2000, 5.750%, 7/01/21
(Pre-refunded to 7/01/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 12.2%
1,000 California Pollution Control Financing Authority, Pollution 12/03 at 101.00 AAA 1,023,780
Control Revenue Bonds, Southern California Edison Company,
Series 1992B, 6.400%, 12/01/24 (Alternative Minimum Tax) -
FGIC Insured
2,250 California Department of Water Resources, Power Supply 5/12 at 101.00 A3 2,272,050
Revenue Bonds, Series 2002A, 5.125%, 5/01/18
23
Nuveen California Premium Income Municipal Fund (NCU) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 1,500 Merced Irrigation District, California, Revenue Refunding 9/05 at 102.00 Baa3 $ 1,561,260
Bonds, Electric System Project, Series 2001, 6.500%, 9/01/22
4,580 Sacramento Municipal Utility District, California, Electric 8/12 at 100.00 AAA 4,760,727
Revenue Refunding Bonds, Series 2002Q, 5.250%, 8/15/20 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 12.6%
5,000 Culver City, California, Wastewater Facilities Revenue Refunding 9/09 at 102.00 AAA 5,331,400
Bonds, Series 1999A, 5.700%, 9/01/29 - FGIC Insured
3,495 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 3,608,098
of Participation, Series 2003, 5.250%, 2/01/21 - FGIC Insured
1,000 Sacramento County Water Financing Authority, California, 6/13 at 100.00 AAA 1,005,678
Revenue Bonds, Agency Zones 40-41 System Projects,
Series 2003, 5.000%, 6/01/22 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 119,785 Total Long-Term Investments (cost $120,449,908) - 153.8% 121,271,882
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.7% 587,400
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (54.5)% (43,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 78,859,282
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
24
Nuveen California Dividend Advantage Municipal Fund (NAC)
Portfolio of
INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 5.2%
$ 5,000 California Statewide Community Development Authority, 11/09 at 102.00 N/R $ 5,140,200
Certificates of Participation, Pride Industries and Pride One,
Inc., Series 1999, 7.250%, 11/01/29
5,200 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 4,203,992
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33
Northern California Tobacco Securitization Authority, Tobacco
Settlement Asset-Backed Bonds, Series 2001A:
2,500 5.250%, 6/01/31 6/11 at 100.00 BBB 1,805,250
4,500 5.375%, 6/01/41 6/11 at 100.00 BBB 3,047,850
4,090 Southern California Tobacco Securitization Authority, 6/12 at 100.00 BBB 3,774,293
Tobacco Settlement Asset-Backed Bonds, Senior
Series 2001A, 5.250%, 6/01/27
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 10.7%
615 California Statewide Community Development Authority, 10/13 at 100.00 N/R 601,808
Revenue Bonds, Notre Dame de Namur University,
Series 2003, 6.500%, 10/01/23
3,000 Long Beach Bond Financing Authority, California, Lease 11/11 at 100.00 AAA 3,253,620
Revenue Refunding Bonds, Long Beach Aquarium of the
South Pacific, Series 2001, 5.500%, 11/01/17 -
AMBAC Insured
700 University of California, Certificates of Participation, 1/10 at 101.00 Aa2 712,005
San Diego and Sacramento Campus Projects, Series 2002A,
5.250%, 1/01/22
6,000 University of California, Revenue Bonds, Multiple Purpose 9/08 at 101.00 Aa2 6,349,200
Projects, Series 2000K, 5.000%, 9/01/12
University of California, Revenue Bonds, Multiple Purpose
Projects, Series 2002O:
10,770 5.000%, 9/01/20 - FGIC Insured 9/10 at 101.00 AAA 10,961,491
11,305 5.000%, 9/01/21 - FGIC Insured 9/10 at 101.00 AAA 11,431,616
3,500 University of California, Revenue Bonds, Multiple Purpose 5/13 at 100.00 AAA 3,682,980
Projects, Series 2003A, 5.125%, 5/15/17 (WI, settling
9/09/03) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 14.0%
8,400 California Health Facilities Financing Authority, Revenue 10/08 at 101.00 A 8,657,544
Bonds, Kaiser Permanente, Series 1998B, 5.250%, 10/01/14
(Optional put 10/01/08)
15,000 California Health Facilities Financing Authority, Revenue 12/09 at 101.00 A3 15,786,600
Bonds, Cedars-Sinai Medical Center, Series 1999A,
6.125%, 12/01/30
8,000 Central California Joint Powers Health Financing 2/10 at 101.00 BBB 8,091,680
Authority, Certificates of Participation, Community Hospitals
of Central California Obligated Group Project, Series 2000,
6.000%, 2/01/30
10,500 Duarte, California, Certificates of Participation, City of Hope 4/09 at 101.00 BBB 9,853,200
National Medical Center, Series 1999A, 5.250%, 4/01/31
3,415 Upland, California, Certificates of Participation, San Antonio 1/04 at 102.00 A 3,502,595
Community Hospital, Series 1993, 5.250%, 1/01/08
2,500 Whittier, California, Health Facility Revenue Bonds, 6/12 at 101.00 A- 2,512,000
Presbyterian Intercommunity Hospital, Series 2002,
5.600%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 15.3%
15,000 California Statewide Community Development Authority, 7/08 at 101.00 BBB 15,889,350
Revenue Refunding Bonds, Irvine Apartment Communities
Development, Series 1998A, 4.900%, 5/15/25 (Mandatory
put 5/15/08)
10,000 California Statewide Community Development Authority, No Opt. Call BBB+ 10,583,900
Multifamily Housing Refunding Bonds, Archstone Pelican
Point Apartments, Archstone Communities Trust,
Series 1999H, 5.300%, 6/01/29 (Mandatory put 6/01/08)
5,250 California Statewide Community Development Authority, 8/12 at 105.00 Aaa 5,831,175
GNMA Collateralized Housing Revenue Refunding Bonds,
Crowne Pointe Project, Series 2002F, 6.750%, 8/20/37
25
Nuveen California Dividend Advantage Municipal Fund (NAC) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 5,000 Contra Costa County, California, Multifamily Housing Revenue 6/09 at 102.00 N/R $ 4,824,550
Bonds, Delta View Apartments Project, Series 1999C,
6.750%, 12/01/30 (Alternative Minimum Tax)
15,000 Housing Authority of the County of San Bernardino, No Opt. Call BBB+ 15,799,650
California, Multifamily Housing Revenue Refunding Bonds,
Equity Residential/Redlands Lawn and Tennis Apartments,
Issue 1999A, 5.200%, 6/15/29 (Mandatory put 6/15/09)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.2%
3,985 California Housing Finance Agency, Single Family Mortgage 2/09 at 31.14 AAA 862,872
Bonds II, Series 1999D2, 0.000%, 2/01/29 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 2.4%
8,500 Riverside County Public Financing Authority, California, 5/09 at 101.00 BBB- 8,296,255
Certificates of Participation, Air-Force Village West,
Series 1999, 5.800%, 5/15/29
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 21.1%
State of California, General Obligation Refunding Bonds,
Series 2002:
8,000 5.000%, 2/01/12 No Opt. Call A3 8,371,200
6,435 6.000%, 4/01/16 - AMBAC Insured No Opt. Call AAA 7,391,498
State of California, General Obligation Bonds, Series 2003:
2,595 5.250%, 2/01/15 8/13 at 100.00 A3 2,714,370
5,200 5.250%, 2/01/20 8/13 at 100.00 A3 5,282,212
2,300 5.000%, 2/01/22 8/13 at 100.00 A3 2,252,482
3,000 Contra Costa County Community College District, California, 8/12 at 100.00 AAA 3,022,530
General Obligation Bonds, Series 2002, 4.900%, 8/01/20 -
FGIC Insured
1,000 Los Angeles Community College District, Los Angeles County, 8/11 at 100.00 AAA 991,200
California, General Obligation Bonds, Election of 2001,
Series 2001A, 5.000%, 6/01/26 - MBIA Insured
18,500 Los Angeles Unified School District, California, General 7/09 at 101.00 AAA 18,742,350
Obligation Bonds, Election of 1997, Series 1999C,
5.250%, 7/01/24 - MBIA Insured
10,845 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 11,105,063
Obligation Bonds, Election of 1997, Series 2002E,
5.000%, 7/01/19 - MBIA Insured
1,750 Oakland Unified School District, Alameda County, California, 8/08 at 101.00 AAA 1,766,818
General Obligation Bonds, Series 2001, 5.125%, 8/01/21 -
FSA Insured
5,000 San Diego Unified School District, San Diego County, 7/13 at 101.00 AAA 5,229,000
California, General Obligation Bonds, Series 2003E,
5.250%, 7/01/20 - FSA Insured
2,700 Ventura County Community College District, California, 8/12 at 101.00 AAA 2,863,593
General Obligation Bonds, Series 2002A, 5.000%, 8/01/15 -
MBIA Insured
3,605 West Contra Costa Unified School District, Contra Costa 8/11 at 101.00 AAA 3,644,943
County, California, General Obligation Bonds, Series 2003B,
5.000%, 8/01/21 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 35.8%
Brentwood Infrastructure Financing Authority, Contra Costa
County, California, Capital Improvement Revenue Bonds, Series
2001:
1,110 5.375%, 11/01/18 - FSA Insured 11/11 at 100.00 AAA 1,187,156
1,165 5.375%, 11/01/19 - FSA Insured 11/11 at 100.00 AAA 1,239,968
1,990 Brentwood Infrastructure Financing Authority, California, 9/12 at 100.00 AAA 2,004,268
Infrastructure Revenue Refunding Bonds, Series 2002A,
5.125%, 9/02/24 - FSA Insured
3,515 Dinuba Redevelopment Agency, California, Tax Allocation 9/11 at 102.00 AAA 3,506,634
Refunding Bonds, Redevelopment Project 2, Series 2001,
4.875%, 9/01/21 - MBIA Insured
3,490 Fontana, California, Senior Special Tax Refunding Bonds, 9/08 at 102.00 AAA 3,696,922
Heritage Village Community Facilities District 2 Project,
Series 1998A, 5.250%, 9/01/17 - MBIA Insured
3,980 Garden Grove, California, Certificates of Participation, 3/12 at 101.00 AAA 4,200,691
Financing Project, Series 2002A, 5.500%, 3/01/22 -
AMBAC Insured
2,000 Lee Lake Water District, Riverside County, California, Special 9/13 at 102.00 N/R 2,047,720
Tax Bonds, Community Facilities District 1 of Sycamore
Creek, Series 2003, 6.500%, 9/01/24
26
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 2,200 Lincoln Community Facilities District No. 2003-1, California, 9/13 at 102.00 N/R $ 2,271,280
Special Tax Bonds, Series A, Lincoln Crossing Project,
6.500%, 9/01/25
5,500 Los Angeles County, California, Refunding Certificates of 9/08 at 101.00 AAA 5,286,875
Participation, Disney Parking Project, Series 1998,
4.750%, 3/01/23 - AMBAC Insured
5,000 Los Angeles County Metropolitan Transportation Authority, 7/08 at 101.00 AAA 4,953,100
California, Proposition C Sales Tax Revenue Refunding Bonds,
Second Senior Lien, Series 1998A, 5.000%, 7/01/23 -
AMBAC Insured
10,000 Los Angeles County Public Works Financing Authority, 10/07 at 101.00 AA 10,307,900
California, Revenue Bonds, Los Angeles County Regional
Park and Open Space District, Series 1997A,
5.000%, 10/01/16
9,200 Norco Redevelopment Agency, California, Tax Allocation 3/11 at 102.00 AAA 9,406,080
Refunding Bonds, Project Area 1, Series 2001,
5.000%, 3/01/19 - MBIA Insured
4,670 Oakland Joint Power Financing Authority, California, No Opt. Call AAA 5,223,395
Lease Revenue Refunding Bonds, Oakland Convention
Centers, Series 2001, 5.500%, 10/01/14 - AMBAC Insured
3,290 Oakland Redevelopment Agency, California, Subordinate 3/13 at 100.00 AAA 3,602,122
Lien Tax Allocation Bonds, Central District Redevelopment
Project, Series 2003, 5.500%, 9/01/16 - FGIC Insured
4,000 Orange County Local Transportation Authority, California, No Opt. Call AAA 4,512,760
Limited Sales Tax Revenue Refunding Bonds, Measure M,
Second Senior Series 1997A, 5.700%, 2/15/08 -
AMBAC Insured
5,600 Palm Springs Financing Authority, California, Lease Revenue 11/11 at 101.00 AAA 5,632,928
Refunding Bonds, Convention Center Project, Series 2001A,
5.000%, 11/01/22 - MBIA Insured
8,100 Poway Redevelopment Agency, California, Tax Allocation 12/10 at 102.00 AAA 8,731,314
Refunding Bonds, Series 2000, 5.750%, 6/15/33 -
MBIA Insured
1,055 Poway Redevelopment Agency, California, Tax Allocation 12/11 at 101.00 AAA 1,137,301
Refunding Bonds, Paguay Redevelopment Project, Series
2001, 5.375%, 12/15/16 - AMBAC Insured
2,000 Puerto Rico Public Finance Corporation, Commonwealth 8/11 at 100.00 AAA 2,171,360
Appropriation Bonds, Series 2001A, 5.500%, 8/01/19 -
MBIA Insured
1,860 Riverside Redevelopment Agency, California, Tax Allocation 8/13 at 100.00 AAA 1,909,867
Refunding Bonds, Merged Project Areas, Series 2003,
5.250%, 8/01/22 - MBIA Insured
7,800 Riverside County Public Financing Authority, California, No Opt. Call N/R 8,279,622
Reassessment Revenue Bonds, Rancho Village Project/AD
No. 159, Junior Lien, 1999 Series B, 6.000%, 9/02/07
1,725 Rohnert Park Finance Authority, California, Rancho Feliz Mobile 9/13 at 100.00 BBB 1,667,006
Home Park Revenue Bonds, Senior Lien, Series 2003A,
5.750%, 9/15/38 (WI, settling 9/11/03)
1,120 Rohnert Park Finance Authority, California, Rancho Feliz 9/13 at 100.00 N/R 1,094,912
Mobile Home Park Revenue Bonds, Subordinate Lien,
Series 2003B, 6.625%, 9/15/38 (WI, settling 9/11/03)
2,500 Sacramento City Financing Authority, California, Lease No Opt. Call AAA 2,706,025
Revenue Refunding Bonds, Series 1993A,
5.400%, 11/01/20 - AMBAC Insured
1,205 San Francisco City and County, California, Certificates 9/09 at 101.00 AAA 1,199,445
of Participation, 30 Van Ness Avenue Property, Series 2001A,
4.600%, 9/01/18 - MBIA Insured
24,060 San Jose Redevelopment Agency, California, Tax Allocation 8/08 at 102.00 A 23,640,875
Bonds, Merged Area Redevelopment Project, Series 1998,
5.250%, 8/01/29
2,810 West Patterson Financing Authority, California, Community 9/13 at 103.00 N/R 2,810,000
Facilities District 01-1 Special Tax Bonds, Series 2003B,
7.000%, 9/01/38 (WI, settling 9/16/03)
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 20.3%
8,150 Foothill-Eastern Transportation Corridor Agency, California, 1/10 at 101.00 BBB- 8,200,530
Toll Road Refunding Revenue Bonds, Series 1999,
5.750%, 1/15/40
8,515 Los Angeles Harbors Department, California, Revenue Refunding 8/11 at 100.00 AAA 8,900,730
Bonds, Series 2001B, 5.500%, 8/01/18 (Alternative Minimum
Tax) - AMBAC Insured
23,000 Port of Oakland, California, Revenue Bonds, Series 2000K, 5/10 at 100.00 AAA 23,894,010
5.750%, 11/01/29 (Alternative Minimum Tax) - FGIC Insured
27
Nuveen California Dividend Advantage Municipal Fund (NAC) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION (continued)
$ 5,000 San Francisco City and County Airports Commission, 5/06 at 101.00 AAA $ 5,158,900
California, Revenue Bonds, San Francisco International
Airport, Second Series, Issue 13B, 5.625%, 5/01/21
(Alternative Minimum Tax) - MBIA Insured
23,275 San Francisco City and County Airports Commission, 5/10 at 101.00 AAA 24,252,550
California, Revenue Bonds, San Francisco International
Airport, Second Series, Issue 24A, 5.750%, 5/01/30
(Alternative Minimum Tax) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
U.S. GUARANTEED - 2.8%
3,600 Los Angeles Unified School District, California, General 7/10 at 100.00 AAA 4,095,504
Obligation Bonds, Election of 1997, Series 2000D,
5.625%, 7/01/14 (Pre-refunded to 7/01/10)
5,000 Puerto Rico Commonwealth, Public Improvement General 7/10 at 100.00 AAA 5,709,700
Obligation Bonds, Series 2000, 5.750%, 7/01/16
(Pre-refunded to 7/01/10) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 11.2%
9,750 California Department of Water Resources, Power Supply 5/12 at 101.00 A3 9,845,550
Revenue Bonds, Series 2002A, 5.125%, 5/01/18
7,000 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 7,222,250
Power System Revenue Bonds, Series 2001A-1,
5.250%, 7/01/21 - FSA Insured
8,370 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 8,900,993
Power System Revenue Refunding Bonds, Series 2001A-2,
5.375%, 7/01/19 - MBIA Insured
7,000 Merced Irrigation District, California, Revenue Refunding 9/05 at 102.00 Baa3 7,322,910
Bonds, Electric System Project, Series 2001, 6.750%, 9/01/31
5,630 Southern California Public Power Authority, Subordinate 7/12 at 100.00 AAA 5,647,791
Revenue Refunding Bonds, Transmission Project,
Series 2002A, 4.750%, 7/01/19 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 11.3%
11,000 California Department of Water Resources, Water System 12/11 at 100.00 AAA 11,282,810
Revenue Bonds, Central Valley Project, Series 2001W,
5.250%, 12/01/22 - FSA Insured
14,000 Orange County Water District, California, Revenue Certificates 8/09 at 101.00 AA+ 14,262,360
of Participation, Series 1999A, 5.375%, 8/15/29
8,250 Pico Rivera Water Authority, California, Revenue Bonds, 12/11 at 102.00 N/R 8,220,464
Series 2001A, 6.250%, 12/01/32
5,115 San Francisco City and County Public Utilities Commission, 11/12 at 100.00 AAA 5,279,907
California, Water Revenue Bonds, Series 2002A,
5.000%, 11/01/18 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 512,260 Total Long-Term Investments (cost $509,460,322) - 150.3% 521,457,420
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.1% 461,079
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (50.4)% (175,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $346,918,499
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
28
Nuveen California Dividend Advantage Municipal Fund 2 (NVX)
Portfolio of
INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.7%
$ 4,625 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa2 $ 3,325,098
Settlement Asset-Backed Bonds, Stanislaus County Tobacco
Funding Corporation, Series 2002A, 5.500%, 6/01/33
3,200 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 2,587,072
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33
3,000 Northern California Tobacco Securitization Authority, Tobacco 6/11 at 100.00 BBB 2,031,900
Settlement Asset-Backed Bonds, Series 2001A,
5.375%, 6/01/41
2,800 Southern California Tobacco Securitization Authority, Tobacco 6/12 at 100.00 BBB 1,995,280
Settlement Asset-Backed Bonds, Senior Series 2001A,
5.500%, 6/01/36
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 19.9%
2,000 California Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AAA 2,031,540
Stanford University, Series 2001Q, 5.250%, 12/01/32
15,000 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa 15,430,350
Revenue Bonds, California Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) - MBIA Insured
California State Public Works Board, Lease Revenue Bonds,
University of California System, Series 2002A:
8,880 5.375%, 10/01/16 - FSA Insured 10/12 at 100.00 AAA 9,525,931
10,570 5.375%, 10/01/18 - FSA Insured 10/12 at 100.00 AAA 11,192,573
620 California Statewide Community Development Authority, 10/13 at 100.00 N/R 606,701
Revenue Bonds, Notre Dame de Namur University,
Series 2003, 6.500%, 10/01/23
3,000 Long Beach Bond Financing Authority, California, Lease 11/11 at 101.00 AAA 3,024,750
Revenue Refunding Bonds, Long Beach Aquarium of the
South Pacific, Series 2001, 5.250%, 11/01/30 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 11.2%
2,000 California Health Facilities Financing Authority, Revenue 4/12 at 100.00 BBB+ 2,033,800
Bonds, Casa Colina, Inc., Series 2001, 6.000%, 4/01/22
500 California Infrastructure and Economic Development Bank, 8/11 at 102.00 A 495,140
Revenue Bonds, Kaiser Hospital Assistance I-LLC,
Series 2001A, 5.550%, 8/01/31
6,000 California Statewide Community Development Authority, No Opt. Call AAA 5,952,660
Revenue Refunding Bonds, Sherman Oaks Project,
Series 1998A, 5.000%, 8/01/22 - AMBAC Insured
5,355 California Statewide Community Development Authority, No Opt. Call A 5,605,025
Revenue Bonds, Kaiser Permanente System, Series 2002E,
4.700%, 11/01/36 (Mandatory put 6/01/09)
2,185 California Statewide Community Development Authority, No Opt. Call A- 2,417,855
Health Facility Revenue Refunding Bonds, Memorial Health
Services, Series 2003A, 6.000%, 10/01/11
3,000 Central California Joint Powers Health Financing Authority, 2/10 at 101.00 BBB 3,034,380
Certificates of Participation, Community Hospitals of Central
California Obligated Group Project, Series 2000,
6.000%, 2/01/30
2,500 Torrance, California, Revenue Bonds, Torrance Memorial 6/11 at 101.00 A+ 2,490,950
Medical Center, Series 2001A, 5.500%, 6/01/31
1,500 Whittier, California, Health Facility Revenue Bonds, 6/12 at 101.00 A- 1,507,200
Presbyterian Intercommunity Hospital, Series 2002,
5.600%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 7.1%
5,962 California Statewide Community Development Authority, 6/11 at 102.00 AAA 6,200,659
Multifamily Housing Revenue Refunding Bonds, Claremont
Village Apartments, Series 2001D, 5.500%, 6/01/31
(Alternative Minimum Tax) (Mandatory put 6/01/16)
3,500 California Statewide Community Development Authority, 8/12 at 105.00 Aaa 3,887,450
GNMA Collateralized Housing Revenue Refunding Bonds,
Crowne Pointe Project, Series 2002F, 6.750%, 8/20/37
29
Nuveen California Dividend Advantage Municipal Fund 2 (NVX) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY (continued)
$ 4,650 San Francisco Redevelopment Agency, California, GNMA 10/11 at 100.00 Aaa $ 4,729,143
Collateralized Multifamily Housing Revenue Bonds, Kokoro
Assisted Living Facility, Series 2001A, 5.675%, 4/20/43
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.5%
5,260 California Rural Home Mortgage Finance Authority, Single 6/11 at 102.00 AAA 5,317,650
Family Mortgage Revenue Bonds, Mortgage-Backed Securities
Program, Series 2001A, 5.650%, 12/01/31 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 0.7%
1,550 California Health Facilities Financing Authority, Revenue 1/13 at 100.00 BBB 1,524,565
Bonds, Northern California Retired Officers Community
Corporation - Paradise Valley Estates, Series 2002,
5.125%, 1/01/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 29.9%
5,000 State of California, General Obligation Refunding Bonds, No Opt. Call A3 5,232,000
Series 2002, 5.000%, 2/01/12
7,225 State of California, General Obligation Veterans Welfare 6/06 at 101.00 AAA 7,307,076
Bonds, Series 2001BV, 5.600%, 12/01/32 - FSA Insured
State of California, General Obligation Bonds, Series 2003:
3,000 5.250%, 2/01/20 8/13 at 100.00 A3 3,047,430
1,400 5.250%, 2/01/21 8/13 at 100.00 A3 1,415,596
1,400 5.000%, 2/01/21 8/13 at 100.00 A3 1,381,520
3,615 Colton Joint Unified School District, San Bernardino County, 8/12 at 102.00 AAA 3,842,239
California, General Obligation Bonds, Series 2002A,
5.500%, 8/01/22 - FGIC Insured
Contra Costa County Community College District, California,
General Obligation Bonds, Series 2002:
3,005 5.000%, 8/01/21 - FGIC Insured 8/12 at 100.00 AAA 3,038,295
3,300 5.000%, 8/01/22 - FGIC Insured 8/12 at 100.00 AAA 3,317,556
8,330 Los Angeles Unified School District, California, General 7/10 at 100.00 AAA 8,583,315
Obligation Bonds, Election of 1997, Series 2000D,
5.375%, 7/01/25 - FGIC Insured
10,840 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 11,099,943
Obligation Bonds, Election of 1997, Series 2002E,
5.000%, 7/01/19 - MBIA Insured
1,250 Los Angeles Unified School District, Los Angeles County, 7/13 at 100.00 AAA 1,303,075
California, General Obligation Bonds, Series 2003A,
5.250%, 7/01/20 - FSA Insured
4,050 Santa Rosa High School District, Sonoma County, 5/11 at 101.00 AAA 4,132,944
California, General Obligation Bonds, Series 2001,
5.300%, 5/01/26 - FGIC Insured
1,160 Saugus Union School District, Los Angeles County, California, 8/12 at 100.00 AAA 1,172,853
General Obligation Bonds, Series 2002A, 5.000%, 8/01/21 -
FGIC Insured
7,600 Southwestern Community College District, San Diego County, 8/11 at 101.00 AAA 7,822,072
California, General Obligation Bonds, Series 2001,
5.375%, 8/01/25 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 42.7%
9,000 Anitoch Area Public Facilities Financing Agency, California, 8/11 at 100.00 AAA 9,139,410
Special Tax Bonds, Community Facilities District 1989-1,
Series 2001, 5.250%, 8/01/25 - MBIA Insured
4,000 Daly City Housing Development Financing Agency, California, 12/13 at 102.00 A- 4,036,960
Mobile Home Park Revenue Bonds, Franciscan Mobile Home
Park Project, Series 2002A, 5.850%, 12/15/32
4,845 Encinitas Public Financing Authority, California, Lease Revenue 4/08 at 102.00 AAA 4,885,020
Bonds, Acquisition Project, Series 2001A, 5.250%, 4/01/31 -
MBIA Insured
5,000 Industry Urban Development Agency, California, Tax Allocation 5/07 at 101.50 AAA 5,368,450
Refunding Bonds, Civic, Recreational and Industrial
Redevelopment Project 1, Series 2002, 5.500%, 5/01/19 -
MBIA Insured
2,000 Lake Elsinore Public Financing Authority, California, Local 10/13 at 102.00 N/R 1,936,600
Agency Revenue Refunding Bonds, Series 2003H,
6.000%, 10/01/20
1,265 Lee Lake Water District, Riverside County, California, 9/13 at 102.00 N/R 1,295,183
Special Tax Bonds, Community Facilities District 1 of
Sycamore Creek, Series 2003, 6.500%, 9/01/24
1,320 Lincoln Community Facilities District No. 2003-1, California, 9/13 at 102.00 N/R 1,362,768
Special Tax Bonds, Series A, Lincoln Crossing Project,
6.500%, 9/01/25
8,000 Los Angeles County Metropolitan Transportation Authority, 7/08 at 101.00 AAA 7,924,960
California, Proposition C Sales Tax Revenue Refunding Bonds,
Second Senior Lien, Series 1998A, 5.000%, 7/01/23 -
AMBAC Insured
30
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 5,000 Los Angeles County Metropolitan Transportation Authority, No Opt. Call AAA $ 5,495,450
California, Proposition C Sales Tax Revenue Refunding Bonds,
Second Senior Lien, Series 2003A, 5.250%, 7/01/13 -
MBIA Insured
3,295 Oakland Redevelopment Agency, California, Subordinate Lien 3/13 at 100.00 AAA 3,607,597
Tax Allocation Bonds, Central District Redevelopment Project,
Series 2003, 5.500%, 9/01/16 - FGIC Insured
2,000 Orange County, California, Special Tax Bonds, Community 8/11 at 101.00 N/R 1,901,800
Facilities District 02-1 of Ladera Ranch, Series 2003A,
5.550%, 8/15/33
4,400 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call BBB+ 4,852,320
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26
6,000 Riverside County Redevelopment Agency, California, Tax 10/11 at 102.00 AAA 6,061,500
Allocation Bonds, Jurupa Valley Project Area, Series 2001,
5.250%, 10/01/35 - AMBAC Insured
1,055 Rohnert Park Finance Authority, California, Rancho Feliz 9/13 at 100.00 BBB 1,019,531
Mobile Home Park Revenue Bonds, Senior Lien, Series 2003A,
5.750%, 9/15/38 (WI, settling 9/11/03)
700 Rohnert Park Finance Authority, California, Rancho Feliz 9/13 at 100.00 N/R 684,320
Mobile Home Park Revenue Bonds, Subordinate Lien,
Series 2003B, 6.625%, 9/15/38 (WI, settling 9/11/03)
Santa Clara Valley Transportation Authority, California, Sales
Tax Revenue Bonds, Series 2001A:
16,090 5.000%, 6/01/25 - MBIA Insured 6/11 at 100.00 AAA 15,972,704
4,000 5.000%, 6/01/26 - MBIA Insured 6/11 at 100.00 AAA 3,964,800
1,930 West Patterson Financing Authority, California, Community 9/13 at 103.00 N/R 1,930,000
Facilities District 01-1 Special Tax Bonds, Series 2003B,
6.750%, 9/01/30 (WI, settling 9/16/03)
3,045 Yucaipa Redevelopment Agency, California, Mobile Home 5/11 at 102.00 N/R 3,064,610
Park Revenue Bonds, Rancho del Sol and Grandview,
Series 2001A, 6.750%, 5/15/36
5,100 Yucaipa, California, Special Tax Bonds, Chapman Heights 9/09 at 102.00 N/R 4,899,315
Community Facilities District 98-1, Series 1998,
6.000%, 9/01/28
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 10.8%
7,000 Foothill-Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 4,833,990
Toll Road Refunding Revenue Bonds, Series 1999,
0.000%, 1/15/27
5,585 Port of Oakland, California, Revenue Bonds, Series 2002N, 11/12 at 100.00 AAA 5,722,950
5.000%, 11/01/16 (Alternative Minimum Tax) -
MBIA Insured
3,840 Sacramento-Yolo Port District, Sacramento and Yolo Counties, 7/08 at 101.00 Baa2 3,888,000
California, Port Facilities Improvement and Revenue
Refunding Bonds, Series 2001, 5.125%, 7/01/14
2,000 San Francisco City and County Airports Commission, California, 5/12 at 100.00 AAA 2,050,960
Revenue Refunding Bonds, San Francisco International Airport,
Second Series, Issue 28A, 5.250%, 5/01/17 (Alternative
Minimum Tax) - MBIA Insured
San Francisco City and County Airports Commission, California,
Revenue Bonds, San Francisco International Airport, Second
Series, Issue 29A:
2,430 5.250%, 5/01/18 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,478,770
2,555 5.250%, 5/01/19 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,582,824
1,000 San Francisco City and County Airports Commission, 5/13 at 100.00 AAA 1,052,120
California, Revenue Bonds, San Francisco International
Airport, Second Series, Issue 29B, 5.125%, 5/01/17 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 6.9%
3,000 California Pollution Control Financing Authority, Pollution 4/11 at 102.00 AAA 3,161,550
Control Revenue Refunding Bonds, Pacific Gas and Electric
Company, Series 1996A Remarketed, 5.350%, 12/01/16
(Alternative Minimum Tax) - MBIA Insured
6,000 California Department of Water Resources, Power Supply 5/12 at 101.00 A3 6,058,800
Revenue Bonds, Series 2002A, 5.125%, 5/01/18
1,000 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 1,001,860
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/23 - MBIA Insured
3,000 Merced Irrigation District, California, Revenue Refunding 9/05 at 102.00 Baa3 3,143,790
Bonds, Electric System Project, Series 2001,
6.850%, 9/01/36
1,000 Merced Irrigation District, California, Revenue Certificates 9/05 at 103.00 Baa3 1,054,330
of Participation, Electric System Project, Series 2002,
6.500%, 9/01/34
31
Nuveen California Dividend Advantage Municipal Fund 2 (NVX) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 12.0%
$ 2,740 California Department of Water Resources, Water System 12/12 at 100.00 AAA $ 2,828,968
Revenue Bonds, Central Valley Project, Series 2002Z,
5.000%, 12/01/18 - FGIC Insured
4,900 East Bay Municipal Utility District, Alameda and Contra 6/11 at 100.00 AAA 4,856,880
Costa Counties, California, Water System Subordinated
Revenue Bonds, Series 2001, 5.000%, 6/01/26 -
MBIA Insured
6,885 San Diego Public Facilities Financing Authority, California, 8/12 at 100.00 AAA 6,961,285
Subordinate Lien Water Revenue Bonds, Series 2002,
5.000%, 8/01/21 - MBIA Insured
10,000 San Francisco City and County Public Utilities Commission, 4/13 at 100.00 AAA 10,416,299
California, Clean Water Revenue Refunding Bonds,
Series 2003A, 5.250%, 10/01/20 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 309,812 Total Long-Term Investments (cost $311,202,914) - 148.4% 311,140,260
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 4.1% 8,582,097
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (52.5)% (110,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $209,722,357
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
32
Nuveen California Dividend Advantage Municipal Fund 3 (NZH)
Portfolio of
INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 4.9%
$ 11,240 California County Tobacco Securitization Agency, Tobacco 6/12 at 100.00 Baa2 $ 8,129,780
Settlement Asset-Backed Bonds, Merced County Tobacco
Funding Corporation, Series 2002A, 5.500%, 6/01/33
6,100 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 4,931,606
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.250%, 6/01/33
4,200 Southern California Tobacco Securitization Authority, Tobacco 6/12 at 100.00 BBB 2,992,920
Settlement Asset-Backed Bonds, Senior Series 2001A,
5.500%, 6/01/36
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 9.7%
9,000 California Educational Facilities Authority, Student Loan 3/08 at 102.00 Aaa 9,258,210
Revenue Bonds, California Loan Program, Series 2001A,
5.400%, 3/01/21 (Alternative Minimum Tax) - MBIA Insured
3,600 California State Public Works Board, Lease Revenue Bonds, 10/12 at 100.00 AAA 3,834,108
University of California System, Series 2002A,
5.375%, 10/01/17 - FSA Insured
620 California Statewide Community Development Authority, 10/13 at 100.00 N/R 606,701
Revenue Bonds, Notre Dame de Namur University,
Series 2003, 6.500%, 10/01/23
7,595 San Francisco State University Foundation, Inc., California, 9/11 at 100.00 AAA 7,528,316
Auxiliary Organization Revenue Bonds, Student Housing,
Series 2001, 5.000%, 9/01/26 - MBIA Insured
2,990 University of California, Revenue Bonds, Multiple Purpose 9/08 at 101.00 Aa2 2,962,014
Projects, Series 2000K, 5.000%, 9/01/23
3,820 University of California, Revenue Bonds, Research Facilities, 9/09 at 101.00 AAA 3,786,460
Series 2001E, 5.000%, 9/01/26 - AMBAC Insured
4,000 University of California, Revenue Bonds, Multiple Purpose 5/13 at 100.00 AAA 4,007,320
Projects, Series 2003A, 5.000%, 5/15/23 (WI, settling
9/09/03) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 12.4%
California Health Facilities Financing Authority, Revenue
Bonds, Casa Colina, Inc., Series 2001:
4,000 6.000%, 4/01/22 4/12 at 100.00 BBB+ 4,067,600
2,000 6.125%, 4/01/32 4/12 at 100.00 BBB+ 2,021,140
9,000 California Infrastructure and Economic Development Bank, 8/11 at 102.00 A 8,912,520
Revenue Bonds, Kaiser Hospital Assistance I-LLC,
Series 2001A, 5.550%, 8/01/31
7,665 California Statewide Community Development Authority, 11/09 at 102.00 BBB 7,765,488
Insured Mortgage Hospital Revenue Bonds, Mission
Community Hospital, Series 2001, 5.375%, 11/01/21
6,525 California Statewide Community Development Authority, No Opt. Call A- 7,215,932
Health Facility Revenue Refunding Bonds, Memorial Health
Services, Series 2003A, 6.000%, 10/01/12
6,450 California Statewide Community Development Authority, 6/13 at 100.00 AAA 6,737,412
Hospital Revenue Bonds, Monterey Peninsula Hospital,
Series 2003B, 5.250%, 6/01/18 - FSA Insured
1,740 Central California Joint Powers Health Financing 2/10 at 101.00 BBB 1,759,940
Authority, Certificates of Participation, Community Hospitals
of Central California Obligated Group Project, Series 2000,
6.000%, 2/01/30
2,500 Whittier, California, Health Facility Revenue Bonds, 6/12 at 101.00 A- 2,512,000
Presbyterian Intercommunity Hospital, Series 2002,
5.600%, 6/01/22
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 4.2%
5,250 California Statewide Community Development Authority, 8/12 at 105.00 Aaa 5,831,175
GNMA Collateralized Housing Revenue Refunding Bonds,
Crowne Pointe Project, Series 2002F, 6.750%, 8/20/37
3,610 San Bernardino County Housing Authority, California, 11/11 at 105.00 Aaa 3,894,612
GNMA Collateralized Multifamily Mortgage Revenue Bonds,
Pacific Palms Mobile Home Park, Series 2001A,
6.700%, 12/20/41
San Jose, California, Multifamily Housing Revenue Bonds, GNMA
Mortgage-Backed Securities Program, Lenzen Housing, Series
2001B:
1,250 5.350%, 2/20/26 (Alternative Minimum Tax) 8/11 at 102.00 AAA 1,254,000
2,880 5.450%, 2/20/43 (Alternative Minimum Tax) 8/11 at 102.00 AAA 2,885,213
33
Nuveen California Dividend Advantage Municipal Fund 3 (NZH) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 0.9%
$ 3,000 California Housing Finance Agency, Home Mortgage Revenue 2/08 at 101.50 AAA $ 3,047,370
Bonds, Series 1998B, 5.150%, 2/01/18 (Alternative
Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
INDUSTRIALS - 1.5%
4,715 California Pollution Control Financing Authority, Solid Waste No Opt. Call BBB 4,816,703
Disposal Revenue Bonds, Waste Management Inc. Project,
Series 2002B, 4.450%, 7/01/27 (Alternative Minimum Tax)
(Mandatory put 7/01/05)
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.6%
California Health Facilities Financing Authority, Insured Senior
Living Revenue Bonds, Aldersly, Series 2002A:
1,500 5.125%, 3/01/22 3/12 at 101.00 BBB 1,475,355
1,315 5.250%, 3/01/32 3/12 at 101.00 BBB 1,276,234
2,450 California Health Facilities Financing Authority, Revenue 1/13 at 100.00 BBB 2,409,796
Bonds, Northern California Retired Officers Community
Corporation - Paradise Valley Estates, Series 2002,
5.125%, 1/01/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 33.2%
8,500 State of California, General Obligation Veterans Welfare 12/03 at 102.00 A 8,580,750
Bonds, Series 1997BH, 5.500%, 12/01/18 (Alternative
Minimum Tax)
10 State of California, General Obligation Veterans Welfare 12/06 at 102.00 A 10,209
Bonds, Series 1997BJ, 5.500%, 12/01/18 (Alternative
Minimum Tax)
9,335 State of California, General Obligation Bonds, Series 2002, No Opt. Call AAA 10,708,832
6.000%, 2/01/16 - FSA Insured
State of California, General Obligation Refunding Bonds,
Series 2002:
8,450 5.000%, 2/01/12 No Opt. Call A3 8,842,080
2,780 6.000%, 4/01/16 - AMBAC Insured No Opt. Call AAA 3,193,219
5,000 5.000%, 4/01/21 - AMBAC Insured 4/12 at 100.00 AAA 5,022,300
1,950 State of California, Various Purpose General Obligation 11/11 at 100.00 AAA 1,911,527
Bonds, Series 2001, 5.000%, 11/01/30 - MBIA Insured
14,300 State of California, General Obligation Veterans Welfare 6/07 at 101.00 AAA 14,406,106
Bonds, Series 2001BZ, 5.350%, 12/01/21 (Alternative
Minimum Tax) - MBIA Insured
2,050 Centinela Valley Union High School District, Los Angeles No Opt. Call AAA 2,139,749
County, California, General Obligation Bonds, Series 2002A,
5.250%, 2/01/26 - MBIA Insured
1,840 Compton Unified School District, Los Angeles County, 9/13 at 100.00 AAA 1,947,916
California, General Obligation Bonds, Series 2003A,
5.250%, 9/01/18 - MBIA Insured
3,000 Contra Costa County Community College District, 8/12 at 100.00 AAA 3,005,220
California, General Obligation Bonds, Series 2002,
5.000%, 8/01/23 - FGIC Insured
2,500 Fullerton Joint Union High School District, Orange County, 8/12 at 100.00 Aaa 2,503,950
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/23 - FSA Insured
2,260 Jurupa Unified School District, Riverside County, California, 8/11 at 101.00 AAA 2,292,228
General Obligation Bonds, Series 2002, 5.125%, 8/01/22 -
FGIC Insured
Los Angeles Unified School District, Los Angeles County,
California, General Obligation Bonds, Series 2003A:
3,750 5.250%, 7/01/20 - FSA Insured 7/13 at 100.00 AAA 3,909,225
7,200 5.000%, 7/01/22 - FSA Insured 7/13 at 100.00 AAA 7,241,256
6,315 Los Angeles Unified School District, Los Angeles County, 7/13 at 100.00 AAA 6,036,824
California, General Obligation Bonds, Series 2003F,
4.750%, 7/01/24 - FGIC Insured
2,710 Pajaro Valley Unified School District, Santa Cruz County, 8/13 at 100.00 AAA 2,725,691
California, General Obligation Bonds, Series 2003,
5.000%, 8/01/22 - FSA Insured
3,000 Puerto Rico Commonwealth, Public Improvement General 7/11 at 100.00 AAA 3,027,900
Obligation Refunding Bonds, Series 2001, 5.000%, 7/01/24 -
FSA Insured
5,000 Riverside Unified School District, Riverside County, California, 2/12 at 101.00 AAA 4,954,150
General Obligation Bonds, Series 2002A, 5.000%, 2/01/27 -
FGIC Insured
10,810 San Diego Unified School District, San Diego County, 7/11 at 102.00 AAA 10,714,764
California, General Obligation Bonds, Election of 1998,
Series 2001C, 5.000%, 7/01/26 - FSA Insured
34
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 4,000 San Diego Unified School District, San Diego County, 7/12 at 101.00 AAA $ 4,152,200
California, General Obligation Bonds, Election of 1998,
Series 2002D, 5.250%, 7/01/21 - FGIC Insured
1,000 Saugus Union School District, Los Angeles County, 8/12 at 100.00 AAA 996,750
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/24 - FGIC Insured
1,630 West Contra Costa Unified School District, Contra Costa 8/11 at 101.00 AAA 1,638,672
County, California, General Obligation Bonds, Series 2003C,
5.000%, 8/01/22 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 47.3%
4,000 Beaumont Financing Authority, California, Local Agency 9/12 at 102.00 N/R 4,041,720
Revenue Bonds, Series 2002A, 6.750%, 9/01/25
7,135 Brentwood Infrastructure Financing Authority, Contra Costa 11/11 at 100.00 AAA 7,082,558
County, California, Capital Improvement Revenue Bonds,
Series 2001, 5.000%, 11/01/25 - FSA Insured
3,620 Burbank Public Financing Authority, California, Revenue 12/13 at 100.00 AAA 3,778,773
Refunding Bonds, Golden State Redevelopment Project,
Series 2003A, 5.250%, 12/01/20 - AMBAC Insured
3,350 California State Public Works Board, Lease Revenue Bonds, 12/12 at 100.00 AAA 3,534,351
Department of General Services, Capital East End,
Series 2002A, 5.250%, 12/01/17 - AMBAC Insured
2,630 California State Public Works Board, Lease Revenue No Opt. Call AAA 2,865,885
Refunding Bonds, Department of Corrections, Series 2001B,
5.250%, 1/01/12 - AMBAC Insured
4,510 California State Public Works Board, Lease Revenue Bonds, 12/11 at 102.00 AAA 4,439,554
Department of Mental Health, Hospital Addition,
Series 2001A, 5.000%, 12/01/26 - AMBAC Insured
15,000 California State Public Works Board, Lease Revenue Bonds, 3/12 at 100.00 AAA 14,761,500
Department of General Services, Series 2002B,
5.000%, 3/01/27 - AMBAC Insured
1,810 Cerritos Public Financing Authority, California, Tax Allocation No Opt. Call AAA 1,940,465
Revenue Bonds, Los Cerritos Redevelopment Projects,
Series 2002A, 5.000%, 11/01/14 - AMBAC Insured
1,270 Coalinga Public Financing Authority, California, Local No Opt. Call AAA 1,474,292
Obligation Senior Lien Revenue Bonds, Series 1998A,
6.000%, 9/15/18 - AMBAC Insured
2,000 Daly City Housing Development Finance Agency, California, 12/13 at 102.00 A- 2,019,960
Mobile Home Park Revenue Bonds, Franciscan Mobile Home
Park Project, Series 2002A, 5.800%, 12/15/25
1,000 Fullerton Community Facilities District 1, California, Special 9/12 at 100.00 N/R 1,010,960
Tax Bonds, Amerige Heights, Series 2002, 6.100%, 9/01/22
3,000 Lake Elsinore Public Financing Authority, California, Local 10/13 at 102.00 N/R 2,904,900
Agency Revenue Refunding Bonds, Series 2003H,
6.000%, 10/01/20
5,250 Lammersville School District, San Joaquin County, California, 9/12 at 101.00 N/R 5,267,325
Special Tax Bonds, Community Facilities District of
Mountain House, Series 2002, 6.300%, 9/01/24
2,000 Lee Lake Water District, Riverside County, California, 9/13 at 102.00 N/R 2,047,720
Special Tax Bonds, Community Facilities District 1 of
Sycamore Creek, Series 2003, 6.500%, 9/01/24
2,200 Lincoln Community Facilities District No. 2003-1, California, 9/13 at 102.00 N/R 2,271,280
Special Tax Bonds, Series A, Lincoln Crossing Project,
6.500%, 9/01/25
5,425 Lodi, California, Certificates of Participation, Public 10/12 at 100.00 AAA 5,355,235
Improvement Financing Project, Series 2002,
5.000%, 10/01/26 - MBIA Insured
6,075 Los Angeles County Metropolitan Transportation Authority, No Opt. Call AAA 6,676,972
California, Proposition C Sales Tax Revenue Refunding Bonds,
Second Senior Lien, Series 2003A, 5.250%, 7/01/13 -
MBIA Insured
1,000 Monterey County, California, Certificates of Participation, 8/11 at 100.00 Aaa 1,071,920
Master Plan Financing, Series 2001, 5.250%, 8/01/15 -
MBIA Insured
1,000 Norco Community Facilities District 01-1, California, 9/12 at 102.00 N/R 985,800
Special Tax Bonds, Series 2002, 6.750%, 9/01/22
3,000 Oakland Redevelopment Agency, California, Subordinate 3/13 at 100.00 AAA 3,221,550
Lien Tax Allocation Bonds, Central District Redevelopment
Project, Series 2003, 5.500%, 9/01/19 - FGIC Insured
4,520 Ontario Redevelopment Financing Authority, California, Lease 8/11 at 101.00 AAA 4,505,310
Revenue Bonds, Capital Projects, Series 2001,
5.000%, 8/01/24 - AMBAC Insured
2,000 Orange County, California, Special Tax Bonds, Community 8/11 at 101.00 N/R 1,901,800
Facilities District 02-1 of Ladera Ranch, Series 2003A,
5.550%, 8/15/33
35
Nuveen California Dividend Advantage Municipal Fund 3 (NZH) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 11,165 Palm Desert Financing Authority, California, Tax Allocation 4/12 at 102.00 AAA $ 11,095,330
Revenue Refunding Bonds, Project Area 1, Series 2002,
5.100%, 4/01/30 - MBIA Insured
5,000 Pomona Public Financing Authority, California, Revenue 2/11 at 100.00 AAA 4,954,150
Refunding Bonds, Merged Redevelopment Projects,
Series 2001AD, 5.000%, 2/01/27 - MBIA Insured
6,500 Puerto Rico Highway and Transportation Authority, Highway 7/12 at 100.00 A 6,554,990
Revenue Bonds, Series 2002D, 5.375%, 7/01/36
4,400 Puerto Rico Public Finance Corporation, Commonwealth No Opt. Call BBB+ 4,852,320
Appropriation Bonds, Series 2002E, 6.000%, 8/01/26
1,735 Rohnert Park Finance Authority, California, Rancho Feliz 9/13 at 100.00 BBB 1,676,669
Mobile Home Park Revenue Bonds, Senior Lien,
Series 2003A, 5.750%, 9/15/38 (WI, settling 9/11/03)
1,125 Rohnert Park Finance Authority, California, Rancho Feliz 9/13 at 100.00 N/R 1,099,800
Mobile Home Park Revenue Bonds, Subordinate Lien,
Series 2003B, 6.625%, 9/15/38 (WI, settling 9/11/03)
1,700 Roseville, California, Special Tax Bonds, Community Facilities 9/09 at 103.00 N/R 1,656,786
District 1 - Crocker, Series 2003, 6.000%, 9/01/27
14,505 San Diego Redevelopment Agency, California, Subordinate 9/11 at 101.00 AAA 14,319,481
Tax Allocation Bonds, Centre City Redevelopment Project,
Series 2001A, 5.000%, 9/01/26 - FSA Insured
8,725 San Francisco Bay Area Rapid Transit District, California, 7/11 at 100.00 AAA 8,648,133
Sales Tax Revenue Bonds, Series 2001, 5.000%, 7/01/26 -
AMBAC Insured
10,000 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 9,852,800
Bonds, Merged Area Redevelopment Project, Series 2002,
5.000%, 8/01/27 - MBIA Insured
2,115 San Marcos Public Facilities Authority, California, Special 9/07 at 102.00 N/R 2,131,455
Tax Revenue Bonds, Series 2002, 6.300%, 9/01/20
1,595 Santa Clara Valley Transportation Authority, California, 6/11 at 100.00 AAA 1,602,512
Sales Tax Revenue Bonds, Series 2001A, 5.000%, 6/01/22 -
MBIA Insured
2,810 West Patterson Financing Authority, California, Special 9/13 at 103.00 N/R 2,810,000
Tax Bonds, Community Facilities District 01-1, Series 2003B,
7.000%, 9/01/38 (WI, settling 9/16/03)
2,500 Yucaipa-Calimesa Joint Unified School District, San 10/11 at 100.00 AAA 2,467,850
Bernardino County, California, General Obligation Refunding
Bonds, Series 2001A, 5.000%, 10/01/26 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 11.3%
11,750 Foothill-Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 7,810,460
Toll Road Refunding Revenue Bonds, Series 1999,
0.000%, 1/15/28
1,500 Port of Oakland, California, Revenue Refunding Bonds, 11/07 at 102.00 AAA 1,629,735
Series 1997I, 5.600%, 11/01/19 - MBIA Insured
1,000 Port of Oakland, California, Revenue Bonds, Series 2002M, 11/12 at 100.00 AAA 1,040,150
5.250%, 11/01/20 - FGIC Insured
3,000 San Francisco City and County Airports Commission, 5/10 at 101.00 AAA 2,924,310
California, Revenue Bonds, San Francisco International
Airport, Second Series, Issue 26B, 5.000%, 5/01/30 -
FGIC Insured
3,000 San Francisco City and County Airports Commission, 5/12 at 100.00 AAA 3,080,730
California, Revenue Refunding Bonds, San Francisco
International Airport, Second Series, Issue 28B,
5.250%, 5/01/22 - MBIA Insured
San Francisco City and County Airports Commission, California,
Revenue Bonds, San Francisco International Airport, Second
Series, Issue 29B:
4,110 5.125%, 5/01/17 - FGIC Insured 5/13 at 100.00 AAA 4,324,213
10,625 5.125%, 5/01/18 - FGIC Insured 5/13 at 100.00 AAA 11,093,881
5,140 5.125%, 5/01/19 - FGIC Insured 5/13 at 100.00 AAA 5,322,059
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 12.1%
15,000 California Pollution Control Financing Authority, Pollution 4/11 at 102.00 AAA 15,807,750
Control Revenue Refunding Bonds, Pacific Gas and Electric
Company, Series 1996A Remarketed, 5.350%, 12/01/16
(Alternative Minimum Tax) - MBIA Insured
9,000 California Department of Water Resources, Power Supply 5/12 at 101.00 A3 9,088,200
Revenue Bonds, Series 2002A, 5.125%, 5/01/18
1,600 Merced Irrigation District, California, Revenue Certificates 9/05 at 103.00 Baa3 1,686,928
of Participation, Electric System Project, Series 2002,
6.500%, 9/01/34
36
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES (continued)
$ 5,000 Merced Irrigation District, California, Revenue Certificates 9/13 at 102.00 Baa3 $ 4,780,650
of Participation, Electric System Project, Series 2003,
5.700%, 9/01/36
2,250 Salinas Valley Solid Waste Authority, California, Revenue 8/12 at 100.00 AAA 2,249,910
Bonds, Series 2002, 5.125%, 8/01/22 (Alternative Minimum
Tax) - AMBAC Insured
6,085 Southern California Public Power Authority, Revenue Bonds, 7/13 at 100.00 AAA 6,531,822
Magnolia Power Project, Series 2003-1A, 5.250%, 7/01/16 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 16.5%
6,080 California Department of Water Resources, Water System 12/12 at 100.00 AAA 6,323,990
Revenue Bonds, Central Valley Project, Series 2002Z,
5.000%, 12/01/17 - FGIC Insured
California Department of Water Resources, Water System Revenue
Bonds, Central Valley Project, Series 2003Y:
8,000 5.250%, 12/01/13 - FGIC Insured 6/13 at 100.00 AAA 8,784,400
2,270 5.250%, 12/01/16 - FGIC Insured 6/13 at 100.00 AAA 2,435,528
7,000 Carmichael Water District, Sacramento County, California, 9/09 at 102.00 AAA 6,989,990
Water Revenue Certificates of Participation, Series 1999,
5.125%, 9/01/29 - MBIA Insured
1,000 Pico Rivera Water Authority, California, Revenue Bonds, 12/11 at 102.00 N/R 996,420
Series 2001A, 6.250%, 12/01/32
San Diego Public Facilities Financing Authority, California,
Subordinate Lien Water Revenue Bonds, Series 2002:
2,500 5.000%, 8/01/23 - MBIA Insured 8/12 at 100.00 AAA 2,504,350
8,910 5.000%, 8/01/24 - MBIA Insured 8/12 at 100.00 AAA 8,881,043
San Francisco City and County Public Utilities Commission,
California, Clean Water Revenue Refunding Bonds, Series 2003A:
3,315 5.250%, 10/01/18 - MBIA Insured 4/13 at 100.00 AAA 3,502,794
12,000 5.250%, 10/01/19 - MBIA Insured 4/13 at 100.00 AAA 12,584,519
1,600 Sunnyvale Financing Authority, California, Water and 10/11 at 100.00 AAA 1,585,855
Wastewater Revenue Bonds, Series 2001, 5.000%, 10/01/26 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 513,810 Total Long-Term Investments (cost $523,832,394) - 155.6% 514,723,236
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 0.9% 3,106,097
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (56.5)% (187,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $330,829,333
====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
See accompanying notes to financial statements.
37
Nuveen Insured California Dividend Advantage Municipal Fund (NKL)
Portfolio of
INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.4%
$ 5,500 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 A- $ 5,254,315
Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2003A-2, 7.900%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
EDUCATION AND CIVIC ORGANIZATIONS - 10.8%
3,070 California Educational Facilities Authority, Revenue Bonds, 3/09 at 101.00 Aa3 3,203,207
Claremont University Center, Series 1999B, 5.250%, 3/01/18
1,675 California Educational Facilities Authority, Revenue Bonds, 10/12 at 100.00 A2 1,679,121
University of San Diego, Series 2002A, 5.250%, 10/01/30
9,000 California State University, Systemwide Revenue Bonds, 11/12 at 100.00 AAA 9,012,420
Series 2002A, 5.125%, 11/01/26 - AMBAC Insured
1,000 California Statewide Community Development Authority, 8/12 at 100.00 A 1,010,840
Student Housing Revenue Bonds, EAH - Irvine East Campus
Apartments LLC Project, Series 2002A, 5.500%, 8/01/22 -
ACA Insured
9,000 University of California, Revenue Bonds, Multiple Purpose 9/08 at 101.00 Aa2 9,054,900
Projects, Series 2000K, 5.300%, 9/01/30
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 7.2%
5,000 ABAG Finance Authority for Non-Profit Corporations, 4/12 at 100.00 BBB 5,093,550
California, Insured Revenue Bonds, Sansum-Santa Barbara
Medical Foundation Clinic, Series 2002A, 5.600%, 4/01/26
California Health Facilities Financing Authority, Revenue
Bonds, Cedars-Sinai Medical Center, Series 1999A:
2,500 6.125%, 12/01/30 12/09 at 101.00 A3 2,631,100
4,600 6.250%, 12/01/34 12/09 at 101.00 A3 4,863,902
3,700 California Health Facilities Financing Authority, Revenue 3/13 at 100.00 A 3,371,588
Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/28
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/MULTIFAMILY - 0.9%
1,905 Los Angeles, California, Multifamily Housing Revenue Bonds, 7/11 at 102.00 AAA 1,961,064
GNMA Mortgage-Backed Securities Program, Park Plaza
West Senior Apartments Project, Series 2001B,
5.300%, 1/20/21 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
HOUSING/SINGLE FAMILY - 2.5%
5,655 California Housing Finance Agency, Home Mortgage Revenue 2/09 at 101.50 AAA 5,629,553
Bonds, Series 1998E, 5.250%, 2/01/33 (Alternative
Minimum Tax) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 1.3%
3,000 ABAG Finance Authority for Nonprofit Corporations, 11/12 at 100.00 BBB 2,980,650
California, Insured Senior Living Revenue Bonds, Odd
Fellows Home of California, Series 2003A, 5.200%, 11/15/22
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 36.7%
5,920 Cajon Valley Union School District, San Diego County, 8/10 at 102.00 AAA 5,923,966
California, General Obligation Bonds, Series 2002B,
5.125%, 8/01/32 - MBIA Insured
9,000 State of California, General Obligation Refunding Bonds, 2/12 at 100.00 AAA 8,994,240
Series 2002, 5.000%, 2/01/22 - MBIA Insured
4,300 State of California, General Obligation Bonds, 8/13 at 100.00 A3 4,243,240
Series 2003, 5.000%, 2/01/21
1,490 Campbell Union High School District, Santa Clara County, 8/11 at 102.00 Aaa 1,466,428
California, General Obligation Bonds, Series 2003,
5.000%, 8/01/32 - FGIC Insured
1,500 Centinela Valley Union High School District, Los Angeles No Opt. Call AAA 1,565,670
County, California, General Obligation Bonds, Series 2002A,
5.250%, 2/01/26 - MBIA Insured
2,415 El Monte Union High School District, Los Angeles County, 6/13 at 100.00 AAA 2,386,092
California, General Obligation Bonds, Series 2003A,
5.000%, 6/01/28 - FSA Insured
38
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL (continued)
$ 10,000 Fremont Unified School District, Alameda County, 8/12 at 101.00 AAA $ 9,927,200
California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/25 - FSA Insured
2,070 Fresno Unified School District, Fresno County, California, 8/10 at 102.00 AAA 2,081,696
General Obligation Bonds, Election of 1995, Series 2002G,
5.125%, 8/01/26 - FSA Insured
Fresno Unified School District, Fresno County, California,
General Obligation Bonds, Election of 2001, Series 2002B:
1,135 5.125%, 8/01/23 - FGIC Insured 8/10 at 102.00 AAA 1,147,099
1,190 5.125%, 8/01/24 - FGIC Insured 8/10 at 102.00 AAA 1,198,425
1,245 5.125%, 8/01/25 - FGIC Insured 8/10 at 102.00 AAA 1,250,254
1,255 5.125%, 8/01/26 - FGIC Insured 8/10 at 102.00 AAA 1,262,091
5,000 Los Angeles Unified School District, California, General 7/12 at 100.00 AAA 5,017,300
Obligation Bonds, Election of 1997, Series 2002E,
5.125%, 1/01/27 - MBIA Insured
4,700 Los Angeles Unified School District, California, General 7/13 at 100.00 AAA 4,726,931
Obligation Bonds, Series 2003A, 5.000%, 7/01/22 -
FSA Insured
1,500 Madera Unified School District, Madera County, California, 8/12 at 100.00 AAA 1,482,045
General Obligation Bonds, Series 2002, 5.000%, 8/01/28 -
FSA Insured
1,155 Montara Sanitary District, California, General Obligation 8/11 at 101.00 AAA 1,141,175
Bonds, Series 2003, 5.000%, 8/01/28 - FGIC Insured
2,500 Oakland Unified School District, Alameda County, California, 8/12 at 100.00 AAA 2,565,250
General Obligation Bonds, Series 2002, 5.250%, 8/01/21 -
FGIC Insured
3,300 Peralta Community College District, Alameda County, 8/09 at 102.00 AAA 3,248,586
California, General Obligation Bonds, Election of 2000,
Series 2001A, 5.000%, 8/01/31 - FGIC Insured
3,250 San Diego Unified School District, San Diego County, 7/11 at 102.00 AAA 3,268,622
California, General Obligation Bonds, Election of 1998,
Series 2001C, 5.000%, 7/01/22 - FSA Insured
3,500 San Mateo County Community College District, California, 9/12 at 100.00 AAA 3,469,270
General Obligation Bonds, Series 2002A, 5.000%, 9/01/26 -
FGIC Insured
2,980 Santa Clarita Community College District, Los Angeles 8/11 at 101.00 AAA 2,990,460
County, California, General Obligation Bonds, Series 2002,
5.125%, 8/01/26 - FGIC Insured
2,460 Vacaville Unified School District, Solano County, California, 8/11 at 101.00 AAA 2,438,352
General Obligation Bonds, Series 2002, 5.000%, 8/01/26 -
FSA Insured
10,000 Vista Unified School District, San Diego County, California, 8/12 at 100.00 AAA 10,017,400
General Obligation Bonds, Series 2002A, 5.000%, 8/01/23 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 39.8%
6,895 Brea and Olinda Unified School District, Orange County, 8/11 at 101.00 AAA 6,904,515
California, Certificates of Participation Refunding,
Series 2002A, 5.125%, 8/01/26 - FSA Insured
2,290 Burbank Public Financing Authority, California, Revenue 12/13 at 100.00 AAA 2,407,569
Refunding Bonds, Golden State Redevelopment Project,
Series 2003A, 5.250%, 12/01/19 - AMBAC Insured
7,035 Corona-Norco Unified School District, Riverside County, 9/13 at 100.00 AAA 6,950,861
California, Special Tax Bonds, Community Facilities
District 98-1, Series 2003, 5.000%, 9/01/28 (WI,
settling 9/10/03) - MBIA Insured
3,145 Culver City Redevelopment Agency, California, Tax Allocation 5/11 at 101.00 AAA 3,151,321
Revenue Bonds, Redevelopment Project, Series 2002A,
5.125%, 11/01/25 - MBIA Insured
1,020 Desert Sands Unified School District, Riverside County, 3/12 at 101.00 AAA 1,035,810
California, Refunding Certificates of Participation,
Series 2002, 5.000%, 3/01/20 - MBIA Insured
8,720 El Monte, California, Senior Lien Certificates of Participation, 1/11 at 100.00 AAA 8,802,055
Department of Public Services Facility - Phase II,
Series 2001, 5.000%, 1/01/21 - AMBAC Insured
6,615 Inglewood Redevelopment Agency, California, Tax No Opt. Call AAA 6,907,251
Allocation Refunding Bonds, Merged Area Redevelopment
Project, Series 1998A, 5.250%, 5/01/23 - AMBAC Insured
1,400 Irvine Assessment District, California, Limited Obligation 3/04 at 103.00 N/R 1,351,532
Improvement Bonds, Assessment District 00-18, Group 3,
Series 2003, 5.550%, 9/02/26
3,500 La Quinta Redevelopment Agency, California, Tax Allocation 9/11 at 102.00 AAA 3,477,775
Bonds, Project Area 1, Series 2001, 5.100%, 9/01/31 -
AMBAC Insured
39
Nuveen Insured California Dividend Advantage Municipal Fund (NKL) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED (continued)
$ 3,400 La Quinta Redevelopment Agency, California, Tax Allocation 9/12 at 102.00 AAA $ 3,409,996
Bonds, Project Area 1, Series 2002, 5.000%, 9/01/22 -
AMBAC Insured
1,460 City of Los Angeles, California, Certificates of Participation, 6/13 at 100.00 AAA 1,423,471
Municipal Improvement Corporation, Series 2003AW,
5.000%, 6/01/33 - AMBAC Insured
7,000 Los Angeles, California, Certificates of Participation, Real 4/12 at 100.00 AAA 7,057,540
Property Acquisition Program, Series 2002, 5.200%, 4/01/27 -
AMBAC Insured
4,690 Los Angeles County Metropolitan Transportation Authority, 7/08 at 101.00 AAA 4,646,008
California, Proposition C Sales Tax Revenue Refunding Bonds,
Second Senior Lien, Series 1998A, 5.000%, 7/01/23 -
AMBAC Insured
8,470 Ontario Redevelopment Financing Authority, California, 8/11 at 101.00 AAA 8,551,397
Lease Revenue Bonds, Capital Projects, Series 2001,
5.200%, 8/01/29 - AMBAC Insured
5,000 Palm Desert Financing Authority, California, Tax Allocation 4/12 at 102.00 AAA 4,944,450
Revenue Refunding Bonds, Project Area 1, Series 2002,
5.000%, 4/01/25 - MBIA Insured
4,475 Riverside County, California, Asset Leasing Corporate 6/12 at 101.00 AAA 4,562,397
Leasehold Revenue Bonds, Riverside County Hospital
Project, Series 1997B, 5.000%, 6/01/19 - MBIA Insured
3,175 San Buenaventura Public Facilities Financing Authority, 2/11 at 101.00 AAA 3,211,322
California, Certificates of Participation, Series 2001C,
5.250%, 2/01/31 - AMBAC Insured
3,730 San Diego Redevelopment Agency, California, Subordinate 9/09 at 101.00 Baa2 3,602,024
Tax Increment and Parking Revenue Bonds, Centre City
Project, Series 2003B, 5.250%, 9/01/26
4,000 San Jose Financing Authority, California, Lease Revenue 9/11 at 100.00 AAA 4,088,640
Refunding Bonds, Convention Center Project, Series 2001F,
5.000%, 9/01/19 - MBIA Insured
2,160 Temecula Redevelopment Agency, California, Tax Allocation 8/08 at 102.00 AAA 2,160,907
Revenue Bonds, Redevelopment Project 1, Series 2002,
5.125%, 8/01/27 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 6.5%
5,000 California Infrastructure and Economic Development Bank, 7/13 at 100.00 AAA 4,901,650
Revenue Bonds, Bay Area Toll Bridges, First Lien, Series 2003A,
5.000%, 7/01/36 - AMBAC Insured
7,500 Foothill-Eastern Transportation Corridor Agency, California, 1/14 at 101.00 BBB- 4,973,925
Toll Road Refunding Revenue Bonds, Series 1999,
0.000%, 1/15/29
San Francisco City and County Airports Commission, California,
Revenue Bonds, San Francisco International Airport, Second
Series, Issue 29A:
2,185 5.250%, 5/01/16 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,262,786
2,300 5.250%, 5/01/17 (Alternative Minimum Tax) - FGIC Insured 5/13 at 100.00 AAA 2,363,940
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 21.6%
9,000 Anaheim Public Financing Authority, California, 10/12 at 100.00 AAA 8,900,190
Electric System Distribution Facilities Revenue Bonds,
Series 2002A, 5.000%, 10/01/27 - FSA Insured
10,000 California Pollution Control Financing Authority, Pollution 4/11 at 102.00 AAA 10,538,500
Control Revenue Refunding Bonds, Pacific Gas and Electric
Company, Series 1996A Remarketed, 5.350%, 12/01/16
(Alternative Minimum Tax) - MBIA Insured
6,000 California Department of Water Resources, Power Supply 5/12 at 101.00 A3 6,058,800
Revenue Bonds, Series 2002A, 5.125%, 5/01/18
3,000 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 3,095,250
Power System Revenue Bonds, Series 2001A-1,
5.250%, 7/01/21 - FSA Insured
5,000 Los Angeles Department of Water and Power, California, 7/13 at 100.00 AAA 4,923,400
Power System Revenue Bonds, Series 2003A-2,
5.000%, 7/01/30 - MBIA Insured
6,000 Northern California Power Agency, Revenue Refunding 7/08 at 101.00 AAA 6,037,980
Bonds, Hydroelectric Project 1, Series 1998A,
5.200%, 7/01/32 - MBIA Insured
3,000 Sacramento Municipal Utility District, California, Electric 8/11 at 100.00 AAA 2,964,090
Revenue Bonds, Series 2001N, 5.000%, 8/15/28 -
MBIA Insured
5,630 Southern California Public Power Authority, Subordinate 7/12 at 100.00 AAA 5,647,791
Revenue Refunding Bonds, Transmission Project, Series 2002A,
4.750%, 7/01/19 - FSA Insured
40
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 18.3%
$ 3,000 California Department of Water Resources, Water System 12/12 at 100.00 AAA $ 3,040,980
Revenue Bonds, Central Valley Project, Series 2002X,
5.150%, 12/01/23 - FGIC Insured
6,100 East Bay Municipal Utility District, Alameda and Contra 6/11 at 100.00 AAA 6,046,320
Costa Counties, California, Water System Subordinated
Revenue Bonds, Series 2001, 5.000%, 6/01/26 -
MBIA Insured
9,000 Eastern Municipal Water District, California, Water and 7/11 at 100.00 AAA 8,823,420
Sewer Revenue Certificates of Participation, Series 2001B,
5.000%, 7/01/30 - FGIC Insured
4,500 Los Angeles County Sanitation Districts Financing Authority, 10/13 at 100.00 AAA 4,508,640
California, Capital Projects Revenue Bonds, Senior Lien,
Series 2003A, 5.000%, 10/01/23 - FSA Insured
4,500 Southern California Metropolitan Water District, Water 1/08 at 101.00 AAA 4,411,710
Revenue Bonds, Series 1997A, 5.000%, 7/01/30 -
MBIA Insured
12,000 Orange County Sanitation District, California, Certificates 8/13 at 100.00 AAA 11,754,960
of Participation, Series 2003, 5.000%, 2/01/33 -
FGIC Insured
2,000 Pico Rivera Water Authority, California, Revenue Refunding No Opt. Call AAA 2,193,419
Bonds, Water System Project, Series 1999A,
5.500%, 5/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
$ 331,365 Total Long-Term Investments (cost $325,776,796) - 148.0% 329,652,594
=============-----------------------------------------------------------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 0.9%
2,100 Stockton, California, Health Facilities Revenue Bonds, Dameron VMIG-1 2,100,000
Hospital Association, Variable Rate Demand Obligations,
Series 2002A, 0.750%, 12/01/32+
------------------------------------------------------------------------------------------------------------------------------------
$ 2,100 Total Short-Term Investments (cost $2,100,000) 2,100,000
=============-----------------------------------------------------------------------------------------------------------------------
Total Investments (cost $327,876,796) - 148.9% 331,752,594
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 4.1% 8,997,914
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (53.0)% (118,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $222,750,508
====================================================================================================================
At least 80% of the Fund's net assets (including net assets
applicable to Preferred shares) are invested in municipal
securities that are either covered by Original Issue
Insurance, Secondary Market Insurance or Portfolio Insurance
which ensures the timely payment of principal and interest.
Up to 20% of the Fund's net assets (including net assets
applicable to Preferred shares) may be invested in municipal
securities that are (i) either backed by an escrow or trust
containing sufficient U.S. Government or U.S. Government
agency securities (also ensuring the timely payment of
principal and interest), or (ii) municipal bonds that are
rated, at the time of investment, within the four highest
grades (Baa or BBB or better by Moody's, S&P or Fitch) or
unrated but judged to be of comparable quality by the
Adviser.
(1) All percentages shown in the Portfolio of Investments are
based on net assets applicable to Common shares.
* Optional Call Provisions (not covered by the report of
independent auditors): Dates (month and year) and prices of
the earliest optional call or redemption. There may be other
call provisions at varying prices at later dates.
** Ratings (not covered by the report of independent auditors):
Using the higher of Standard & Poor's or Moody's rating.
N/R Investment is not rated.
(WI) Security purchased on a when-issued basis.
+ Security has a maturity of more than one year, but has
variable rate and demand features which qualify it as a
short-term security. The rate disclosed is that currently in
effect. This rate changes periodically based on market
conditions or a specified market index.
See accompanying notes to financial statements.
41
Nuveen Insured California Tax-Free Advantage Municipal Fund (NKX)
Portfolio of
INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
CONSUMER STAPLES - 2.4%
$ 2,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 A- $ 1,910,660
Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2003A-2, 7.900%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
HEALTHCARE - 13.1%
2,700 California Health Facilities Financing Authority, Revenue 12/09 at 101.00 A3 2,854,899
Bonds, Cedars-Sinai Medical Center, Series 1999A,
6.250%, 12/01/34
1,500 California Health Facilities Financing Authority, Revenue 11/08 at 101.00 AAA 1,454,670
Bonds, USCF - Stanford Health Care, 1998 Series A,
5.000%, 11/15/31 - FSA Insured
California Health Facilities Financing Authority, Revenue
Bonds, Adventist Health System/West, Series 2003A:
1,235 5.000%, 3/01/25 3/13 at 100.00 A 1,139,102
1,500 5.000%, 3/01/28 3/13 at 100.00 A 1,366,860
1,800 California Infrastructure and Economic Development Bank, 8/11 at 102.00 A 1,782,504
Revenue Bonds, Kaiser Hospital Assistance I-LLC,
Series 2001A, 5.550%, 8/01/31
2,000 California Statewide Community Development Authority, 6/13 at 100.00 AAA 2,026,500
Hospital Revenue Bonds, Monterey Peninsula Hospital,
Series 2003B, 5.250%, 6/01/23 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
LONG-TERM CARE - 3.6%
1,000 ABAG Finance Authority for Nonprofit Corporations, 11/12 at 100.00 BBB 993,550
California, Insured Senior Living Revenue Bonds, Odd Fellows
Home of California, Series 2003A, 5.200%, 11/15/22
2,000 California Health Facilities Financing Authority, Revenue 1/13 at 100.00 BBB 1,957,380
Bonds, Northern California Retired Officers Community
Corporation - Paradise Valley Estates, Series 2002,
5.250%, 1/01/26
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/GENERAL - 42.5%
1,000 Berryessa Union School District, Santa Clara County, 8/12 at 100.00 AAA 1,011,080
California, General Obligation Bonds, Series 2003C,
5.000%, 8/01/21 - FSA Insured
2,000 Butte-Glenn Community College District, Butte and Glenn 8/12 at 101.00 Aaa 1,982,400
Counties, California, General Obligation Bonds, Series 2002A,
5.000%, 8/01/26 - MBIA Insured
2,250 State of California, General Obligation Bonds, 2/13 at 100.00 A3 2,192,333
Series 2003, 5.250%, 2/01/33
State of California, General Obligation Refunding Bonds,
Series 2002:
1,500 5.000%, 2/01/12 No Opt. Call A3 1,569,600
3,750 5.000%, 4/01/27 - AMBAC Insured 4/12 at 100.00 AAA 3,690,113
3,000 5.250%, 4/01/30 - XLCA Insured 4/12 at 100.00 AAA 3,013,230
450 Fremont Unified School District, Alameda County, California, 8/12 at 101.00 AAA 446,724
General Obligation Bonds, Series 2002A, 5.000%, 8/01/25 -
FSA Insured
2,000 City of Los Angeles, California, General Obligation Bonds, 9/12 at 100.00 AAA 2,010,800
Series 2002A, 5.000%, 9/01/22 - MBIA Insured
10,750 Los Angeles Unified School District, Los Angeles County, 7/13 at 100.00 AAA 10,811,597
California, General Obligation Bonds, Series 2003A,
5.000%, 7/01/22 - FSA Insured
3,000 San Diego Unified School District, California, General 7/10 at 100.00 AAA 3,034,290
Obligation Bonds, Election of 1998, Series 2000B,
5.125%, 7/01/22 - MBIA Insured
3,855 San Rafael City High School District, Marin County, California, 8/12 at 100.00 AAA 3,808,856
General Obligation Bonds, Series 2003A, 5.000%, 8/01/28 -
FSA Insured
905 San Rafael Elementary School District, Marin County, 8/12 at 100.00 AAA 894,167
California, General Obligation Bonds, Series 2003C,
5.000%, 8/01/28 - MBIA Insured
42
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
TAX OBLIGATION/LIMITED - 56.3%
$ 2,025 Burbank Public Financing Authority, California, Revenue 12/13 at 100.00 AAA $ 2,087,208
Refunding Bonds, Golden State Redevelopment Project,
Series 2003A, 5.250%, 12/01/22 - AMBAC Insured
4,000 California State Public Works Board, Lease Revenue Bonds, 12/12 at 100.00 AAA 3,953,720
Department of General Services, Capital East End,
Series 2002A, 5.000%, 12/01/27 - AMBAC Insured
600 Irvine Assessment District, California, Limited Obligation 3/04 at 103.00 N/R 579,228
Improvement Bonds, Assessment District 00-18, Group 3,
Series 2003, 5.550%, 9/02/26
5,540 Irvine Public Facilities and Infrastructure Authority, 9/03 at 103.00 AAA 5,568,143
California, Assessment Revenue Bonds, Series 2003C,
5.000%, 9/02/21 - AMBAC Insured
9,840 City of Los Angeles, California, Certificates of Participation, 6/13 at 100.00 AAA 9,593,803
Municipal Improvement Corporation, Series 2003AW,
5.000%, 6/01/33 - AMBAC Insured
1,770 Los Angeles Unified School District, Los Angeles County, 10/12 at 100.00 AAA 1,743,114
California, Certificates of Participation, Series 2002C,
Administration Building Project II, 5.000%, 10/01/27 -
AMBAC Insured
1,500 Los Osos Community Services Wastewater Assessment 9/10 at 103.00 AAA 1,475,940
District No. 1, California, Improvement Bonds, Series 2002,
5.000%, 9/02/33 - MBIA Insured
1,165 Poway, California, Housing Revenue Bonds, Poinsettia 5/13 at 102.00 BBB+ 1,118,412
Mobile Home Park Project, Series 2003, 5.000%, 5/01/23
3,350 Puerto Rico Municipal Finance Agency, General Obligation 8/12 at 100.00 AAA 3,514,016
Bonds, 2002 Series A, 5.250%, 8/01/20 - FSA Insured
San Buenaventura, California, Certificates of Participation,
Golf Course Financing Project, Series 2002D:
3,000 5.000%, 2/01/27 - AMBAC Insured 2/12 at 100.00 AAA 2,960,340
3,300 5.000%, 2/01/32 - AMBAC Insured 2/12 at 100.00 AAA 3,233,637
2,405 San Diego Redevelopment Agency, California, Subordinate 9/11 at 101.00 Aaa 2,376,236
Lien Tax Allocation Bonds, Centre City Project,
Series 2003A, 5.000%, 9/01/28 - MBIA Insured
1,200 San Diego Redevelopment Agency, California, Subordinate 9/09 at 101.00 Baa2 1,158,828
Tax Increment and Parking Revenue Bonds, Centre City
Project, Series 2003B, 5.250%, 9/01/26
1,220 San Jose Redevelopment Agency, California, Tax Allocation 8/10 at 101.00 AAA 1,195,271
Bonds, Merged Area Redevelopment Project, Series 2002,
5.000%, 8/01/32 - MBIA Insured
2,770 City of San Jose Financing Authority, California, Lease Revenue 6/12 at 100.00 AAA 2,726,179
Bonds, Civic Center Project, Series 2002B Refunding,
5.000%, 6/01/32 - AMBAC Insured
2,390 Solano County, California, Certificates of Participation, 11/12 at 100.00 AAA 2,434,239
Series 2002, 5.250%, 11/01/24 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
TRANSPORTATION - 21.9%
5,480 Bay Area Government Association, California, BART SFO 8/12 at 100.00 AAA 5,409,856
Extension Airport Premium Fare Revenue Bonds,
Series 2002A, 5.000%, 8/01/26 - AMBAC Insured
2,000 Foothill-Eastern Transportation Corridor Agency, California, 1/10 at 100.00 BBB- 1,779,160
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35
3,135 San Francisco City and County Airports Commission, 5/08 at 101.00 AAA 3,124,780
California, Revenue Bonds, San Francisco International
Airport, Second Series, Issue 16B, 5.000%, 5/01/24 -
FSA Insured
1,300 San Francisco City and County Airports Commission, 5/10 at 101.00 AAA 1,278,784
California, Revenue Bonds, San Francisco International
Airport, Second Series, Issue 26B, 5.000%, 5/01/25 -
FGIC Insured
6,000 San Francisco City and County Airports Commission, 5/13 at 100.00 AAA 6,212,520
California, Revenue Bonds, San Francisco International
Airport, Second Series, Issue 29B, 5.125%, 5/01/19 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
UTILITIES - 3.9%
3,055 Los Angeles Department of Water and Power, California, 7/11 at 100.00 AAA 3,132,505
Power System Revenue Bonds, Series 2001A-1,
5.250%, 7/01/22 - FSA Insured
43
Nuveen Insured California Tax-Free Advantage Municipal Fund (NKX) (continued)
Portfolio of INVESTMENTS August 31, 2003
PRINCIPAL OPTIONAL CALL MARKET
AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE
------------------------------------------------------------------------------------------------------------------------------------
WATER AND SEWER - 8.6%
$ 1,495 Southern California Metropolitan Water District, Water 1/08 at 101.00 AAA $ 1,465,668
Revenue Bonds, Series 1997A, 5.000%, 7/01/30 -
MBIA Insured
San Diego Public Facilities Financing Authority, California,
Subordinate Lien Water Revenue Bonds, Series 2002:
3,000 5.000%, 8/01/22 - MBIA Insured 8/12 at 100.00 AAA 3,015,960
2,500 5.000%, 8/01/23 - MBIA Insured 8/12 at 100.00 AAA 2,504,349
------------------------------------------------------------------------------------------------------------------------------------
$ 124,235 Total Long-Term Investments (cost $125,138,384) - 152.3% 123,593,211
=============-----------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 3.2% 2,547,365
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (55.5)% (45,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $81,140,576
====================================================================================================================
At least 80% of the Fund's net assets (including net
assets applicable to Preferred shares) are invested
in municipal securities that are either covered by
Original Issue Insurance, Secondary Market Insurance
or Portfolio Insurance which ensures the timely
payment of principal and interest. Up to 20% of the
Fund's net assets (including net assets applicable
to Preferred shares) may be invested in municipal
securities that are (i) either backed by an escrow
or trust containing sufficient U.S. Government or
U.S. Government agency securities (also ensuring the
timely payment of principal and interest), or (ii)
municipal bonds that are rated, at the time of
investment, within the four highest grades (Baa or
BBB or better by Moody's, S&P or Fitch) or unrated
but judged to be of comparable quality by the
Adviser.
(1) All percentages shown in the Portfolio of
Investments are based on net assets applicable to
Common shares.
* Optional Call Provisions (not covered by the report
of independent auditors): Dates (month and year) and
prices of the earliest optional call or redemption.
There may be other call provisions at varying prices
at later dates.
** Ratings (not covered by the report of independent
auditors): Using the higher of Standard & Poor's or
Moody's rating.
N/R Investment is not rated.
See accompanying notes to financial statements.
44
Statement of
ASSETS AND LIABILITIES August 31, 2003
INSURED INSURED CALIFORNIA CALIFORNIA
CALIFORNIA CALIFORNIA PREMIUM DIVIDEND
PREMIUM INCOME PREMIUM INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $143,352,848,
$267,897,010, $120,449,908 and
$509,460,322, respectively) $152,791,340 $283,737,849 $121,271,882 $521,457,420
Cash 349,460 390,793 670,954 286,274
Receivables:
Interest 2,121,224 4,082,793 1,628,541 7,277,848
Investments sold -- 13,083,700 10,300 2,433,150
Other assets 10,598 30,864 3,457 37,590
------------------------------------------------------------------------------------------------------------------------------------
Total assets 155,272,622 301,325,999 123,585,134 531,492,282
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 9,684,494 20,891,454 1,574,025 9,236,901
Accrued expenses:
Management fees 79,806 152,258 67,129 147,339
Other 79,179 93,354 79,405 177,122
Preferred share dividends payable 2,160 8,273 5,293 12,421
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 9,845,639 21,145,339 1,725,852 9,573,783
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 45,000,000 95,000,000 43,000,000 175,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $100,426,983 $185,180,660 $ 78,859,282 $346,918,499
====================================================================================================================================
Common shares outstanding 6,441,830 12,681,101 5,774,216 23,412,013
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common
shares, divided by Common shares outstanding) $ 15.59 $ 14.60 $ 13.66 $ 14.82
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 64,418 $ 126,811 $ 57,742 $ 234,120
Paid-in surplus 89,139,083 175,681,008 80,188,301 332,500,600
Undistributed (Over-distribution of) net
investment income 1,458,167 2,165,243 930,997 4,145,773
Accumulated net realized gain (loss) from investments 326,823 (8,633,241) (3,139,732) (1,959,092)
Net unrealized appreciation (depreciation)
of investments 9,438,492 15,840,839 821,974 11,997,098
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $100,426,983 $185,180,660 $ 78,859,282 $346,918,499
====================================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 Unlimited Unlimited
Preferred 1,000,000 1,000,000 Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
45
Statement of
ASSETS AND LIABILITIES August 31, 2003 (continued)
CALIFORNIA CALIFORNIA INSURED INSURED
DIVIDEND DIVIDEND CALIFORNIA CALIFORNIA
ADVANTAGE 2 ADVANTAGE 3 DIVIDEND TAX-FREE
(NVX) (NZH) ADVANTAGE (NKL) ADVANTAGE (NKX)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at market value (cost $311,202,914,
$523,832,394, $327,876,796 and
$125,138,384, respectively) $311,140,260 $514,723,236 $331,752,594 $123,593,211
Cash 627,484 5,338,943 12,384,632 948,481
Receivables:
Interest 4,371,552 7,591,997 3,661,112 1,668,045
Investments sold 7,353,735 -- -- --
Other assets 22,333 7,737 19,702 5,977
------------------------------------------------------------------------------------------------------------------------------------
Total assets 323,515,364 527,661,913 347,818,040 126,215,714
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Payable for investments purchased 3,629,077 9,568,446 6,897,184 --
Accrued expenses:
Management fees 96,612 150,053 102,182 36,227
Other 55,266 102,540 56,289 31,319
Preferred share dividends payable 12,052 11,541 11,877 7,592
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 3,793,007 9,832,580 7,067,532 75,138
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 110,000,000 187,000,000 118,000,000 45,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $209,722,357 $330,829,333 $222,750,508 $ 81,140,576
====================================================================================================================================
Common shares outstanding 14,790,660 24,112,833 15,259,759 5,882,285
====================================================================================================================================
Net asset value per Common share outstanding
(net assets applicable to Common
shares, divided by Common
shares outstanding) $ 14.18 $ 13.72 $ 14.60 $ 13.79
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 147,907 $ 241,128 $ 152,598 $ 58,823
Paid-in surplus 210,031,314 342,482,133 216,626,387 82,985,669
Undistributed (Over-distribution of) net
investment income 1,819,993 1,609,827 236,194 (37,648)
Accumulated net realized gain (loss) from investments (2,214,203) (4,394,597) 1,859,531 (321,095)
Net unrealized appreciation (depreciation)
of investments (62,654) (9,109,158) 3,875,798 (1,545,173)
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $209,722,357 $330,829,333 $222,750,508 $ 81,140,576
====================================================================================================================================
Authorized shares:
Common Unlimited Unlimited Unlimited Unlimited
Preferred Unlimited Unlimited Unlimited Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
46
Statement of
OPERATIONS Year Ended August 31, 2003
INSURED INSURED CALIFORNIA CALIFORNIA
CALIFORNIA CALIFORNIA PREMIUM DIVIDEND
PREMIUM INCOME PREMIUM INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 7,615,602 $14,813,026 $ 6,587,172 $27,255,530
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 967,370 1,838,182 817,185 3,382,954
Preferred shares - auction fees 112,687 237,896 107,679 438,227
Preferred shares - dividend disbursing agent fees 10,000 20,000 10,000 20,000
Shareholders' servicing agent fees and expenses 15,250 23,511 10,949 10,671
Custodian's fees and expenses 40,483 68,721 34,001 125,012
Directors'/Trustees' fees and expenses 1,958 3,320 1,699 6,922
Professional fees 12,842 16,810 11,185 21,925
Shareholders' reports - printing and mailing expenses 12,917 23,910 12,226 34,629
Stock exchange listing fees 11,434 16,035 1,288 16,001
Investor relations expense 9,987 19,389 8,873 36,868
Portfolio insurance expense 11,139 4,553 -- --
Other expenses 14,739 20,081 14,858 26,086
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 1,220,806 2,292,408 1,029,943 4,119,295
Custodian fee credit (10,033) (8,295) (6,506) (10,038)
Expense reimbursement -- -- -- (1,603,385)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,210,773 2,284,113 1,023,437 2,505,872
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 6,404,829 12,528,913 5,563,735 24,749,658
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investments 524,720 (166,188) 982,095 1,584,946
Change in net unrealized appreciation
(depreciation) of investments (3,552,084) (6,281,308) (5,507,976) (12,671,586)
------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (3,027,364) (6,447,496) (4,525,881) (11,086,640)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (382,478) (863,570) (383,629) (1,616,891)
From accumulated net realized gains from investments (42,365) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (424,843) (863,570) (383,629) (1,616,891)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from operations $ 2,952,622 $ 5,217,847 $ 654,225 $12,046,127
====================================================================================================================================
See accompanying notes to financial statements.
47
Statement of
OPERATIONS Year Ended August 31, 2003 (continued) )
CALIFORNIA CALIFORNIA INSURED INSURED
DIVIDEND DIVIDEND CALIFORNIA CALIFORNIA
ADVANTAGE 2 ADVANTAGE 3 DIVIDEND TAX-FREE
(NVX) (NZH) ADVANTAGE (NKL) ADVANTAGE (NKX)*
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $16,405,530 $ 26,085,990 $16,791,646 $ 4,187,323
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 2,104,950 3,378,318 2,245,906 602,915
Preferred shares - auction fees 258,982 454,477 293,151 70,039
Preferred shares - dividend disbursing agent fees 20,000 20,000 20,000 6,219
Shareholders' servicing agent fees and expenses 5,089 6,796 3,873 3,053
Custodian's fees and expenses 105,464 142,483 103,375 24,305
Directors'/Trustees' fees and expenses 4,524 6,886 4,920 1,465
Professional fees 15,996 24,378 19,828 13,636
Shareholders' reports - printing and mailing expenses 23,555 43,123 26,196 15,308
Stock exchange listing fees 1,605 2,656 929 675
Investor relations expense 32,450 47,308 36,161 6,871
Portfolio insurance expense -- -- -- --
Other expenses 19,942 23,544 13,430 3,096
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense reimbursement 2,592,557 4,149,969 2,767,769 747,582
Custodian fee credit (9,293) (22,782) (31,947) (12,179)
Expense reimbursement (983,334) (1,597,406) (1,051,075) (297,025)
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 1,599,930 2,529,781 1,684,747 438,378
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 14,805,600 23,556,209 15,106,899 3,748,945
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS
Net realized gain (loss) from investments (1,481,214) 2,071,600 2,233,096 (319,256)
Change in net unrealized appreciation
(depreciation) of investments (7,762,388) (17,764,997) (9,779,462) (1,545,173)
------------------------------------------------------------------------------------------------------------------------------------
Net gain (loss) from investments (9,243,602) (15,693,397) (7,546,366) (1,864,429)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (1,015,700) (1,834,161) (1,085,060) (233,784)
From accumulated net realized gains from investments (49,489) -- (87,519) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (1,065,189) (1,834,161) (1,172,579) (233,784)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable to Common shares
from operations $ 4,496,809 $ 6,028,651 $ 6,387,954 $ 1,650,732
====================================================================================================================================
* For the period November 22, 2002 (commencement of operations) through
August 31, 2003.
See accompanying notes to financial statements.
48
Statement of
CHANGES IN NET ASSETS
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA PREMIUM)
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) INCOME (NCU)
---------------------------- ------------------------------ ---------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/03 8/31/02 8/31/03 8/31/02 8/31/03 8/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 6,404,829 $ 6,729,063 $ 12,528,913 $ 12,715,990 $ 5,563,735 $ 5,735,508
Net realized gain (loss)
from investments 524,720 2,870,032 (166,188) 92,173 982,095 709,477
Change in net unrealized
appreciation (depreciation)
of investments (3,552,084) (2,620,683) (6,281,308) (194,559) (5,507,976) 10,347
Distributions to Preferred Shareholders:
From net investment income (382,478) (578,229) (863,570) (1,211,432) (383,629) (583,093)
From accumulated net realized
gains from investments (42,365) -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from operations 2,952,622 6,400,183 5,217,847 11,402,172 654,225 5,872,239
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (6,218,425) (5,538,554) (11,323,762) (10,503,880) (5,043,780) (4,728,811)
From accumulated net realized
gains from investments (490,993) -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (6,709,418) (5,538,554) (11,323,762) (10,503,880) (5,043,780) (4,728,811)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- -- -- -- --
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions 47,136 207,189 416,645 338,627 -- 38,176
Preferred shares offering costs -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from capital
share transactions 47,136 207,189 416,645 338,627 -- 38,176
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (3,709,660) 1,068,818 (5,689,270) 1,236,919 (4,389,555) 1,181,604
Net assets applicable to
Common shares at the
beginning of period 104,136,643 103,067,825 190,869,930 189,633,011 83,248,837 82,067,233
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $100,426,983 $104,136,643 $185,180,660 $190,869,930 $78,859,282 $83,248,837
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at
the end of period $ 1,458,167 $ 1,830,679 $ 2,165,243 $ 1,761,555 $ 930,997 $ 830,638
====================================================================================================================================
See accompanying notes to financial statements.
49
Statement of
CHANGES IN NET ASSETS (continued)
CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND ADVANTAGE (NAC) DIVIDEND ADVANTAGE 2 (NVX) DIVIDEND ADVANTAGE 3 (NZH)
----------------------------- ------------------------------- -----------------------------
FOR THE
PERIOD 9/25/01
(COMMENCEMENT
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED OF OPERATIONS
8/31/03 8/31/02 8/31/03 8/31/02 8/31/03 THROUGH 8/31/02
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 24,749,658 $ 24,981,916 $ 14,805,600 $ 15,663,509 $ 23,556,209 $ 20,039,962
Net realized gain (loss)
from investments 1,584,946 3,991,908 (1,481,214) 351,147 2,071,600 (6,468,859)
Change in net unrealized
appreciation (depreciation)
of investments (12,671,586) (3,853,349) (7,762,388) (6,268,122) (17,764,997) 8,660,828
Distributions to Preferred Shareholders:
From net investment income (1,616,891) (2,424,510) (1,015,700) (1,578,722) (1,834,161) (1,962,036)
From accumulated net realized
gains from investments -- -- (49,489) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets
applicable to Common shares
from operations 12,046,127 22,695,965 4,496,809 8,167,812 6,028,651 20,269,895
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (21,948,762) (20,156,545) (13,178,729) (12,867,313) (20,833,487) (17,358,987)
From accumulated net realized gains
from investments -- -- (430,161) -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions to
Common shareholders (21,948,762) (20,156,545) (13,608,890) (12,867,313) (20,833,487) (17,358,987)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares -- -- (1,664) -- 171,736 344,509,500
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions -- 84,644 -- 73,486 -- 79,128
Preferred shares offering costs -- -- 21,719 -- (7,528) (2,129,850)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from capital
share transactions -- 84,644 20,055 73,486 164,208 342,458,778
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (9,902,635) 2,624,064 (9,092,026) (4,626,015) (14,640,628) 345,369,686
Net assets applicable to
Common shares at the
beginning of period 356,821,134 354,197,070 218,814,383 223,440,398 345,469,961 100,275
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $346,918,499 $356,821,134 $209,722,357 $218,814,383 $330,829,333 $345,469,961
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at
the end of period $ 4,145,773 $ 2,840,186 $ 1,819,993 $ 1,221,035 $ 1,609,827 $ 718,939
====================================================================================================================================
See accompanying notes to financial statements.
50
INSURED
CALIFORNIA
TAX-FREE
INSURED CALIFORNIA ADVANTAGE
DIVIDEND ADVANTAGE (NKL) (NKX)
----------------------------- ---------------
FOR THE FOR THE
PERIOD 3/27/02 PERIOD 11/22/02
(COMMENCEMENT (COMMENCEMENT
YEAR ENDED OF OPERATIONS) OF OPERATIONS)
8/31/03 THROUGH 8/31/02 THROUGH 8/31/03
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 15,106,899 $ 5,170,454 $ 3,748,945
Net realized gain (loss) from investments 2,233,096 486,634 (319,256)
Change in net unrealized appreciation
(depreciation) of investments (9,779,462) 13,672,712 (1,545,173)
Distributions to Preferred Shareholders:
From net investment income (1,085,060) (406,088) (233,784)
From accumulated net realized
gains from investments (87,519) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from operations 6,387,954 18,923,712 1,650,732
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (13,916,900) (4,638,508) (3,552,809)
From accumulated net realized gains
from investments (784,735) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions to
Common shareholders (14,701,635) (4,638,508) (3,552,809)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from sale of shares 9,614 217,998,750 83,983,125
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions -- 41,170 4,206
Preferred shares offering costs (7,636) (1,363,188) (1,044,953)
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from capital
share transactions 1,978 216,676,732 82,942,378
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (8,311,703) 230,961,936 81,040,301
Net assets applicable to Common shares
at the beginning of period 231,062,211 100,275 100,275
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common
shares at the end of period $222,750,508 $231,062,211 $81,140,576
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income at
the end of period $ 236,194 $ 125,858 $ (37,648)
====================================================================================================================================
See accompanying notes to financial statements.
51
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The California Funds (the "Funds") covered in this report and their
corresponding Common share stock exchange symbols are Nuveen Insured California
Premium Income Municipal Fund, Inc. (NPC), Nuveen Insured California Premium
Income Municipal Fund 2, Inc. (NCL), Nuveen California Premium Income Municipal
Fund (NCU), Nuveen California Dividend Advantage Municipal Fund (NAC), Nuveen
California Dividend Advantage Municipal Fund 2 (NVX), Nuveen California Dividend
Advantage Municipal Fund 3 (NZH), Nuveen Insured California Dividend Advantage
Municipal Fund (NKL) and Nuveen Insured California Tax-Free Advantage Municipal
Fund (NKX). Common shares of Insured California Premium Income (NPC), Insured
California Premium Income 2 (NCL) and California Dividend Advantage (NAC) are
traded on the New York Stock Exchange while Common shares of California Premium
Income (NCU), California Dividend Advantage 2 (NVX), California Dividend
Advantage 3 (NZH), Insured California Dividend Advantage (NKL) and Insured
California Tax-Free Advantage (NKX) are traded on the American Stock Exchange.
The Funds are registered under the Investment Company Act of 1940, as amended,
as closed-end management investment companies.
Prior to the commencement of operations of California Dividend Advantage 3
(NZH), Insured California Dividend Advantage (NKL) and Insured California
Tax-Free Advantage (NKX), each Fund had no operations other than those related
to organizational matters, the initial capital contribution of $100,275 per Fund
by Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen
Investments, Inc. (formerly, The John Nuveen Company), and the recording of the
organization expenses ($11,500 per Fund) and their reimbursement by Nuveen
Investments, LLC (formerly, Nuveen Investments), also a wholly owned subsidiary
of Nuveen Investments, Inc.
Each Fund seeks to provide current income exempt from both regular federal and
California state income taxes, and in the case of Insured California Tax-Free
Advantage (NKX) the alternative minimum tax applicable to individuals, by
investing primarily in a diversified portfolio of municipal obligations issued
by state and local government authorities within the state of California.
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, evaluations
of anticipated cash flows or collateral and general market conditions. If it is
determined that market prices for a security are unavailable or inappropriate,
the Board of Directors/Trustees of the Funds, or its designee, may establish a
fair value for the security. Temporary investments in securities that have
variable rate and demand features qualifying them as short-term securities are
valued at amortized cost, which approximates market value.
Securities Transactions
Securities transactions are recorded on a trade date basis. Realized gains and
losses from such transactions are determined on the specific identification
method. Securities purchased or sold on a when-issued or delayed delivery basis
may have extended settlement periods. The securities so purchased are subject to
market fluctuation during this period. The Funds have instructed the custodian
to segregate assets with a current value at least equal to the amount of the
when-issued and delayed delivery purchase commitments. At August 31, 2003,
Insured California Premium Income (NPC), Insured California Premium Income 2
(NCL), California Premium Income (NCU), California Dividend Advantage (NAC),
California Dividend Advantage 2 (NVX), California Dividend Advantage 3 (NZH) and
Insured California Dividend Advantage (NKL) had outstanding when-issued and
delayed delivery purchase commitments of $9,684,494, $20,891,454, $1,574,025,
$9,236,901, $3,629,077, $9,568,446, and $6,897,184, respectively. There were no
such outstanding purchase commitments in Insured California Tax-Free Advantage
(NKX).
Investment Income
Interest income, which includes the amortization of premiums and accretion of
discounts for financial reporting purposes, is recorded on an accrual basis.
52
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, and in the case of Insured California Tax-Free
Advantage (NKX) the alternative minimum tax applicable to individuals, to retain
such tax-exempt status when distributed to shareholders of the Funds. All
monthly tax-exempt income dividends paid during the fiscal year ended August 31,
2003, have been designated Exempt Interest Dividends.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States.
Preferred Shares
The Funds have issued and outstanding $25,000 stated value Preferred shares.
Each Fund's Preferred shares are issued in one or more Series. The dividend rate
on each Series may change every seven days, as set pursuant to a dutch auction
process by the auction agent, and is payable at or near the end of each rate
period. The number of Preferred shares outstanding, by series and in total, for
each Fund is as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M -- -- 1,720 --
Series T 1,800 1,900 -- --
Series TH -- 1,900 -- 3,500
Series F -- -- -- 3,500
---------------------------------------------------------------------------------------------------------
Total 1,800 3,800 1,720 7,000
=========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
---------------------------------------------------------------------------------------------------------
Number of shares:
Series M 2,200 3,740 -- --
Series T -- -- 2,360 --
Series TH -- 3,740 -- 1,800
Series F 2,200 -- 2,360 --
---------------------------------------------------------------------------------------------------------
Total 4,400 7,480 4,720 1,800
=========================================================================================================
Effective January 17, 2003, Insured California Tax-Free Advantage (NKX) issued
1,800 Series TH, $25,000 stated value Preferred shares.
53
Notes to
FINANCIAL STATEMENTS (continued)
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.
Insured California Dividend Advantage (NKL) and Insured California Tax-Free
Advantage (NKX) invest at least 80% of their net assets (including net assets
applicable to Preferred shares) in municipal securities that are covered by
insurance. Each Fund may also invest up to 20% of its net assets (including net
assets applicable to Preferred shares) in municipal securities which are either
(i) backed by an escrow or trust containing sufficient U.S. Government or U.S.
Government agency securities, or (ii) municipal bonds that are rated, at the
time of investment, within the four highest grades (Baa or BBB or better by
Moody's, S&P or Fitch) or unrated but judged to be of comparable quality by the
Adviser.
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' Common 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 Common share net asset value of the
Funds 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 certain derivative financial instruments including
futures, forward, swap and option contracts, and other financial instruments
with similar characteristics. Although the Funds are authorized to invest in
such financial instruments, and may do so in the future, they did not make any
such investments during the fiscal year ended August 31, 2003.
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian
fees and expenses are reduced by credits earned on each Fund's cash on deposit
with the bank. Such deposit arrangements are an alternative to overnight
investments.
Offering Costs
Nuveen Investments, LLC has agreed to pay all Common share offering costs (other
than the sales load) that exceed $.03 per Common share for California Dividend
Advantage 3 (NZH), Insured California Dividend Advantage (NKL) and Insured
California Tax-Free Advantage (NKX). California Dividend Advantage 3's (NZH),
Insured California Dividend Advantage's (NKL) and Insured California Tax-Free
Advantage's (NKX) share of Common share offering costs ($551,264, $447,886 and
$176,250, respectively) were recorded as a reduction of the proceeds from the
sale of Common shares.
Costs incurred by California Dividend Advantage 3 (NZH), Insured California
Dividend Advantage (NKL) and Insured California Tax-Free Advantage (NKX) in
connection with their offering of Preferred shares ($2,137,378, $1,370,824 and
$1,044,953, respectively) were recorded as a reduction to paid-in surplus.
Use of Estimates
The preparation of financial statements in conformity with accounting principles
generally accepted in the United States requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
54
2. FUND SHARES
Transactions in Common and Preferred shares were as follows:
INSURED CALIFORNIA INSURED CALIFORNIA CALIFORNIA
PREMIUM INCOME (NPC) PREMIUM INCOME 2 (NCL) PREMIUM INCOME (NCU)
---------------------- ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
8/31/03 8/31/02 8/31/03 8/31/02 8/31/03 8/31/02
-----------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- -- -- --
Shares issued to shareholders
due to reinvestment
of distributions 2,919 13,079 27,169 22,774 -- 2,696
-----------------------------------------------------------------------------------------------------------
2,919 13,079 27,169 22,774 -- 2,696
===========================================================================================================
Preferred shares sold -- -- -- -- -- --
===========================================================================================================
CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND CALIFORNIA DIVIDEND
ADVANTAGE (NAC) ADVANTAGE 2 (NVX) ADVANTAGE 3 (NZH)
---------------------- ----------------------- -------------------------
FOR THE
PERIOD 9/25/01
(COMMENCEMENT
OF OPERATIONS)
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED THROUGH
8/31/03 8/31/02 8/31/03 8/31/02 8/31/03 8/31/02
-----------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- -- -- -- -- 24,100,000
Shares issued to shareholders
due to reinvestment
of distributions -- 5,665 -- 3,644 -- 5,833
-----------------------------------------------------------------------------------------------------------
-- 5,665 -- 3,644 -- 24,105,833
===========================================================================================================
Preferred shares sold -- -- -- -- -- 7,480
===========================================================================================================
INSURED INSURED
CALIFORNIA DIVIDEND CALIFORNIA TAX-FREE
ADVANTAGE (NKL) ADVANTAGE (NKX)
--------------------------- ---------------------
FOR THE FOR THE
PERIOD 3/27/02 PERIOD 11/22/02
(COMMENCEMENT (COMMENCEMENT
OF OPERATIONS) OF OPERATIONS
YEAR ENDED THROUGH THROUGH
8/31/03 8/31/02 8/31/03
-----------------------------------------------------------------------------------------------------------
Common shares:
Shares sold -- 15,250,000 5,875,000
Shares issued to shareholders
due to reinvestment
of distributions -- 2,759 285
-----------------------------------------------------------------------------------------------------------
-- 15,252,759 5,875,285
===========================================================================================================
Preferred shares sold -- 4,720 1,800
===========================================================================================================
55
Notes to
FINANCIAL STATEMENTS (continued)
3. SECURITIES TRANSACTIONS
Purchases and sales (including maturities) of investments in long-term municipal
securities during the fiscal year ended August 31, 2003, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------
Purchases $45,146,980 $67,879,363 $31,185,950 $67,750,971
Sales and maturities 37,137,174 61,374,564 29,676,129 60,203,482
============================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)*
------------------------------------------------------------------------------------------------------------
Purchases $133,727,841 $271,458,501 $246,398,251 $176,293,906
Sales and maturities 128,490,031 252,516,190 257,393,182 50,751,631
============================================================================================================
* For the period November 22, 2002 (commencement of operations) through
August 31, 2003.
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to timing differences in recognizing income on taxable market
discount securities and timing differences in recognizing certain gains and
losses on security transactions.
At August 31, 2003, the cost of investments were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------
Cost of investments $143,098,832 $267,710,329 $120,406,029 $509,286,772
============================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------
Cost of investments $311,183,341 $523,827,527 $327,983,022 $125,137,914
============================================================================================================
56
Gross unrealized appreciation and gross unrealized depreciation of investments
at August 31, 2003, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $9,807,588 $16,223,814 $ 3,583,789 $16,567,059
Depreciation (115,080) (196,294) (2,717,936) (4,396,411)
------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments $9,692,508 $16,027,520 $ 865,853 $12,170,648
============================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $ 5,112,566 $ 2,173,027 $ 5,396,639 $ 129,977
Depreciation (5,155,647) (11,277,318) (1,627,067) (1,674,680)
------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments $ (43,081) $ (9,104,291) $ 3,769,572 $(1,544,703)
============================================================================================================
The tax components of undistributed net investment income and net realized gains
at August 31, 2003, were as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income $1,636,577 $2,950,611 $1,313,927 $5,854,730
Undistributed net ordinary income * 59,311 -- -- 2,875
Undistributed net long-term capital gains 326,823 -- -- --
============================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income $2,921,637 $3,350,890 $1,362,657 $408,586
Undistributed net ordinary income * 131 1,734 1,783,045 --
Undistributed net long-term capital gains -- -- 227,868 --
============================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
57
Notes to
FINANCIAL STATEMENTS (continued)
The tax character of distributions paid during the fiscal years ended August 31,
2003 and August 31, 2002, was designated for purposes of the dividends paid
deduction as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
2003 (NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $6,123,025 $12,130,717 $5,376,229 $23,425,975
Distributions from net ordinary income * 459,740 -- 40,993 --
Distributions from net long-term capital gains 533,358 -- -- --
============================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
2003 (NVX) (NZH) (NKL) (NKX)
------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $14,174,057 $22,678,767 $15,008,754 $3,339,890
Distributions from net ordinary income * 540 -- 872,254 --
Distributions from net long-term capital gains 479,390 -- -- --
============================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
2002 (NPC) (NCL) (NCU) (NAC)
------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $6,096,991 $11,644,088 $5,280,680 $22,478,680
Distributions from net ordinary income * -- -- -- --
Distributions from net long-term capital gains -- -- -- --
============================================================================================================
INSURED
CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE
2002 (NVX) (NZH) (NKL)
------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $14,436,589 $17,562,240 $3,866,185
Distributions from net ordinary income * -- -- --
Distributions from net long-term capital gains -- -- --
============================================================================================================
* Net ordinary income consists of taxable market discount income and net
short-term capital gains, if any.
58
At August 31, 2003, the following Funds had unused capital loss carryforwards
available for federal income tax purposes to be applied against future capital
gains, if any. If not applied, the carryforwards will expire as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM DIVIDEND DIVIDEND TAX-FREE
INCOME 2 INCOME ADVANTAGE ADVANTAGE 3 ADVANTAGE
(NCL) (NCU) (NAC) (NZH) (NKX)
---------------------------------------------------------------------------------------------------------
Expiration year:
2004 $4,345,091 $2,089,738 $ -- $ -- $ --
2005 1,283,948 1,049,994 -- -- --
2006 -- -- -- -- --
2007 -- -- -- -- --
2008 -- -- -- -- --
2009 2,185,870 -- 1,959,092 -- --
2010 440,510 -- -- -- --
2011 -- -- -- 4,394,597 321,095
---------------------------------------------------------------------------------------------------------
Total $8,255,419 $3,139,732 $1,959,092 $4,394,597 $321,095
=========================================================================================================
The following Funds have elected to defer net realized losses from investments
incurred from November 1, 2002 through August 31, 2003 ("post-October losses")
in accordance with Federal income tax regulations. The following post-October
losses are treated as having arisen in the following fiscal year:
INSURED
CALIFORNIA CALIFORNIA
PREMIUM DIVIDEND
INCOME 2 ADVANTAGE 2
(NCL) (NVX)
---------------------------------------------------------------------------------------------------------
$377,822 $2,214,203
=========================================================================================================
5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES
Under Insured California Premium Income's (NPC), Insured California Premium
Income 2's (NCL) and California Premium Income's (NCU) investment management
agreements with the Adviser, each Fund pays an annual management fee, payable
monthly, at the rates set forth below, which are based upon the average daily
net assets (including net assets attributable to Preferred shares) of each Fund
as follows:
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS
ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For the next $3 billion .5875
For net assets over $5 billion .5750
================================================================================
Under California Dividend Advantage's (NAC), California Dividend Advantage 2's
(NVX), California Dividend Advantage 3's (NZH), Insured California Dividend
Advantage's (NKL) and Insured California Tax-Free Advantage (NKX) investment
management agreements with the Adviser, each Fund pays an annual management fee,
payable monthly, at the rates set forth below, which are based upon the average
daily net assets (including net assets attributable to Preferred shares) of each
Fund as follows:
AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS
ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE
--------------------------------------------------------------------------------
For the first $125 million .6500%
For the next $125 million .6375
For the next $250 million .6250
For the next $500 million .6125
For the next $1 billion .6000
For net assets over $2 billion .5750
================================================================================
The management fee compensates the Adviser for overall investment advisory and
administrative services and general office facilities. The Funds pay no
compensation directly to those of its Directors/Trustees who are affiliated with
the Adviser or to their officers, all of whom receive remuneration for their
services to the Funds from the Adviser.
59
Notes to
FINANCIAL STATEMENTS (continued)
For the first ten years of California Dividend Advantage's (NAC) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
JULY 31, JULY 31,
--------------------------------------------------------------------------------
1999* .30% 2005 .25%
2000 .30 2006 .20
2001 .30 2007 .15
2002 .30 2008 .10
2003 .30 2009 .05
2004 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse California Dividend Advantage (NAC) for
any portion of its fees and expenses beyond July 31, 2009.
For the first ten years of California Dividend Advantage 2's (NVX) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse California Dividend Advantage 2 (NVX)
for any portion of its fees and expenses beyond March 31, 2011.
60
For the first ten years of California Dividend Advantage 3's (NZH) operations,
the Adviser has agreed to reimburse the Fund, as a percentage of average daily
net assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
SEPTEMBER 30, SEPTEMBER 30,
--------------------------------------------------------------------------------
2001* .30% 2007 .25%
2002 .30 2008 .20
2003 .30 2009 .15
2004 .30 2010 .10
2005 .30 2011 .05
2006 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse California Dividend Advantage 3 (NZH)
for any portion of its fees and expenses beyond September 30, 2011.
For the first ten years of Insured California Dividend Advantage's (NKL)
operations, the Adviser has agreed to reimburse the Fund, as a percentage of
average daily net assets (including net assets attributable to Preferred
shares), for fees and expenses in the amounts, and for the time periods set
forth below:
YEAR ENDING YEAR ENDING
MARCH 31, MARCH 31,
--------------------------------------------------------------------------------
2002* .30% 2008 .25%
2003 .30 2009 .20
2004 .30 2010 .15
2005 .30 2011 .10
2006 .30 2012 .05
2007 .30
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Insured California Dividend Advantage
(NKL) for any portion of its fees and expenses beyond March 31, 2012.
For the first eight years of Insured California Tax-Free Advantage's (NKX)
operations, the Adviser has agreed to reimburse the Fund, as a percentage of
average daily net assets (including net assets attributable to Preferred
shares), for fees and expenses in the amounts, and for the time periods set
forth below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
2002* .32% 2007 .32%
2003 .32 2008 .24
2004 .32 2009 .16
2005 .32 2010 .08
2006 .32
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse Insured California Tax-Free Advantage
(NKX) for any portion of its fees and expenses beyond November 30, 2010.
61
Notes to
FINANCIAL STATEMENTS (continued)
6. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on October 1, 2003, to shareholders of record
on September 15, 2003, as follows:
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
PREMIUM PREMIUM PREMIUM DIVIDEND
INCOME INCOME 2 INCOME ADVANTAGE
(NPC) (NCL) (NCU) (NAC)
----------------------------------------------------------------------------------------------------------
Dividend per share $.0760 $.0760 $.0730 $.0810
==========================================================================================================
INSURED INSURED
CALIFORNIA CALIFORNIA CALIFORNIA CALIFORNIA
DIVIDEND DIVIDEND DIVIDEND TAX-FREE
ADVANTAGE 2 ADVANTAGE 3 ADVANTAGE ADVANTAGE
(NVX) (NZH) (NKL) (NKX)
----------------------------------------------------------------------------------------------------------
Dividend per share $.0760 $.0720 $.0760 $.0755
==========================================================================================================
62
Financial
HIGHLIGHTS
63
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
------------------------------------------------------------------- -----------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 $16.17 $ .99 $ (.45) $(.06) $(.01) $ .47 $(.97) $(.08) $(1.05)
2002 16.04 1.05 .03 (.09) -- .99 (.86) -- (.86)
2001 15.08 1.04 .99 (.21) -- 1.82 (.86) -- (.86)
2000 14.81 1.09 .30 (.24) -- 1.15 (.88) -- (.88)
1999 16.31 1.09 (1.56) (.20) -- (.67) (.83) -- (.83)
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 15.08 .99 (.51) (.07) -- .41 (.89) -- (.89)
2002 15.01 1.02 (.02) (.10) -- .90 (.83) -- (.83)
2001 14.09 1.01 .91 (.22) -- 1.70 (.78) -- (.78)
2000 13.70 1.02 .41 (.24) -- 1.19 (.80) -- (.80)
1999 14.82 1.01 (1.14) (.21) -- (.34) (.78) -- (.78)
CALIFORNIA PREMIUM
INCOME (NCU)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 14.42 .96 (.78) (.07) -- .11 (.87) -- (.87)
2002 14.22 .99 .13 (.10) -- 1.02 (.82) -- (.82)
2001 13.34 1.00 .90 (.23) -- 1.67 (.79) -- (.79)
2000 13.19 1.03 .14 (.23) -- .94 (.79) -- (.79)
1999 14.30 1.00 (1.13) (.21) -- (.34) (.77) -- (.77)
====================================================================================================================================
Total Returns
-----------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
==================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
----------------------------------------------------------------------------------
Year Ended 8/31:
2003 $-- $15.59 $15.0700 1.55% 2.82%
2002 -- 16.17 15.8500 6.73 6.47
2001 -- 16.04 15.6900 14.12 12.43
2000 -- 15.08 14.5625 .84 8.34
1999 -- 14.81 15.3750 1.62 (4.35)
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
----------------------------------------------------------------------------------
Year Ended 8/31:
2003 -- 14.60 14.3200 2.69 2.71
2002 -- 15.08 14.8000 5.57 6.29
2001 -- 15.01 14.8300 11.99 12.45
2000 -- 14.09 14.0000 3.58 9.21
1999 -- 13.70 14.3750 2.27 (2.50)
CALIFORNIA PREMIUM
INCOME (NCU)
----------------------------------------------------------------------------------
Year Ended 8/31:
2003 -- 13.66 13.0200 (.91) .69
2002 -- 14.42 14.0000 4.84 7.48
2001 -- 14.22 14.1700 12.84 12.92
2000 -- 13.34 13.3125 5.93 7.63
1999 -- 13.19 13.3750 .81 (2.57)
==================================================================================
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement**
------------------------------ -------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
=======================================================================================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 $100,427 1.17% 6.13% 1.16% 6.14% 26%
2002 104,137 1.21 6.65 1.19 6.66 30
2001 103,068 1.22 6.77 1.21 6.79 21
2000 96,903 1.25 7.65 1.24 7.66 27
1999 95,091 1.22 6.81 1.22 6.82 50
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 185,181 1.20 6.53 1.19 6.54 22
2002 190,870 1.23 6.83 1.22 6.84 6
2001 189,633 1.24 7.01 1.24 7.02 18
2000 177,977 1.28 7.65 1.26 7.66 26
1999 172,833 1.24 6.86 1.24 6.86 35
CALIFORNIA PREMIUM
INCOME (NCU)
-----------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 78,859 1.24 6.72 1.24 6.72 24
2002 83,249 1.27 7.07 1.26 7.08 10
2001 82,067 1.32 7.36 1.30 7.38 18
2000 76,878 1.38 8.09 1.36 8.10 19
1999 75,877 1.30 7.08 1.30 7.08 36
=======================================================================================================================
Preferred Shares at End of Period
--------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
===============================================================
INSURED CALIFORNIA
PREMIUM INCOME (NPC)
---------------------------------------------------------------
Year Ended 8/31:
2003 $45,000 $25,000 $80,793
2002 45,000 25,000 82,854
2001 45,000 25,000 82,260
2000 45,000 25,000 78,835
1999 45,000 25,000 77,828
INSURED CALIFORNIA
PREMIUM INCOME 2 (NCL)
---------------------------------------------------------------
Year Ended 8/31:
2003 95,000 25,000 73,732
2002 95,000 25,000 75,229
2001 95,000 25,000 74,903
2000 95,000 25,000 71,836
1999 95,000 25,000 70,482
CALIFORNIA PREMIUM
INCOME (NCU)
---------------------------------------------------------------
Year Ended 8/31:
2003 43,000 25,000 70,848
2002 43,000 25,000 73,400
2001 43,000 25,000 72,714
2000 43,000 25,000 69,696
1999 43,000 25,000 69,115
===============================================================
* Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Common Share Net Asset
Value is the combination of reinvested dividend income, reinvested capital
gains distributions, if any, and changes in Common Share net asset value
per share. Total returns are not annualized.
** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
See accompanying notes to financial statements.
64-65 SPREAD
Financial HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
------------------------------------------------------------------- -----------------------------
Distributions Distributions
from Net from Net
Beginning Net Investment Capital Investment Capital
Common Realized/ Income to Gains to Income to Gains to
Share Net Unrealized Preferred Preferred Common Common
Net Asset Investment Investment Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
====================================================================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 $15.24 $1.06 $ (.47) $(.07) $ -- $ .52 $(.94) $ -- $(.94)
2002 15.13 1.07 -- (.10) -- .97 (.86) -- (.86)
2001 13.82 1.07 1.28 (.23) -- 2.12 (.81) -- (.81)
2000 13.33 1.07 .52 (.26) -- 1.33 (.84) -- (.84)
1999(a) 14.33 .20 (.92) (.03) -- (.75) (.14) -- (.14)
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 14.79 1.00 (.62) (.07) -- .31 (.89) (.03) (.92)
2002 15.11 1.06 (.40) (.11) -- .55 (.87) -- (.87)
2001(b) 14.33 .34 .90 (.05) -- 1.19 (.29) -- (.29)
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 14.33 .98 (.66) (.08) -- .24 (.86) -- (.86)
2002(c) 14.33 .83 .09 (.08) -- .84 (.72) -- (.72)
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 15.14 .99 (.49) (.07) (.01) .42 (.91) (.05) (.96)
2002(d) 14.33 .34 .92 (.03) -- 1.23 (.30) -- (.30)
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003(e) 14.33 .64 (.33) (.04) -- .27 (.60) -- (.60)
====================================================================================================================================
Total Returns
-----------------
Based
Offering on
Costs and Ending Common
Preferred Common Based Share
Share Share Ending on Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value** Value**
================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
--------------------------------------------------------------------------------
Year Ended 8/31:
2003 $ -- $14.82 $14.3000 4.79% 3.37%
2002 -- 15.24 14.5500 3.67 6.75
2001 -- 15.13 14.8900 15.06 15.85
2000 -- 13.82 13.7500 (2.18) 10.80
1999(a) (.11) 13.33 15.0000 .96 (5.99)
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
--------------------------------------------------------------------------------
Year Ended 8/31:
2003 -- 14.18 13.2400 (.95) 2.16
2002 -- 14.79 14.2800 (.27) 3.90
2001(b) (.12) 15.11 15.2100 3.40 7.55
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
--------------------------------------------------------------------------------
Year Ended 8/31:
2003 .01 13.72 12.7100 (3.20) 1.68
2002(c) (.12) 14.33 14.0000 (1.68) 5.32
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
--------------------------------------------------------------------------------
Year Ended 8/31:
2003 -- 14.60 14.0000 (.35) 2.70
2002(d) (.12) 15.14 15.0000 2.05 7.84
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
--------------------------------------------------------------------------------
Year Ended 8/31:
2003(e) (.21) 13.79 13.5600 (5.79) .34
================================================================================
Ratios/Supplemental Data
----------------------------------------------------------------------------------------------
Before Credit/Reimbursement After Credit/Reimbursement***
------------------------------ -------------------------------
Ratio of Net Ratio of Net
Ratio of Investment Ratio of Investment
Ending Expenses Income to Expenses Income to
Net to Average Average to Average Average
Assets Net Assets Net Assets Net Assets Net Assets
Applicable Applicable Applicable Applicable Applicable Portfolio
to Common to Common to Common to Common to Common Turnover
Shares (000) Shares++ Shares++ Shares++ Shares++ Rate
====================================================================================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
--------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 $346,918 1.15% 6.44% .70% 6.88% 11%
2002 356,821 1.18 6.76 .72 7.22 33
2001 354,197 1.19 7.03 .72 7.50 17
2000 323,326 1.24 7.93 .75 8.43 25
1999(a) 311,367 .93* 5.06* .55* 5.45* 8
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
--------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 209,722 1.18 6.30 .73 6.75 40
2002 218,814 1.19 6.82 .73 7.28 32
2001(b) 223,440 1.05* 5.23* .62* 5.65* 40
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
--------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 330,829 1.20 6.33 .73 6.79 48
2002(c) 345,470 1.15* 6.01* .69* 6.47* 49
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
--------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003 222,751 1.18 6.00 .72 6.46 71
2002(d) 231,062 1.10* 4.98* .60* 5.47* 12
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
--------------------------------------------------------------------------------------------------------------------
Year Ended 8/31:
2003(e) 81,141 1.14* 5.25* .67* 5.72* 45
====================================================================================================================
Preferred Shares at End of Period
--------------------------------------
Aggregate Liquidation
Amount and Market Asset
Outstanding Value Coverage
(000) Per Share Per Share
==============================================================
CALIFORNIA DIVIDEND
ADVANTAGE (NAC)
--------------------------------------------------------------
Year Ended 8/31:
2003 $175,000 $25,000 $74,560
2002 175,000 25,000 75,974
2001 175,000 25,000 75,600
2000 175,000 25,000 71,189
1999(a) 175,000 25,000 69,481
CALIFORNIA DIVIDEND
ADVANTAGE 2 (NVX)
--------------------------------------------------------------
Year Ended 8/31:
2003 110,000 25,000 72,664
2002 110,000 25,000 74,731
2001(b) 110,000 25,000 75,782
CALIFORNIA DIVIDEND
ADVANTAGE 3 (NZH)
--------------------------------------------------------------
Year Ended 8/31:
2003 187,000 25,000 69,229
2002(c) 187,000 25,000 71,186
INSURED CALIFORNIA
DIVIDEND ADVANTAGE (NKL)
--------------------------------------------------------------
Year Ended 8/31:
2003 118,000 25,000 72,193
2002(d) 118,000 25,000 73,954
INSURED CALIFORNIA
TAX-FREE ADVANTAGE (NKX)
--------------------------------------------------------------
Year Ended 8/31:
2003(e) 45,000 25,000 70,078
==============================================================
* Annualized.
** Total Investment Return on Market Value is the combination of reinvested
dividend income, reinvested capital gains distributions, if any, and
changes in stock price per share. Total Return on Common Share Net Asset
Value is the combination of reinvested dividend income, reinvested capital
gains distributions, if any, and changes in Common Share net asset value
per share. Total returns are not annualized.
*** After custodian fee credit and expense reimbursement, where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) For the period May 26, 1999 (commencement of operations) through August 31,
1999.
(b) For the period March 27, 2001 (commencement of operations) through August
31, 2001.
(c) For the period September 25, 2001 (commencement of operations) through
August 31, 2002.
(d) For the period March 27, 2002 (commencement of operations) through August
31, 2002.
(e) For the period November 22, 2002 (commencement of operations) through
August 31, 2003.
See accompanying notes to financial statements.
66-67 SPREAD
Directors/Trustees
AND OFFICERS
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board of
Directors/ Trustees of the Funds. The number of directors/trustees of the Funds
is currently set at eight. None of the directors/trustees who are not
"interested" persons of the Funds has ever been a director/trustee or employee
of, or consultant to, Nuveen or its affiliates. The names and business addresses
of the directors/trustees and officers of the Funds, their principal occupations
and other affiliations during the past five years, the number of portfolios each
oversees and other directorships they hold are set forth below.
NUMBER OF
PORTFOLIOS
IN FUND
COMPLEX
YEAR FIRST PRINCIPAL OCCUPATION(S) OVERSEEN
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR INCLUDING OTHER DIRECTORSHIPS BY DIRECTOR/
AND ADDRESS WITH THE FUNDS APPOINTED(2) DURING PAST 5 YEARS TRUSTEE
------------------------------------------------------------------------------------------------------------------------------------
DIRECTOR/TRUSTEE WHO IS AN INTERESTED PERSON OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Timothy R. Schwertfeger (1) Chairman of the 1994 Chairman and Director (since 1996) of Nuveen 141
3/28/49 Board and Investments, Inc. and Nuveen Investments, LLC;
333 W. Wacker Drive Director/Trustee Director (since 1992) and Chairman (since 1996) of
Chicago, IL 60606 Nuveen Advisory Corp. and Nuveen Institutional
Advisory Corp.; Chairman and Director (since 1997)
of Nuveen Asset Management, Inc.; Director (since 1996)
of Institutional Capital Corporation; Chairman and
Director (since 1999) of Rittenhouse Asset Management,
Inc.; Chairman of Nuveen Investments Advisers Inc.
(since 2002).
DIRECTORS/TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
William E. Bennett Director/Trustee 2001 Private Investor; previously, President and Chief 141
10/16/46 Executive Officer, Draper & Kramer, Inc., a private
333 W. Wacker Drive company that handles mortgage banking, real estate
Chicago, IL 60606 development, pension advisory and real estate
management (1995-1998). Prior thereto, Executive
Vice President and Chief Credit Officer of
First Chicago Corporation and its principal
subsidiary, The First National Bank of Chicago.
------------------------------------------------------------------------------------------------------------------------------------
Robert P. Bremner Director/Trustee 1997 Private Investor and Management Consultant. 135
8/22/40
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Lawrence H. Brown Director/Trustee 1993 Retired (since 1989) as Senior Vice President of The 135
7/29/34 Northern Trust Company; Director of the United Way of
333 W. Wacker Drive Highland Park-Highwood (since 2002).
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Anne E. Impellizzeri Director/Trustee 1994 Retired, formerly, Executive Director (since 1998) 135
1/26/33 of Manitoga/The Russel Wright Design Center; prior
333 W. Wacker Drive thereto, President and Chief Executive Officer of
Chicago, IL 60606 Blanton-Peale Institute (since 1990); prior thereto,
Vice President, Metropolitan Life Insurance Co.
------------------------------------------------------------------------------------------------------------------------------------
Peter R. Sawers Director/Trustee 1991 Adjunct Professor of Business and Economics, 135
4/3/33 University of Dubuque, Iowa; formerly (1991-2000)
333 W. Wacker Drive Adjunct Professor, Lake Forest Graduate School of
Chicago, IL 60606 Management, Lake Forest, Illinois; prior thereto,
Executive Director, Towers Perrin Australia, a
management consulting firm; Chartered Financial
Analyst; Certified Management Consultant;
Director, Executive Service Corps of Chicago,
a not-for-profit organization.
------------------------------------------------------------------------------------------------------------------------------------
William J. Schneider Director/Trustee 1997 Senior Partner and Chief Operating Officer, 135
9/24/44 Miller-Valentine Group, Vice President,
333 W. Wacker Drive Miller-Valentine Realty, a construction company;
Chicago, IL 60606 Chair, MiamiValley Hospital; Chair, Dayton Development
Coalition; formerly, Member, Community Advisory Board,
National City Bank, Dayton, Ohio and Business Advisory
Council, Cleveland Federal Reserve Bank.
------------------------------------------------------------------------------------------------------------------------------------
Judith M. Stockdale Director/Trustee 1997 Executive Director, Gaylord and Dorothy Donnelley 135
12/29/47 Foundation (since 1994); prior thereto, Executive
333 W. Wacker Drive Director, Great Lakes Protection Fund (from 1990
Chicago, IL 60606 to 1994).
68
NUMBER OF
PORTFOLIOS
IN FUND
YEAR FIRST COMPLEX
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN
AND ADDRESS WITH THE FUNDS APPOINTED (3) DURING PAST 5 YEARS BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS:
------------------------------------------------------------------------------------------------------------------------------------
Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary 141
9/9/56 Administrative and Associate General Counsel, formerly, Vice President
333 W. Wacker Drive Officer and Assistant General Counsel of Nuveen Investments,
Chicago, IL 60606 LLC; Managing Director (since 2002), General Counsel
and Assistant Secretary, formerly, Vice President of
Nuveen Advisory Corp. and Nuveen Institutional Advisory
Corp.; Managing Director (since 2002), Assistant
Secretary and Associate General Counsel, formerly, Vice
President (since 2000), of Nuveen Asset Management, Inc.;
Assistant Secretary of Nuveen Investments, Inc. (since
1994); Assistant Secretary of NWQ Investment Management
Company, LLC (since 2002); Vice President and
Assistant Secretary of Nuveen Investments Advisers Inc.
(since 2002); Managing Director, Associate General
Counsel and Assistant Secretary of Rittenhouse Asset
Management, Inc. (since May 2003); Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant 141
2/3/66 and Assistant Vice President (since 2000), previously, Associate of
333 W. Wacker Drive Secretary Nuveen Investments, LLC.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Paul L. Brennan Vice President 1999 Vice President (since 2002), formerly, Assistant 127
11/10/66 Vice President (since 1997), of Nuveen Advisory Corp.;
333 W. Wacker Drive prior thereto, portfolio manager of Flagship Financial
Chicago, IL 60606 Inc.; Chartered Financial Analyst and Certified
Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 141
11/28/67 and Treasurer 1999), prior thereto, Assistant Vice President (since
333 W. Wacker Drive 1997); Vice President and Treasurer of Nuveen
Chicago, IL 60606 Investments, Inc. (since 1999); Vice President and
Treasurer of Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp. (since 1999); Vice
President and Treasurer of Nuveen Asset Management,
Inc. (since 2002) and of Nuveen Investments Advisers
Inc. (since 2002); Assistant Treasurer of NWQ Investment
Management Company, LLC (since 2002); Chartered
Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Susan M. DeSanto Vice President 2001 Vice President of Nuveen Advisory Corp. (since 2001); 141
9/8/54 previously, Vice President of Van Kampen Investment
333 W. Wacker Drive Advisory Corp. (since 1998); Vice President of Nuveen
Chicago, IL 60606 Institutional Advisory Corp. (since 2002); prior
thereto, Assistant Vice President of Van Kampen
Investment Advisory Corp. (since 1994).
------------------------------------------------------------------------------------------------------------------------------------
Jessica R. Droeger Vice President 2000 Vice President (since 2002) and Assistant General 141
9/24/64 and Secretary Counsel (since 1998); formerly, Assistant Vice
333 W. Wacker Drive President (since 1998) of Nuveen Investments, LLC;
Chicago, IL 60606 Vice President (since 2002) and Assistant Secretary
(since 1998), formerly Assistant Vice President of
Nuveen Advisory Corp. and Nuveen Institutional
Advisory Corp.
69
Directors/Trustees
AND OFFICERS (continued)
NUMBER OF
PORTFOLIOS
IN FUND
YEAR FIRST COMPLEX
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN
AND ADDRESS WITH THE FUNDS APPOINTED (3) DURING PAST 5 YEARS BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
------------------------------------------------------------------------------------------------------------------------------------
Lorna C. Ferguson Vice President 1998 Vice President of Nuveen Investments, LLC; Vice 141
10/24/45 President (since 1998) of Nuveen Advisory Corp. and
333 W. Wacker Drive Nuveen Institutional Advisory Corp.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 141
3/2/64 LLC; Managing Director (since 2001), formerly Vice
333 W. Wacker Drive President of Nuveen Advisory Corp. and Nuveen
Chicago, IL 60606 Institutional Advisory Corp. (since 1995); Managing
Director of Nuveen Asset Management, Inc. (since 2001);
Vice President of Nuveen Investment Advisers Inc.
(since 2002); Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller 141
5/31/54 and Controller (since 1998) of Nuveen Investments, LLC and Vice
333 W. Wacker Drive President and Funds Controller (since 1998) of Nuveen
Chicago, IL 60606 Investments, Inc.; Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
J. Thomas Futrell Vice President 1988 Vice President of Nuveen Advisory Corp.; Chartered 127
7/5/55 Financial Analyst.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Richard A. Huber Vice President 1997 Vice President of Nuveen Institutional Advisory Corp. 127
3/26/63 (since 1998) and Nuveen Advisory Corp. (since 1997);
333 W. Wacker Drive prior thereto, Vice President and Portfolio Manager of
Chicago, IL 60606 Flagship Financial, Inc.
------------------------------------------------------------------------------------------------------------------------------------
Steven J. Krupa Vice President 1990 Vice President of Nuveen Advisory Corp. 127
8/21/57
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 141
3/22/63 LLC, previously Assistant Vice President (since
333 W. Wacker Drive 1999); prior thereto, Associate of Nuveen Investments,
Chicago, IL 60606 LLC; Certified Public Accountant.
------------------------------------------------------------------------------------------------------------------------------------
Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant 141
8/27/61 Vice President (since 1993) of Nuveen Investments, LLC.
333 W. Wacker Drive
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant 141
7/27/51 and Assistant General Counsel of Nuveen Investments, LLC; Vice
333 W. Wacker Drive Secretary President and Assistant Secretary of Nuveen Advisory
Chicago, IL 60606 Corp. and Nuveen Institutional Advisory Corp.;
Assistant Secretary of Nuveen Investments, Inc.
and (since 1997) Nuveen Asset Management, Inc.;
Vice President (since 2000), Assistant Secretary
and Assistant General Counsel (since 1998) of
Rittenhouse Asset Management, Inc.; Vice President
and Assistant Secretary of Nuveen Investments
Advisers Inc. (since 2002); Assistant Secretary
of NWQ Investment Management Company, LLC
(since 2002).
70
NUMBER OF
PORTFOLIOS
IN FUND
YEAR FIRST COMPLEX
NAME, BIRTHDATE POSITION(S) HELD ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN
AND ADDRESS WITH THE FUNDS APPOINTED (3) DURING PAST 5 YEARS BY OFFICER
------------------------------------------------------------------------------------------------------------------------------------
OFFICERS OF THE FUNDS (CONTINUED):
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John V. Miller Vice President 2003 Vice President (since 2003), previously, Assistant 127
4/10/67 Vice President (since 1999), prior thereto, credit
333 W. Wacker Drive analyst (since 1996) of Nuveen Advisory Corp.;
Chicago, IL 60606 Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, 141
7/7/65 LLC; Managing Director (since 1997), formerly Vice
333 W. Wacker Drive President (since 1996) of Nuveen Advisory Corp. and
Chicago, IL 60606 Nuveen Institutional Advisory Corp.; Managing
Director of Nuveen Asset Management, Inc. (since
1999). Chartered Financial Analyst.
------------------------------------------------------------------------------------------------------------------------------------
Thomas J. O'Shaughnessy Vice President 1999 Vice President (since 2002), formerly, Assistant 127
9/4/60 Vice President (since 1998), of Nuveen Advisory Corp.;
333 W. Wacker Drive prior thereto, portfolio manager.
Chicago, IL 60606
------------------------------------------------------------------------------------------------------------------------------------
Thomas C. Spalding Vice President 1982 Vice President of Nuveen Advisory Corp. and Nuveen 127
7/31/51 Institutional Advisory Corp.; Chartered Financial
333 W. Wacker Drive Analyst.
Chicago, IL 60606
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, because he is an officer and trustee of the
Adviser.
(2) Directors/Trustees serve a one-year term until his/her successor is elected.
The year first elected or appointed represents the year in which the
Directors/Trustees was first elected or appointed to any fund in the Nuveen
Complex.
(3) Officers serve a one-year term through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
71
Build Your Wealth
AUTOMATICALLY
SIDEBAR TEXT: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET
UP YOUR REINVESTMENT ACCOUNT.
NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN
Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest
dividends and/or capital gains distributions in additional fund shares.
By choosing to reinvest, you'll be able to invest money regularly and
automatically, and watch your investment grow through the power of tax-free
compounding. Just like dividends or distributions in cash, there may be times
when income or capital gains taxes may be payable on dividends or distributions
that are reinvested.
It is important to note that an automatic reinvestment plan does not ensure a
profit, nor does it protect you against loss in a declining market.
EASY AND CONVENIENT
To make recordkeeping easy and convenient, each month you'll receive a statement
showing your total dividends and distributions, the date of investment, the
shares acquired and the price per share, and the total number of shares you own.
HOW SHARES ARE PURCHASED
The shares you acquire by reinvesting will either be purchased on the open
market or newly issued by the Fund. If the shares are trading at or above net
asset value at the time of valuation, the Fund will issue new shares at the
then-current market price. If the shares are trading at less than net asset
value, shares for your account will be purchased on the open market. Dividends
and distributions received to purchase shares in the open market will normally
be invested shortly after the dividend payment date. No interest will be paid on
dividends and distributions awaiting reinvestment. Because the market price of
shares may increase before purchases are completed, the average purchase price
per share may exceed the market price at the time of valuation, resulting in the
acquisition of fewer shares than if the dividend or distribution had been paid
in shares issued by the Fund. A pro rata portion of any applicable brokerage
commissions on open market purchases will be paid by Plan participants. These
commissions usually will be lower than those charged on individual transactions.
FLEXIBILITY
You may change your distribution option or withdraw from the Plan at any time,
should your needs or situation change. Should you withdraw, you can receive a
certificate for all whole shares credited to your reinvestment account and cash
payment for fractional shares, or cash payment for all reinvestment account
shares, less brokerage commissions and a $2.50 service fee.
You can reinvest whether your shares are registered in your name, or in the name
of a brokerage firm, bank, or other nominee. Ask your investment advisor if his
or her firm will participate on your behalf. Participants whose shares are
registered in the name of one firm may not be able to transfer the shares to
another firm and continue to participate in the Plan.
The Fund reserves the right to amend or terminate the Plan at any time. Although
the Fund reserves the right to amend the Plan to include a service charge
payable by the participants, there is no direct service charge to participants
in the Plan at this time.
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in
or withdraw from the Plan, speak with your financial advisor or call us at (800)
257-8787.
72
Fund
INFORMATION
BOARD OF DIRECTORS/TRUSTEES
William E. Bennett
Robert P. Bremner
Lawrence H. Brown
Anne E. Impellizzeri
Peter R. Sawers
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
FUND MANAGER
Nuveen Advisory Corp.
333 West Wacker Drive
Chicago, IL 60606
CUSTODIAN
State Street Bank & Trust
Boston, MA
TRANSFER AGENT AND
SHAREHOLDER SERVICES
State Street Bank & Trust
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
LEGAL COUNSEL
Chapman and Cutler LLP
Chicago, IL
INDEPENDENT AUDITORS
Ernst & Young LLP
Chicago, IL
POLICY CHANGE
On November 14, 2002, the Board adopted a policy that allows each Fund, in
addition to investments in municipal bonds, to invest up to 5% of its net assets
(including assets attributable to preferred shares, if any) in tax-exempt or
taxable fixed-income securities or equity securities for the purpose of
acquiring control of an issuer whose municipal bonds (a) the Fund already owns
and (b) have deteriorated or are expected shortly to deteriorate significantly
in credit quality, provided Nuveen Advisory determines that such investment
should enable the Fund to better maximize the value of its existing investment
in such issuer. This policy is a non-fundamental policy of each Fund which means
that it can be changed at any time by the Board of Directors without vote of the
shareholders.
GLOSSARY OF TERMS USED IN THIS REPORT
Average Annual Total Return: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period. It
expresses the return (including change in NAV and reinvested dividends) that
would have been necessary on an annual basis to equal the investment's actual
performance over the time period being considered.
Average Effective Maturity: The average of all the maturities of the bonds in a
fund's portfolio, computed by weighting each maturity date (the date the
security comes due) by the market value of the security. This figure does not
account for the likelihood of prepayments or the exercise of call provisions.
Leverage-Adjusted Duration: Duration is a measure of a bond or bond fund's
sensitivity to changes in interest rates. Generally, the longer a bond or fund's
duration, the more the price of the bond or fund will change as interest rates
change. Leverage-adjusted duration takes into account the leveraging process for
a Fund and therefore is generally longer than the duration of the actual
portfolio of individual bonds that make up the Fund.
Market Yield (also known as Dividend Yield or Current Yield): An investment's
current annualized dividend divided by its current market price.
Net Asset Value (NAV): A fund's NAV is calculated by subtracting the liabilities
of the fund from its total assets and then dividing the remainder by the number
of shares outstanding. Fund NAVs are calculated at the end of each business day.
Taxable-Equivalent Yield: The yield necessary from a fully taxable investment to
equal, on an after-tax basis, the yield of a municipal bond investment.
---------
Each Fund intends to repurchase shares of its own common or preferred stock in
the future at such times and in such amounts as is deemed advisable. No shares
were repurchased during the fiscal year ended August 31, 2003. Any future
repurchases will be reported to shareholders in the next annual or semiannual
report.
73
Serving Investors
FOR GENERATIONS
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
Managing $90 billion in assets, Nuveen Investments offers access to a number of
different asset classes and investing solutions through a variety of products.
Nuveen Investments markets its capabilities under four distinct brands: Nuveen,
a leader in tax-free investments; NWQ, a leader in value-style equities;
Rittenhouse, a leader in growth-style equities; and Symphony, a leading
institutional manager of market-neutral alternative investment portfolios.
To learn more about the products and services Nuveen Investments offers and for
a prospectus, where applicable, talk to your financial advisor, or call us at
(800) 257-8787. Please read the information carefully before you invest.
Distributed by
NUVEEN INVESTMENTS, LLC | 333 West Wacker Drive | Chicago, Illinois 60606
| www.nuveen.com
EAN-B-0803D
ITEM 2. CODE OF ETHICS.
As of the end of the period covered by this report, the registrant has adopted
a code of ethics that applies to the registrant's principal executive officer,
principal financial officer, principal accounting officer or controller, or
persons performing similar functions. The registrant has posted such code of
ethics on its website at www.nuveen.com/etf.
ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.
The registrant's board of directors has determined that the registrant has
at least one "audit committee financial expert" (as defined in Item 3 of
Form N-CSR) serving on its audit committee. The registrant's audit committee
financial expert is William E. Bennett, who is "independent" for purposes of
Item 3 of Form N-CSR.
Mr. Bennett was formerly Executive Vice President and Chief Credit Officer for
First Chicago Corp./First National Bank. As part of his role as Chief Credit
Officer, Mr. Bennett set policy as to accrual of assets/loans; designated
performing/non-performing assets; set the level of reserves against the credit
portfolio and determined the carrying value of credit related assets and
exposure. Among other things, Mr. Bennett was also responsible for the oversight
of the internal analysis function including setting ground rules for the review
and preparation of financial analysis and financial statements for use in making
credit and risk decisions for clients. Mr. Bennett has significant experience
reviewing, analyzing and evaluating financial statements of domestic and
international companies in a variety of industries with complex accounting
issues.
ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.
Not applicable at this time.
ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.
Not applicable at this time.
ITEM 6. [RESERVED]
ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END
MANAGEMENT INVESTMENT COMPANIES
In the rare event that a municipal issuer held by the Fund were to issue a proxy
or that the Fund were to receive a proxy issued by a cash management security,
Nuveen Advisory Corp. (the "Adviser") would either engage an independent third
party to determine how the proxy should be voted or vote the proxy with the
consent, or based on the instructions, of the Fund's Board of Directors or
Trustees or its representative. In the case of a conflict of interest, the proxy
would be submitted to the applicable fund's Board to determine how the proxy
should be voted. A member of the Adviser's legal department would oversee the
administration of the voting, and ensure that records were maintained in
accordance with Rule 206(4)-6, reports were filed with the SEC on Form N-PX, and
the results were provided to the Board of Directors or Trustees and made
available to shareholders as required by applicable rules.
ITEM 8. [RESERVED]
ITEM 9. CONTROLS AND PROCEDURES.
(a) The registrant's principal executive and principal financial officers,
or persons performing similar functions, have concluded that the
registrant's disclosure controls and procedures (as defined in Rule
30a-3(c) under the Investment Company Act of 1940, as amended (the
"1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within
90 days of the filing date of this report that includes the disclosure
required by this paragraph, based on their evaluation of the controls
and procedures required by Rule 30a-3(b) under the 1940 Act
(17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the
Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)).
(b) There were no changes in the registrant's internal control over
financial reporting (as defined in Rule 30a-3(d) under the 1940 Act
(17 CFR 270.30a-3(d)) that occurred during the registrant's last
fiscal half-year (the registrant's second fiscal half-year in the case
of an annual report) that has materially affected, or is reasonably
likely to materially affect, the registrant's internal control over
financial reporting.
ITEM 10. EXHIBITS.
File the exhibits listed below as part of this Form. Letter or number the
exhibits in the sequence indicated.
(a)(1) Any code of ethics, or amendment thereto, that is the subject of the
disclosure required by Item 2, to the extent that the registrant intends to
satisfy the Item 2 requirements through filing of an exhibit: Not applicable
because posted on registrant's website at www.nuveen.com/etf
(a)(2) A separate certification for each principal executive officer and
principal financial officer of the registrant as required by Rule 30a-2(a) under
the Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT
Attached hereto.
(b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act,
provide the certifications required by Rule 30a-2(b) under the Act (17 CFR
270.30a-2(b), Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR
240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of
the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished
pursuant to this paragraph will not be deemed "filed" for purposes of Section 18
of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of
that section. Such certification will not be deemed to be incorporated by
reference into any filing under the Securities Act of 1933 or the Exchange Act,
except to the extent that the registrant specifically incorporates it by
reference. Ex-99.906 CERT attached hereto.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, the registrant has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Nuveen Insured California Tax-Free Advantage Municipal Fund
-------------------------------------------------------------
By (Signature and Title)* /s/ Jessica R. Droeger
----------------------------------------------
Jessica R. Droeger
Vice President and Secretary
Date: November 7, 2003
-------------------------------------------------------------------
Pursuant to the requirements of the Securities Exchange Act of 1934 and the
Investment Company Act of 1940, this report has been signed below by the
following persons on behalf of the registrant and in the capacities and on the
dates indicated.
By (Signature and Title)* /s/ Gifford R. Zimmerman
----------------------------------------------
Gifford R. Zimmerman
Chief Administrative Officer
(Principal Executive Officer)
Date: November 7, 2003
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(Principal Financial Officer)
Date: November 7, 2003
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.