naz.htm
 
 
 
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 811-7278
 
Nuveen Arizona Premium Income Municipal Fund, Inc.
(Exact name of registrant as specified in charter)
 
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
(Address of principal executive offices) (Zip code)
 
Kevin J. McCarthy
Nuveen Investments
333 West Wacker Drive
Chicago, IL 60606
(Name and address of agent for service)
 
Registrant's telephone number, including area code: (312) 917-7700
 
Date of fiscal year end: July 31
 
Date of reporting period: July 31, 2010
 
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 Announces Strategic Combination with FAF Advisors
 
On July 29, 2010, Nuveen Investments, Inc. announced that U.S. Bancorp will receive a 9.5% stake in Nuveen Investments and cash consideration in exchange for the long-term asset business of U.S. Bancorp’s FAF Advisors (FAF). Nuveen Investments is the parent of Nuveen Asset Management (NAM), the investment adviser for the Funds included in this report.
 
FAF Advisors, which currently manages about $25 billion of long-term assets and serves as the advisor of the First American Funds, will be combined with NAM, which currently manages about $75 billion in municipal fixed income assets. Upon completion of the transaction, Nuveen Investments, which currently manages about $150 billion of assets across several high-quality affiliates, will manage a combined total of about $175 billion in institutional and retail assets.
 
This combination will not affect the investment objectives, strategies or policies of the Funds in this report. Over time, Nuveen Investments expects that the combination will provide even more ways to meet the needs of investors who work with financial advisors and consultants by enhancing the multi-boutique model of Nuveen Investments, which also includes highly respected investment teams at NWQ Investment Management, Santa Barbara Asset Management, Symphony Asset Management, Tradewinds Global Investors, Winslow Capital and Nuveen HydePark.
 
The transaction is expected to close late in 2010, subject to customary conditions.
 
 
 
 
 
 
Chairman’s
Letter to Shareholders
 
 
 
 
Dear Shareholder,
 
Recent months have revealed the fragility and disparity of the global economic recovery. In the U.S., the rate of economic growth has slowed as various stimulus programs have started to wind down, exposing weakness in the underlying economy. In contrast, many emerging market countries are experiencing a return to comparatively high rates of growth. Confidence in global financial markets has been undermined by concerns about high sovereign debt levels in Europe and the U.S. Until these countries can begin credible programs to reduce their budgetary deficits, market unease and hesitation will remain. On a more positive note, even though the countries now enjoying the strongest recovery depend on exports to countries with trade deficits, these importing countries have resisted the temptation to damage world trade by erecting trade barriers.
 
The U.S. economy is subject to unusually high levels of uncertainty as it struggles to recover from a devastating financial crisis. Unemployment remains stubbornly high, due to what appears to be both cyclical and structural forces. Federal Reserve policy makers are considering novel approaches to provide support to the economy, and administration policy makers are debating additional stimulus measures. However, the high levels of debt owed both by U.S. consumers and the U.S. government limit their ability to engineer a stronger economic recovery.
 
The U.S. financial markets reflect the crosscurrents now impacting the U.S. economy. Today’s historically low interest rates reflect the Fed’s easy monetary policy and the demand for U.S. government debt by U.S. and overseas investors looking for a safe haven for investment. Despite a continued corporate earnings recovery, equity markets continue to reflect concern about the possibility of a “double dip” recession. Encouragingly, financial institutions are rebuilding their balance sheets and the financial reform legislation enacted this summer has the potential to address many of the most significant contributors to the financial crisis, although many details still have to be worked out.
 
In this difficult environment, your Nuveen investment team continues to seek sustainable investment opportunities and, at the same time, remains alert for potential risks that may result from a recovery still facing many headwinds. As your representative, the Nuveen Fund Board monitors the activities of each investment team to assure that all maintain their investment disciplines. As always, I encourage you to contact your financial consultant if you have any questions about your investment in a Nuveen Fund.
 
On behalf of the other members of your Fund Board, we look forward to continuing to earn your trust in the months and years ahead.
 
Sincerely,
 
 
Robert P. Bremner
Chairman of the Board
September 22, 2010
 
 
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Portfolio Managers’ Comments
 
 
Nuveen Arizona Premium Income Municipal Fund, Inc. (NAZ)
Nuveen Arizona Dividend Advantage Municipal Fund (NFZ)
Nuveen Arizona Dividend Advantage Municipal Fund 2 (NKR)
Nuveen Arizona Dividend Advantage Municipal Fund 3 (NXE)
Nuveen Texas Quality Income Municipal Fund (NTX)
 
 
Portfolio managers Scott Romans and Daniel Close review economic and municipal market conditions at the national and state levels, key investment strategies, and the twelve-month performance of these five Nuveen Funds. Scott, who has been with Nuveen since 2000, has managed the Arizona Funds since 2003. Dan, who joined Nuveen in 2000, assumed portfolio management responsibility for NTX in 2007.
 
What factors affected the U.S. economic and municipal market environments during the twelve-month reporting period ended July 31, 2010?
 
During this period, there continued to be considerable stress on the economy and both the Federal Reserve (Fed) and the federal government took actions intended to improve the overall economic environment. For its part, the Fed continued to hold the benchmark fed funds rate in a target range of zero to 0.25%. At its June 2010 meeting, the central bank renewed its pledge to keep the fed funds rate “exceptionally low” for an “extended period.” The federal government focused on implementing a $787 billion economic stimulus package intended to provide job creation, tax relief, fiscal assistance to state and local governments and expansion of unemployment benefits.
 
These and other measures taken by the Fed and the government to ease the economic recession helped to produce some signs of improvement. Over the four calendar quarters comprising most of this period, the U.S. economy, as measured by the U.S. gross domestic product (GDP), grew at annualized rates of 1.6%, 5.0%, 3.7% and 1.6%, respectively. This marked the first time since 2007 that the economy managed to string together four consecutive positive quarters. Housing also provided something of a bright spot, as the S&P/Case-Shiller Home Price Index of average residential prices gained 3.6% for the twelve months ended June 2010 (the most recent data available at the time this report was produced).  This moved average home prices across the United States to levels similar to where they were in the autumn of 2003.
 
Inflation continued to be relatively tame, as the Consumer Price Index (CPI) rose 1.2% year-over-year as of July 2010. The labor markets remained weak, with the national unemployment rate at 9.5% as of July 2010. This compares with the 26-year high of 10.1% in October 2009 and a rate of 9.4% in July 2009.
 
Certain statements in this report are forward-looking statements. Discussions of specific investments are for illustration only and are not intended as recommendations of individual investments. The forward-looking statements and other views expressed herein are those of the portfolio managers as of the date of this report. Actual future results or occurrences may differ significantly from those anticipated in any forward-looking statements, and the views expressed herein are subject to change at any time, due to numerous market and other factors. The Funds disclaim any obligation to update publicly or revise any forward-looking statements or views expressed herein.
 
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Municipal market conditions began to show general signs of improvement throughout most of the period, as strong cash flows into municipal bond funds combined with tighter supply of new tax-exempt issuance to create favorable supply and demand conditions. The reduced issuance of tax-exempt municipal debt was due in part to the introduction of the Build America Bond program in 2009. Build America Bonds are a new class of taxable municipal debt, created as part of the February 2009 economic stimulus package. These bonds currently offer municipal issuers a federal subsidy equal to 35% of the bond’s interest payments, often times providing issuers with a lower cost alternative to traditional tax-exempt debt. During the twelve months ended July 31, 2010, taxable Build America Bonds issuance totaled $102.8 billion, accounting for over 24% of new bonds issued in the municipal market.
 
Over the twelve months ended July 31, 2010, municipal bond issuance nationwide—both tax-exempt and taxable—totaled $420.8 billion, an increase of 20% compared with the twelve-month period ended July 31, 2009. However, if taxable Build America Bond issuance were removed from the equation, the supply of tax-exempt bonds alone fell more than 4%. Demand for tax-exempt securities generally remained strong during this period, bolstered in part by the prospect of higher tax rates in the future. Combined with the lower supply of tax-exempt bonds, this drove prices on municipal bonds higher.
 
How were the economic and market environments in Arizona and Texas during this period?
 
Like the national economy, Arizona recently took small steps toward economic improvement. Growth in the education and health services sector continued to provide some stability on the jobs front, and the professional and business services, leisure and hospitality and financial services sectors all saw fewer job losses than they did in the previous twelve months. However, Arizona’s overall employment picture remained weak, as the state’s unemployment rate for July 2010 reached 9.6%, the highest in 27 years, up from 9.4% in July 2009. The construction sector continued to be the hardest hit, losing more than 50% of its jobs since the recession began in 2007. For fiscal 2011, the $8.5 billion Arizona state budget closed an estimated $3 billion budget gap through spending cuts, federal stimulus funding, and a voter-approved one-cent sales tax increase effective through May 2013. In November 2010, Arizona voters will decide two additional proposals that would redirect money from two voter-established funds (land conservation and early childhood programs) to the state’s general fund. As of July 31, 2010, Moody’s listed Arizona’s issuer credit rating at Aa2 with a stable outlook, while Standard & Poor’s (S&P) rated the state at AA- with a negative outlook. For the twelve months ended July 31, 2010, municipal issuance (both taxable and tax-free) in Arizona totaled $5.3 billion, down almost 38% from the previous twelve months.
 
In Texas, the economic recovery appeared to be proceeding at a somewhat faster pace than in the nation as a whole, as a strong rebound in the state’s exports—chiefly, crude energy products, petrochemicals and electronics—provided major support over the period. Although demand from Europe was projected to taper off, the market for these products was expected to remain strong in Asia, Latin America and domestically. In
 
 
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recent months, the education and health services, government, leisure and hospitality and professional and business services sectors of the Texas market have all posted job gains, although construction and information services continued to suffer losses. While unemployment in Texas rose from 7.9% in July 2009 to 8.2% in July 2010, its highest level since 1987, the state’s jobless rate remained below the national average of 9.5%. The strength of the Texas job market was reflected in the stability of the state’s housing market, which also benefited from the fact that Texas did not participate in subprime lending to the extent of many other states. As Texas headed into fiscal 2011, the state was facing a shortfall of approximately $18 billion in its $182 billion fiscal 2010-2011 biennium budget. As of July 31, 2010, Moody’s and S&P rated Texas general obligation (GO) debt at Aaa and AA+, respectively; both rating agencies maintained stable outlooks for the state. For the twelve months ended July 31, 2010, municipal issuance (both taxable and tax-free) in Texas totaled $34.1 billion, an increase of 12% over the previous twelve months. Texas continued to rank as the third largest state issuer behind California and New York.
 
What key strategies were used to manage the Arizona and Texas Funds during this reporting period?
 
As previously mentioned, the supply of tax-exempt bonds nationally tightened during this period, due in part to the introduction of taxable Build America Bonds in April 2009. This program also impacted the availability of tax-exempt bonds in both Texas and Arizona, which ranked 6th and 19th, respectively, among the 50 states by dollar amount of bonds issued under the Build America Bond program during the first half of 2010. For the twelve months ended July 2010, Build America Bonds accounted for approximately 23% of municipal supply in Texas and 24% in Arizona, where overall issuance was already down significantly. Since interest payments from Build America Bonds represent taxable income, we do not view these bonds as good investment opportunities for these Funds.
 
Despite the constrained issuance of tax-exempt municipal bonds, we continued to find attractive value opportunities, taking a bottom-up approach to discovering undervalued sectors and individual credits with the potential to perform well over the long term. In the Arizona Funds, we found value in several areas of the market, including health care, utilities and community facilities district (CFD) bonds associated with land development projects, also known as “dirt deals,” which we purchased in both the primary and secondary markets. In general, we focused on bonds at the lower end of the quality spectrum, which we believed offered value relative to historical credit spreads, particularly during the earlier part of the period. We also purchased higher quality bonds when necessary to keep the Funds fully invested.
 
In NTX, our purchases during the second half of this period included single A rated health care and public power bonds, an insured higher education issue (with a single-A underlying rating), and a BBB rated, zero coupon toll road credit. Earlier in the period, NTX also purchased several GO credits and toll road, electric utility and tax incremental financing (TIF) district bonds.
 
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Some of this investment activity resulted from opportunities created by the provisions of the Build America Bond program. For example, tax-exempt supply was more plentiful in the health care and higher education sectors because, as 501(c)(3) (nonprofit) organizations, hospitals and private universities generally do not qualify for the Build America Bond program and must continue to issue bonds in the tax-exempt municipal market. Bonds with proceeds earmarked for refundings, working capital and private activities also are not covered by the Build America Bond program and this resulted in attractive opportunities in various other sectors of the market.
 
The impact of the Build America Bond program was also evident in the area of longer-term issuance, as municipal issuers sought to take full advantage of the attractive financing terms offered by these bonds. Approximately 70% of Build America Bonds were issued with maturities of at least 30 years. Even though this significantly reduced the availability of tax-exempt credits with longer maturities, we continued to find good opportunities to purchase attractive longer-term bonds for these Funds. For example, nearly all of the bonds purchased in NTX during the second half of the period offered longer maturities. These bonds helped us to maintain NTX’s duration and also rewarded investors as the yield curve remained relatively steep.
 
Cash for new purchases during this period was generated primarily by the proceeds from called and maturing bonds, which we worked to redeploy to keep the Funds fully invested. In NTX, we also sold a couple of pre-refunded bonds with very short maturities. On the whole, however, selling was relatively limited during this period, as the bonds in our portfolios generally offered higher yields than those available in the current marketplace.
 
As of July 31, 2010, all five of these Funds continued to use inverse floating rate securities.1 We employ inverse floaters as a form of leverage for a variety of reasons, including duration management, income enhancement and total return enhancement.
 
1 An inverse floating rate security, also known as an inverse floater, is a financial instru- ment designed to pay long-term tax-exempt interest at a rate that varies inversely with a short-term tax-exempt interest rate index. For the Nuveen Funds, the index typically used is the Securities Industry and Financial Markets (SIFM) Municipal Swap Index (previously referred to as the Bond Market Association Index or BMA). Inverse floaters, including those inverse floating rate securi- ties in which the Funds invested during this reporting period, are further defined within the Notes to Financial Statements and Glossary of Terms Used in this Report sections of this report.
 
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How did the Funds perform?
 
Individual results for the Nuveen Arizona and Texas Funds, as well as relevant index and peer group information, are presented in the accompanying table.
 
Average Annual Total Returns on Common Share Net Asset Value For periods ended 7/31/10
                   
Arizona Funds
  
1-Year
    
5-Year
    
10-Year
  
NAZ 
     13.94 %      4.11 %      5.44 % 
NFZ 
     17.93 %      3.71 %      5.65 % 
NKR 
     14.75 %      4.36 %      6.04 % 
NXE 
     16.66 %      4.42 %      5.10 % 
                         
Standard & Poor’s (S&P) Arizona Municipal Bond Index2
     9.47 %      4.74 %      5.51 % 
                         
Standard & Poor’s (S&P) National Municipal Bond Index3
     9.88 %      4.51 %      5.58 % 
                         
Lipper Other States Municipal Debt Funds Average4
     14.58 %      4.31 %      6.27 % 
                         
Texas Fund
                        
NTX
     14.71 %      4.89 %      6.50 % 
                         
Standard & Poor’s (S&P) Texas Municipal Bond Index2
     10.20 %      4.89 %      5.81 % 
                         
Standard & Poor’s (S&P) National Municipal Bond Index3
     9.88 %      4.51 %      5.58 % 
                         
Lipper Other States Municipal Debt Funds Average4
     14.58 %      4.31 %      6.27 % 
 
For the twelve months ended July 31, 2010, the total returns on common share net asset value (NAV) for all of the Arizona and Texas Funds exceeded the returns for their respective state’s Standard & Poor’s (S&P) Municipal Bond Index as well as that of the S&P National Municipal Bond Index. For the same period, NFZ, NKR, NXE and NTX outperformed the average return for the Lipper Other States Municipal Debt Funds Average, while NAZ lagged this Lipper average.
 
Key management factors that influenced the Funds’ returns during this period included duration and yield curve positioning, credit exposure and sector allocation. In addition, the use of structural leverage was an important positive factor during this period. The impact of structural leverage is discussed in more detail on page eight.
 
During this period, bonds with longer maturities generally outperformed those with shorter maturities, with bonds at the longest end of the yield curve posting the strongest returns. The outperformance of longer term bonds was due in part to the decline in interest rates, particularly at the longer end of the curve. The scarcity of tax-exempt bonds with longer maturities also drove up the prices of these bonds. Overall, yield curve positioning and duration proved positive for the performance of NAZ, NXE and NTX, with NFZ having the longest duration among these Funds. All four of these Funds were underweighted in the shortest part of the yield curve that produced the weakest returns. However, yield curve positioning and duration were a net negative for NKR, which had the shortest duration among these Funds. In particular, the performance of this Fund was restrained by its overweighting in the underperforming short intermediate part of the curve.
 
Credit exposure also played an important role in performance in these funds. The demand for municipal bonds increased during this period driven by a variety of factors,
 
 
 
Past performance is not predictive of future results. Current performance may be higher or lower than the data shown. Returns do not reflect the deduction of taxes that shareholders may have to pay on Fund distributions or upon the sale of Fund shares.
 
For additional information, see the individual Performance Overview for your Fund in this report.
 
2
The Standard & Poor's (S&P) Municipal Bond Indexes for Arizona and Texas are unleveraged, market value-weighted indexes designed to measure the performance of the tax-exempt, investment-grade Arizona and Texas municipal bond markets, respectively. These indexes do not reflect any initial or ongoing expenses and are not available for direct investment.
   
3
The Standard & Poor's (S&P) National Municipal Bond Index is an unleveraged, market value-weighted index designed to measure the performance of the tax-exempt, investment-grade U.S. municipal bond market. These indexes do not reflect any or ongoing expenses and are not available for direct investment.
   
4
The Lipper Other States Municipal Debt Funds Average is calculated using the returns of all closed-end funds in this category for each period as follows: 1-year, 46 funds; 5-year, 46 funds; and 10-year, 20 funds. Lipper returns account for the effects of management fees and assume reinvestment of dividends, but do not reflect any applicable sales charges. The Lipper average is not available for direct investment.
 
 
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including concerns about potential tax increases, the need to rebalance portfolio allocations and a growing appetite for additional risk. At the same time, the supply of new tax-exempt municipal paper declined, due largely to the Build America Bond program. As investors bid up municipal bond prices, bonds rated BBB or below and non-rated bonds generally outperformed those rated AAA. In this environment, the performance of all of these Funds benefited from their overexposure to lower quality credits. Because NAZ cannot invest in sub-investment grade securities (those rated BB and lower by at least one Nationally Recognized Statical Rating Organization (NRSRO) or those non-rated), which performed well, the contribution from credit exposure was smaller in this Fund.
 
Holdings that generally contributed to the Funds’ returns during this period included industrial development revenue (IDR) and health care bonds, both of which exceeded the overall municipal market return by substantial margins. NTX, in particular, benefited from its overweight in IDR credits. Revenue bonds as a whole performed well, with transportation, special tax and leasing among the other sectors that outperformed the general municipal market. Zero coupon bonds also were among the strongest performers.
 
In contrast, pre-refunded bonds, which are often backed by U.S. Treasury securities, performed relatively poorly during this period. The underperformance of these bonds can be attributed primarily to their shorter effective maturities and higher credit quality. As of July 31, 2010, NKR, NXE and NTX held the heaviest weightings of pre-refunded bonds, while NFZ had the smallest holding of these bonds. Among the revenue sectors, resource recovery trailed the overall municipal market by the widest margin and electric utilities and water and sewer also turned in weaker performances. In addition, many general obligation and other tax-supported bonds failed to keep pace with the market for the twelve months.
 
One sector that generally performed in line with the market but that outperformed dramatically for the Arizona Funds was the “other revenue” sector. In Arizona, the other revenue sector is focused largely on CFD or land development bonds, also known as “dirt deals.” This area of the market had been hit hard in the states most affected by the housing crisis, including California, Florida and Arizona. In California, which is a relatively high wealth state with higher taxes and a more developed market for this type of credit, we saw dirt deal bonds begin to rally, while the Arizona market for these bonds continued to lag. This occurred despite the fact that, because of Arizona’s smaller, less developed market for dirt deals, Arizona-issued bonds of this type generally have stronger fundamental credit quality and security features. During this twelve-month reporting period, however, as investors sought higher yields, these Arizona bonds became very attractive to buyers and performed exceptionally well. The performances of NFZ, NKR and NXE were boosted by their significant exposure to Arizona dirt deals, especially to non-rated CFD bonds that were judged to be in the sub-investment grade credit quality category by Nuveen Asset Management. In NKR, as mentioned previously, this contribution was offset to some degree by the Fund’s shorter duration. Also as noted above, NAZ’s participation in the Arizona dirt deal rally was limited by its inability to invest in sub-investment grade bonds.
 
IMPACT OF THE FUNDS’ LEVERAGE STRATEGIES ON PERFORMANCE
 
One important factor impacting the returns of these Funds relative to the comparative indexes was the Funds’ use of financial leverage. The Funds use leverage because their managers believe that, over time, leveraging provides opportunities for additional income and total return for common shareholders. However, use of leverage also can
 
 
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expose common shareholders to additional volatility. For example, as the prices of securities held by a Fund decline, the negative impact of these valuation changes on common share net asset value and common shareholder total return is magnified by the use of leverage. Conversely, leverage may enhance common share returns during periods when the prices of securities held by a Fund generally are rising.
 
Leverage made a positive contribution to the performance of all these Funds over this reporting period.
 
RECENT DEVELOPMENTS REGARDING THE FUNDS’ LEVERAGED CAPITAL STRUCTURE
 
Shortly after their inceptions, each of the Funds issued auction rate preferred shares (ARPS) to create financial leverage. As noted in past shareholder reports, the ARPS issued by many closed-end funds, including these Funds, have been hampered by a lack of liquidity since February 2008. Since that time, more ARPS have been submitted for sale in each of their regularly scheduled auctions than there have been offers to buy. In fact, offers to buy have been almost completely non-existent since late February 2008. This means that these auctions have “failed to clear,” and that many, or all, of the ARPS shareholders who wanted to sell their shares in these auctions were unable to do so. This lack of liquidity in ARPS did not lower the credit quality of these shares, and ARPS shareholders unable to sell their shares continued to receive distributions at the “maximum rate” applicable to failed auctions, as calculated in accordance with the pre-established terms of the ARPS. In the recent market, with short-term rates at multi-generational lows, those maximum rates also have been low.
 
One continuing implication for common shareholders from the auction failures is that each Fund’s cost of leverage likely has been incrementally higher at times than it otherwise might have been had the auctions continued to be successful. As a result, each Fund’s common share earnings likely have been incrementally lower at times than they otherwise might have been.
 
As noted in past shareholder reports, the Nuveen funds’ Board of Directors/Trustees authorized several methods to refinance a portion of the Nuveen funds’ outstanding ARPS. Some funds have utilized tender option bonds (TOBs), also known as inverse floating rate securities, for leverage purposes. The amount of TOBs that a fund may use varies according to the composition of each fund’s portfolio. Some funds have a greater ability to use TOBs than others. Some funds have issued Variable Rate Demand Preferred (VRDP) Shares, a floating rate form of preferred stock. Some funds have issued MuniFund Term Preferred (MTP) Shares, a fixed rate form of preferred stock with a mandatory redemption period of five years.
 
While all these efforts have reduced the total amount of outstanding ARPS issued by the Nuveen funds, the funds cannot provide any assurance on when the remaining outstanding ARPS might be redeemed.
 
In April and May 2010, 30 Nuveen leveraged closed-end funds, including NXE, received a demand letter from a law firm on behalf of purported holders of common shares of each such fund, alleging that Nuveen and the funds’ officers and Board of Directors/ Trustees breached their fiduciary duties related to the redemption at par of the funds’ ARPS. In response, the Board established an ad hoc Demand Committee consisting of certain of its disinterested and independent Board members to investigate the claims. The Demand Committee retained independent counsel to assist it in conducting an extensive investigation. Based upon its investigation, the Demand Committee found
 
 
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that it was not in the best interests of each fund or its shareholders to take the actions suggested in the demand letters, and recommended that the full Board reject the demands made in the demand letters. After reviewing the findings and recommendation of the Demand Committee, the full Board of each fund unanimously adopted the Demand Committee’s recommendation.
 
Subsequently, twenty of the funds that received demand letters (not including NXE) were named as nominal defendants in a putative shareholder derivative action complaint captioned Safier and Smith v. Nuveen Asset Management, et al. that was filed in the Circuit Court of Cook County, Illinois, Chancery Division (the “Cook County Chancery Court”) on July 27, 2010. Three additional funds (not including NXE) were named as nominal defendants in a similar complaint captioned Curbow v. Nuveen Asset Management, et al. filed in the Cook County Chancery Court on August 12, 2010, and three additional funds (including NXE) were named as nominal defendants in a similar complaint captioned Beidler v. Nuveen Asset Management, et al. filed in the Cook County Chancery Court on September 21, 2010 (collectively, the “Complaints”). The Complaints, filed on behalf of purported holders of each fund’s common shares, also name Nuveen Asset Management as a defendant, together with current and former Officers and Trustees of each of the funds (together with the nominal defendants, collectively, the “Defendants”). The Complaints contain the same basic allegations contained in the demand letters. The suits seek a declaration that the Defendants have breached their fiduciary duties, an order directing the Defendants not to redeem any ARPS at their liquidation value using fund assets, indeterminate monetary damages in favor of the funds and an award of plaintiffs’ costs and disbursements in pursuing the action. Nuveen Asset Management believes that the Complaints are without merit, and intends to defend vigorously against these charges.
 
As of July 31, 2010, the amounts of ARPS redeemed by the Funds are as shown in the accompanying table.
 
   
Auction Rate
    
% of Original
  
   
Preferred Shares
    
Auction Rate
  
Fund 
  
Redeemed
    
Preferred Share
  
NAZ 
   $ 2,125,000       7.1 % 
NFZ 
   $ 1,400,000       11.7 % 
NKR 
   $ 1,875,000       10.1 % 
NXE 
   $ 3,600,000       16.4 % 
NTX 
   $ 3,950,000       5.7 % 
 
During the twelve-month reporting period, NFZ, NKR and NXE filed with the Securities and Exchange Commission (SEC) a registration statement seeking to register MTP. These registration statements, declared effective by the SEC, enable the Funds to issue to the public shares of MTP to refinance all or a portion of their ARPS. The issuance of MTP by NFZ, NKR and NXE is subject to market conditions. There is no assurance that these MTP shares will be issued.
 
As of July 31, 2010, 83 out of the 84 Nuveen closed-end municipal funds that had issued ARPS have redeemed, at par, all or a portion of these shares. These redemptions bring the total amount of Nuveen’s municipal closed-end funds’ ARPS redemptions to approximately $4.4 billion of the approximately $11 billion outstanding.
 
For up-to-date information, please visit the Nuveen CEF Auction Rate Preferred Resource Center at: http://www.nuveen.com/arps.
 
 
Nuveen Investments 9
 

 
 
 

Common Share Dividend and
Share Price Information
 
During the twelve-month reporting period ended July 31, 2010, NFZ and NKR each had four monthly dividend increases and NAZ, NXE and NTX each had three monthly dividend increases.
 
Due to normal portfolio activity, common shareholders of NTX received a long-term capital gains distribution of $0.0118 per share and a short-term capital gains distribution of $0.0002 per share at the end of December 2009.
 
All of the Funds in this report seek to pay stable dividends at rates that reflect each Fund’s past results and projected future performance. During certain periods, each Fund may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it holds the excess in reserve as undistributed net investment income (UNII) as part of the Fund’s NAV. Conversely, if a Fund has cumulatively paid dividends in excess of its earnings, the excess constitutes negative UNII that is likewise reflected in the Fund's NAV. Each Fund will, over time, pay all of its net investment income as dividends to shareholders. As of July 31, 2010, all five of the Funds in this report had positive UNII balances for both tax and financial reporting purposes.
 
COMMON SHARE REPURCHASES AND SHARE PRICE INFORMATION
 
As of July 31, 2010, and since the inception of the Funds’ repurchase program, NFZ, NKR and NXE have cumulatively repurchased their outstanding common shares as shown in the accompanying table. Since the inception of the Funds’ repurchase program, NAZ and NTX have not repurchased any of their outstanding common shares.
 
             
   
Common Shares
    
% of Outstanding
  
Fund 
  
Repurchased
    
Common Shares
  
NFZ 
     2,500       0.2 % 
NKR 
     800       0.0 % 
NXE 
     1,600       0.1 % 

 
During the twelve-month reporting period, NFZ, NKR and NXE did not repurchase any of their outstanding common shares.
 
10 Nuveen Investments
 
 
 
 
As of July 31, 2010, the Funds’ common share prices were trading at (+) premiums or (-) discounts to their common share NAVs as shown in the accompanying table.
 
             
   
7/31/10
    
Twelve-Month Average
  
Fund 
  
(+)Premium/(-)Discount
    
(+)Premium/(-)Discount
  
NAZ 
     -4.65 %      -4.09 % 
NFZ 
     -0.07 %      -6.83 % 
NKR 
     -4.98 %      -6.68 % 
NXE 
     -6.94 %      -7.43 % 
NTX 
     +12.72 %      +6.50 % 

Nuveen Investments 11
 
 
 
 
   
  NAZ
Nuveen Arizona 
  Performance 
Premium Income 
  OVERVIEW 
Municipal Fund, Inc. 
   
 
as of July 31, 2010 
 
 
             
Fund Snapshot
            
Common Share Price 
         $ 13.34  
Common Share Net Asset Value 
         $ 13.99  
Premium/(Discount) to NAV 
           -4.65 % 
Market Yield 
           5.62 % 
Taxable-Equivalent Yield1
           8.18 % 
Net Assets Applicable to Common Shares ($000)
     $ 62,549  
Average Effective Maturity on Securities (Years)
       17.83  
Leverage-Adjusted Duration 
           7.86  
               
Average Annual Total Return
              
(Inception 11/19/92) 
              
   
On Share Price
    
On NAV
  
1-Year 
     14.47 %      13.94 % 
5-Year 
     2.37 %      4.11 % 
10-Year 
     4.48 %      5.44 % 
                 
Portfolio Composition
                
(as a % of total investments) 
                
Tax Obligation/Limited 
             23.9 % 
Utilities 
             16.8 % 
Health Care 
             15.5 % 
Water and Sewer 
             14.7 % 
Education and Civic Organizations 
             9.6 % 
U.S. Guaranteed 
             7.7 % 
Tax Obligation/General 
             7.7 % 
Other 
             4.1 % 

[Missing Graphic Reference]
 
 
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance 
Overview page. 
 
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield 
of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 31.3%. When comparing 
this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 
 
2 Ratings shown are the highest of Standard & Poor’s Group, Moody’s Investor Service, Inc. or Fitch, Inc. AAA includes 
bonds with an implied AAA rating since they are backed by U.S. Government or agency securities. AAA, AA, A and BBB 
ratings are investment grade; BB, B, CCC, CC, C and D ratings are below-investment grade. Holdings designated N/R are 
not rated by any of these national rating agencies. 

12 Nuveen Investments
 
 
 
 

   
NFZ
Nuveen Arizona
Performance
Dividend Advantage
OVERVIEW 
 Municipal Fund
 
as of July 31, 2010 
 
 
 
             
Fund Snapshot
            
Common Share Price 
         $ 14.19  
Common Share 
              
Net Asset Value 
         $ 14.20  
Premium/(Discount) to NAV 
           -0.07 % 
Market Yield 
           5.45 % 
Taxable-Equivalent Yield1
           7.93 % 
Net Assets Applicable to Common Shares ($000)
     $ 21,984  
Average Effective Maturity on Securities (Years)
       15.57  
Leverage-Adjusted Duration 
           8.74  
               
Average Annual Total Return
              
(Inception 1/30/01) 
              
   
On Share Price
    
On NAV
  
1-Year 
     23.34 %      17.93 % 
5-Year 
     2.88 %      3.71 % 
Since 
                
Inception 
     5.08 %      5.65 % 
                 
Portfolio Composition
                
(as a % of total investments) 
                
Tax Obligation/Limited 
             32.2 % 
Utilities 
             21.4 % 
Health Care 
             12.4 % 
Water and Sewer 
             9.5 % 
Tax Obligation/General 
             8.0 % 
Education and Civic Organizations 
             7.2 % 
U.S. Guaranteed 
             4.8 % 
Other 
             4.5 % 
 
 
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance 
Overview page. 
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield 
of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 31.3%. When comparing 
this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 
2 Ratings shown are the highest of Standard & Poor’s Group, Moody’s Investor Service, Inc. or Fitch, Inc. AAA includes 
bonds with an implied AAA rating since they are backed by U.S. Government or agency securities. AAA, AA, A and BBB 
ratings are investment grade; BB, B, CCC, CC, C and D ratings are below-investment grade. Holdings designated N/R are 
not rated by any of these national rating agencies. 

 
Nuveen Investments 13
 
 
 
 
 
   
  NKR
Nuveen Arizona 
  Performance 
Dividend Advantage 
  OVERVIEW 
Municipal Fund 2 
   
  as of July 31, 2010 
 
 
             
Fund Snapshot
            
Common Share Price 
         $ 13.92  
Common Share 
              
Net Asset Value 
         $ 14.65  
Premium/(Discount) to NAV 
           -4.98 % 
Market Yield 
           5.78 % 
Taxable-Equivalent Yield1
           8.41 % 
Net Assets Applicable to Common Shares ($000)
     $ 35,733  
Average Effective Maturity on Securities (Years)
       14.18  
Leverage-Adjusted Duration 
           6.49  
               
Average Annual Total Return
              
(Inception 3/25/02) 
              
   
On Share Price
    
On NAV
  
1-Year 
     17.65 %      14.75 % 
5-Year 
     2.67 %      4.36 % 
Since Inception 
     4.94 %      6.04 % 
                 
Portfolio Composition
                
(as a % of total investments) 
                
Tax Obligation/Limited 
             31.5 % 
Health Care 
             16.9 % 
Tax Obligation/General 
             13.9 % 
U.S. Guaranteed 
             12.0 % 
Water and Sewer 
             8.7 % 
Education and Civic Organizations 
             6.0 % 
Utilities 
             4.2 % 
Other 
             6.8 % 
 
 
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance 
Overview page. 
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield 
of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 31.3%. When comparing 
this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 
2 Ratings shown are the highest of Standard & Poor’s Group, Moody’s Investor Service, Inc. or Fitch, Inc. AAA includes 
bonds with an implied AAA rating since they are backed by U.S. Government or agency securities. AAA, AA, A and BBB 
ratings are investment grade; BB, B, CCC, CC, C and D ratings are below-investment grade. Holdings designated N/R are 
not rated by any of these national rating agencies. 
 
14 Nuveen Investments
 
 
 
 
   
NXE
Nuveen Arizona
Performance
Dividend Advantage
OVERVIEW 
 Municipal Fund 3
 
as of July 31, 2010 
 

 
             
Fund Snapshot
            
Common Share Price 
         $ 13.14  
Common Share 
              
Net Asset Value 
         $ 14.12  
Premium/(Discount) to NAV 
           -6.94 % 
Market Yield 
           5.75 % 
Taxable-Equivalent Yield1
           8.37 % 
Net Assets Applicable to Common Shares ($000)
     $ 43,280  
Average Effective Maturity on Securities (Years)
       16.01  
Leverage-Adjusted Duration 
           7.20  
               
Average Annual Total Return
              
(Inception 9/25/02) 
              
   
On Share Price
    
On NAV
  
1-Year 
     18.58 %      16.66 % 
5-Year 
     3.43 %      4.42 % 
Since 
                
Inception 
     3.78 %      5.10 % 
                 
Portfolio Composition
                
(as a % of total investments) 
                
Tax Obligation/Limited 
             22.7 % 
Health Care 
             20.9 % 
Education and Civic Organizations 
             11.9 % 
U.S. Guaranteed 
             10.2 % 
Water and Sewer 
             10.0 % 
Transportation 
             9.7 % 
Utilities 
             9.6 % 
Other 
             5.0 % 
 
 
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance 
Overview page. 
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield 
of the Fund on an after-tax basis. It is based on a combined federal and state income tax rate of 31.3%. When comparing 
this Fund to investments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 
2 Ratings shown are the highest of Standard & Poor’s Group, Moody’s Investor Service, Inc. or Fitch, Inc. AAA includes 
bonds with an implied AAA rating since they are backed by U.S. Government or agency securities. AAA, AA, A and BBB 
ratings are investment grade; BB, B, CCC, CC, C and D ratings are below-investment grade. Holdings designated N/R are 
not rated by any of these national rating agencies. 

 
Nuveen Investments 15
 
 
 
 
 
 NTX
Nuveen Texas 
  Performance
Quality Income 
  OVERVIEW 
Municipal Fund 
   
  as of July 31, 2010 
 
 
             
Fund Snapshot
            
Common Share Price 
         $ 16.92  
Common Share Net Asset Value 
         $ 15.01  
Premium/(Discount) to NAV 
           12.72 % 
Market Yield 
           5.07 % 
Taxable-Equivalent Yield1
           7.04 % 
Net Assets Applicable to Common Shares ($000)
     $ 143,080  
Average Effective Maturity on Securities (Years)
       15.92  
Leverage-Adjusted Duration 
           6.98  
               
Average Annual Total Return
              
(Inception 10/17/91) 
              
   
On Share Price
    
On NAV
  
1-Year 
     20.92 %      14.71 % 
5-Year 
     6.65 %      4.89 % 
10-Year 
     9.03 %      6.50 % 
                 
Portfolio Composition
                
(as a % of total investments) 
                
Tax Obligation/General 
             30.9 % 
Education and Civic Organizations 
             10.9 % 
U.S. Guaranteed 
             10.4 % 
Health Care 
             8.8 % 
Utilities 
             8.7 % 
Water and Sewer 
             7.9 % 
Transportation 
             7.0 % 
Tax Obligation/Limited 
             6.3 % 
Other 
             9.1 % 
 
 
Refer to the Glossary of Terms Used in this Report for further definition of the terms used within this Fund’s Performance 
Overview page. 
1 Taxable-Equivalent Yield represents the yield that must be earned on a fully taxable investment in order to equal the yield 
of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. When comparing this Fund to invest- 
ments that generate qualified dividend income, the Taxable-Equivalent Yield is lower. 
2 Ratings shown are the highest of Standard & Poor’s Group, Moody’s Investor Service, Inc. or Fitch, Inc. AAA includes 
bonds with an implied AAA rating since they are backed by U.S. Government or agency securities. AAA, AA, A and BBB 
ratings are investment grade; BB, B, CCC, CC, C and D ratings are below-investment grade. Holdings designated N/R are 
not rated by any of these national rating agencies. 
3 The Fund paid shareholders capital gains and net ordinary income distributions in December 2009 of $0.0120 per share. 

16 Nuveen Investments
 
 
 

             
NAZ 
Shareholder Meeting Report
  
NFZ
            
NKR
The annual meeting of shareholders was held in the offices of Nuveen Investments on November 30, 
 
2009; at this meeting the shareholders were asked to vote on the election of Board Members, the 
 
elimination of Fundamental Investment Policies and the approval of new Fundamental Investment 
 
Policies. The meeting for all funds was subsequently adjourned to January 12, 2010; the meeting for 
 
NAZ and NKR was additionally adjourned to March 23, 2010. The meeting for NKR was additionally 
 
adjourned to March 30, 2010. 
        
 
        NAZ       NFZ    
NKR
  
   
Common and
          
Common and
          
Common and
        
   
Preferred
    
Preferred
    
Preferred
    
Preferred
    
Preferred
    
Preferred
  
   
shares voting
    
shares voting
    
shares voting
    
shares voting
    
shares voting
    
shares voting
  
   
together
    
together
    
together
    
together
    
together
    
together
  
   
as a class
    
as a class
    
as a class
    
as a class
    
as a class
    
as a class
  
To approve the elimination of the Fund’s fundamental
                                
policy relating to investments in municipal
                                    
securities and below investment grade securities.
                                
For 
     2,280,789       873       771,037       256       1,200,028       319  
Against 
     233,433       139       47,643       7       75,228       91  
Abstain 
     93,611       17       38,273       —       55,084       7  
Broker Non-Votes 
     566,661       —       196,335       —       379,788       117  
Total 
     3,174,494       1,029       1,053,288       263       1,710,128       534  
To approve the new fundamental policy relating
                                          
to investments in municipal securities for the Fund.
                                          
For 
     2,390,577       873       782,112       256       1,206,462       319  
Against 
     140,959       139       42,868       7       72,814       91  
Abstain 
     76,297       17       31,973       —       51,064       7  
Broker Non-Votes 
     566,661       —       196,335       —       379,788       117  
Total 
     3,174,494       1,029       1,053,288       263       1,710,128       534  
To approve the elimination of the fundamental
                                          
policy prohibiting investment in other
                                                
investment companies.
                                                
For 
     2,381,154       873       —       —       —       —  
Against 
     141,502       139       —       —       —       —  
Abstain 
     85,177       17       —       —       —       —  
Broker Non-Votes 
     566,661       —       —       —       —       —  
Total 
     3,174,494       1,029       —       —       —       —  
To approve the elimination of the fundamental
                                          
policy relating to derivatives and short sales.
                                                
For 
     2,267,770       873       —       —       —       —  
Against 
     257,385       139       —       —       —       —  
Abstain 
     82,678       17       —       —       —       —  
Broker Non-Votes 
     566,661       —       —       —       —       —  
Total 
     3,174,494       1,029       —       —       —       —  
To approve the elimination of the fundamental
                                          
policy relating to commodities.
                                                
For 
     2,259,516       873       —       —       —       —  
Against 
     267,358       139       —       —       —       —  
Abstain 
     80,959       17       —       —       —       —  
Broker Non-Votes 
     566,661       —       —       —       —       —  
Total 
     3,174,494       1,029       —       —       —       —  
To approve the new fundamental policy relating
                                          
to commodities.
                                                
For 
     2,260,959       873       —       —       —       —  
Against 
     260,594       139       —       —       —       —  
Abstain 
     86,280       17       —       —       —       —  
Broker Non-Votes 
     566,661       —       —       —       —       —  
Total 
     3,174,494       1,029       —       —       —       —  

 
Nuveen Investments 17
 
 
 
 
 
               
NAZ 
Shareholder Meeting Report (continued)
      
NFZ 
              
NKR
              
 
    NAZ     NFZ     NKR  
   
Common and
          
Common and
          
Common and
        
   
Preferred
    
Preferred
    
Preferred
    
Preferred
    
Preferred
    
Preferred
  
   
shares voting
    
shares voting
    
shares voting
    
shares voting
    
shares voting
    
shares voting
  
   
together
    
together
    
together
    
together
    
together
    
together
  
   
as a class
    
as a class
    
as a class
    
as a class
    
as a class
    
as a class
  
Approval of the Board Members was reached
                                
as follows:
                                    
John P. Amboian 
                                    
For 
     2,929,434       —       —       —       —       —  
Withhold 
     244,566       —       —       —       —       —  
Total 
     3,174,000       —       —       —       —       —  
Robert P. Bremner 
                                                
For 
     2,918,583       —       1,004,873       —       1,604,900       —  
Withhold 
     255,417       —       48,415       —       105,101       —  
Total 
     3,174,000       —       1,053,288       —       1,710,001       —  
Jack B. Evans 
                                                
For 
     2,917,233       —       1,004,873       —       1,604,900       —  
Withhold 
     256,767       —       48,415       —       105,101       —  
Total 
     3,174,000       —       1,053,288       —       1,710,001       —  
William C. Hunter 
                                                
For 
     —       362       —       219       —       216  
Withhold 
     —       173       —       44       —       190  
Total 
     —       535       —       263       —       406  
David J. Kundert 
                                                
For 
     2,929,084       —       —       —       —       —  
Withhold 
     244,916       —       —       —       —       —  
Total 
     3,174,000       —       —       —       —       —  
William J. Schneider 
                                                
For 
     —       362       —       219       —       216  
Withhold 
     —       173       —       44       —       190  
Total 
     —       535       —       263       —       406  
Judith M. Stockdale 
                                                
For 
     2,926,384       —       —       —       —       —  
Withhold 
     247,616       —       —       —       —       —  
Total 
     3,174,000       —       —       —       —       —  
Carole E. Stone 
                                                
For 
     2,928,084       —       —       —       —       —  
Withhold 
     245,916       —       —       —       —       —  
Total 
     3,174,000       —       —       —       —       —  
Terence J. Toth 
                                                
For 
     2,927,384       —       —       —       —       —  
Withhold 
     246,616       —       —       —       —       —  
Total 
     3,174,000       —       —       —       —       —  

18 Nuveen Investments
 
 
 
 
             
 NXE 
          
NTX
          
 
    NXE     NTX  
   
Common and
          
Common and
        
   
Preferred
    
Preferred
    
Preferred
    
Preferred
  
   
shares voting
    
shares voting
    
shares voting
    
shares voting
  
   
together
    
together
    
together
    
together
  
   
as a class
    
as a class
    
as a class
    
as a class
  
To approve the elimination of the Fund’s fundamental
                        
policy relating to investments in municipal
                        
securities and below investment grade securities.
                        
For 
     1,604,588       547       4,575,435       1,768  
Against 
     73,702       24       377,271       28  
Abstain 
     39,454       —       129,374       2  
Broker Non-Votes 
     469,959       —       1,499,903       —  
Total 
     2,187,703       571       6,581,983       1,798  
To approve the new fundamental policy relating
                                
to investments in municipal securities for the Fund.
                                
For 
     1,609,489       547       4,613,150       1,735  
Against 
     63,670       24       336,083       61  
Abstain 
     44,585       —       132,847       2  
Broker Non-Votes 
     469,959       —       1,499,903       —  
Total 
     2,187,703       571       6,581,983       1,798  
To approve the elimination of the fundamental
                                
policy prohibiting investment in other
                                
investment companies.
                                
For 
     —       —       4,544,203       1,735  
Against 
     —       —       395,405       63  
Abstain 
     —       —       142,472       —  
Broker Non-Votes 
     —       —       1,499,903       —  
Total 
     —       —       6,581,983       1,798  
To approve the elimination of the fundamental
                                
policy relating to derivatives and short sales.
                                
For 
     —       —       4,548,122       1,737  
Against 
     —       —       392,713       61  
Abstain 
     —       —       141,245       —  
Broker Non-Votes 
     —       —       1,499,903       —  
Total 
     —       —       6,581,983       1,798  
To approve the elimination of the fundamental
                                
policy relating to commodities.
                                
For 
     —       —       4,554,664       1,735  
Against 
     —       —       391,793       63  
Abstain 
     —       —       135,623       —  
Broker Non-Votes 
     —       —       1,499,903       —  
Total 
     —       —       6,581,983       1,798  
To approve the new fundamental policy relating
                                
to commodities.
                                
For 
     —       —       4,492,126       1,735  
Against 
     —       —       457,240       61  
Abstain 
     —       —       132,714       2  
Broker Non-Votes 
     —       —       1,499,903       —  
Total 
     —       —       6,581,983       1,798  

 
Nuveen Investments 19
 
 
 
 
 

     
 
Shareholder Meeting Report (continued)
  
  NXE     
 NTX    
 
    NXE     NTX  
   
Common and
          
Common and
        
   
Preferred
    
Preferred
    
Preferred
    
Preferred
  
   
shares voting
    
shares voting
    
shares voting
    
shares voting
  
   
together
    
together
    
together
    
together
  
   
as a class
    
as a class
    
as a class
    
as a class
  
Approval of the Board Members was reached as follows:
                    
John P. Amboian 
                        
For 
     —       —       —       —  
Withhold 
     —       —       —       —  
Total 
     —       —       —       —  
Robert P. Bremner 
                                
For 
     2,113,145       —       6,340,269       —  
Withhold 
     74,558       —       241,714       —  
Total 
     2,187,703       —       6,581,983       —  
Jack B. Evans 
                                
For 
     2,115,870       —       6,346,942       —  
Withhold 
     71,833       —       235,041       —  
Total 
     2,187,703       —       6,581,983       —  
William C. Hunter 
                                
For 
     —       476       —       1,569  
Withhold 
     —       95       —       229  
Total 
     —       571       —       1,798  
David J. Kundert 
                                
For 
     —       —       —       —  
Withhold 
     —       —       —       —  
Total 
     —       —       —       —  
William J. Schneider 
                                
For 
     —       476       —       1,569  
Withhold 
     —       95       —       229  
Total 
     —       571       —       1,798  
Judith M. Stockdale 
                                
For 
     —       —       —       —  
Withhold 
     —       —       —       —  
Total 
     —       —       —       —  
Carole E. Stone 
                                
For 
     —       —       —       —  
Withhold 
     —       —       —       —  
Total 
     —       —       —       —  
Terence J. Toth 
                                
For 
     —       —       —       —  
Withhold 
     —       —       —       —  
Total 
     —       —       —       —  

20 Nuveen Investments
 
 
 
 
 
Report of Independent
Registered Public Accounting Firm
 
 
The Board of Directors/Trustees and Shareholders
Nuveen Arizona Premium Income Municipal Fund, Inc.
Nuveen Arizona Dividend Advantage Municipal Fund
Nuveen Arizona Dividend Advantage Municipal Fund 2
Nuveen Arizona Dividend Advantage Municipal Fund 3
Nuveen Texas Quality Income Municipal Fund
 
 
We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Arizona Premium Income Municipal Fund, Inc., Nuveen Arizona Dividend Advantage Municipal Fund, Nuveen Arizona Dividend Advantage Municipal Fund 2, Nuveen Arizona Dividend Advantage Municipal Fund 3 and Nuveen Texas Quality Income Municipal Fund (the “Funds”), as of July 31, 2010, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
 
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Funds’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of July 31, 2010, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. 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 Arizona Premium Income Municipal Fund, Inc., Nuveen Arizona Dividend Advantage Municipal Fund, Nuveen Arizona Dividend Advantage Municipal Fund 2, Nuveen Arizona Dividend Advantage Municipal Fund 3 and Nuveen Texas Quality Income Municipal Fund at July 31, 2010, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended in conformity with U.S. generally accepted accounting principles.
 
Chicago, Illinois
September 27, 2010
 
 
Nuveen Investments 21
 
 
 
 
 

         
 
Nuveen Arizona Premium Income Municipal Fund, Inc. 
    
NAZ
Portfolio of Investments
    
   
July 31, 2010 
 
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Consumer Staples – 1.2% (0.8% of Total Investments)
      
$        765 
  
Puerto Rico, The Children’s Trust Fund, Tobacco Settlement Asset-Backed Refunding Bonds, 
5/12 at 100.00 
BBB 
$     730,613 
   
Series 2002, 5.375%, 5/15/33 
      
   
Education and Civic Organizations – 13.5% (9.6% of Total Investments)
      
2,500 
  
Arizona Higher Education Loan Authority, Student Loan Revenue Bonds, Series 2007B, Auction 
9/10 at 100.00 
A 
2,055,600 
   
Rate Securities, 0.585%, 11/01/41 (Alternative Minimum Tax) (4) 
      
1,000 
  
Arizona State University, System Revenue Bonds, Series 2002, 5.000%, 7/01/25 – FGIC Insured 
7/12 at 100.00 
AA 
1,056,590 
   
Arizona State University, System Revenue Bonds, Series 2005: 
      
1,455 
  
5.000%, 7/01/20 – AMBAC Insured 
7/15 at 100.00 
Aa3 
1,527,634 
750 
  
5.000%, 7/01/21 – AMBAC Insured 
7/15 at 100.00 
Aa3 
782,490 
1,600 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, Midwestern University, 
5/20 at 100.00 
A– 
1,607,824 
   
Series 2010, 5.125%, 5/15/40 
      
1,500 
  
Tempe Industrial Development Authority, Arizona, Lease Revenue Bonds, Arizona State University 
7/13 at 100.00 
N/R 
1,410,300 
   
Foundation Project, Series 2003, 5.000%, 7/01/34 – AMBAC Insured 
      
8,805 
  
Total Education and Civic Organizations 
    
8,440,438 
   
Health Care – 21.8% (15.5% of Total Investments)
      
1,430 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/17 at 100.00 
A+ 
1,456,655 
   
2007A, 5.000%, 1/01/25 
      
885 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/17 at 100.00 
A+ 
573,834 
   
2007B, 1.167%, 1/01/37 
      
3,470 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/18 at 100.00 
A+ 
3,552,551 
   
2008D, 5.500%, 1/01/38 
      
675 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, John C. Lincoln Health 
12/15 at 100.00 
BBB 
619,488 
   
Network, Series 2005B, 5.000%, 12/01/37 
      
1,110 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, John C. Lincoln Health 
12/17 at 100.00 
BBB 
1,001,775 
   
Network, Series 2007, 5.000%, 12/01/42 
      
2,150 
  
Maricopa County Industrial Development Authority, Arizona, Health Facility Revenue Bonds, 
7/14 at 100.00 
A 
2,227,379 
   
Catholic Healthcare West, Series 2004A, 5.375%, 7/01/23 
      
2,800 
  
Maricopa County Industrial Development Authority, Arizona, Health Facility Revenue Bonds, 
7/17 at 100.00 
A 
2,843,680 
   
Catholic Healthcare West, Series 2007A, 5.250%, 7/01/32 
      
515 
  
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities 
11/10 at 101.00 
Aa1 
526,953 
   
Financing Authority, Hospital Revenue Bonds, Hospital de la Concepcion, Series 2000A, 
      
   
6.375%, 11/15/15 
      
950 
  
Winslow Industrial Development Authority, Arizona, Hospital Revenue Bonds, Winslow Memorial 
12/10 at 100.00 
N/R 
852,017 
   
Hospital, Series 1998, 5.500%, 6/01/22 
      
13,985 
  
Total Health Care 
    
13,654,332 
   
Housing/Single Family – 4.6% (3.3% of Total Investments)
      
795 
  
Phoenix and Pima County Industrial Development Authority, Arizona, Single Family Mortgage 
7/17 at 103.00 
Aaa 
822,332 
   
Revenue Bonds, Series 2007-4, 5.800%, 12/01/39 (Alternative Minimum Tax) 
      
2,010 
  
Tucson and Pima County Industrial Development Authority, Arizona, Joint Single Family Mortgage 
6/17 at 101.00 
Aaa 
2,052,130 
   
Revenue Bonds, Series 2007B, 5.350%, 6/01/47 (Alternative Minimum Tax) 
      
2,805 
  
Total Housing/Single Family 
    
2,874,462 

22 Nuveen Investments
 
 
 
 

           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Tax Obligation/General – 10.8% (7.7% of Total Investments)
      
$          1,265 
  
Gila County Unified School District 10 Payson, Arizona, School Improvement Bonds, Project 
7/18 at 100.00 
Aa3 
$     1,390,083 
   
2006, Series 2008B, 5.750%, 7/01/28 
      
1,200 
  
Maricopa County Unified School District 95 Queen Creek, Arizona, General Obligation Bonds, 
7/18 at 100.00 
Aa3 
1,257,060 
   
Series 2008, 5.000%, 7/01/27 – AGM Insured 
      
3,530 
  
Pinal County Unified School District 1, Florence, Arizona, General Obligation Bonds, Series 
7/18 at 100.00 
A 
3,761,497 
   
2008C, 5.250%, 7/01/28 
      
330 
  
Puerto Rico, General Obligation and Public Improvement Bonds, Series 2001A, 5.375%, 7/01/28 
7/11 at 100.00 
A3 
331,142 
6,325 
  
Total Tax Obligation/General 
    
6,739,782 
   
Tax Obligation/Limited – 33.7% (23.9% of Total Investments)
      
355 
  
Estrella Mountain Ranch Community Facilities District, Goodyear, Arizona, Special Assessment 
7/12 at 100.00 
N/R 
362,384 
   
Lien Bonds, Series 2001A, 7.875%, 7/01/25 
      
3,000 
  
Glendale Western Loop 101 Public Facilities Corporation, Arizona, Third Lien Excise Tax 
1/14 at 100.00 
AA 
3,153,870 
   
Revenue Bonds, Series 2008B, 6.250%, 7/01/38 
      
1,280 
  
Greater Arizona Development Authority, Infrastructure Revenue Bonds, Series 2006-1, 5.000%, 
8/16 at 100.00 
AA– 
1,347,149 
   
8/01/22 – NPFG Insured 
      
740 
  
Greater Arizona Development Authority, Infrastructure Revenue Bonds, Series 2006A, 5.000%, 
8/16 at 100.00 
AA– 
786,161 
   
8/01/23 – NPFG Insured 
      
575 
  
Marana Municipal Property Corporation, Arizona, Revenue Bonds, Series 2003, 5.000%, 7/01/28 – 
7/13 at 100.00 
AA 
590,997 
   
AMBAC Insured 
      
1,511 
  
Marana, Arizona, Tangerine Farms Road Improvement District Revenue Bonds, Series 2006, 
7/16 at 100.00 
A2 
1,441,811 
   
4.600%, 1/01/26 
      
3,400 
  
Maricopa County Stadium District, Arizona, Revenue Refunding Bonds, Series 2002, 5.375%, 
6/12 at 100.00 
N/R 
3,595,840 
   
6/01/18 – AMBAC Insured 
      
3,400 
  
Mesa, Arizona, Street and Highway User Tax Revenue Bonds, Series 2005, 5.000%, 7/01/24 – 
7/15 at 100.00 
AAA 
3,631,710 
   
AGM Insured 
      
1,140 
  
Pinetop Fire District of Navajo County, Arizona, Certificates of Participation, Series 2008, 
6/16 at 102.00 
A3 
1,156,564 
   
7.750%, 6/15/29 
      
1,200 
  
Prescott Valley Municipal Property Corporation, Arizona, Municipal Facilities Revenue Bonds, 
1/13 at 100.00 
AA– 
1,225,428 
   
Series 2003, 5.000%, 1/01/27 – FGIC Insured 
      
265 
  
Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Refunding 
7/12 at 100.00 
A3 
265,779 
   
Bonds, Series 2002D, 5.125%, 7/01/24 
      
1,610 
  
San Luis Civic Improvement Corporation, Arizona, Municipal Facilities Excise Tax Revenue 
7/15 at 100.00 
A+ 
1,657,286 
   
Bonds, Series 2005, 5.000%, 7/01/25 – SYNCORA GTY Insured 
      
1,000 
  
Scottsdale Municipal Property Corporation, Arizona, Excise Tax Revenue Bonds, Refunding Series 
No Opt. Call 
AAA 
1,178,670 
   
2006, 5.000%, 7/01/24 
      
645 
  
Vistancia Community Facilities District, Arizona, Restricted General Obligation Bonds, Series 
7/15 at 100.00 
A1 
683,100 
   
2005, 5.750%, 7/15/24 
      
20,121 
  
Total Tax Obligation/Limited 
    
21,076,749 
   
U.S. Guaranteed – 10.8% (7.7% of Total Investments) (5)
      
1,000 
  
Arizona Health Facilities Authority, Hospital System Revenue Bonds, John C. Lincoln Health 
12/10 at 102.00 
BBB (5) 
1,041,490 
   
Network, Series 2000, 7.000%, 12/01/25 (Pre-refunded 12/01/10) 
      
1,250 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, Midwestern University, 
5/11 at 101.00 
AAA 
1,317,688 
   
Series 2001A, 5.875%, 5/15/31 (Pre-refunded 5/15/11) 
      
1,250 
  
Maricopa County Industrial Development Authority, Arizona, Hospital Revenue Refunding Bonds, 
No Opt. Call 
A (5) 
1,525,850 
   
Samaritan Health Services, Series 1990A, 7.000%, 12/01/16 – MBIA Insured (ETM) 
      

 
Nuveen Investments 23
 
 
 
 
 
NAZ
Nuveen Arizona Premium Income Municipal Fund, Inc. (continued)
Portfolio of Investments July 31, 2010
 
             
Principal
    
Optional Call
      
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
  
Value
   
U.S. Guaranteed (5) (continued) 
        
$ 385 
  
Maricopa County, Arizona, Hospital Revenue Bonds, Sun Health Corporation, Series 2005, 5.000%, 
4/15 at 100.00 
N/R (5) 
 $
 449,615 
   
4/01/16 (Pre-refunded 4/01/15) 
        
735 
  
Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Refunding 
7/12 at 100.00 
Baa3 (5) 
  
798,151 
   
Bonds, Series 2002D, 5.125%, 7/01/24 (Pre-refunded 7/01/12) 
        
1,500 
  
Scottsdale Industrial Development Authority, Arizona, Hospital Revenue Bonds, Scottsdale 
12/11 at 101.00 
N/R (5) 
  
1,624,665 
   
Healthcare, Series 2001, 5.800%, 12/01/31 (Pre-refunded 12/01/11) 
        
6,120 
  
Total U.S. Guaranteed 
      
6,757,459 
   
Utilities – 23.6% (16.8% of Total Investments)
        
1,000 
  
Arizona Power Authority, Special Obligation Power Resource Revenue Refunding Crossover Bonds, 
No Opt. Call 
AA 
  
1,182,010 
   
Hoover Project, Series 2001, 5.250%, 10/01/15 
        
1,340 
  
Pima County Industrial Development Authority, Arizona, Revenue Bonds, Tucson Electric Power 
1/15 at 100.00 
BBB– 
  
1,371,034 
   
Company, Refunding Series 2008, 5.750%, 9/01/29 
        
2,170 
  
Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 2005RR, 5.000%, 7/01/27 – 
7/15 at 100.00 
A3 
  
2,190,159 
   
SYNCORA GTY Insured 
        
530 
  
Salt River Project Agricultural Improvement and Power District, Arizona, Electric System 
1/13 at 100.00 
Aa1 
  
567,360 
   
Revenue Bonds, Series 2002B, 5.000%, 1/01/22 
        
715 
  
Salt River Project Agricultural Improvement and Power District, Arizona, Electric System 
1/18 at 100.00 
Aa1 
  
856,684 
   
Revenue Bonds, Tender Option Bond Trust 09-9W, 17.172%, 1/01/38 (IF) 
        
1,000 
  
Salt River Project Agricultural Improvement and Power District, Arizona, Electric System 
1/12 at 101.00 
Aa1 
  
1,029,930 
   
Revenue Refunding Bonds, Series 2002A, 5.125%, 1/01/27 
        
   
Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds, Citigroup Energy Inc 
        
   
Prepay Contract Obligations, Series 2007: 
        
4,500 
  
5.500%, 12/01/29 
No Opt. Call 
A 
  
4,459,995 
3,500 
  
5.000%, 12/01/37 
No Opt. Call 
A 
  
3,120,320 
14,755 
  
Total Utilities 
      
14,777,492 
   
Water and Sewer – 20.7% (14.7% of Total Investments)
        
1,005 
  
Cottonwood, Arizona, Senior Lien Water System Revenue Bonds, Municipal Property Corporation, 
7/14 at 100.00 
A 
  
1,006,729 
   
Series 2004, 5.000%, 7/01/24 – SYNCORA GTY Insured 
        
3,500 
  
Glendale, Arizona, Water and Sewer Revenue Bonds, Subordinate Lien, Series 2003, 5.000%, 
7/13 at 100.00 
AA 
  
3,663,730 
   
7/01/28 – AMBAC Insured 
        
1,425 
  
Goodyear, Arizona, Water and Sewer Revenue Obligations, Series 2010, 5.625%, 7/01/39 
7/20 at 100.00 
A2 
  
1,432,994 
600 
  
Oro Valley Municipal Property Corporation, Arizona, Senior Lien Water Revenue Bonds, Series 
7/13 at 100.00 
AA– 
  
620,874 
   
2003, 5.000%, 7/01/23 – NPFG Insured 
        
1,000 
  
Phoenix Civic Improvement Corporation, Arizona, Junior Lien Wastewater System Revenue Bonds, 
7/14 at 100.00 
AA+ 
  
1,055,210 
   
Series 2004, 5.000%, 7/01/24 – NPFG Insured 
        
1,500 
  
Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water System Revenue Bonds, Series 
7/12 at 100.00 
AAA 
  
1,549,125 
   
2002, 5.000%, 7/01/26 – FGIC Insured 
        
1,250 
  
Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water System Revenue Refunding 
No Opt. Call 
AAA 
  
1,531,275 
   
Bonds, Series 2001, 5.500%, 7/01/21 – FGIC Insured 
        

24 Nuveen Investments
 
 
 
 

             
Principal
    
Optional Call
      
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
  
   
Water and Sewer (continued) 
        
   
Surprise Municipal Property Corporation, Arizona, Wastewater System Revenue Bonds, Series 2007: 
        
$         600 
  
4.700%, 4/01/22 
4/14 at 100.00 
N/R 
$       604,386
  
695 
  
4.900%, 4/01/32 
4/17 at 100.00 
N/R 
646,016
  
905 
  
Yuma County Industrial Development Authority, Arizona, Exempt Revenue Bonds, Far West Water & 
12/17 at 100.00 
N/R 
841,478
  
   
Sewer Inc. Refunding, Series 2007A, 6.375%, 12/01/37 (Alternative Minimum Tax) 
        
12,480 
  
Total Water and Sewer 
    
12,951,817
  
$    86,161 
  
Total Investments (cost $83,508,446) – 140.7% 
    
88,003,144
  
   
Other Assets Less Liabilities – 3.9% 
    
2,420,402
  
   
Auction Rate Preferred Shares, at Liquidation Value – (44.6)% (6) 
    
(27,875,000
 ) 
   
Net Assets Applicable to Common Shares – 100% 
    
$   62,548,546
  

   
(1) 
All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. 
(2) 
Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest 
 
optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic 
 
principal paydowns. 
(3) 
Ratings (not covered by the report of independent registered public accounting firm): Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), 
 
Moody’s Investor Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are 
 
considered to be below investment grade. 
(4) 
Investment valued at fair value using methods determined in good faith by, or at the discretion of, the Board of Directors. For fair value measurement 
 
disclosure purposes, investment categorized as Level 3. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting 
 
Policies, Investment Valuation for more information. 
(5) 
Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal 
 
and interest. Such investments are normally considered to be equivalent to AAA rated securities. 
(6) 
Auction Rate Preferred shares, at Liquidation Value as a percentage of Total Investments is 31.7%. 
N/R 
Not rated. 
(ETM) 
Escrowed to maturity. 
(IF) 
Inverse floating rate investment. 

 
See accompanying notes to financial statements.
 
 
Nuveen Investments 25
 
 
 
 
 
 

           
   
Nuveen Arizona Dividend Advantage Municipal Fund 
    
NFZ 
  
Portfolio of Investments
    
     
July 31, 2010 
 
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Education and Civic Organizations – 10.5% (7.2% of Total Investments)
      
$        280 
  
Arizona Higher Education Loan Authority, Student Loan Revenue Bonds, Series 2007B, Auction 
9/10 at 100.00 
A 
$     230,227 
   
Rate Securities, 0.585%, 11/01/41 (Alternative Minimum Tax) (4) 
      
500 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, Midwestern University, 
5/20 at 100.00 
A– 
502,445 
   
Series 2010, 5.125%, 5/15/40 
      
1,000 
  
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities 
8/10 at 100.50 
BBB– 
975,400 
   
Financing Authority, Higher Education Revenue Bonds, Ana G. Mendez University System, 
      
   
Series 1999, 5.375%, 2/01/29 
      
300 
  
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities 
9/11 at 100.00 
BBB 
301,713 
   
Financing Authority, Higher Education Revenue Bonds, University of the Sacred Heart, Series 
      
   
2001, 5.250%, 9/01/21 
      
305 
  
Tucson Industrial Development Authority, Arizona, Charter School Revenue Bonds, Arizona 
9/14 at 100.00 
BBB– 
288,323 
   
Agribusiness and Equine Center Charter School, Series 2004A, 6.125%, 9/01/34 
      
2,385 
  
Total Education and Civic Organizations 
    
2,298,108 
   
Health Care – 18.0% (12.4% of Total Investments)
      
565 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/17 at 100.00 
A+ 
575,532 
   
2007A, 5.000%, 1/01/25 
      
325 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/17 at 100.00 
A+ 
210,730 
   
2007B, 1.167%, 1/01/37 
      
720 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/18 at 100.00 
A+ 
737,129 
   
2008D, 5.500%, 1/01/38 
      
10 
  
California Health Facilities Financing Authority, Health Facility Revenue Bonds, Adventist 
3/13 at 100.00 
A 
10,002 
   
Health System/West, Series 2003A, 5.000%, 3/01/28 
      
250 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, John C. Lincoln Health 
12/15 at 100.00 
BBB 
229,440 
   
Network, Series 2005B, 5.000%, 12/01/37 
      
415 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, John C. Lincoln Health 
12/17 at 100.00 
BBB 
374,538 
   
Network, Series 2007, 5.000%, 12/01/42 
      
750 
  
Maricopa County Industrial Development Authority, Arizona, Health Facility Revenue Bonds, 
7/14 at 100.00 
A 
776,993 
   
Catholic Healthcare West, Series 2004A, 5.375%, 7/01/23 
      
1,025 
  
Maricopa County Industrial Development Authority, Arizona, Health Facility Revenue Bonds, 
7/17 at 100.00 
A 
1,040,990 
   
Catholic Healthcare West, Series 2007A, 5.250%, 7/01/32 
      
4,060 
  
Total Health Care 
    
3,955,354 
   
Housing/Multifamily – 3.3% (2.2% of Total Investments)
      
1,000 
  
Maricopa County Industrial Development Authority, Arizona, Multifamily Housing Revenue Bonds, 
8/10 at 101.00 
Baa1 
724,150 
   
Whispering Palms Apartments, Series 1999A, 5.900%, 7/01/29 – NPFG Insured 
      
   
Housing/Single Family – 3.3% (2.3% of Total Investments)
      
720 
  
Tucson and Pima County Industrial Development Authority, Arizona, Joint Single Family Mortgage 
6/17 at 101.00 
Aaa 
735,091 
   
Revenue Bonds, Series 2007B, 5.350%, 6/01/47 (Alternative Minimum Tax) 
      
   
Tax Obligation/General – 11.7% (8.0% of Total Investments)
      
1,000 
  
Maricopa County Unified School District 11, Peoria, Arizona, General Obligation Bonds, Second 
7/15 at 100.00 
Aa2 
1,105,900 
   
Series 2005, 5.000%, 7/01/20 – FGIC Insured 
      
1,340 
  
Yuma & La Paz Counties Community College District, Arizona, General Obligation Bonds, Series 
7/16 at 100.00 
Aa2 
1,458,912 
   
2006, 5.000%, 7/01/21 – NPFG Insured 
      
2,340 
  
Total Tax Obligation/General 
    
2,564,812 
   
Tax Obligation/Limited – 46.8% (32.2% of Total Investments)
      
1,220 
  
Arizona Tourism and Sports Authority, Tax Revenue Bonds, Multipurpose Stadium Facility 
7/13 at 100.00 
A1 
1,209,020 
   
Project, Series 2003A, 5.000%, 7/01/31 – NPFG Insured 
      
88 
  
Centerra Community Facilities District, Goodyear, Arizona, General Obligation Bonds, Series 
7/15 at 100.00 
N/R 
72,340 
   
2005, 5.500%, 7/15/29 
      
207 
  
Estrella Mountain Ranch Community Facilities District, Arizona, Special Assessment Bonds, 
1/17 at 100.00 
N/R 
160,547 
   
Montecito Assessment District, Series 2007, 5.700%, 7/01/27 
      

26 Nuveen Investments
 
 
 
 
 

           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Tax Obligation/Limited (continued) 
      
$          138 
  
Estrella Mountain Ranch Community Facilities District, Goodyear, Arizona, Special Assessment 
7/12 at 100.00 
N/R 
$       140,870 
   
Lien Bonds, Series 2001A, 7.875%, 7/01/25 
      
1,000 
  
Greater Arizona Development Authority, Infrastructure Revenue Bonds, Series 2006-1, 5.000%, 
8/16 at 100.00 
AA– 
1,052,460 
   
8/01/22 – NPFG Insured 
      
275 
  
Greater Arizona Development Authority, Infrastructure Revenue Bonds, Series 2006A, 5.000%, 
8/16 at 100.00 
AA– 
292,155 
   
8/01/23 – NPFG Insured 
      
1,180 
  
Marana Municipal Property Corporation, Arizona, Revenue Bonds, Series 2003, 5.000%, 7/01/23 – 
7/13 at 100.00 
AA 
1,246,587 
   
AMBAC Insured 
      
528 
  
Marana, Arizona, Tangerine Farms Road Improvement District Revenue Bonds, Series 2006, 
7/16 at 100.00 
A2 
503,823 
   
4.600%, 1/01/26 
      
150 
  
Marley Park Community Facilities District, City of Surprise, Arizona, Limited Tax General 
7/17 at 100.00 
N/R 
130,886 
   
Obligation Bonds, Series 2007, 6.100%, 7/15/32 
      
255 
  
Merrill Ranch Community Facilities District 1, Florence, Arizona, General Obligation Bonds, 
7/18 at 100.00 
N/R 
256,293 
   
Series 2008A, 7.400%, 7/15/33 
      
330 
  
Palm Valley Community Facility District 3, Goodyear, Arizona, General Obligation Bonds, Series 
7/16 at 100.00 
N/R 
261,779 
   
2006, 5.300%, 7/15/31 
      
225 
  
Palm Valley Community Facility District 3, Goodyear, Arizona, Limited Tax General Obligation 
7/17 at 100.00 
N/R 
188,980 
   
Bonds, Series 2007, 5.800%, 7/15/32 
      
100 
  
Parkway Community Facilities District 1, Prescott Valley, Arizona, General Obligation Bonds, 
7/16 at 100.00 
N/R 
79,862 
   
Series 2006, 5.350%, 7/15/31 
      
900 
  
Phoenix Industrial Development Authority, Arizona, Government Bonds, Capitol Mall LLC II, 
3/12 at 100.00 
A1 
949,014 
   
Series 2001, 5.250%, 9/15/16 – AMBAC Insured 
      
680 
  
Pinal County Industrial Development Authority, Arizona, Correctional Facilities Contract 
No Opt. Call 
BBB– 
665,244 
   
Revenue Bonds, Florence West Prison LLC, Series 2002A, 5.000%, 10/01/18 – ACA Insured 
      
600 
  
San Luis Civic Improvement Corporation, Arizona, Municipal Facilities Excise Tax Revenue 
7/15 at 100.00 
A+ 
617,622 
   
Bonds, Series 2005, 5.000%, 7/01/25 – SYNCORA GTY Insured 
      
1,000 
  
Scottsdale Municipal Property Corporation, Arizona, Excise Tax Revenue Bonds, Refunding Series 
No Opt. Call 
AAA 
1,178,670 
   
2006, 5.000%, 7/01/24 
      
350 
  
Tartesso West Community Facility District, Buckeye, Arizona, Limited Tax General Obligation 
7/17 at 100.00 
N/R 
297,780 
   
Bonds, Series 2007, 5.900%, 7/15/32 
      
500 
  
Vistancia Community Facilities District, Arizona, Restricted General Obligation Bonds, Series 
7/15 at 100.00 
A1 
529,535 
   
2005, 5.750%, 7/15/24 
      
341 
  
Watson Road Community Facilities District, Arizona, Special Assessment Revenue Bonds, Series 
7/16 at 100.00 
N/R 
281,802 
   
2005, 6.000%, 7/01/30 
      
225 
  
Westpark Community Facilities District, Buckeye, Arizona, General Obligation Tax Increment 
7/16 at 100.00 
N/R 
177,282 
   
Bonds Series 2006, 5.250%, 7/15/31 
      
10,292 
  
Total Tax Obligation/Limited 
    
10,292,551 
   
U.S. Guaranteed – 7.0% (4.8% of Total Investments) (5)
      
240 
  
Maricopa County Union High School District 210 Phoenix, Arizona, General Obligation Bonds, 
7/16 at 100.00 
AA (5) 
288,689 
   
Series 2006C, 5.000%, 7/01/24 (Pre-refunded 7/01/16) – MBIA Insured 
      
140 
  
Maricopa County, Arizona, Hospital Revenue Bonds, Sun Health Corporation, Series 2005, 5.000%, 
4/15 at 100.00 
N/R (5) 
163,496 
   
4/01/16 (Pre-refunded 4/01/15) 
      
1,000 
  
Scottsdale Industrial Development Authority, Arizona, Hospital Revenue Bonds, Scottsdale 
12/11 at 101.00 
N/R (5) 
1,083,110 
   
Healthcare, Series 2001, 5.800%, 12/01/31 (Pre-refunded 12/01/11) 
      
1,380 
  
Total U.S. Guaranteed 
    
1,535,295 
   
Utilities – 31.1% (21.4% of Total Investments)
      
1,500 
  
Arizona Power Authority, Special Obligation Power Resource Revenue Refunding Crossover Bonds, 
No Opt. Call 
AA 
1,789,245 
   
Hoover Project, Series 2001, 5.250%, 10/01/17 
      
1,000 
  
Mesa, Arizona, Utility System Revenue Refunding Bonds, Series 2002, 5.250%, 7/01/17 – 
No Opt. Call 
Aa2 
1,176,850 
   
FGIC Insured 
      
665 
  
Pima County Industrial Development Authority, Arizona, Revenue Bonds, Tucson Electric Power 
1/15 at 100.00 
BBB– 
680,401 
   
Company, Refunding Series 2008, 5.750%, 9/01/29 
      

 
Nuveen Investments 27
 
 
 
 
 
 
NFZ
Nuveen Arizona Dividend Advantage Municipal Fund (continued)
Portfolio of Investments July 31, 2010
 
           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Utilities (continued) 
      
$    1,000 
  
Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 2005RR, 5.000%, 7/01/26 – 
7/15 at 100.00 
A3 
$    1,013,220 
   
SYNCORA GTY Insured 
      
200 
  
Salt River Project Agricultural Improvement and Power District, Arizona, Electric System 
1/13 at 100.00 
Aa1 
214,098 
   
Revenue Bonds, Series 2002B, 5.000%, 1/01/22 
      
560 
  
Salt River Project Agricultural Improvement and Power District, Arizona, Electric System 
1/18 at 100.00 
Aa1 
670,970 
   
Revenue Bonds, Tender Option Bond Trust 09-9W, 17.172%, 1/01/38 (IF) 
      
235 
  
Salt River Project Agricultural Improvement and Power District, Arizona, Electric System 
7/10 at 100.00 
Aa1 
235,848 
   
Revenue Refunding Bonds, Series 1997A, 5.000%, 1/01/20 
      
1,000 
  
Salt River Project Agricultural Improvement and Power District, Arizona, Electric System 
1/12 at 101.00 
Aa1 
1,064,150 
   
Revenue Refunding Bonds, Series 2002A, 5.250%, 1/01/18 
      
6,160 
  
Total Utilities 
    
6,844,782 
   
Water and Sewer – 13.8% (9.5% of Total Investments)
      
475 
  
Goodyear, Arizona, Water and Sewer Revenue Obligations, Series 2010, 5.625%, 7/01/39 
7/20 at 100.00 
A2 
477,665 
225 
  
Oro Valley Municipal Property Corporation, Arizona, Senior Lien Water Revenue Bonds, Series 
7/13 at 100.00 
AA– 
232,828 
   
2003, 5.000%, 7/01/23 – NPFG Insured 
      
1,500 
  
Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water System Revenue Bonds, Series 
7/12 at 100.00 
AAA 
1,549,125 
   
2002, 5.000%, 7/01/26 – FGIC Insured 
      
   
Surprise Municipal Property Corporation, Arizona, Wastewater System Revenue Bonds, Series 2007: 
      
225 
  
4.700%, 4/01/22 
4/14 at 100.00 
N/R 
226,644 
260 
  
4.900%, 4/01/32 
4/17 at 100.00 
N/R 
241,674 
325 
  
Yuma County Industrial Development Authority, Arizona, Exempt Revenue Bonds, Far West Water & 
12/17 at 100.00 
N/R 
302,187 
   
Sewer Inc. Refunding, Series 2007A, 6.375%, 12/01/37 (Alternative Minimum Tax) 
      
3,010 
  
Total Water and Sewer 
    
3,030,123 
$  31,347 
  
Total Investments (cost $31,425,432) – 145.5% 
    
31,980,266 
   
Other Assets Less Liabilities – 2.7% 
    
604,129 
   
Auction Rate Preferred Shares, at Liquidation Value – (48.2)% (6) 
    
(10,600,000) 
   
Net Assets Applicable to Common Shares – 100% 
    
$    21,984,395 

   
(1) 
All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. 
(2) 
Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest 
 
optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic 
 
principal paydowns. 
(3) 
Ratings (not covered by the report of independent registered public accounting firm): Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), 
 
Moody’s Investor Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are 
 
considered to be below investment grade. 
(4) 
Investment valued at fair value using methods determined in good faith by, or at the discretion of, the Board of Trustees. For fair value measurement disclo- 
 
sure purposes, investment categorized as Level 3. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, 
 
Investment Valuation for more information. 
(5) 
Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal 
 
and interest. Such investments are normally considered to be equivalent to AAA rated securities. 
(6) 
Auction Rate Preferred shares, at Liquidation Value as a percentage of Total Investments is 33.1%. 
N/R 
Not rated. 
(IF) 
Inverse floating rate investment. 

 
See accompanying notes to financial statements.
 
28 Nuveen Investments
 
 
 
 

           
   
Nuveen Arizona Dividend Advantage Municipal Fund 2 
  
NKR 
  
Portfolio of Investments
    
     
July 31, 2010 
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Education and Civic Organizations – 8.6% (6.0% of Total Investments)
      
$       1,130 
  
Arizona Higher Education Loan Authority, Student Loan Revenue Bonds, Series 2007B, Auction 
9/10 at 100.00 
A 
$       929,131 
   
Rate Securities, 0.585%, 11/01/41 (Alternative Minimum Tax) (4) 
      
775 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, Midwestern University, 
5/20 at 100.00 
A– 
778,790 
   
Series 2010, 5.125%, 5/15/40 
      
485 
  
Pima County Industrial Development Authority, Arizona, Charter School Revenue Bonds, Noah 
12/14 at 100.00 
BBB– 
469,107 
   
Webster Basic Schools Inc., Series 2004, 6.000%, 12/15/24 
      
320 
  
Puerto Rico Industrial, Tourist, Educational, Medical and Environmental Control Facilities 
8/10 at 100.50 
BBB– 
320,854 
   
Financing Authority, Higher Education Revenue Bonds, Ana G. Mendez University System, 
      
   
Series 1999, 5.375%, 2/01/19 
      
480 
  
Tucson Industrial Development Authority, Arizona, Charter School Revenue Bonds, Arizona 
9/14 at 100.00 
BBB– 
453,754 
   
Agribusiness and Equine Center Charter School, Series 2004A, 6.125%, 9/01/34 
      
   
University of Arizona, Certificates of Participation, Series 2002A: 
      
65 
  
5.500%, 6/01/18 – AMBAC Insured 
6/12 at 100.00 
AA– 
69,566 
40 
  
5.125%, 6/01/22 – AMBAC Insured 
6/12 at 100.00 
AA– 
41,860 
3,295 
  
Total Education and Civic Organizations 
    
3,063,062 
   
Health Care – 24.0% (16.9% of Total Investments)
      
845 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/17 at 100.00 
A+ 
860,751 
   
2007A, 5.000%, 1/01/25 
      
520 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/17 at 100.00 
A+ 
337,168 
   
2007B, 1.167%, 1/01/37 
      
1,150 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/18 at 100.00 
A+ 
1,177,359 
   
2008D, 5.500%, 1/01/38 
      
600 
  
Arizona Health Facilities Authority, Revenue Bonds, Blood Systems Inc., Series 2004, 
4/14 at 100.00 
A 
617,574 
   
5.000%, 4/01/20 
      
400 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, John C. Lincoln Health 
12/15 at 100.00 
BBB 
367,104 
   
Network, Series 2005B, 5.000%, 12/01/37 
      
655 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, John C. Lincoln Health 
12/17 at 100.00 
BBB 
591,138 
   
Network, Series 2007, 5.000%, 12/01/42 
      
1,375 
  
Maricopa County Industrial Development Authority, Arizona, Health Facility Revenue Bonds, 
7/14 at 100.00 
A 
1,424,486 
   
Catholic Healthcare West, Series 2004A, 5.375%, 7/01/23 
      
1,650 
  
Maricopa County Industrial Development Authority, Arizona, Health Facility Revenue Bonds, 
7/17 at 100.00 
A 
1,675,740 
   
Catholic Healthcare West, Series 2007A, 5.250%, 7/01/32 
      
500 
  
Maricopa County Industrial Development Authority, Arizona, Hospital Revenue Bonds, Mayo Clinic 
11/10 at 100.00 
Aa2 
500,195 
   
Hospital, Series 1998, 5.250%, 11/15/37 
      
1,000 
  
Yavapai County Industrial Development Authority, Arizona, Hospital Revenue Bonds, Yavapai 
8/13 at 100.00 
Baa2 
1,009,820 
   
Regional Medical Center, Series 2003A, 6.000%, 8/01/33 
      
8,695 
  
Total Health Care 
    
8,561,335 
   
Housing/Multifamily – 2.1% (1.5% of Total Investments)
      
705 
  
Maricopa County Industrial Development Authority, Arizona, GNMA Collateralized Multifamily 
10/11 at 105.00 
AAA 
746,102 
   
Housing Revenue Refunding Bonds, Pine Ridge, Cambridge Court, Cove on 44th and Fountain 
      
   
Place Apartments, Series 2001A-1, 6.000%, 10/20/31 
      
   
Housing/Single Family – 3.4% (2.4% of Total Investments)
      
1,185 
  
Tucson and Pima County Industrial Development Authority, Arizona, Joint Single Family Mortgage 
6/17 at 101.00 
Aaa 
1,209,838 
   
Revenue Bonds, Series 2007B, 5.350%, 6/01/47 (Alternative Minimum Tax) 
      

 
Nuveen Investments 29
 
 
 
 
 
 
NKR
Nuveen Arizona Dividend Advantage Municipal Fund 2 (continued)
Portfolio of Investments July 31, 2010
 
           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Tax Obligation/General – 19.6% (13.9% of Total Investments)
      
$      1,000 
  
Maricopa County School District 6, Arizona, General Obligation Refunding Bonds, Washington 
No Opt. Call 
AAA 
$     1,186,890 
   
Elementary School, Series 2002A, 5.375%, 7/01/16 – AGM Insured 
      
1,165 
  
Maricopa County Unified School District 69, Paradise Valley, Arizona, General Obligation 
No Opt. Call 
Aa2 
1,342,208 
   
Refunding Bonds, Series 2002A, 5.250%, 7/01/14 – FGIC Insured 
      
1,405 
  
Mesa, Arizona, General Obligation Bonds, Series 2002, 5.375%, 7/01/15 – FGIC Insured 
No Opt. Call 
AA 
1,639,073 
   
Phoenix, Arizona, Various Purpose General Obligation Bonds, Series 2002B: 
      
1,700 
  
5.000%, 7/01/22 
7/12 at 100.00 
AAA 
1,810,143 
500 
  
5.000%, 7/01/27 
7/12 at 100.00 
AAA 
513,745 
510 
  
Scottsdale, Arizona, General Obligation Bonds, Series 2002, 5.000%, 7/01/24 
7/11 at 100.00 
AAA 
518,588 
6,280 
  
Total Tax Obligation/General 
    
7,010,647 
   
Tax Obligation/Limited – 44.6% (31.5% of Total Investments)
      
   
Arizona State, Certificates of Participation, Series 2002A: 
      
750 
  
5.000%, 11/01/17 – NPFG Insured 
5/12 at 100.00 
A+ 
776,430 
1,000 
  
5.000%, 11/01/18 – NPFG Insured 
5/12 at 100.00 
A+ 
1,030,760 
500 
  
5.000%, 11/01/20 – NPFG Insured 
5/12 at 100.00 
A+ 
511,675 
124 
  
Centerra Community Facilities District, Goodyear, Arizona, General Obligation Bonds, Series 
7/15 at 100.00 
N/R 
101,933 
   
2005, 5.500%, 7/15/29 
      
340 
  
Estrella Mountain Ranch Community Facilities District, Arizona, Special Assessment Bonds, 
1/17 at 100.00 
N/R 
251,529 
   
Montecito Assessment District, Series 2007, 5.800%, 7/01/32 
      
218 
  
Estrella Mountain Ranch Community Facilities District, Goodyear, Arizona, Special Assessment 
7/12 at 100.00 
N/R 
222,534 
   
Lien Bonds, Series 2001A, 7.875%, 7/01/25 
      
884 
  
Marana, Arizona, Tangerine Farms Road Improvement District Revenue Bonds, Series 2006, 
7/16 at 100.00 
A2 
843,522 
   
4.600%, 1/01/26 
      
   
Maricopa County Stadium District, Arizona, Revenue Refunding Bonds, Series 2002: 
      
840 
  
5.375%, 6/01/18 – AMBAC Insured 
6/12 at 100.00 
N/R 
888,384 
2,645 
  
5.375%, 6/01/19 – AMBAC Insured 
6/12 at 100.00 
N/R 
2,797,352 
240 
  
Marley Park Community Facilities District, City of Surprise, Arizona, Limited Tax General 
7/17 at 100.00 
N/R 
209,417 
   
Obligation Bonds, Series 2007, 6.100%, 7/15/32 
      
415 
  
Merrill Ranch Community Facilities District 1, Florence, Arizona, General Obligation Bonds, 
7/18 at 100.00 
N/R 
417,104 
   
Series 2008A, 7.400%, 7/15/33 
      
530 
  
Palm Valley Community Facility District 3, Goodyear, Arizona, General Obligation Bonds, Series 
7/16 at 100.00 
N/R 
420,433 
   
2006, 5.300%, 7/15/31 
      
350 
  
Palm Valley Community Facility District 3, Goodyear, Arizona, Limited Tax General Obligation 
7/17 at 100.00 
N/R 
293,969 
   
Bonds, Series 2007, 5.800%, 7/15/32 
      
140 
  
Parkway Community Facilities District 1, Prescott Valley, Arizona, General Obligation Bonds, 
7/16 at 100.00 
N/R 
111,807 
   
Series 2006, 5.350%, 7/15/31 
      
1,500 
  
Phoenix Industrial Development Authority, Arizona, Government Bonds, Capitol Mall LLC II, 
3/12 at 100.00 
A1 
1,581,690 
   
Series 2001, 5.250%, 9/15/16 – AMBAC Insured 
      
1,070 
  
Pinal County Industrial Development Authority, Arizona, Correctional Facilities Contract 
No Opt. Call 
BBB– 
1,046,781 
   
Revenue Bonds, Florence West Prison LLC, Series 2002A, 5.000%, 10/01/18 – ACA Insured 
      
270 
  
Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Refunding 
7/12 at 100.00 
A3 
270,794 
   
Bonds, Series 2002D, 5.125%, 7/01/24 
      
960 
  
San Luis Civic Improvement Corporation, Arizona, Municipal Facilities Excise Tax Revenue 
7/15 at 100.00 
A+ 
988,195 
   
Bonds, Series 2005, 5.000%, 7/01/25 – SYNCORA GTY Insured 
      
1,000 
  
Scottsdale Municipal Property Corporation, Arizona, Excise Tax Revenue Bonds, Refunding Series 
No Opt. Call 
AAA 
1,178,670 
   
2006, 5.000%, 7/01/24 
      
555 
  
Tartesso West Community Facility District, Buckeye, Arizona, Limited Tax General Obligation 
7/17 at 100.00 
N/R 
472,194 
   
Bonds, Series 2007, 5.900%, 7/15/32 
      
750 
  
Vistancia Community Facilities District, Arizona, Restricted General Obligation Bonds, Series 
7/15 at 100.00 
A1 
794,303 
   
2005, 5.750%, 7/15/24 
      

30 Nuveen Investments
 
 
 
 

           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Tax Obligation/Limited (continued) 
      
$        538 
  
Watson Road Community Facilities District, Arizona, Special Assessment Revenue Bonds, Series 
7/16 at 100.00 
N/R 
$      444,603 
   
2005, 6.000%, 7/01/30 
      
350 
  
Westpark Community Facilities District, Buckeye, Arizona, General Obligation Tax Increment 
7/16 at 100.00 
N/R 
275,772 
   
Bonds Series 2006, 5.250%, 7/15/31 
      
15,969 
  
Total Tax Obligation/Limited 
    
15,929,851 
   
Transportation – 4.1% (2.9% of Total Investments)
      
470 
  
Phoenix Civic Improvement Corporation, Arizona, Senior Lien Airport Revenue Bonds, Series 
1/11 at 100.00 
AAA 
471,415 
   
1998A, 5.000%, 7/01/25 – AGM Insured 
      
1,000 
  
Phoenix, Arizona, Civic Improvement Corporation, Senior Lien Airport Revenue Bonds, Series 
7/12 at 100.00 
AA– 
1,008,120 
   
2002B, 5.250%, 7/01/27 – FGIC Insured (Alternative Minimum Tax) 
      
1,470 
  
Total Transportation 
    
1,479,535 
   
U.S. Guaranteed – 17.0% (12.0% of Total Investments) (5)
      
735 
  
Arizona Health Facilities Authority, Hospital System Revenue Bonds, Phoenix Children’s 
2/12 at 101.00 
N/R (5) 
809,529 
   
Hospital, Series 2002A, 6.250%, 2/15/21 (Pre-refunded 2/15/12) 
      
715 
  
Arizona State University, System Revenue Bonds, Series 2002, 5.750%, 7/01/27 (Pre-refunded 
7/12 at 100.00 
AAA 
789,160 
   
7/01/12) – FGIC Insured 
      
100 
  
Maricopa County Unified School District 89, Dysart, Arizona, General Obligation Bonds, Series 
7/14 at 100.00 
AAA 
117,369 
   
2004B, 5.250%, 7/01/20 (Pre-refunded 7/01/14) – AGM Insured 
      
375 
  
Maricopa County Union High School District 210 Phoenix, Arizona, General Obligation Bonds, 
7/16 at 100.00 
AA (5) 
451,076 
   
Series 2006C, 5.000%, 7/01/24 (Pre-refunded 7/01/16) – MBIA Insured 
      
225 
  
Maricopa County, Arizona, Hospital Revenue Bonds, Sun Health Corporation, Series 2005, 5.000%, 
4/15 at 100.00 
N/R (5) 
262,762 
   
4/01/16 (Pre-refunded 4/01/15) 
      
730 
  
Puerto Rico Public Buildings Authority, Guaranteed Government Facilities Revenue Refunding 
7/12 at 100.00 
Baa3 (5) 
792,722 
   
Bonds, Series 2002D, 5.125%, 7/01/24 (Pre-refunded 7/01/12) 
      
1,000 
  
Scottsdale Industrial Development Authority, Arizona, Hospital Revenue Bonds, Scottsdale 
12/11 at 101.00 
N/R (5) 
1,083,110 
   
Healthcare, Series 2001, 5.800%, 12/01/31 (Pre-refunded 12/01/11) 
      
490 
  
Scottsdale, Arizona, General Obligation Bonds, Series 2002, 5.000%, 7/01/24 
7/11 at 100.00 
AAA 
511,663 
   
(Pre-refunded 7/01/11) 
      
   
University of Arizona, Certificates of Participation, Series 2002A: 
      
685 
  
5.500%, 6/01/18 (Pre-refunded 6/01/12) – AMBAC Insured 
6/12 at 100.00 
AA– (5) 
747,678 
460 
  
5.125%, 6/01/22 (Pre-refunded 6/01/12) – AMBAC Insured 
6/12 at 100.00 
Aa3 (5) 
498,939 
5,515 
  
Total U.S. Guaranteed 
    
6,064,008 
   
Utilities – 5.9% (4.2% of Total Investments)
      
665 
  
Pima County Industrial Development Authority, Arizona, Revenue Bonds, Tucson Electric Power 
1/15 at 100.00 
BBB– 
680,401 
   
Company, Refunding Series 2008, 5.750%, 9/01/29 
      
450 
  
Salt River Project Agricultural Improvement and Power District, Arizona, Electric System 
1/18 at 100.00 
Aa1 
539,172 
   
Revenue Bonds, Tender Option Bond Trust 09-9W, 17.172%, 1/01/38 (IF) 
      
1,000 
  
Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds, Citigroup Energy Inc 
No Opt. Call 
A 
891,520 
   
Prepay Contract Obligations, Series 2007, 5.000%, 12/01/37 
      
2,115 
  
Total Utilities 
    
2,111,093 
   
Water and Sewer – 12.3% (8.7% of Total Investments)
      
500 
  
Maricopa County Industrial Development Authority, Arizona, Water System Improvement Revenue 
12/10 at 100.00 
N/R 
500,050 
   
Bonds, Chaparral City Water Company, Series 1997A, 5.400%, 12/01/22 – AMBAC Insured 
      
   
(Alternative Minimum Tax) 
      
360 
  
Oro Valley Municipal Property Corporation, Arizona, Senior Lien Water Revenue Bonds, Series 
7/13 at 100.00 
AA– 
372,524 
   
2003, 5.000%, 7/01/23 – NPFG Insured 
      
1,000 
  
Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water System Revenue Refunding 
No Opt. Call 
AAA 
1,221,410 
   
Bonds, Series 2001, 5.500%, 7/01/22 – FGIC Insured 
      

 
Nuveen Investments 31
 
 
 
 

 
NKR
Nuveen Arizona Dividend Advantage Municipal Fund 2 (continued)
Portfolio of Investments July 31, 2010
 
             
Principal
    
Optional Call
      
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
  
   
Water and Sewer (continued) 
        
   
Surprise Municipal Property Corporation, Arizona, Wastewater System Revenue Bonds, Series 2007: 
        
$         350 
  
4.700%, 4/01/22 
4/14 at 100.00 
N/R 
$      352,559
  
410 
  
4.900%, 4/01/32 
4/17 at 100.00 
N/R 
381,102
  
1,000 
  
Tucson, Arizona, Water System Revenue Refunding Bonds, Series 2002, 5.500%, 7/01/18 – 
7/12 at 102.00 
Aa2 
1,097,039
  
   
FGIC Insured 
        
525 
  
Yuma County Industrial Development Authority, Arizona, Exempt Revenue Bonds, Far West Water & 
12/17 at 100.00 
N/R 
488,149
  
   
Sewer Inc. Refunding, Series 2007A, 6.375%, 12/01/37 (Alternative Minimum Tax) 
        
4,145 
  
Total Water and Sewer 
    
4,412,833
  
$     49,374 
  
Total Investments (cost $49,228,018) – 141.6% 
    
50,588,304
  
   
Other Assets Less Liabilities – 4.9% 
    
1,769,958
  
   
Auction Rate Preferred Shares, at Liquidation Value – (46.5)% (6) 
    
(16,625,000
 ) 
   
Net Assets Applicable to Common Shares – 100% 
    
$   35,733,262
  

   
(1) 
All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. 
(2) 
Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest 
 
optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic 
 
principal paydowns. 
(3) 
Ratings (not covered by the report of independent registered public accounting firm): Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), 
 
Moody’s Investor Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are 
 
considered to be below investment grade. 
(4) 
Investment valued at fair value using methods determined in good faith by, or at the discretion of, the Board of Trustees. For fair value measurement disclo- 
 
sure purposes, investment categorized as Level 3. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, 
 
Investment Valuation for more information. 
(5) 
Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal 
 
and interest. Such investments are normally considered to be equivalent to AAA rated securities. 
(6) 
Auction Rate Preferred shares, at Liquidation Value as a percentage of Total Investments is 32.9%. 
N/R 
Not rated. 
(IF) 
Inverse floating rate investment. 

 
See accompanying notes to financial statements.
 
32 Nuveen Investments
 
 
 
 
 
           
   
Nuveen Arizona Dividend Advantage Municipal Fund 3 
  
NXE 
  
Portfolio of Investments
    
     
July 31, 2010 
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Consumer Staples – 1.1% (0.8% of Total Investments)
      
$        485 
  
Puerto Rico, The Children’s Trust Fund, Tobacco Settlement Asset-Backed Refunding Bonds, 
5/12 at 100.00 
BBB 
$        463,199 
   
Series 2002, 5.375%, 5/15/33 
      
   
Education and Civic Organizations – 16.6% (11.9% of Total Investments)
      
690 
  
Arizona Higher Education Loan Authority, Student Loan Revenue Bonds, Series 2007B, Auction 
9/10 at 100.00 
A 
567,346 
   
Rate Securities, 0.585%, 11/01/41 (Alternative Minimum Tax) (4) 
      
1,250 
  
Arizona State University, System Revenue Bonds, Series 2005, 5.000%, 7/01/20 – AMBAC Insured 
7/15 at 100.00 
Aa3 
1,312,400 
1,130 
  
Energy Management Services LLC, Arizona State University, Energy Conservation Revenue Bonds, 
7/12 at 100.00 
AA 
1,209,089 
   
Main Campus Project, Series 2002, 5.250%, 7/01/18 – NPFG Insured 
      
900 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, Midwestern University, 
5/20 at 100.00 
A– 
904,401 
   
Series 2010, 5.125%, 5/15/40 
      
560 
  
Pima County Industrial Development Authority, Arizona, Charter School Revenue Bonds, Noah 
12/14 at 100.00 
BBB– 
541,649 
   
Webster Basic Schools Inc., Series 2004, 6.000%, 12/15/24 
      
565 
  
Tucson Industrial Development Authority, Arizona, Charter School Revenue Bonds, Arizona 
9/14 at 100.00 
BBB– 
534,106 
   
Agribusiness and Equine Center Charter School, Series 2004A, 6.125%, 9/01/34 
      
2,000 
  
University of Arizona, Certificates of Participation, Series 2002B, 5.125%, 6/01/20 – 
6/12 at 100.00 
AA– 
2,126,980 
   
AMBAC Insured 
      
7,095 
  
Total Education and Civic Organizations 
    
7,195,971 
   
Health Care – 29.1% (20.9% of Total Investments)
      
1,015 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/17 at 100.00 
A+ 
1,033,920 
   
2007A, 5.000%, 1/01/25 
      
620 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/17 at 100.00 
A+ 
402,008 
   
2007B, 1.167%, 1/01/37 
      
2,390 
  
Arizona Health Facilities Authority, Hospital Revenue Bonds, Banner Health Systems, Series 
1/18 at 100.00 
A+ 
2,446,858 
   
2008D, 5.500%, 1/01/38 
      
625 
  
Arizona Health Facilities Authority, Revenue Bonds, Blood Systems Inc., Series 2004, 
4/14 at 100.00 
A 
643,306 
   
5.000%, 4/01/20 
      
475 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, John C. Lincoln Health 
12/15 at 100.00 
BBB 
435,936 
   
Network, Series 2005B, 5.000%, 12/01/37 
      
785 
  
Glendale Industrial Development Authority, Arizona, Revenue Bonds, John C. Lincoln Health 
12/17 at 100.00 
BBB 
708,463 
   
Network, Series 2007, 5.000%, 12/01/42 
      
1,825 
  
Maricopa County Industrial Development Authority, Arizona, Health Facility Revenue Bonds, 
7/14 at 100.00 
A 
1,890,682 
   
Catholic Healthcare West, Series 2004A, 5.375%, 7/01/23 
      
1,985 
  
Maricopa County Industrial Development Authority, Arizona, Health Facility Revenue Bonds, 
7/17 at 100.00 
A 
2,015,966 
   
Catholic Healthcare West, Series 2007A, 5.250%, 7/01/32 
      
2,000 
  
Maricopa County Industrial Development Authority, Arizona, Hospital Revenue Bonds, Mayo Clinic 
11/10 at 100.00 
Aa2 
2,000,780 
   
Hospital, Series 1998, 5.250%, 11/15/37 
      
1,000 
  
Yavapai County Industrial Development Authority, Arizona, Hospital Revenue Bonds, Yavapai 
8/13 at 100.00 
Baa2 
1,009,820 
   
Regional Medical Center, Series 2003A, 6.000%, 8/01/33 
      
12,720 
  
Total Health Care 
    
12,587,739 
   
Housing/Single Family – 3.3% (2.4% of Total Investments)
      
1,420 
  
Tucson and Pima County Industrial Development Authority, Arizona, Joint Single Family Mortgage 
6/17 at 101.00 
Aaa 
1,449,763 
   
Revenue Bonds, Series 2007B, 5.350%, 6/01/47 (Alternative Minimum Tax) 
      

 
Nuveen Investments 33
 
 
 
 
 
NXE
Nuveen Arizona Dividend Advantage Municipal Fund 3 (continued)
Portfolio of Investments July 31, 2010
 
           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Tax Obligation/General – 2.5% (1.8% of Total Investments)
      
$       1,000 
  
Pinal County Unified School District 1, Florence, Arizona, General Obligation Bonds, Series 
7/18 at 100.00 
A 
$     1,065,580 
   
2008C, 5.250%, 7/01/28 
      
   
Tax Obligation/Limited – 31.6% (22.7% of Total Investments)
      
142 
  
Centerra Community Facilities District, Goodyear, Arizona, General Obligation Bonds, Series 
7/15 at 100.00 
N/R 
116,730 
   
2005, 5.500%, 7/15/29 
      
2,250 
  
DC Ranch Community Facilities District, Scottsdale, Arizona, General Obligation Bonds, Series 
7/13 at 100.00 
A1 
2,224,620 
   
2002, 5.000%, 7/15/27 – AMBAC Insured 
      
   
Estrella Mountain Ranch Community Facilities District, Arizona, Special Assessment Bonds, 
      
   
Montecito Assessment District, Series 2007: 
      
250 
  
5.700%, 7/01/27 
1/17 at 100.00 
N/R 
193,898 
155 
  
5.800%, 7/01/32 
1/17 at 100.00 
N/R 
114,667 
257 
  
Estrella Mountain Ranch Community Facilities District, Goodyear, Arizona, Special Assessment 
7/12 at 100.00 
N/R 
262,346 
   
Lien Bonds, Series 2001A, 7.875%, 7/01/25 
      
525 
  
Greater Arizona Development Authority, Infrastructure Revenue Bonds, Series 2006A, 5.000%, 
8/16 at 100.00 
AA– 
557,750 
   
8/01/23 – NPFG Insured 
      
1,033 
  
Marana, Arizona, Tangerine Farms Road Improvement District Revenue Bonds, Series 2006, 
7/16 at 100.00 
A2 
985,699 
   
4.600%, 1/01/26 
      
290 
  
Marley Park Community Facilities District, City of Surprise, Arizona, Limited Tax General 
7/17 at 100.00 
N/R 
253,045 
   
Obligation Bonds, Series 2007, 6.100%, 7/15/32 
      
490 
  
Merrill Ranch Community Facilities District 1, Florence, Arizona, General Obligation Bonds, 
7/18 at 100.00 
N/R 
492,484 
   
Series 2008A, 7.400%, 7/15/33 
      
2,175 
  
Mohave County, Arizona, Certificates of Participation, Series 2004, 5.250%, 7/01/19 – 
7/14 at 100.00 
N/R 
2,334,645 
   
AMBAC Insured 
      
640 
  
Palm Valley Community Facility District 3, Goodyear, Arizona, General Obligation Bonds, Series 
7/16 at 100.00 
N/R 
507,693 
   
2006, 5.300%, 7/15/31 
      
425 
  
Palm Valley Community Facility District 3, Goodyear, Arizona, Limited Tax General Obligation 
7/17 at 100.00 
N/R 
356,962 
   
Bonds, Series 2007, 5.800%, 7/15/32 
      
160 
  
Parkway Community Facilities District 1, Prescott Valley, Arizona, General Obligation Bonds, 
7/16 at 100.00 
N/R 
127,779 
   
Series 2006, 5.350%, 7/15/31 
      
1,250 
  
Pinal County Industrial Development Authority, Arizona, Correctional Facilities Contract 
No Opt. Call 
BBB– 
1,222,875 
   
Revenue Bonds, Florence West Prison LLC, Series 2002A, 5.000%, 10/01/18 – ACA Insured 
      
1,130 
  
San Luis Civic Improvement Corporation, Arizona, Municipal Facilities Excise Tax Revenue 
7/15 at 100.00 
A+ 
1,163,188 
   
Bonds, Series 2005, 5.000%, 7/01/25 – SYNCORA GTY Insured 
      
665 
  
Tartesso West Community Facility District, Buckeye, Arizona, Limited Tax General Obligation 
7/17 at 100.00 
N/R 
565,782 
   
Bonds, Series 2007, 5.900%, 7/15/32 
      
1,250 
  
Vistancia Community Facilities District, Arizona, Restricted General Obligation Bonds, Series 
7/15 at 100.00 
A1 
1,323,838 
   
2005, 5.750%, 7/15/24 
      
639 
  
Watson Road Community Facilities District, Arizona, Special Assessment Revenue Bonds, Series 
7/16 at 100.00 
N/R 
528,070 
   
2005, 6.000%, 7/01/30 
      
425 
  
Westpark Community Facilities District, Buckeye, Arizona, General Obligation Tax Increment 
7/16 at 100.00 
N/R 
334,866 
   
Bonds Series 2006, 5.250%, 7/15/31 
      
14,151 
  
Total Tax Obligation/Limited 
    
13,666,937 

34 Nuveen Investments
 
 
 
 
           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Transportation – 13.5% (9.7% of Total Investments)
      
   
Phoenix, Arizona, Civic Improvement Corporation, Senior Lien Airport Revenue Bonds, 
      
   
Series 2002B: 
      
$      1,000 
  
5.750%, 7/01/16 – FGIC Insured (Alternative Minimum Tax) 
7/12 at 100.00 
AA– 
$     1,050,610 
2,300 
  
5.250%, 7/01/21 – FGIC Insured (Alternative Minimum Tax) 
7/12 at 100.00 
AA– 
2,347,633 
2,450 
  
Tucson Airport Authority Inc., Arizona, Revenue Refunding Bonds, Series 2001B, 5.000%, 
6/11 at 100.00 
A1 
2,464,088 
   
6/01/20 – AMBAC Insured (Alternative Minimum Tax) 
      
5,750 
  
Total Transportation 
    
5,862,331 
   
U.S. Guaranteed – 14.3% (10.2% of Total Investments) (5)
      
600 
  
Arizona Health Facilities Authority, Hospital System Revenue Bonds, John C. Lincoln Health 
12/10 at 102.00 
BBB (5) 
624,654 
   
Network, Series 2000, 6.875%, 12/01/20 (Pre-refunded 12/01/10) 
      
1,575 
  
Maricopa County Union High School District 210, Phoenix, Arizona, General Obligation Bonds, 
7/14 at 100.00 
AAA 
1,833,379 
   
Series 2004A, 5.000%, 7/01/20 (Pre-refunded 7/01/14) – AGM Insured 
      
270 
  
Maricopa County, Arizona, Hospital Revenue Bonds, Sun Health Corporation, Series 2005, 5.000%, 
4/15 at 100.00 
N/R (5) 
315,314 
   
4/01/16 (Pre-refunded 4/01/15) 
      
250 
  
Scottsdale Industrial Development Authority, Arizona, Hospital Revenue Bonds, Scottsdale 
12/11 at 101.00 
N/R (5) 
270,778 
   
Healthcare, Series 2001, 5.800%, 12/01/31 (Pre-refunded 12/01/11) 
      
2,770 
  
Tempe, Arizona, Excise Tax Revenue Refunding Bonds, Series 2003, 5.000%, 7/01/22 
7/13 at 100.00 
AAA 
3,126,915 
   
(Pre-refunded 7/01/13) 
      
5,465 
  
Total U.S. Guaranteed 
    
6,171,040 
   
Utilities – 13.4% (9.6% of Total Investments)
      
1,250 
  
Maricopa County Pollution Control Corporation, Arizona, Revenue Bonds, Arizona Public Service 
11/12 at 100.00 
Baa2 
1,190,213 
   
Company – Palo Verde Project, Series 2002A, 5.050%, 5/01/29 – AMBAC Insured 
      
665 
  
Pima County Industrial Development Authority, Arizona, Revenue Bonds, Tucson Electric Power 
1/15 at 100.00 
BBB– 
680,401 
   
Company, Refunding Series 2008, 5.750%, 9/01/29 
      
1,660 
  
Puerto Rico Electric Power Authority, Power Revenue Bonds, Series 2005RR, 5.000%, 7/01/26 – 
7/15 at 100.00 
A3 
1,681,945 
   
SYNCORA GTY Insured 
      
270 
  
Salt River Project Agricultural Improvement and Power District, Arizona, Electric System 
1/13 at 100.00 
Aa1 
289,032 
   
Revenue Bonds, Series 2002B, 5.000%, 1/01/22 
      
775 
  
Salt River Project Agricultural Improvement and Power District, Arizona, Electric System 
1/18 at 100.00 
Aa1 
928,574 
   
Revenue Bonds, Tender Option Bond Trust 09-9W, 17.172%, 1/01/38 (IF) 
      
1,165 
  
Salt Verde Financial Corporation, Arizona, Senior Gas Revenue Bonds, Citigroup Energy Inc 
No Opt. Call 
A 
1,038,621 
   
Prepay Contract Obligations, Series 2007, 5.000%, 12/01/37 
      
5,785 
  
Total Utilities 
    
5,808,786 
   
Water and Sewer – 13.9% (10.0% of Total Investments)
      
955 
  
Goodyear, Arizona, Water and Sewer Revenue Obligations, Series 2010, 5.625%, 7/01/39 
7/20 at 100.00 
A2 
960,358 
405 
  
Oro Valley Municipal Property Corporation, Arizona, Senior Lien Water Revenue Bonds, Series 
7/13 at 100.00 
AA– 
419,090 
   
2003, 5.000%, 7/01/23 – NPFG Insured 
      
1,000 
  
Phoenix Civic Improvement Corporation, Arizona, Junior Lien Wastewater System Revenue 
7/11 at 100.00 
AA+ 
1,034,379 
   
Refunding Bonds, Series 2001, 5.125%, 7/01/21 – FGIC Insured 
      

 
Nuveen Investments 35
 
 
 
 
 
NXE
Nuveen Arizona Dividend Advantage Municipal Fund 3 (continued)
Portfolio of Investments July 31, 2010
 
             
Principal
    
Optional Call
      
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
  
   
Water and Sewer (continued) 
        
$       2,000 
  
Phoenix Civic Improvement Corporation, Arizona, Junior Lien Water System Revenue Bonds, Series 
7/12 at 100.00 
AAA 
$     2,134,299
  
   
2002, 5.000%, 7/01/18 – FGIC Insured 
        
   
Surprise Municipal Property Corporation, Arizona, Wastewater System Revenue Bonds, Series 2007: 
        
425 
  
4.700%, 4/01/22 
4/14 at 100.00 
N/R 
428,106
  
490 
  
4.900%, 4/01/32 
4/17 at 100.00 
N/R 
455,464
  
615 
  
Yuma County Industrial Development Authority, Arizona, Exempt Revenue Bonds, Far West Water & 
12/17 at 100.00 
N/R 
571,832
  
   
Sewer Inc. Refunding, Series 2007A, 6.375%, 12/01/37 (Alternative Minimum Tax) 
        
5,890 
  
Total Water and Sewer 
    
6,003,528
  
$      59,761 
  
Total Investments (cost $59,477,262) – 139.3% 
    
60,274,874
  
   
Other Assets Less Liabilities – 3.2% 
    
1,405,358
  
   
Auction Rate Preferred Shares, at Liquidation Value – (42.5)% (6) 
    
(18,400,000
 )
   
Net Assets Applicable to Common Shares – 100% 
    
$     43,280,232
  

   
(1) 
All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. 
(2) 
Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest 
 
optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic 
 
principal paydowns. 
(3) 
Ratings (not covered by the report of independent registered public accounting firm): Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), 
 
Moody’s Investor Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are 
 
considered to be below investment grade. 
(4) 
Investment valued at fair value using methods determined in good faith by, or at the discretion of, the Board of Trustees. For fair value measurement disclo- 
 
sure purposes, investment categorized as Level 3. See Notes to Financial Statements, Footnote 1 – General Information and Significant Accounting Policies, 
 
Investment Valuation for more information. 
(5) 
Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal 
 
and interest. Such investments are normally considered to be equivalent to AAA rated securities. 
(6) 
Auction Rate Preferred shares, at Liquidation Value as a percentage of Total Investments is 30.5%. 
N/R 
Not rated. 
(IF) 
Inverse floating rate investment. 

 
See accompanying notes to financial statements.
 
36 Nuveen Investments
 
 
 
 

           
   
Nuveen Texas Quality Income Municipal Fund 
    
NTX 
  
Portfolio of Investments
    
     
July 31, 2010 
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Consumer Staples – 1.5% (1.0% of Total Investments)
      
$      2,280 
  
Puerto Rico, The Children’s Trust Fund, Tobacco Settlement Asset-Backed Refunding Bonds, 
5/12 at 100.00 
BBB 
$      2,177,514 
   
Series 2002, 5.375%, 5/15/33 
      
   
Education and Civic Organizations – 15.9% (10.9% of Total Investments)
      
2,000 
  
Laredo Community College District, Wells County, Texas, Combined Fee Revenue Bonds, Series 
8/20 at 100.00 
AAA 
2,081,320 
   
2010, 5.250%, 8/01/35 – AGM Insured 
      
   
Red River Education Finance Corporation, Texas, Revenue Bonds, Hockaday School, Series 2005: 
      
1,170 
  
5.000%, 5/15/27 
5/15 at 100.00 
AA 
1,217,385 
1,230 
  
5.000%, 5/15/28 
5/15 at 100.00 
AA 
1,274,391 
1,290 
  
5.000%, 5/15/29 
5/15 at 100.00 
AA 
1,332,596 
   
Texas Public Finance Authority, Revenue Bonds, Texas Southern University Financing System, 
      
   
Series 2003: 
      
1,710 
  
5.000%, 5/01/18 – FGIC Insured 
5/13 at 100.00 
Ba1 
1,635,683 
1,795 
  
5.000%, 5/01/19 – FGIC Insured 
5/13 at 100.00 
Ba1 
1,696,185 
1,885 
  
5.000%, 5/01/20 – FGIC Insured 
5/13 at 100.00 
Ba1 
1,764,360 
1,665 
  
Texas State University System, Financing Revenue Bonds, Series 2004, 5.000%, 3/15/24 – 
9/14 at 100.00 
AAA 
1,772,010 
   
AGM Insured 
      
2,000 
  
Texas State University System, Financing Revenue Refunding Bonds, Series 2002, 5.000%, 
3/12 at 100.00 
AAA 
2,117,240 
   
3/15/20 – AGM Insured 
      
2,330 
  
Universal City Education Facilities Corporation, Texas, Revenue Bonds, Wayland Baptist 
3/11 at 102.00 
A– 
2,378,394 
   
University Project, Series 2001, 5.625%, 3/01/26 
      
5,000 
  
University of North Texas, Financing System Revenue Bonds, Series 2001, 5.000%, 4/15/24 – 
4/12 at 100.00 
AAA 
5,399,400 
   
AGM Insured 
      
22,075 
  
Total Education and Civic Organizations 
    
22,668,964 
   
Energy – 2.0% (1.4% of Total Investments)
      
3,000 
  
Gulf Coast Waste Disposal Authority, Texas, Waste Disposal Revenue Bonds, Valero Energy 
10/10 at 100.00 
BBB 
2,843,100 
   
Corporation Project, Series 1998, 5.600%, 4/01/32 (Alternative Minimum Tax) 
      
   
Health Care – 12.8% (8.8% of Total Investments)
      
   
Brazoria County Health Facilities Development Corporation, Texas, Revenue Bonds, Brazosport 
      
   
Memorial Hospital, Series 2004: 
      
1,745 
  
5.250%, 7/01/20 – RAAI Insured 
7/14 at 100.00 
BBB– 
1,692,458 
1,835 
  
5.250%, 7/01/21 – RAAI Insured 
7/14 at 100.00 
BBB– 
1,755,526 
1,270 
  
Midland County Hospital District, Texas, Hospital Revenue Bonds, Series 1992, 0.000%, 6/01/11 
No Opt. Call 
BBB– 
1,224,521 
2,000 
  
North Central Texas Health Facilities Development Corporation, Hospital Revenue Bonds, Baylor 
5/11 at 100.00 
Aa2 
2,007,620 
   
Healthcare System, Series 2001A, 5.125%, 5/15/29 
      
105 
  
Richardson Hospital Authority, Texas, Hospital Revenue Refunding and Improvement Bonds, 
12/10 at 100.00 
Baa2 
98,869 
   
Baylor/Richardson Medical Center, Series 1998, 5.625%, 12/01/28 
      
   
Richardson Hospital Authority, Texas, Revenue Bonds, Richardson Regional Medical Center, 
      
   
Series 2004: 
      
2,000 
  
5.875%, 12/01/24 
12/13 at 100.00 
Baa2 
1,981,680 
1,000 
  
6.000%, 12/01/34 
12/13 at 100.00 
Baa2 
968,840 
2,500 
  
Tarrant County Cultural & Educational Facilities Financing Corporation, Texas, Revenue Bonds, 
11/17 at 100.00 
AA– 
2,499,825 
   
Texas Health Resources, Series 2007B, 5.000%, 11/15/42 
      
1,250 
  
Tarrant County Cultural Education Facilities Finance Corporation, Texas, Hospital Revenue 
8/20 at 100.00 
A1 
1,250,938 
   
Bonds, Scott & White HealthCare Project, Series 2010, 5.250%, 8/15/40 
      
2,000 
  
Tarrant County Cultural Education Facilities Finance Corporation, Texas, Revenue Refunding 
1/19 at 100.00 
AAA 
2,199,680 
   
Bonds, Christus Health, Series 2008, 6.500%, 7/01/37 – AGC Insured 
      

 
Nuveen Investments 37
 
 
 
 
 
NTX
Nuveen Texas Quality Income Municipal Fund (continued)
Portfolio of Investments July 31, 2010
 
           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Health Care (continued) 
      
$        700 
  
Tyler Health Facilities Development Corporation, Texas, Hospital Revenue Bonds, Mother Frances 
7/17 at 100.00 
Baa1 
$       615,503 
   
Hospital Regional Healthcare Center, Series 2007B, 5.000%, 7/01/37 
      
2,250 
  
Tyler Health Facilities Development Corporation, Texas, Hospital Revenue Bonds, Mother Frances 
7/17 at 100.00 
Baa1 
2,018,003 
   
Hospital Regional Healthcare Center, Series 2007, 5.000%, 7/01/33 
      
18,655 
  
Total Health Care 
    
18,313,463 
   
Housing/Multifamily – 1.7% (1.2% of Total Investments)
      
   
Bexar County Housing Finance Corporation, Texas, Insured Multifamily Housing Revenue Bonds, 
      
   
Waters at Northern Hills Apartments Project, Series 2001A: 
      
2,000 
  
6.000%, 8/01/31 – NPFG Insured 
8/11 at 102.00 
Baa1 
1,816,260 
750 
  
6.050%, 8/01/36 – NPFG Insured 
8/11 at 102.00 
Baa1 
670,958 
2,750 
  
Total Housing/Multifamily 
    
2,487,218 
   
Housing/Single Family – 2.8% (1.9% of Total Investments)
      
1,418 
  
El Paso Housing Finance Corporation, Texas, GNMA Collateralized Single Family Mortgage Revenue 
4/11 at 106.75 
AAA 
1,511,916 
   
Bonds, Series 2001A-3, 6.180%, 4/01/33 
      
5 
  
Galveston Property Finance Authority Inc., Texas, Single Family Mortgage Revenue Bonds, Series 
9/10 at 100.00 
Caa1 
4,924 
   
1991A, 8.500%, 9/01/11 
      
2,440 
  
Texas Department of Housing and Community Affairs, Single Family Mortgage Bonds, Series 2002B, 
3/12 at 100.00 
AAA 
2,460,838 
   
5.550%, 9/01/33 – NPFG Insured (Alternative Minimum Tax) 
      
3,863 
  
Total Housing/Single Family 
    
3,977,678 
   
Long-Term Care – 1.0% (0.7% of Total Investments)
      
   
Bexar County, Texas, Health Facilities Development Corporation Revenue Bonds, Army Retirement 
      
   
Residence, Series 2007: 
      
1,000 
  
5.000%, 7/01/27 
7/17 at 100.00 
BBB 
912,430 
600 
  
5.000%, 7/01/37 
7/17 at 100.00 
BBB 
521,052 
1,600 
  
Total Long-Term Care 
    
1,433,482 
   
Materials – 4.2% (2.9% of Total Investments)
      
3,000 
  
Cass County Industrial Development Corporation, Texas, Environmental Improvement Revenue 
9/10 at 101.00 
BBB 
3,032,520 
   
Bonds, International Paper Company, Series 2000A, 6.600%, 3/15/24 (Alternative Minimum Tax) 
      
3,000 
  
Guadalupe-Blanco River Authority, Texas, Sewage and Solid Waste Disposal Facility Bonds, E.I. 
10/10 at 100.00 
A 
3,002,700 
   
DuPont de Nemours and Company Project, Series 1996, 6.400%, 4/01/26 (Alternative Minimum Tax) 
      
6,000 
  
Total Materials 
    
6,035,220 
   
Tax Obligation/General – 45.1% (30.9% of Total Investments)
      
1,260 
  
Bexar County, Texas, Combined Tax and Revenue Certificates of Obligation, Series 2004, 
6/14 at 100.00 
Aaa 
1,366,634 
   
5.000%, 6/15/19 
      
2,000 
  
Borger Independent School District, Hutchison County, Texas, General Obligation Bonds, Series 
2/16 at 100.00 
AAA 
2,087,880 
   
2006, 5.000%, 2/15/36 
      
400 
  
Calallen Independent School District, Nueces County, Texas, General Obligation Bonds, School 
2/18 at 100.00 
AAA 
419,308 
   
Building Series 2008, 5.000%, 2/15/38 
      
1,190 
  
Canutillo Independent School District, El Paso County, Texas, General Obligation Bonds, Series 
8/15 at 100.00 
AAA 
1,331,170 
   
2006A, 5.000%, 8/15/22 
      
325 
  
Copperas Cove, Texas, Certificates of Obligation, Series 2003, 5.000%, 8/15/23 – MBIA Insured 
8/12 at 100.00 
AA– 
343,554 
2,305 
  
Corpus Christi, Texas, Combination Tax and Municipal Hotel Occupancy Tax Revenue Certificates 
9/12 at 100.00 
AAA 
2,482,116 
   
of Obligation, Series 2002, 5.500%, 9/01/21 – AGM Insured 
      
2,595 
  
Denton County, Texas, Permanent Improvement General Obligation Bonds, Series 2005, 
7/12 at 100.00 
AAA 
2,821,959 
   
5.000%, 7/15/25 
      
1,750 
  
El Paso County, Texas, Certificates of Obligation, Series 2001, 5.000%, 2/15/21 – AGM Insured 
No Opt. Call 
AAA 
2,049,775 

38 Nuveen Investments
 
 
 
 
           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Tax Obligation/General (continued) 
      
   
Fort Bend County Municipal Utility District 25, Texas, General Obligation Bonds, Series 2005: 
      
$     1,330 
  
5.000%, 10/01/26 – FGIC Insured 
10/12 at 100.00 
A 
$     1,343,247 
1,320 
  
5.000%, 10/01/27 – FGIC Insured 
10/12 at 100.00 
A 
1,330,428 
3,615 
  
Frisco, Texas, General Obligation Bonds, Series 2006, 5.000%, 2/15/26 – FGIC Insured 
2/16 at 100.00 
Aa1 
3,852,180 
8,500 
  
Grand Prairie Independent School District, Dallas County, Texas, General Obligation Bonds, 
8/18 at 22.64 
AA– 
1,233,265 
   
Capital Appreciation Refunding Series 2009, 0.000%, 8/15/39 
      
   
Houston Community College System, Texas, Limited Tax General Obligation Bonds, Series 2003: 
      
2,500 
  
5.000%, 2/15/20 – AMBAC Insured 
2/13 at 100.00 
AA+ 
2,707,675 
2,235 
  
5.000%, 2/15/21 – AMBAC Insured 
2/13 at 100.00 
AA+ 
2,420,661 
5,000 
  
Houston, Texas, General Obligation Bonds, Series 2005E, 5.000%, 3/01/23 – AMBAC Insured 
3/15 at 100.00 
AA 
5,408,000 
100 
  
Judson Independent School District, Bexar County, Texas, General Obligation Refunding Bonds, 
2/11 at 100.00 
Aaa 
102,157 
   
Series 2002, 5.250%, 2/01/21 
      
4,900 
  
Leander Independent School District, Williamson and Travis Counties, Texas, General Obligation 
8/14 at 17.78 
AAA 
704,963 
   
Bonds, Series 2006, 0.000%, 8/15/45 
      
1,000 
  
Leander Independent School District, Williamson and Travis Counties, Texas, General Obligation 
8/17 at 33.01 
AAA 
231,990 
   
Bonds, Series 2008, 0.000%, 8/15/36 
      
5,220 
  
Leander Independent School District, Williamson and Travis Counties, Texas, Unlimited Tax 
8/10 at 49.80 
AAA 
2,603,893 
   
School Building and Refunding Bonds, Series 2000, 0.000%, 8/15/21 
      
365 
  
Lone Star College System, Harris and Montgomery Counties, Texas, General Obligation Bonds, 
8/19 at 100.00 
AAA 
389,747 
   
Series 2009, 5.000%, 8/15/34 
      
1,000 
  
Mansfield Independent School District, Tarrant County, Texas, General Obligation Bonds, Series 
2/14 at 100.00 
AAA 
1,114,380 
   
2004, 5.000%, 2/15/20 
      
1,010 
  
Mercedes Independent School District, Hidalgo County, Texas, General Obligation Bonds, Series 
8/15 at 100.00 
AAA 
1,097,587 
   
2005, 5.000%, 8/15/23 
      
5,515 
  
Midlothian Independent School District, Ellis County, Texas, General Obligation Bonds, Series 
2/15 at 100.00 
Aaa 
5,724,460 
   
2005, 5.000%, 2/15/34 
      
1,500 
  
Montgomery County, Texas, General Obligation Bonds, Refunding Series 2008B, 5.250%, 3/01/32 
3/19 at 100.00 
AA 
1,614,735 
100 
  
Northside Independent School District, Bexar County, Texas, Unlimited Tax School Building and 
8/10 at 100.00 
AAA 
100,414 
   
Refunding Bonds, Series 2000, 5.875%, 8/15/25 
      
2,000 
  
Plano Independent School District, Collin County, Texas, General Obligation Bonds, Series 
2/18 at 100.00 
Aaa 
2,156,620 
   
2008, 5.250%, 2/15/34 
      
   
Roma Independent School District, Texas, General Obligation Bonds, Series 2005: 
      
1,110 
  
5.000%, 8/15/22 
8/15 at 100.00 
AAA 
1,241,679 
1,165 
  
5.000%, 8/15/23 – AGM Insured 
8/15 at 100.00 
AAA 
1,294,210 
1,250 
  
Southside Independent School District, Bexar County, Texas, General Obligation Bonds, Series 
8/14 at 100.00 
Aaa 
1,382,588 
   
2004A, 5.000%, 8/15/22 
      
1,140 
  
Sunnyvale School District, Texas, General Obligation Bonds, Series 2004, 5.250%, 2/15/25 
2/14 at 100.00 
AAA 
1,247,035 
5,000 
  
Texas State, General Obligation Bonds, Transportation Commission Mobility Fund, Series 2006A, 
4/17 at 100.00 
Aaa 
5,267,450 
   
5.000%, 4/01/33 (UB) 
      
1,000 
  
Texas State, General Obligation Bonds, Transportation Commission Mobility Fund, Series 2008, 
4/18 at 100.00 
Aaa 
1,074,660 
   
5.000%, 4/01/30 (UB) 
      
1,110 
  
Texas State, General Obligation Bonds, Water Utility, Series 2001, 5.250%, 8/01/23 
8/11 at 100.00 
Aaa 
1,152,247 
3,025 
  
Victoria Independent School District, Victoria County, Texas, General Obligation Bonds, Series 
2/17 at 100.00 
AAA 
3,212,762 
   
2007, 5.000%, 2/15/32 
      
   
West Texas Independent School District, McLennan and Hill Counties, General Obligation 
      
   
Refunding Bonds, Series 1998: 
      
1,000 
  
0.000%, 8/15/22 
8/13 at 61.20 
AAA 
545,140 
1,000 
  
0.000%, 8/15/24 
8/13 at 54.88 
AAA 
485,250 

 
Nuveen Investments 39
 
 
 
 
 
NTX
Nuveen Texas Quality Income Municipal Fund (continued)
Portfolio of Investments July 31, 2010
 
           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
Tax Obligation/General (continued) 
      
   
White Settlement Independent School District, Tarrant County, Texas, General Obligation Bonds, 
      
   
Series 2006: 
      
$       1,500 
  
0.000%, 8/15/43 
8/15 at 23.11 
AAA 
$        266,970 
1,500 
  
0.000%, 8/15/44 
8/15 at 21.88 
AAA 
252,435 
425 
  
0.000%, 8/15/45 
8/15 at 20.76 
AAA 
67,805 
79,260 
  
Total Tax Obligation/General 
    
64,529,029 
   
Tax Obligation/Limited – 9.1% (6.3% of Total Investments)
      
7,940 
  
Dallas Area Rapid Transit, Texas, Sales Tax Revenue Bonds, Senior Lien Refunding Series 2007, 
12/16 at 100.00 
AAA 
8,218,218 
   
5.000%, 12/01/36 – AMBAC Insured 
      
   
Harris County-Houston Sports Authority, Texas, Junior Lien Revenue Bonds, Series 2001H: 
      
1,720 
  
0.000%, 11/15/34 – NPFG Insured 
11/31 at 83.17 
A 
307,089 
930 
  
0.000%, 11/15/36 – NPFG Insured 
11/31 at 73.51 
A 
144,085 
3,265 
  
0.000%, 11/15/38 – NPFG Insured 
11/31 at 64.91 
A 
438,947 
   
Harris County-Houston Sports Authority, Texas, Senior Lien Revenue Bonds, Series 2001G: 
      
2,250 
  
5.250%, 11/15/22 – NPFG Insured 
11/11 at 100.00 
A 
2,262,510 
2,475 
  
0.000%, 11/15/41 – NPFG Insured 
11/31 at 53.78 
A 
267,350 
1,470 
  
Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds, Convention and Entertainment 
No Opt. Call 
A2 
386,581 
   
Project, Series 2001B, 0.000%, 9/01/32 – AMBAC Insured 
      
1,000 
  
Uptown Development Authority, Houston, Texas, Tax Increment Revenue Bonds, Infrastructure 
9/19 at 100.00 
BBB+ 
1,015,670 
   
Improvement Facilities, Series 2009, 5.500%, 9/01/29 
      
21,050 
  
Total Tax Obligation/Limited 
    
13,040,450 
   
Transportation – 10.2% (7.0% of Total Investments)
      
1,000 
  
Austin, Texas, Airport System Prior Lien Revenue Bonds, Series 2003, 5.250%, 11/15/16 – 
11/13 at 100.00 
A 
1,072,710 
   
NPFG Insured 
      
   
Central Texas Regional Mobility Authority, Senior Lien Revenue Bonds, Series 2010: 
      
2,945 
  
0.000%, 1/01/36 
No Opt. Call 
BBB– 
517,378 
2,205 
  
0.000%, 1/01/37 
No Opt. Call 
BBB– 
359,900 
2,000 
  
0.000%, 1/01/38 
No Opt. Call 
BBB– 
303,200 
3,260 
  
Central Texas Regional Mobility Authority, Travis and Williamson Counties, Toll Road Revenue 
1/15 at 100.00 
A 
3,301,076 
   
Bonds, Series 2005, 5.000%, 1/01/22 – FGIC Insured 
      
2,600 
  
Dallas-Ft. Worth International Airport Facility Improvement Corporation, Texas, Revenue Bonds, 
11/10 at 100.50 
CCC+ 
2,092,012 
   
American Airlines Inc., Series 1999, 6.375%, 5/01/35 (Alternative Minimum Tax) 
      
2,000 
  
Houston, Texas, Subordinate Lien Airport System Revenue Bonds, Series 2000A, 5.625%, 7/01/30 – 
1/11 at 100.00 
AAA 
2,000,680 
   
AGM Insured (Alternative Minimum Tax) 
      
2,500 
  
North Texas Thruway Authority, First Tier System Revenue Refunding Bonds, Capital Appreciation 
No Opt. Call 
AAA 
602,050 
   
Series 2008, 0.000%, 1/01/36 – AGC Insured 
      
395 
  
North Texas Thruway Authority, First Tier System Revenue Refunding Bonds, Series 2008A, 
1/18 at 100.00 
A2 
412,040 
   
5.750%, 1/01/40 
      
   
North Texas Thruway Authority, First Tier System Revenue Refunding Bonds, Series 2008B: 
      
325 
  
5.750%, 1/01/40 
1/18 at 100.00 
A2 
339,021 
225 
  
5.750%, 1/01/40 – NPFG Insured 
1/18 at 100.00 
A 
234,707 
950 
  
North Texas Thruway Authority, Second Tier System Revenue Refunding Bonds, Series 2008, 
1/18 at 100.00 
A3 
996,370 
   
5.750%, 1/01/38 
      
   
North Texas Tollway Authority, System Revenue Bonds, First Tier Series 2009A: 
      
100 
  
6.100%, 1/01/28 
1/19 at 100.00 
A2 
110,259 
2,000 
  
6.250%, 1/01/39 
1/19 at 100.00 
A2 
2,186,520 
22,505 
  
Total Transportation 
    
14,527,923 

40 Nuveen Investments
 
 
 
 

           
Principal
    
Optional Call
    
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
   
U.S. Guaranteed – 15.2% (10.4% of Total Investments) (4)
      
$           295 
  
Coppell Independent School District, Dallas County, Texas, Unlimited Tax School Building and 
No Opt. Call 
AAA 
$         279,330 
   
Refunding Bonds, Series 1992, 0.000%, 8/15/14 – MBIA Insured (ETM) 
      
950 
  
Copperas Cove, Texas, Certificates of Obligation, Series 2003, 5.000%, 8/15/23 (Pre-refunded 
8/12 at 100.00 
A (4) 
1,038,996 
   
8/15/12) – MBIA Insured 
      
   
Gregg County Health Facilities Development Corporation, Texas, Hospital Revenue Bonds, Good 
      
   
Shepherd Medical Center Project, Series 2000: 
      
2,000 
  
6.875%, 10/01/20 (Pre-refunded 10/01/10) – RAAI Insured 
10/10 at 101.00 
N/R (4) 
2,041,980 
3,250 
  
6.375%, 10/01/25 (Pre-refunded 10/01/10) – RAAI Insured 
10/10 at 101.00 
N/R (4) 
3,315,520 
500 
  
Harris County Health Facilities Development Corporation, Texas, Revenue Bonds, St. Luke’s 
8/11 at 100.00 
AAA 
527,535 
   
Episcopal Hospital, Series 2001A, 5.500%, 2/15/21 (Pre-refunded 8/15/11) 
      
1,000 
  
North Central Texas Health Facilities Development Corporation, Hospital Revenue Bonds, 
No Opt. Call 
Aaa 
1,221,780 
   
Presbyterian Healthcare System, Series 1996B, 5.750%, 6/01/26 – NPFG Insured (ETM) 
      
2,500 
  
Retama Development Corporation, Texas, Special Facilities Revenue Bonds, Retama Park 
12/17 at 100.00 
AAA 
3,525,025 
   
Racetrack, Series 1993, 8.750%, 12/15/18 (Pre-refunded 12/15/17) 
      
1,750 
  
San Antonio, Texas, Electric and Gas System Revenue Refunding Bonds, Series 2002, 5.375%, 
2/12 at 100.00 
AAA 
1,881,198 
   
2/01/20 (Pre-refunded 2/01/12) 
      
1,440 
  
South Texas Community College District, General Obligation Bonds, Series 2002, 5.500%, 8/15/17 
8/12 at 100.00 
Aa2 (4) 
1,588,277 
   
(Pre-refunded 8/15/12) – AMBAC Insured 
      
3,500 
  
Tarrant County Health Facilities Development Corporation, Texas, Hospital Revenue Bonds, 
11/10 at 101.00 
N/R (4) 
3,598,735 
   
Adventist Health System – Sunbelt Obligated Group, Series 2000, 6.625%, 11/15/20 
      
   
(Pre-refunded 11/15/10) 
      
1,500 
  
Texas, General Obligation Refunding Bonds, Public Finance Authority, Series 2002, 5.000%, 
10/12 at 100.00 
Aaa 
1,648,035 
   
10/01/18 (Pre-refunded 10/01/12) 
      
1,000 
  
Tyler Health Facilities Development Corporation, Texas, Hospital Revenue Bonds, Mother Frances 
7/12 at 100.00 
Baa1 (4) 
1,096,930 
   
Hospital Regional Healthcare Center, Series 2001, 6.000%, 7/01/31 (Pre-refunded 7/01/12) 
      
19,685 
  
Total U.S. Guaranteed 
    
21,763,341 
   
Utilities – 12.7% (8.7% of Total Investments)
      
2,560 
  
Brazos River Authority, Texas, Pollution Control Revenue Refunding Bonds, TXU Electric 
4/13 at 101.00 
Caa3 
1,368,986 
   
Company, Series 1999C, 7.700%, 3/01/32 (Alternative Minimum Tax) 
      
2,400 
  
Brazos River Authority, Texas, Revenue Bonds, Reliant Energy Inc., Series 1999A, 
10/10 at 100.50 
BBB– 
2,409,288 
   
5.375%, 4/01/19 
      
5,000 
  
Brownsville, Texas, Utility System Priority Revenue Bonds, Series 2005A, 5.000%, 9/01/27 – 
9/15 at 100.00 
Aa3 
5,189,400 
   
AMBAC Insured 
      
2,000 
  
Bryan, Brazos County, Texas, Electric System Revenue Bonds, Series 2009, 5.000%, 7/01/34 
7/17 at 100.00 
A+ 
2,039,160 
2,000 
  
Harris County Health Facilities Development Corporation, Texas, Thermal Utility Revenue Bonds, 
8/10 at 100.00 
Aa3 
2,005,160 
   
TECO Project, Series 2000, 5.750%, 2/15/15 – AMBAC Insured (Alternative Minimum Tax) 
      
2,000 
  
Lower Colorado River Authority, Texas, Revenue Bonds, Series 2008, 5.750%, 5/15/37 
5/15 at 100.00 
A1 
2,106,080 
1,000 
  
Matagorda County Navigation District 1, Texas, Revenue Bonds, Reliant Energy Inc., Series 
11/10 at 100.50 
BBB– 
1,000,140 
   
1999B, 5.950%, 5/01/30 (Alternative Minimum Tax) 
      
1,000 
  
Matagorda County Navigation District Number One, Texas, Pollution Control Revenue Refunding 
7/19 at 102.00 
BBB 
1,094,070 
   
Bonds, Central Power and Light Company Project, Series 2009A, 6.300%, 11/01/29 
      
1,000 
  
Texas Municipal Power Agency, Revenue Bonds, Transmission Refunding Series 2010, 5.000%, 
9/20 at 100.00 
A+ 
1,010,620 
   
9/01/40 (WI/DD, Settling 8/30/10) 
      
18,960 
  
Total Utilities 
    
18,222,904 

 
Nuveen Investments 41
 
 
 
 
 
NTX
Nuveen Texas Quality Income Municipal Fund (continued)
Portfolio of Investments July 31, 2010
 
             
Principal
    
Optional Call
      
Amount (000)
  
Description (1)
Provisions (2)
Ratings (3)
Value
  
   
Water and Sewer – 11.6% (7.9% of Total Investments)
        
   
Coastal Water Authority, Texas, Contract Revenue Bonds, Houston Water Projects, Series 2004: 
        
$      1,005 
  
5.000%, 12/15/20 – FGIC Insured 
12/14 at 100.00 
A 
$    1,066,375
  
1,030 
  
5.000%, 12/15/21 – FGIC Insured 
12/14 at 100.00 
A 
1,086,443
  
1,000 
  
El Paso, Texas, Water and Sewer Revenue Bonds, Refunding Series 2008C, 5.375%, 3/01/29 
3/18 at 100.00 
AA 
1,088,489
  
3,000 
  
Houston, Texas, First Lien Combined Utility System Revenue Bonds, Series 2004A, 5.250%, 
5/14 at 100.00 
AA 
3,287,549
  
   
5/15/23 – FGIC Insured 
        
3,500 
  
Houston, Texas, Junior Lien Water and Sewerage System Revenue Refunding Bonds, Series 2001A, 
12/11 at 100.00 
AAA 
3,708,669
  
   
5.500%, 12/01/17 – AGM Insured 
        
   
Irving, Texas, Subordinate Lien Waterworks and Sewerage Revenue Bonds, Series 2004: 
        
1,680 
  
5.000%, 8/15/22 – AMBAC Insured 
8/14 at 100.00 
Aa1 
1,816,213
  
1,760 
  
5.000%, 8/15/23 – AMBAC Insured 
8/14 at 100.00 
Aa1 
1,889,482
  
1,260 
  
Rowlett, Rockwall and Dallas Counties, Texas, Waterworks and Sewerage System Revenue Bonds, 
3/14 at 100.00 
AA– 
1,323,969
  
   
Series 2004A, 5.000%, 3/01/22 – NPFG Insured 
        
1,300 
  
Texas Water Development Board, Senior Lien State Revolving Fund Revenue Bonds, Series 1999A, 
1/11 at 100.00 
AAA 
1,305,602
  
   
5.500%, 7/15/21 
        
15,535 
  
Total Water and Sewer 
    
16,572,791
  
$    237,218 
  
Total Investments (cost $201,879,097) – 145.8% 
    
208,593,077
  
   
Floating Rate Obligations – (2.8)% 
    
(3,960,000
 )
   
Other Assets Less Liabilities – 2.5% 
    
3,496,817
  
   
Auction Rate Preferred Shares, at Liquidation Value – (45.5)% (5) 
    
(65,050,000
 ) 
   
Net Assets Applicable to Common Shares – 100% 
    
$   143,079,894
  

   
(1) 
All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. 
(2) 
Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest 
 
optional call or redemption. There may be other call provisions at varying prices at later dates. Certain mortgage-backed securities may be subject to periodic 
 
principal paydowns. 
(3) 
Ratings (not covered by the report of independent registered public accounting firm): Using the highest of Standard & Poor’s Group (“Standard & Poor’s”), 
 
Moody’s Investor Service, Inc. (“Moody’s”) or Fitch, Inc. (“Fitch”) rating. Ratings below BBB by Standard & Poor’s, Baa by Moody’s or BBB by Fitch are 
 
considered to be below investment grade. 
(4) 
Backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities, which ensure the timely payment of principal 
 
and interest. Such investments are normally considered to be equivalent to AAA rated securities. 
(5) 
Auction Rate Preferred shares, at Liquidation Value as a percentage of Total Investments is 31.2%. 
N/R 
Not rated. 
WI/DD 
Purchased on a when-issued or delayed delivery basis. 
(ETM) 
Escrowed to maturity. 
(UB) 
Underlying bond of an inverse floating rate trust reflected as a financing transaction. See Notes to Financial Statements, Footnote 1 – Inverse Floating Rate 
 
Securities for more information. 

 
See accompanying notes to financial statements.
 
42 Nuveen Investments
 
 
 
 

           
Statement of 
          
Assets & Liabilities
      
     
July 31, 2010 
 
   
Arizona
    
Arizona
    
Arizona
    
Arizona
    
Texas
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
    
Quality
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
    
Income
  
   
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
    
(NTX)
  
Assets
                              
Investments, at value (cost $83,508,446, $31,425,432, 
                              
$49,228,018, $59,477,262 and $201,879,097, respectively) 
   $ 88,003,144     $ 31,980,266     $ 50,588,304     $ 60,274,874     $ 208,593,077  
Cash 
     2,113,293       459,732       1,552,243       1,231,287       1,463,040  
Receivables: 
                                        
Interest 
     590,159       265,069       411,268       418,964       3,074,789  
Investments sold 
     55,000       —       —       —       1,046,665  
Other assets 
     19,484       16,053       19,932       16,135       45,237  
Total assets 
     90,781,080       32,721,120       52,571,747       61,941,260       214,222,808  
Liabilities
                                        
Floating rate obligations 
     —       —       —       —       3,960,000  
Payables: 
                                        
Investments purchased 
     —       —       —       —       1,331,909  
Auction Rate Preferred share dividends 
     628       496       584       1,288       2,147  
Common share dividends 
     262,204       97,479       159,261       190,926       603,100  
Accrued expenses: 
                                        
Management fees 
     49,713       16,120       24,300       30,025       112,949  
Other 
     44,989       22,630       29,340       38,789       82,809  
Total liabilities 
     357,534       136,725       213,485       261,028       6,092,914  
Auction Rate Preferred shares, at liquidation value 
     27,875,000       10,600,000       16,625,000       18,400,000       65,050,000  
Net assets applicable to Common shares 
   $ 62,548,546     $ 21,984,395     $ 35,733,262     $ 43,280,232     $ 143,079,894  
Common shares outstanding 
     4,469,952       1,548,020       2,439,551       3,066,030       9,529,884  
Net asset value per Common share outstanding (net assets 
                                        
applicable to Common shares, divided by Common 
                                        
shares outstanding) 
   $ 13.99     $ 14.20     $ 14.65     $ 14.12     $ 15.01  
Net assets applicable to Common shares consist of:
                                        
Common shares, $.01 par value per share 
   $ 44,700     $ 15,480     $ 24,396     $ 30,660     $ 95,299  
Paid-in surplus 
     62,166,864       21,910,016       34,577,972       43,233,092       135,135,057  
Undistributed (Over-distribution of) net investment income 
     961,516       278,947       427,638       487,582       2,042,050  
Accumulated net realized gain (loss) 
     (5,119,232 )      (774,882 )      (657,030 )      (1,268,714 )      (906,492 ) 
Net unrealized appreciation (depreciation) 
     4,494,698       554,834       1,360,286       797,612       6,713,980  
Net assets applicable to Common shares 
   $ 62,548,546     $ 21,984,395     $ 35,733,262     $ 43,280,232     $ 143,079,894  
Authorized shares: 
                                        
Common 
     200,000,000    
Unlimited
    
Unlimited
    
Unlimited
    
Unlimited
  
Auction Rate Preferred 
     1,000,000    
Unlimited
    
Unlimited
    
Unlimited
    
Unlimited
  

 
See accompanying notes to financial statements.
 
 
Nuveen Investments 43
 
 
 
 
 
           
Statement of 
          
Operations
        
     
Year Ended July 31, 2010 
  
 
   
Arizona
    
Arizona
    
Arizona
    
Arizona
    
Texas
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
    
Quality
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
    
Income
  
   
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
    
(NTX)
  
Investment Income
   $ 4,507,457     $ 1,579,349     $ 2,571,398     $ 3,099,881     $ 10,596,403  
Expenses
                                        
Management fees 
     582,148       202,746       336,597       399,605       1,318,389  
Auction Rate Preferred shares – auction fees 
     41,811       15,899       24,937       27,601       97,575  
Auction Rate Preferred shares – dividend disbursing agent fees 
     10,000       10,000       10,000       10,000       20,000  
Shareholders’ servicing agent fees and expenses 
     3,352       536       482       390       9,051  
Interest expense on floating rate obligations 
     —       —       —       —       20,183  
Custodian’s fees and expenses 
     20,920       11,611       15,505       16,322       42,365  
Directors’/Trustees’ fees and expenses 
     2,548       908       1,469       1,909       5,852  
Professional fees 
     18,717       11,034       12,841       13,604       41,748  
Shareholders’ reports – printing and mailing expenses 
     27,656       14,043       18,775       21,141       52,459  
Stock exchange listing fees 
     9,145       217       342       430       9,177  
Investor relations expense 
     7,114       2,533       4,103       4,752       14,710  
Other expenses 
     18,336       15,284       16,644       15,704       22,882  
Total expenses before custodian fee credit and 
                                        
expense reimbursement 
     741,747       284,811       441,695       511,458       1,654,391  
Custodian fee credit 
     (310 )      (281 )      (403 )      (304 )      (569 ) 
Expense reimbursement 
     —       (23,792 )      (69,610 )      (57,404 )      —  
Net expenses 
     741,437       260,738       371,682       453,750       1,653,822  
Net investment income 
     3,766,020       1,318,611       2,199,716       2,646,131       8,942,581  
Realized and Unrealized Gain (Loss)
                                        
Net realized gain (loss) from investments 
     211,410       3,081       15,295       103,076       197,927  
Change in net unrealized appreciation (depreciation) 
                                        
of investments 
     4,067,325       2,172,884       2,615,288       3,715,857       10,122,568  
Net realized and unrealized gain (loss) 
     4,278,735       2,175,965       2,630,583       3,818,933       10,320,495  
Distributions to Auction Rate Preferred Shareholders
                                        
From net investment income 
     (115,298 )      (44,516 )      (69,894 )      (76,983 )      (257,907 ) 
From accumulated net realized gains 
     —       —       —       —       (19,921 ) 
Decrease in net assets applicable to Common shares 
                                        
from distributions to Auction Rate Preferred shareholders 
     (115,298 )      (44,516 )      (69,894 )      (76,983 )      (277,828 ) 
Net increase (decrease) in net assets applicable to 
                                        
Common shares from operations 
   $ 7,929,457     $ 3,450,060     $ 4,760,405     $ 6,388,081     $ 18,985,248  

 
See accompanying notes to financial statements.
 
44 Nuveen Investments
 
 
 
 
                                     
Statement of
                                
Changes in Net Assets
              
   
Arizona
       Arizona       Arizona  
   
Premium Income (NAZ)
    
Dividend Advantage (NFZ)
    
Dividend Advantage 2 (NKR)
  
   
Year
    
Year
    
Year
    
Year
    
Year
    
Year
  
   
Ended
    
Ended
    
Ended
    
Ended
    
Ended
    
Ended
  
   
7/31/10
    
7/31/09
    
7/31/10
    
7/31/09
    
7/31/10
    
7/31/09
  
Operations
                                    
Net investment income 
   $ 3,766,020     $ 3,812,672     $ 1,318,611     $ 1,299,942     $ 2,199,716     $ 2,259,065  
Net realized gain (loss) from: 
                                                
Investments 
     211,410       (2,710,445 )      3,081       (429,021 )      15,295       (349,393 ) 
Futures contracts 
     —       —       —       —       —       —  
Change in net unrealized appreciation 
                                                
(depreciation) of: 
                                                
Investments 
     4,067,325       1,955,974       2,172,884       (604,752 )      2,615,288       (337,136 ) 
Futures contracts 
     —       —       —       —       —       —  
Distributions to Auction Rate 
                                                
Preferred Shareholders: 
                                                
From net investment income 
     (115,298 )      (565,487 )      (44,516 )      (220,718 )      (69,894 )      (349,919 ) 
From accumulated net realized gains 
     —       —       —       —       —       —  
Net increase (decrease) in net assets 
                                                
applicable to Common shares 
                                                
from operations 
     7,929,457       2,492,714       3,450,060       45,451       4,760,405       1,222,617  
Distributions to Common Shareholders
                                                
From net investment income 
     (3,146,573 )      (2,846,851 )      (1,070,455 )      (976,248 )      (1,856,497 )      (1,712,859 ) 
From accumulated net realized gains 
     —       —       —       —       —       —  
Decrease in net assets applicable to 
                                                
Common shares from distributions 
                                                
to Common shareholders 
     (3,146,573 )      (2,846,851 )      (1,070,455 )      (976,248 )      (1,856,497 )      (1,712,859 ) 
Capital Share Transactions
                                                
Common shares: 
                                                
Net proceeds from shares issued to 
                                                
shareholders due to reinvestment 
                                                
of distributions 
     10,931       12,298       —       7,371       —       16,440  
Repurchased and retired 
     —       —       —       (24,038 )      —       (8,296 ) 
Net increase in net assets 
                                                
applicable to Common shares 
                                                
from capital share transactions 
     10,931       12,298       —       (16,667 )      —       8,144  
Net increase (decrease) in net assets 
                                                
applicable to Common shares 
     4,793,815       (341,839 )      2,379,605       (947,464 )      2,903,908       (482,098 ) 
Net assets applicable to Common 
                                                
shares at the beginning of year 
     57,754,731       58,096,570       19,604,790       20,552,254       32,829,354       33,311,452  
Net assets applicable to Common 
                                                
shares at the end of year 
   $ 62,548,546     $ 57,754,731     $ 21,984,395     $ 19,604,790     $ 35,733,262     $ 32,829,354  
Undistributed (Over-distribution of) 
                                                
net investment income 
                                                
at the end of year 
   $ 961,516     $ 492,363     $ 278,947     $ 75,318     $ 427,638     $ 154,645  

 
See accompanying notes to financial statements.
 
 
Nuveen Investments 45
 
 
 
 
                         
Statement of
                        
Changes in Net Assets (continued) 
                        
      Arizona       Texas  
   
Dividend Advantage 3 (NXE)
    
Quality Income (NTX)
  
   
Year
    
Year
    
Year
    
Year
  
   
Ended
    
Ended
    
Ended
    
Ended
  
   
7/31/10
    
7/31/09
    
7/31/10
    
7/31/09
  
Operations
                        
Net investment income 
   $ 2,646,131     $ 2,685,306     $ 8,942,581     $ 8,942,930  
Net realized gain (loss) from: 
                                
Investments 
     103,076       (323,361 )      197,927       (260,097 ) 
Futures contracts 
     —       —       —       279,232  
Change in net unrealized appreciation 
                                
(depreciation) of: 
                                
Investments 
     3,715,857       (880,027 )      10,122,568       (1,592,328 ) 
Futures contracts 
     —       —       —       (80,805 ) 
Distributions to Auction Rate 
                                
Preferred Shareholders: 
                                
From net investment income 
     (76,983 )      (412,423 )      (257,907 )      (1,209,638 ) 
From accumulated net realized gains 
     —       —       (19,921 )      (148,005 ) 
Net increase (decrease) in net assets 
                                
applicable to Common shares 
                                
from operations 
     6,388,081       1,069,495       18,985,248       5,931,289  
Distributions to Common Shareholders
                                
From net investment income 
     (2,236,669 )      (2,005,865 )      (7,745,753 )      (6,752,824 ) 
From accumulated net realized gains 
     —       —       (114,136 )      (446,272 ) 
Decrease in net assets applicable to 
                                
Common shares from distributions 
                                
to Common shareholders 
     (2,236,669 )      (2,005,865 )      (7,859,889 )      (7,199,096 ) 
Capital Share Transactions
                                
Common shares: 
                                
Net proceeds from shares issued to 
                                
shareholders due to reinvestment 
                                
of distributions 
     —       —       441,175       67,966  
Repurchased and retired 
     —       (15,380 )      —       —  
Net increase in net assets 
                                
applicable to Common shares 
                                
from capital share transactions 
     —       (15,380 )      441,175       67,966  
Net increase (decrease) in net assets 
                                
applicable to Common shares 
     4,151,412       (951,750 )      11,566,534       (1,199,841 ) 
Net assets applicable to Common 
                                
shares at the beginning of year 
     39,128,820       40,080,570       131,513,360       132,713,201  
Net assets applicable to Common 
                                
shares at the end of year 
   $ 43,280,232     $ 39,128,820     $ 143,079,894     $ 131,513,360  
Undistributed (Over-distribution of) 
                                
net investment income 
                                
at the end of year 
   $ 487,582     $ 157,033     $ 2,042,050     $ 1,103,875  

 
See accompanying notes to financial statements.
 
46 Nuveen Investments
 
 
 
 

 
Notes to
Financial Statements
 
 
1. General Information and Significant Accounting Policies
The funds covered in this report and their corresponding Common share stock exchange symbols are Nuveen Arizona Premium Income Municipal Fund, Inc. (NAZ), Nuveen Arizona Dividend Advantage Municipal Fund (NFZ), Nuveen Arizona Dividend Advantage Municipal Fund 2 (NKR), Nuveen Arizona Dividend Advantage Municipal Fund 3 (NXE) and Nuveen Texas Quality Income Municipal Fund (NTX) (collectively, the “Funds”). Common shares of Arizona Premium Income (NAZ) and Texas Quality Income (NTX) are traded on the New York Stock Exchange (“NYSE”) while Common shares of Arizona Dividend Advantage (NFZ), Arizona Dividend Advantage 2 (NKR) and Arizona Dividend Advantage 3 (NXE) are traded on the NYSE Amex. The Funds are registered under the Investment Company Act of 1940, as amended, as closed-end management investment companies.
 
Each Fund seeks to provide current income exempt from both regular federal and designated state income taxes by investing primarily in a portfolio of municipal obligations issued by state and local government authorities within a single state or certain U.S. territories.
 
In June 2009, the Financial Accounting Standards Board (“FASB”) established the FASB Accounting Standards Codification™ (the “Codification”) as the single source of authoritative accounting principles recognized by the FASB in the preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”). The Codification supersedes existing non-grandfathered, non-SEC accounting and reporting standards. The Codification did not change GAAP but rather organized it into a hierarchy where all guidance within the Codification carries an equal level of authority. The Codification became effective for financial statements issued for interim and annual periods ending after September 15, 2009. The Codification did not have a material effect on the Funds’ financial statements.
 
The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”).
 
Investment Valuation
Prices of fixed-income securities and derivative instruments are provided by a pricing service approved by the Funds’ Board of Directors/Trustees. Fixed-income securities are valued by a pricing service that values portfolio securities at the mean between the quoted bid and ask prices or the yield equivalent when quotations are readily available. These securities are generally classified as Level 2. Securities for which quotations are not readily available (which is usually the case for municipal securities) are valued at fair value as determined by the pricing service using methods that may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. The pricing service may employ electronic data processing techniques and/or a matrix system to determine valuations. These securities are generally classified as Level 2.
 
Futures contracts are valued using the closing settlement price or, in the absence of such a price, at the mean of the bid and ask prices and are generally classified as Level 1.
 
Temporary investments in securities that have variable rate and demand features qualifying them as short-term investments are valued at amortized cost, which approximates market value. These securities are generally classified as Level 1.
 
Certain securities may not be able to be priced by the pre-established pricing methods as described above. Such securities may be valued by the Funds’ Board of Directors/Trustees or its designee at fair value. These securities generally include, but are not limited to, restricted securities (securities which may not be publicly sold without registration under the Securities Act) for which a pricing service is unable to provide a market price; securities whose trading has been formally suspended; fixed-income securities that have gone into default and for which there is no current market quotation; a security whose market price is not available from a pre-established pricing source; a security with respect to which an event has occurred that is likely to materially affect the value of the security after the market has closed but before the calculation of a Fund’s net asset value (as may be the case in non-U.S. markets on which the security is primarily traded) or make it difficult or impossible to obtain a reliable market quotation; and a security whose price, as provided by the pricing service, is not deemed to reflect the security’s fair value. As a general principle, the fair value of an issue of securities would appear to be the amount that the owner might reasonably expect to receive for them in a current sale. A variety of factors may be considered in determining the fair value of these securities, which may include consideration of the following: yields or prices of investments of comparable quality, type of issue, coupon, maturity and rating, market quotes or indications of value from security dealers, evaluations of anticipated cash flows or collateral, general market conditions and other information and analysis, including the obligor’s credit characteristics considered relevant. These
 
 
Nuveen Investments 47
 
 
 
 
 
 
Notes to
Financial Statements (continued)
 
 
securities are generally classified as Level 2 or Level 3 depending on the priority of the significant inputs. Regardless of the method employed to value a particular security, all valuations are subject to review by the Funds’ Board of Directors/Trustees or its designee.
 
Refer to Footnote 2 – Fair Value Measurements for further details on the leveling of securities held by the Funds as of the end of the reporting period.
 
Investment Transactions
Investment transactions are recorded on a trade date basis. Realized gains and losses from transactions are determined on the specific identification method. Investments purchased on a when-issued/delayed delivery basis may have extended settlement periods. Any investments 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/delayed delivery purchase commitments. At July 31, 2010, Texas Quality Income (NTX) had outstanding when-issued/delayed delivery purchase commitments of $1,010,190. There were no such outstanding purchase commitments in any of the other Funds.
 
Investment Income
Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Investment income also includes paydown gains and losses, if any.
 
Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute substantially all of its net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions that will enable interest from municipal securities, which is exempt from regular federal and designated state income taxes, to retain such tax-exempt status when distributed to shareholders of the Funds. Net realized capital gains and ordinary income distributions paid by the Funds are subject to federal taxation.
 
For all open tax years and all major taxing jurisdictions, management of the Funds has concluded that there are no significant uncertain tax positions that would require recognition in the financial statements. Open tax years are those that are open for examination by taxing authorities (i.e., generally the last four tax year ends and the interim tax period since then). Furthermore, management of the Funds is also not aware of any tax positions for which it is reasonably possible that the total amounts of unrecognized tax benefits will significantly change in the next twelve months.
 
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 at least annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards.
 
Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP.
 
Auction Rate Preferred Shares
The Funds have issued and outstanding Auction Rate Preferred shares (“ARPS”), $25,000 stated value per share, which approximates market value, as a means of effecting financial leverage. Each Fund’s ARPS are issued in one or more Series. The dividend rate paid by the Funds on each Series is determined every seven days, pursuant to a dutch auction process overseen by the auction agent, and is payable at the end of each rate period.
As of July 31, 2010, the number of ARPS outstanding, by Series and in total, for each Fund is as follows:
 
                               
   
Arizona
    
Arizona
    
Arizona
    
Arizona
    
Texas
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
    
Quality
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
    
Income
  
   
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
    
(NTX)
  
Number of shares: 
                              
Series M 
     —       —       —       736       716  
Series T 
     —       424       —       —       —  
Series W 
     —       —       665       —       —  
Series TH 
     1,115       —       —       —       1,886  
Total 
     1,115       424       665       736       2,602  
 
Beginning in February 2008, more shares for sale were submitted in the regularly scheduled auctions for the ARPS issued by the Funds than there were offers to buy. This meant that these auctions “failed to clear,’’ and that many ARPS shareholders who wanted to sell their shares in these auctions were unable to do so. ARPS shareholders unable to sell their shares received distributions at the “maximum rate’’ applicable to failed auctions as
 
48 Nuveen Investments
 
 
 
 
 
calculated in accordance with the pre-established terms of the ARPS. As of July 31, 2010, the aggregate amount of outstanding ARPS redeemed by each Fund is as follows:
 
           
 
Arizona
Arizona
Arizona
Arizona
Texas
 
Premium
Dividend
Dividend
Dividend
Quality
 
Income
Advantage
Advantage 2
Advantage 3
Income
 
(NAZ)
(NFZ)
(NKR)
(NXE)
(NTX)
ARPS redeemed, at liquidation value 
$2,125,000 
$1,400,000 
$1,875,000 
$3,600,000 
$3,950,000 
 
Inverse Floating Rate Securities
Each Fund is authorized to invest in inverse floating rate securities. An inverse floating rate security is created by depositing a municipal bond, typically with a fixed interest rate, into a special purpose trust created by a broker-dealer. In turn, this trust (a) issues floating rate certificates, in face amounts equal to some fraction of the deposited bond’s par amount or market value, that typically pay short-term tax-exempt interest rates to third parties, and (b) issues to a long-term investor (such as one of the Funds) an inverse floating rate certificate (sometimes referred to as an “inverse floater”) that represents all remaining or residual interest in the trust. The income received by the inverse floater holder varies inversely with the short-term rate paid to the floating rate certificates’ holders, and in most circumstances the inverse floater holder bears substantially all of the underlying bond’s downside investment risk and also benefits disproportionately from any potential appreciation of the underlying bond’s value. The price of an inverse floating rate security will be more volatile than that of the underlying bond because the interest rate is dependent on not only the fixed coupon rate of the underlying bond but also on the short-term interest paid on the floating rate certificates, and because the inverse floating rate security essentially bears the risk of loss of the greater face value of the underlying bond.
 
A Fund may purchase an inverse floating rate security in a secondary market transaction without first owning the underlying bond (referred to as an “externally-deposited inverse floater”), or instead by first selling a fixed-rate bond to a broker-dealer for deposit into the special purpose trust and receiving in turn the residual interest in the trust (referred to as a “self-deposited inverse floater”). The inverse floater held by a Fund gives the Fund the right (a) to cause the holders of the floating rate certificates to tender their notes at par, and (b) to have the broker transfer the fixed-rate bond held by the trust to the Fund, thereby collapsing the trust. An investment in an externally-deposited inverse floater is identified in the Portfolio of Investments as “(IF) – Inverse floating rate investment.” An investment in a self-deposited inverse floater is accounted for as a financing transaction. In such instances, a fixed-rate bond deposited into a special purpose trust is identified in the Portfolio of Investments as “(UB) – Underlying bond of an inverse floating rate trust reflected as a financing transaction,” with the Fund accounting for the short-term floating rate certificates issued by the trust as “Floating rate obligations” on the Statement of Assets and Liabilities. In addition, the Fund reflects in “Investment Income” the entire earnings of the underlying bond and recognizes the related interest paid to the holders of the short-term floating rate certificates as “Interest expense on floating rate obligations” on the Statement of Operations.
 
During the fiscal year ended July 31, 2010, each Fund invested in externally-deposited inverse floaters and/or self-deposited inverse floaters.
 
Each Fund may also enter into shortfall and forbearance agreements (sometimes referred to as a “recourse trust” or “credit recovery swap”) (such agreements referred to herein as “Recourse Trusts”) with a broker-dealer by which a Fund agrees to reimburse the broker-dealer, in certain circumstances, for the difference between the liquidation value of the fixed-rate bond held by the trust and the liquidation value of the floating rate certificates issued by the trust plus any shortfalls in interest cash flows. Under these agreements, a Fund’s potential exposure to losses related to or on inverse floaters may increase beyond the value of a Fund’s inverse floater investments as a Fund may potentially be liable to fulfill all amounts owed to holders of the floating rate certificates. At period end, any such shortfall is recognized as “Unrealized depreciation on Recourse Trusts” on the Statement of Assets and Liabilities.
 
At July 31, 2010, the Funds were not invested in externally-deposited Recourse Trusts. 
        
 
Arizona
Arizona
Arizona
Arizona
Texas
 
Premium
Dividend
Dividend
Dividend
Quality
 
Income
Advantage
Advantage 2
Advantage 3
Income
 
(NAZ)
(NFZ)
(NKR)
(NXE)
(NTX)
Maximum exposure to Recourse Trusts 
$ — 
$ — 
$ — 
$ — 
$ — 
 
The average floating rate obligations outstanding and average annual interest rate and fees related to self-deposited inverse floaters during the fiscal year ended July 31, 2010, were as follows:
 
   
Texas
  
   
Quality
  
   
Income
  
   
(NTX)
  
Average floating rate obligations outstanding 
   $ 3,960,000  
Average annual interest rate and fees 
     0.51 % 

Nuveen Investments 49
 
 
 
 
 
 
Notes to
Financial Statements (continued)
 
 
Futures Contracts
Each Fund is subject to interest rate risk in the normal course of pursuing its investment objectives and is authorized to invest in futures contracts in an attempt to manage such risk. Upon entering into a futures contract, a Fund is required to deposit with the broker an amount of cash or liquid securities equal to a specified percentage of the contract amount. This is known as the “initial margin.” Cash held by the broker to cover initial margin requirements on open futures contracts, if any, is recognized as “Deposits with brokers for open futures contracts” on the Statement of Assets and Liabilities. Subsequent payments (“variation margin”) are made or received by a Fund each day, depending on the daily fluctuation of the value of the contract. Variation margin is recognized as a receivable or payable for “Variation margin on futures contracts” on the Statement of Assets and Liabilities, when applicable.
 
During the period the futures contract is open, changes in the value of the contract are recorded as an unrealized gain or loss by “marking-to-market” on a daily basis to reflect the changes in market value of the contract and is recognized as “Change in net unrealized appreciation (depreciation) of futures contracts” on the Statement of Operations. When the contract is closed or expired, a Fund records a realized gain or loss equal to the difference between the value of the contract on the closing date and value of the contract when originally entered into and is recognized as “Net realized gain (loss) from futures contracts” on the Statement of Operations.
 
Risks of investments in futures contracts include the possible adverse movement of the securities or indices underlying the contracts, the possibility that there may not be a liquid secondary market for the contracts and/or that a change in the value of the contract may not correlate with a change in the value of the underlying securities or indices. The Funds did not invest in futures contracts during the fiscal year ended July 31, 2010.
 
Market and Counterparty Credit Risk
In the normal course of business each Fund may invest in financial instruments and enter into financial transactions where risk of potential loss exists due to changes in the market (market risk) or failure of the other party to the transaction to perform (counterparty credit risk). The potential loss could exceed the value of the financial assets recorded on the financial statements. Financial assets, which potentially expose each Fund to counterparty credit risk, consist principally of cash due from counterparties on forward, option and swap transactions, when applicable. The extent of each Fund’s exposure to counterparty credit risk in respect to these financial assets approximates their carrying value as recorded on the Statement of Assets and Liabilities. Futures contracts, when applicable, expose a Fund to minimal counterparty credit risk as they are exchange traded and the exchange’s clearinghouse, which is counterparty to all exchange traded futures, guarantees the futures contracts against default.
 
Each Fund helps manage counterparty credit risk by entering into agreements only with counterparties Nuveen Asset Management (the “Adviser”), a wholly-owned subsidiary of Nuveen Investments, Inc. (“Nuveen”), believes have the financial resources to honor their obligations and by having the Adviser monitor the financial stability of the counterparties. Additionally, counterparties may be required to pledge collateral daily (based on the daily valuation of the financial asset) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain above a pre-determined threshold. Reciprocally, when each Fund has an unrealized loss, the Funds have instructed the custodian to pledge assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss above a pre-determined threshold. Collateral pledges are monitored and subsequently adjusted if and when the valuations fluctuate, either up or down, by at least the predetermined threshold amount.
 
Zero Coupon Securities
Each Fund is authorized to invest in zero coupon securities. A zero coupon security does not pay a regular interest coupon to its holders during the life of the security. Tax-exempt income to the holder of the security comes from accretion of the difference between the original purchase price of the security at issuance and the par value of the security at maturity and is effectively paid at maturity. The market prices of zero coupon securities generally are more volatile than the market prices of securities that pay interest periodically.
 
Custodian Fee Credit
Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by net credits earned on each Fund’s cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Credits for cash balances may be offset by charges for any days on which a Fund overdraws its account at the custodian bank.
 
Indemnifications
Under the Funds’ organizational documents, their officers and directors/trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote.
 
Use of Estimates
The preparation of financial statements in conformity with U.S. GAAP 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.
 
50 Nuveen Investments
 
 
 
 
 
 
2. Fair Value Measurements
In determining the value of each Fund’s investments, various inputs are used. These inputs are summarized in the three broad levels listed below:
 
Level 1 – Quoted prices in active markets for identical securities.
Level 2 – Other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.).
Level 3 – Significant unobservable inputs (including management’s assumptions in determining the fair value of investments).
 
The inputs or methodologies used for valuing securities are not an indication of the risk associated with investing in those securities. The following is a summary of each Fund’s fair value measurements as of July 31, 2010:
 
Arizona Premium Income (NAZ)
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Investments: 
                        
Municipal Bonds 
   $ —     $ 85,947,544     $ 2,055,600     $ 88,003,144  
Arizona Dividend Advantage (NFZ)
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Investments: 
                                
Municipal Bonds 
   $ —     $ 31,750,039     $ 230,227     $ 31,980,266  
Arizona Dividend Advantage 2 (NKR)
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Investments: 
                                
Municipal Bonds 
   $ —     $ 49,659,173     $ 929,131     $ 50,588,304  
Arizona Dividend Advantage 3 (NXE)
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Investments: 
                                
Municipal Bonds 
   $ —     $ 59,707,528     $ 567,346     $ 60,274,874  
Texas Quality Income (NTX)
  
Level 1
    
Level 2
    
Level 3
    
Total
  
Investments: 
                                
Municipal Bonds 
   $ —     $ 208,593,077     $ —     $ 208,593,077  

 
The following is a reconciliation of each Fund’s Level 3 investments held at the beginning and end of the measurement period:
 
   
Arizona
    
Arizona
    
Arizona
    
Arizona
    
Texas
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
    
Quality
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
    
Income
  
   
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
    
(NTX)
  
   
Level 3
    
Level 3
    
Level 3
    
Level 3
    
Level 3
  
   
Municipal
    
Municipal
    
Municipal
    
Municipal
    
Municipal
  
   
Bonds
    
Bonds
    
Bonds
    
Bonds
    
Bonds
  
Balance at the beginning of year 
   $ 1,978,300     $ 221,570     $ 894,192     $ 546,011     $ 950,615  
Gains (losses): 
                                        
Net realized gains (losses) 
     —       —       —       —       180  
Net change in unrealized appreciation (depreciation) 
     77,300       8,657       34,939       21,335       49,205  
Net purchases at cost (sales at proceeds) 
     —       —       —       —       (1,000,000 ) 
Net discounts (premiums) 
     —       —       —       —       —  
Net transfers in to (out of) at end of period fair value 
     —       —       —       —       —  
Balance at the end of year 
   $ 2,055,600     $ 230,227     $ 929,131     $ 567,346     $ —  

 
“Change in net unrealized appreciation (depreciation) of investments” presented on the Statement of Operations includes net appreciation (depreciation) related to securities classified as Level 3 at year end as follows:
 
   
Arizona
    
Arizona
    
Arizona
    
Arizona
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
  
   
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
  
Level 3 net appreciation (depreciation) 
   $ 77,300     $ 8,657     $ 34,939     $ 21,335  
 
 
Nuveen Investments 51
 
 
 
 
 
 
Notes to
Financial Statements (continued)
 
 
3. Derivative Instruments and Hedging Activities
The Funds record derivative instruments at fair value with changes in fair value recognized on the Statement of Operations, when applicable. Even though the Funds’ investments in derivatives may represent economic hedges, they are not considered to be hedge transactions for financial reporting purposes. The Funds did not invest in derivative instruments during the fiscal year ended July 31, 2010.
 
4. Fund Shares
 
Common Shares
Transactions in Common shares were as follows:
 
                                     
   
Arizona Premium
    
Arizona Dividend
    
Arizona Dividend
  
   
Income (NAZ)
    
Advantage (NFZ)
    
Advantage 2 (NKR)
  
   
Year
    
Year
    
Year
    
Year
    
Year
    
Year
  
   
Ended
    
Ended
    
Ended
    
Ended
    
Ended
    
Ended
  
   
7/31/10
    
7/31/09
    
7/31/10
    
7/31/09
    
7/31/10
    
7/31/09
  
Common shares: 
                                    
Issued to shareholders due to 
                                    
reinvestment of distributions 
     798       944       —       581       —       1,193  
Repurchased and retired 
     —       —       —       (2,500 )      —       (800 ) 
Weighted average Common share: 
                                                
Price per share repurchased and retired 
     —       —       —     $ 9.60       —     $ 10.35  
Discount per share repurchased and retired 
     —       —       —       19.20 %      —       17.60 % 
                             
                   
Arizona Dividend
    
Texas Quality
  
                   
Advantage 3 (NXE)
    
Income (NTX)
  
                   
Year
    
Year
    
Year
    
Year
  
                   
Ended
    
Ended
    
Ended
    
Ended
  
                   
7/31/10
    
7/31/09
    
7/31/10
    
7/31/09
  
Common shares: 
                                                
Issued to shareholders due to 
                                                
reinvestment of distributions 
                     —       —       29,688       5,052  
Repurchased and retired 
                     —       (1,600 )      —       —  
Weighted average Common share: 
                                                
Price per share repurchased and retired 
                     —     $ 9.59       —       —  
Discount per share repurchased and retired 
                     —       18.61 %      —       —  
 
Auction Rate Preferred Shares
Transactions in ARPS were as follows:
 
                       
    Arizona Premium Income (NAZ)   Arizona Dividend Advantage (NFZ)
    Year   Year   Year   Year
 
Ended
Ended
Ended
Ended
 
7/31/10
7/31/09
7/31/10
7/31/09
 
Shares
  
Amount
Shares
   Amount
Shares
  
Amount
Shares
Amount
ARPS redeemed: 
                    
Series T 
— 
  
$ — 
— 
$           — 
— 
  
$ — 
56 
$1,400,000 
Series TH 
— 
  
— 
85 
2,125,000 
— 
  
— 
— 
— 
Total 
— 
  
$ — 
85 
$2,125,000 
— 
  
$ — 
56 
$1,400,000 
 
 
52 Nuveen Investments

 
 
 
 

 
   Arizona Dividend Advantage 2 (NKR) Arizona Dividend Advantage 3 (NXE)
    Year   Year   Year   Year
 
Ended
Ended
Ended
Ended
 
7/31/10
7/31/09
7/31/10
7/31/09
 
Shares
  
Amount
Shares
   Amount
Shares
  
Amount
Shares
Amount
ARPS redeemed: 
                    
Series M 
— 
  
$ — 
— 
$           — 
— 
  
$ — 
144 
$3,600,000 
Series W 
— 
  
— 
75 
1,875,000 
— 
  
— 
— 
— 
Total 
— 
  
$ — 
75 
$1,875,000 
— 
  
$ — 
144 
$3,600,000 


                         
    Texas Quality  
    Income (NTX)  
      Year       Year  
   
Ended
    
Ended
  
   
7/31/10
    
7/31/09
  
   
Shares
    
Amount
    
Shares
    
Amount
  
ARPS redeemed: 
                        
Series M 
    —       $ —      44       $ 1,100,000  
Series TH 
    —         —      114         2,850,000  
Total 
    —       $ —      158       $ 3,950,000  

5. Investment Transactions
 
Purchases and sales (including maturities but excluding short-term investments) during the fiscal year ended July 31, 2010, were as follows:
 
                               
   
Arizona
    
Arizona
    
Arizona
    
Arizona
    
Texas
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
    
Quality
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
    
Income
  
   
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
    
(NTX)
  
Purchases 
   $ 6,733,065     $ 2,890,432     $ 2,809,996     $ 2,935,127     $ 14,387,590  
Sales and maturities 
     7,788,316       958,770       2,004,345       2,870,118       11,560,150  

 
6. 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 taxable market discount, timing differences in recognizing certain gains and losses on investment transactions and the treatment of investments in inverse floating rate securities reflected as financing transactions, if any. To the extent that differences arise that are permanent in nature, such amounts are reclassified within the capital accounts as detailed below. Temporary differences do not require reclassification. Temporary and permanent differences do not impact the net asset values of the Funds.
 
At July 31, 2010, the cost and unrealized appreciation (depreciation) of investments, as determined on a federal income tax basis, were as follows:
 
                               
   
Arizona
    
Arizona
    
Arizona
    
Arizona
    
Texas
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
    
Quality
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
    
Income
  
   
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
    
(NTX)
  
Cost of investments 
   $ 85,702,926     $ 31,409,851     $ 49,209,102     $ 59,455,322     $ 198,810,417  
Gross unrealized: 
                                        
Appreciation 
   $ 5,456,904     $ 1,433,280     $ 2,414,652     $ 2,044,210     $ 10,078,209  
Depreciation 
     (3,156,686 )      (862,865 )      (1,035,450 )      (1,224,658 )      (4,255,687 ) 
Net unrealized appreciation (depreciation) of investments 
   $ 2,300,218     $ 570,415     $ 1,379,202     $ 819,552     $ 5,822,522  

 
Nuveen Investments 53
 
 
 
 
 
Notes to
Financial Statements (continued)
 
 
Permanent differences, primarily due to federal taxes paid, taxable market discount and distribution character reclassifications, resulted in reclassifications among the Funds’ components of Common share net assets at July 31, 2010, the Funds’ tax year end, as follows:
 
                               
   
Arizona
    
Arizona
    
Arizona
    
Arizona
    
Texas
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
    
Quality
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
    
Income
  
   
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
    
(NTX)
  
Paid-in-surplus 
   $ —     $ 9     $ —     $ —     $ 2,818  
Undistributed (Over-distribution of) net investment income 
     (34,996 )      (11 )      (332 )      (1,930 )      (746 ) 
Accumulated net realized gain (loss) 
     34,996       2       332       1,930       (2,072 ) 
 
The tax components of undistributed net tax-exempt income, net ordinary income and net long-term capital gains at July 31, 2010, the Funds’ tax year end, were as follows:
 
                               
   
Arizona
    
Arizona
    
Arizona
    
Arizona
    
Texas
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
    
Quality
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
    
Income
  
   
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
    
(NTX)
  
Undistributed net tax-exempt income * 
   $ 1,160,094     $ 363,711     $ 572,754     $ 660,087     $ 2,646,053  
Undistributed net ordinary income ** 
     —       —       —       —       —  
Undistributed net long-term capital gains 
     —       —       —       —       64,495  

* 
Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on July 1, 2010, paid on August 2, 2010. 
** 
Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. 
 
The tax character of distributions paid during the Funds’ tax years ended July 31, 2010 and July 31, 2009, was designated for purposes of the dividends paid deduction as follows:
 
                               
   
Arizona
    
Arizona
    
Arizona
    
Arizona
    
Texas
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
    
Quality
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
    
Income
  
2010
  
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
    
(NTX)
  
Distributions from net tax-exempt income*** 
   $ 3,223,648     $ 1,096,403     $ 1,905,599     $ 2,287,520     $ 7,910,812  
Distributions from net ordinary income** 
     —       —       —       —       —  
Distributions from net long-term capital gains**** 
     —       —       —       —       134,057  
                               
   
Arizona
    
Arizona
    
Arizona
    
Arizona
    
Texas
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
    
Quality
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
    
Income
  
2009
  
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
    
(NTX)
  
Distributions from net tax-exempt income 
   $ 3,419,031     $ 1,198,865     $ 2,063,963     $ 2,423,629     $ 7,900,976  
Distributions from net ordinary income** 
     —       —       —       —       378,151  
Distributions from net long-term capital gains 
     —       —       —       —       268,060  

**     
Net ordinary income consists of taxable market discount income and net short-term capital gains, if any.
***     
The Funds hereby designate these amounts paid during the fiscal year ended July 31, 2010, as Exempt Interest Dividends.
****   
The Funds designate as a long term capital gain dividend, pursuant to the Internal Revenue Code Section 852(b)(3), the amount necessary to reduce earnings and profits of the Funds related to net capital gain to zero for the tax year ended July 31, 2010.
 
At July 31, 2010, the Funds’ tax year end, the following Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows:
 
                         
   
Arizona
    
Arizona
    
Arizona
    
Arizona
  
   
Premium
    
Dividend
    
Dividend
    
Dividend
  
   
Income
    
Advantage
    
Advantage 2
    
Advantage 3
  
   
(NAZ)
    
(NFZ)
    
(NKR)
    
(NXE)
  
Expiration: 
                        
July 31, 2011 
   $ 359,724     $ —     $ —     $ —  
July 31, 2012 
     1,553,627       —       —       158,487  
July 31, 2013 
     —       —       —       160,902  
July 31, 2014 
     —       —       —       218,127  
July 31, 2016 
     562,384       246,571       212,903       363,937  
July 31, 2017 
     323,876       210,308       220,271       258,905  
July 31, 2018 
     43,720       318,004       223,857       108,356  
Total 
   $ 2,843,331     $ 774,883     $ 657,031     $ 1,268,714  

54 Nuveen Investments
 
 
 
 
 
 
7. Management Fees and Other Transactions with Affiliates
Each Fund’s management fee is separated into two components – a fund-level fee, based only on the amount of assets within each individual Fund, and a complex-level fee, based on the aggregate amount of all fund assets managed by the Adviser. This pricing structure enables each Fund’s shareholders to benefit from growth in the assets within their respective Fund as well as from growth in the amount of complex-wide assets managed by the Adviser.
 
The annual fund-level fee for each Fund, payable monthly, is calculated according to the following schedule:
 
   
 
Arizona Premium Income (NAZ)
 
Texas Quality Income (NTX)
Average Daily Net Assets*
Fund-Level Fee Rate
For the first $125 million 
.4500% 
For the next $125 million 
.4375    
For the next $250 million 
.4250    
For the next $500 million 
.4125    
For the next $1 billion 
.4000    
For the next $3 billion 
.3875    
For net assets over $5 billion 
.3750    
   
 
Arizona Dividend Advantage (NFZ)
 
Arizona Dividend Advantage 2 (NKR)
 
Arizona Dividend Advantage 3 (NXE)
Average Daily Net Assets*
Fund-Level Fee Rate
For the first $125 million 
.4500% 
For the next $125 million 
.4375    
For the next $250 million 
.4250    
For the next $500 million 
.4125    
For the next $1 billion 
.4000    
For net assets over $2 billion 
.3750    

 
Nuveen Investments 55
 
 
 
 
 
 
Notes to
Financial Statements (continued)
 
The annual complex-level fee for each Fund, payable monthly, is calculated according to the following schedule:
 
Complex-Level Managed Asset Breakpoint Level*
Effective Rate at Breakpoint Level
$55 billion 
.2000% 
$56 billion 
.1996    
$57 billion 
.1989    
$60 billion 
.1961    
$63 billion 
.1931    
$66 billion 
.1900    
$71 billion 
.1851    
$76 billion 
.1806    
$80 billion 
.1773    
$91 billion 
.1691    
$125 billion 
.1599    
$200 billion 
.1505    
$250 billion 
.1469    
$300 billion 
.1445    
 
*
The complex-level fee is calculated based upon the aggregate daily managed assets of all Nuveen funds, with such daily managed assets defined separately for each fund in its management agreement, but excluding assets attributable to investments in other Nuveen funds. For the complex-level and fund-level fees, daily net assets and managed assets include closed-end fund assets managed by the Adviser that are attributable to financial leverage. For these purposes, financial leverage includes the funds’ use of preferred stock and borrowings and certain investments in the residual interest certificates (also called inverse floating rate securities) in tender option bond (TOB) trusts, including the portion of assets held by a TOB trust that has been effectively financed by the trust’s issuance of floating rate securities, subject to an agreement by the Adviser to limit the amount of such assets for determining managed assets in certain circumstances. As of July 31, 2010, the complex-level fee rate was 1844%.
 
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 its officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. The Board of Directors/Trustees has adopted a deferred compensation plan for independent directors/trustees that enables directors/trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised funds.
 
For the first ten years of Arizona Dividend Advantage’s (NFZ) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets, for fees and expenses in the amounts and for the time periods set forth below:
 
Year Ending
  
Year Ending
  
January 31,
  
January 31,
  
2001* 
.30% 
2007 
.25% 
2002 
.30 
2008 
.20 
2003 
.30 
2009 
.15 
2004 
.30 
2010 
.10 
2005 
.30 
2011 
.05 
2006 
.30 
    
* From the commencement of operations.
 
The Adviser has not agreed to reimburse Arizona Dividend Advantage (NFZ) for any portion of its fees and expenses beyond January 31, 2011.
 
56 Nuveen Investments
 
 
 
 
 
For the first ten years of Arizona Dividend Advantage 2’s (NKR) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets, 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 Arizona Dividend Advantage 2 (NKR) for any portion of its fees and expenses beyond March 31, 2012.
 
For the first eight years of Arizona Dividend Advantage 3’s (NXE) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets, for fees and expenses in the amounts and for the time periods set forth below:
 
       
Year Ending
  
Year Ending
  
September 30,
  
September 30,
  
2002* 
.32% 
2007 
.32% 
2003 
.32 
2008 
.24 
2004 
.32 
2009 
.16 
2005 
.32 
2010 
.08 
2006 
.32 
    
* From the commencement of operations.
 
The Adviser has not agreed to reimburse Arizona Dividend Advantage 3 (NXE) for any portion of its fees and expenses beyond September 30, 2010.
 
8. New Accounting Pronouncements
 
Fair Value Measurements
On January 21, 2010, FASB issued changes to the authoritative guidance under U.S. GAAP for fair value measurements. The objective of which is to provide guidance on how investment assets and liabilities are to be valued and disclosed. Specifically, the amendment requires reporting entities disclose Level 3 activity for purchases, sales, issuances and settlements in the Level 3 roll-forward on a gross basis rather than as one net number. The effective date of the amendment is for interim and annual periods beginning after December 15, 2010. At this time, management is evaluating the implications of this guidance and the impact it will have to the financial statement amounts and footnote disclosures, if any.
 
9. Subsequent Events
 
Other Matters
On September 21, 2010, lawsuits pursuing claims made in the demand letter alleging that Arizona Dividend Advantage 3’s (NXE) Board of Trustees breached their fiduciary duties related to the redemption at par of its ARPS had been filed on behalf of shareholders of Arizona Dividend Advantage 3 (NXE), against the Adviser, the Nuveen holding company, the majority owner of the holding company, the lone interested trustee, and current and former officers of Arizona Dividend Advantage 3 (NXE). Nuveen and the other named defendants believe these lawsuits to be without merit, and all named parties intend to defend themselves vigorously. Arizona Dividend Advantage 3 (NXE) believes that these lawsuits will not have a material effect on it or on the Adviser’s ability to serve as investment adviser to it.
 
 
Nuveen Investments 57
 
 
 
 
 
Financial
Highlights
 
 
Selected data for a Common share outstanding throughout each period:
 
   Investment Operations  
               
Distributions
  
Distributions
      
               
from Net
  
from
      
               
Investment
  
Capital
      
    Beginning            
Income to
  
Gains to
  
 
    Common      
Net
    
Auction Rate
  
Auction Rate
      
    Share  
Net
  
Realized/
    
Preferred
  
Preferred
      
    Net Asset  
Investment
  
Unrealized
    
Share-
  
Share-
      
    Value  
Income
  
Gain (Loss)
    
holders(a)
   holders(a)   Total  
Arizona Premium Income (NAZ)
                        
Year Ended 7/31: 
                          
2010 
  $ 12.92   $ .84   $ .96     $ (.03 )  $ —   $ 1.77  
2009 
   13.00     .85     (.16 )      (.13 )    —     .56  
2008 
   14.00     .88     (1.05 )      (.22 )    —     (.39 ) 
2007 
   14.10     .83     (.10 )      (.22 )    —     .51  
2006 
   14.53     .83     (.39 )      (.18 )    —     .26  
Arizona Dividend Advantage (NFZ)
                                  
Year Ended 7/31: 
                                      
2010 
   12.66     .85     1.41       (.03 )    —     2.23  
2009 
   13.26     .84     (.67 )      (.14 )    —     .03  
2008 
   14.48     .91     (1.23 )      (.25 )    — *    (.57 ) 
2007 
   14.77     .91     (.17 )      (.24 )    (.02 )    .48  
2006 
   15.37     .93     (.40 )      (.20 )    (.01 )    .32  
 
 
    Less Distributions              
               
Discount
              
               
from
              
 
Net
            
Common
      Ending        
 
Investment
  
Capital
        
Shares
    
Common
        
 
Income to
  
Gains to
        
Repur-
    
Share
        
 
Common
  
Common
        
chased
    
Net
   
Ending
  
 
Share-
  
Share-
        
and
    
Asset
    
Market
  
  holders  
holders
   Total     Retired    
Value
    
Value
  
Arizona Premium Income (NAZ)
                              
Year Ended 7/31: 
                              
2010 
 $ (.70 )  $ —   $ (.70 )    $ —     $ 13.99     $ 13.34  
2009 
   (.64 )    —     (.64 )      —       12.92       12.29  
2008 
   (.61 )    —     (.61 )      —       13.00       13.35  
2007 
   (.61 )    —     (.61 )      —       14.00       13.07  
2006 
   (.69 )    —     (.69 )      —       14.10       13.69  
Arizona Dividend Advantage (NFZ)
                                          
Year Ended 7/31: 
                                          
2010 
   (.69 )    —     (.69 )      —       14.20       14.19  
2009 
   (.63 )    —     (.63 )      — *      12.66       12.14  
2008 
   (.64 )    (.01 )    (.65 )      —       13.26       13.70  
2007 
   (.71 )    (.06 )    (.77 )      —       14.48       13.35  
2006 
   (.84 )    (.08 )    (.92 )      —       14.77       15.90  

 
                   
   
Auction Rate Preferred Shares at End of Period
  
   
Aggregate
              
   
Amount
    
Liquidation
    
Asset
  
   
Outstanding
    
Value
    
Coverage
  
      (000 )  
Per Share
    
Per Share
  
Arizona Premium Income (NAZ)
              
Year Ended 7/31: 
                    
2010 
   $ 27,875     $ 25,000     $ 81,097  
2009 
     27,875       25,000       76,798  
2008 
     30,000       25,000       73,414  
2007 
     30,000       25,000       77,111  
2006 
     30,000       25,000       77,520  
Arizona Dividend Advantage (NFZ)
                  
Year Ended 7/31: 
                        
2010 
     10,600       25,000       76,850  
2009 
     10,600       25,000       71,238  
2008 
     12,000       25,000       67,817  
2007 
     12,000       25,000       71,748  
2006 
     12,000       25,000       72,628  

58 Nuveen Investments
 
 
 
 
 
 
                                                         
              Ratios/Supplemental Data
                 
Ratios to Average Net Assets
    
Ratios to Average Net Assets
        
                 
Applicable to Common Shares
    
Applicable to Common Shares
        
Total Returns
          
Before Reimbursement(c)
    
After Reimbursement(c)(d)
        
     
Based
    
Ending
                                            
     
on
    
Net
                                            
Based
    
Common
    
Assets
                                            
on
    
Share Net
    
Applicable
    
Expenses
    
Expenses
    
Net
    
Expenses
    
Expenses
    
Net
    
Portfolio
  
Market
    
Asset
    
to Common
    
Including
    
Excluding
    
Investment
    
Including
    
Excluding
    
Investment
    
Turnover
  
Value(b)
     Value(b)    
Shares (000)
      Interest(e)    
Interest
    
Income
    
Interest(e)
    
Interest
    
Income
    
Rate
  
  14.47 %      13.94 %    $ 62,549       1.21 %      1.21 %      6.13 %      N/A       N/A       N/A       8 % 
  (2.61 )      4.73       57,755       1.33       1.33       7.01       N/A       N/A       N/A       25  
  7.10       (2.87 )      58,097       1.40       1.26       6.42       N/A       N/A       N/A       21  
  (.22 )      3.62       62,534       1.32       1.24       5.81       N/A       N/A       N/A       13  
  (5.62 )      1.84       63,024       1.21       1.21       5.83       N/A       N/A       N/A       22  
  23.34       17.93       21,984       1.35       1.35       6.12       1.23 %      1.23 %      6.23 %      3  
  (6.12 )      .58       19,605       1.51       1.51       6.70       1.30       1.30       6.91       6  
  7.72       (4.09 )      20,552       1.58       1.44       6.14       1.31       1.16       6.42       10  
  (11.63 )      3.24       22,439       1.48       1.38       5.74       1.14       1.04       6.08       19  
  4.54       2.14       22,862       1.36       1.36       5.79       .94       .94       6.21       24  

   
(a) 
The amounts shown are based on Common share equivalents. 
(b) 
Total Return Based on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains 
 
distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day 
 
of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over 
 
several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total 
 
returns are not annualized. 
 
Total Return Based on Common Share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and 
 
reinvested capital gains distributions at net asset value, if any. The last dividend declared in the period, which is typically paid on the first business day of the following 
 
month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund’s 
 
market price (and not its net asset value), and therefore may be different from the price used in the calculation. Total returns are not annualized. 
(c) 
Ratios do not reflect the effect of dividend payments to Auction Rate Preferred shareholders; Net Investment Income ratios reflect income earned and expenses incurred on 
 
assets attributable to Auction Rate Preferred shares. 
(d) 
After expense reimbursement from the Adviser, where applicable. Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the 
 
custodian bank, where applicable. 
(e) 
The expense ratios reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose 
 
trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1 – General Information and Significant Accounting Policies, 
 
Inverse Floating Rate Securities. 
* 
Rounds to less than $.01 per share. 
N/A 
Fund does not have a contractual reimbursement agreement with the Adviser. 

 
See accompanying notes to financial statements.
 
Nuveen Investments 59
 
 
 
 
 
Financial
Highlights (continued)
 
 
Selected data for a Common share outstanding throughout each period:
 
                                         
               
Investment Operations
      
                     
Distributions
    
Distributions
            
                     
from Net
    
from
            
                     
Investment
    
Capital
            
   
Beginning
                
Income to
    
Gains to
    
 
  
   
Common
          
Net
    
Auction Rate
    
Auction Rate
            
   
Share
    
Net
    
Realized/
    
Preferred
    
Preferred
            
   
Net Asset
    
Investment
    
Unrealized
    
Share-
    
Share-
            
   
Value
    
Income
    
Gain (Loss)
    
holders(a)
    
holders(a)
      Total      
Arizona Dividend Advantage 2 (NKR)
                              
Year Ended 7/31: 
                                        
2010 
   $ 13.46     $ .90     $ 1.08     $ (.03 )    $ —     $ 1.95      
2009 
     13.66       .93       (.29 )      (.14 )      —       .50      
2008 
     14.76       .96       (1.03 )      (.24 )      (.02 )      (.33 )     
2007 
     15.00       .97       (.18 )      (.24 )      (.01 )      .54      
2006 
     15.56       .96       (.37 )      (.20 )      (.01 )      .38      
Arizona Dividend Advantage 3 (NXE)
                                      
Year Ended 7/31: 
                                                    
2010 
     12.76       .86       1.26       (.03 )      —       2.09      
2009 
     13.07       .88       (.41 )      (.13 )      —       .34      
2008 
     14.20       .91       (1.15 )      (.24 )      —       (.48 )     
2007 
     14.32       .90       (.10 )      (.25 )      —       .55      
2006 
     14.62       .88       (.26 )      (.19 )      —       .43      
 
 
                                     
      Less Distributions              
                     
Discount
              
                     
from
              
   
Net
                
Common
              
   
Investment
    
Capital
          
Shares
    
Ending
        
   
Income to
    
Gains to
          
Repur-
    
Common
        
   
Common
    
Common
          
chased
    
Share
    
Ending
  
   
Share-
    
Share-
          
and
    
Net Asset
    
Market
  
   
holders
    
holders
      Total     Retired    
Value
    
Value
  
Arizona Dividend Advantage 2 (NKR)
                                  
Year Ended 7/31: 
                                    
2010 
   $ (.76 )    $ —     $ (.76 )    $ —     $ 14.65     $ 13.92  
2009 
     (.70 )      —       (.70 )      — *      13.46       12.52  
2008 
     (.71 )      (.06 )      (.77 )      —       13.66       14.00  
2007 
     (.74 )      (.04 )      (.78 )      —       14.76       15.27  
2006 
     (.83 )      (.11 )      (.94 )      —       15.00       15.37  
Arizona Dividend Advantage 3 (NXE)
                                              
Year Ended 7/31: 
                                                
2010 
     (.73 )      —       (.73 )      —       14.12       13.14  
2009 
     (.65 )      —       (.65 )      — *      12.76       11.73  
2008 
     (.65 )      —       (.65 )      —       13.07       13.30  
2007 
     (.67 )      —       (.67 )      —       14.20       13.44  
2006 
     (.73 )      —       (.73 )      —       14.32       13.52  

 

 
                   
   
Auction Rate Preferred Shares at End of Period
  
   
Aggregate
              
   
Amount
    
Liquidation
    
Asset
  
   
Outstanding
    
Value
    
Coverage
  
      (000 )  
Per Share
    
Per Share
  
Arizona Dividend Advantage 2 (NKR)
              
Year Ended 7/31: 
                    
2010 
   $ 16,625     $ 25,000     $ 78,734  
2009 
     16,625       25,000       74,367  
2008 
     18,500       25,000       70,015  
2007 
     18,500       25,000       73,616  
2006 
     18,500       25,000       74,277  
Arizona Dividend Advantage 3 (NXE)
                  
Year Ended 7/31: 
                        
2010 
     18,400       25,000       83,805  
2009 
     18,400       25,000       78,164  
2008 
     22,000       25,000       70,546  
2007 
     22,000       25,000       74,490  
2006 
     22,000       25,000       74,902  

60 Nuveen Investments
 
 
 
 
 
 
                                                         
              Ratios/Supplemental Data  
             
Ratios to Average Net Assets
    
Ratios to Average Net Assets
        
                 
Applicable to Common Shares
    
Applicable to Common Shares
        
Total Returns
          
Before Reimbursement(c)
  
After Reimbursement(c)(d)
        
     
Based
    
Ending
                                            
     
on
    
Net
                                            
Based
    
Common
    
Assets
                                            
on
    
Share Net
    
Applicable
    
Expenses
    
Expenses
    
Net
    
Expenses
    
Expenses
    
Net
    
Portfolio
  
Market
    
Asset
    
to Common
    
Including
    
Excluding
    
Investment
    
Including
    
Excluding
    
Investment
    
Turnover
  
Value(b)
    
Value(b)
     Shares (000)     Interest(e)    
Interest
    
Income
    
Interest(e)
    
Interest
    
Income
    
Rate
  
  17.65 %      14.75 %    $ 35,733       1.27 %      1.27 %      6.11 %      1.07 %      1.07 %      6.31 %      4 % 
  (4.99 )      4.09       32,829       1.40       1.40       6.93       1.11       1.11       7.22       5  
  (3.16 )      (2.38 )      33,311       1.49       1.34       6.32       1.13       .98       6.68       15  
  4.52       3.59       35,976       1.39       1.29       5.92       .96       .86       6.35       14  
  .82       2.49       36,465       1.28       1.28       5.88       .83       .83       6.33       11  
  18.58       16.66       43,280       1.22       1.22       6.15       1.08       1.08       6.29       5  
  (6.18 )      3.08       39,129       1.37       1.37       6.97       1.09       1.09       7.25       9  
  3.96       (3.48 )      40,081       1.46       1.30       6.17       1.08       .92       6.55       16  
  4.21       3.81       43,552       1.36       1.26       5.69       .88       .78       6.16       15  
  (1.80 )      3.03       43,913       1.26       1.26       5.63       .79       .79       6.11       12  

   
(a) 
The amounts shown are based on Common share equivalents. 
(b) 
Total Return Based on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains 
 
distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business 
 
day of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place 
 
over several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. 
 
Total returns are not annualized. 
 
Total Return Based on Common Share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and 
 
reinvested capital gains distributions at net asset value, if any. The last dividend declared in the period, which is typically paid on the first business day of the following 
 
month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund’s 
 
market price (and not its net asset value), and therefore may be different from the price used in the calculation. Total returns are not annualized. 
(c) 
Ratios do not reflect the effect of dividend payments to Auction Rate Preferred shareholders; Net Investment Income ratios reflect income earned and expenses incurred 
 
on assets attributable to Auction Rate Preferred shares. 
(d) 
After expense reimbursement from the Adviser, where applicable. Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with 
 
the custodian bank, where applicable. 
(e) 
The expense ratios reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose 
 
trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1 – General Information and Significant Accounting Policies, 
 
Inverse Floating Rate Securities. 
* 
Rounds to less than $.01 per share. 

 
See accompanying notes to financial statements.
 
 
Nuveen Investments 61
 
 
 
 
 
 
Financial
Highlights (continued)
 
Selected data for a Common share outstanding throughout each period:
 
                                     
            Investment Operations  
                     
Distributions
    
Distributions
        
                     
from Net
    
from
        
                     
Investment
    
Capital
        
   
Beginning
                
Income to
    
Gains to
    
 
   
Common
          
Net
    
Auction Rate
    
Auction Rate
        
   
Share
    
Net
    
Realized/
    
Preferred
    
Preferred
        
   
Net Asset
    
Investment
    
Unrealized
    
Share-
    
Share-
        
   
Value
    
Income
    
Gain (Loss)
    
holders(a)
     holders(a)      Total  
Texas Quality Income (NTX)
                                
Year Ended 7/31: 
                                    
2010 
   $ 13.84     $ .94     $ 1.08     $ (.03 )    $ — *    $ 1.99  
2009 
     13.98       .94       (.17 )      (.13 )      (.02 )      .62  
2008 
     14.87       .94       (.83 )      (.23 )      (.02 )      (.14 ) 
2007 
     15.06       .95       (.11 )      (.25 )      (.01 )      .58  
2006 
     15.46       .96       (.32 )      (.22 )      —       .42  
 
 
                                   
    Less Distributions              
                   
Discount
              
                   
from
              
 
Net
                
Common
              
 
Investment
    
Capital
          
Shares
    
Ending
        
 
Income to
    
Gains to
          
Repur-
    
Common
        
 
Common
    
Common
          
chased
    
Share
    
Ending
  
 
Share-
    
Share-
          
and
    
Net Asset
    
Market
  
 
holders
    
holders
      Total    
Retired
    
Value
    
Value
  
Texas Quality Income (NTX)
                                  
Year Ended 7/31: 
                                  
2010 
 $ (.81 )    $ (.01 )    $ (.82 )    $ —     $ 15.01     $ 16.92  
2009 
   (.71 )      (.05 )      (.76 )      —       13.84       14.78  
2008 
   (.69 )      (.06 )      (.75 )      —       13.98       12.46  
2007 
   (.73 )      (.04 )      (.77 )      —       14.87       13.89  
2006 
   (.82 )      —       (.82 )      —       15.06       14.71  

 
                   
   
Auction Rate Preferred Shares at End of Period
  
   
Aggregate
              
   
Amount
    
Liquidation
    
Asset
  
   
Outstanding
    
Value
    
Coverage
  
      (000 )  
Per Share
    
Per Share
  
Texas Quality Income (NTX)
              
Year Ended 7/31: 
                    
2010 
   $ 65,050     $ 25,000     $ 79,988  
2009 
     65,050       25,000       75,543  
2008 
     69,000       25,000       73,084  
2007 
     69,000       25,000       76,173  
2006 
     69,000       25,000       76,815  

62 Nuveen Investments
 
 
 
 

                                       
                    Ratios/Supplemental Data        
                    Ratios to Average Net Assets        
Total Returns
      
Applicable to Common Shares(c)(d)
        
     
Based
    
Ending
                          
     
on
    
Net
                          
Based
    
Common
    
Assets
                          
on
    
Share Net
    
Applicable
    
Expenses
    
Expenses
    
Net
    
Portfolio
  
Market
    
Asset
    
to Common
    
Including
    
Excluding
    
Investment
    
Turnover
  
Value(b)
    
Value(b)
    
Shares (000)
    
Interest(e)
    
Interest
      Income    
Rate
  
  20.92 %      14.71 %    $ 143,080       1.19 %      1.17 %      6.42 %      6 % 
  25.98       4.80       131,513       1.27       1.26       7.06       10  
  (5.16 )      (1.04 )      132,713       1.26       1.21       6.46       8  
  (.52 )      3.82       141,238       1.24       1.18       6.24       9  
  (4.03 )      2.77       143,009       1.19       1.19       6.31       13  

   
(a) 
The amounts shown are based on Common share equivalents. 
(b) 
Total Return Based on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains 
 
distributions, if any, at the average price paid per share at the time of reinvestment. The last dividend declared in the period, which is typically paid on the first business day 
 
of the following month, is assumed to be reinvested at the ending market price. The actual reinvestment for the last dividend declared in the period may take place over 
 
several days, and in some instances may not be based on the market price, so the actual reinvestment price may be different from the price used in the calculation. Total 
 
returns are not annualized. 
 
Total Return Based on Common Share Net Asset Value is the combination of changes in Common share net asset value, reinvested dividend income at net asset value and 
 
reinvested capital gains distributions at net asset value, if any. The last dividend declared in the period, which is typically paid on the first business day of the following 
 
month, is assumed to be reinvested at the ending net asset value. The actual reinvest price for the last dividend declared in the period may often be based on the Fund’s 
 
market price (and not its net asset value), and therefore may be different from the price used in the calculation. Total returns are not annualized. 
(c) 
Ratios do not reflect the effect of dividend payments to Auction Rate Preferred shareholders; Net Investment Income ratios reflect income earned and expenses incurred on 
 
assets attributable to Auction Rate Preferred shares. 
(d) 
Ratios do not reflect the effect of custodian fee credits earned on the Fund’s net cash on deposit with the custodian bank, where applicable. 
(e) 
The expense ratios reflect, among other things, the interest expense deemed to have been paid by the Fund on the floating rate certificates issued by the special purpose 
 
trusts for the self-deposited inverse floaters held by the Fund, where applicable, as described in Footnote 1 – General Information and Significant Accounting Policies, 
 
Inverse Floating Rate Securities. 
* 
Rounds to less than $.01 per share. 

 
See accompanying notes to financial statements.
 
 
Nuveen Investments 63
 
 
 
 
 
Board Members & Officers (Unaudited)
 
 
The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board Members of the Funds. The number of board members of the Fund is currently set at nine. None of the board members who are not “interested” persons of the Funds (referred to herein as “independent board members”) has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the board members and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below.
 
         
Name,
Position(s) Held
Year First
Principal
Number
Birthdate
with the Funds
Elected or
Occupation(s)
of Portfolios
& Address
  
Appointed
Including other
in Fund Complex
   
and Term(1)
Directorships
Overseen by
     
During Past 5 Years
Board Member
Independent Board Members: 
      
       
■ ROBERT P. BREMNER(2)
    
Private Investor and Management Consultant; Treasurer and Director, 
  
8/22/40 
Chairman of 
  
Humanities Council of Washington, D.C. 
  
333 W. Wacker Drive
the Board 
1996
  
200
Chicago, IL 60606 
and Board Member 
      
         
■ JACK B. EVANS
    
President, The Hall-Perrine Foundation, a private philanthropic 
  
10/22/48 
    
corporation (since 1996); Director and Chairman, United Fire 
  
333 W. Wacker Drive
Board Member 
1999
Group, a publicly held company; President Pro Tem of the Board of 
200
Chicago, IL 60606 
    
Regents for the State of Iowa University System; Director, Gazette 
  
     
Companies; Life Trustee of Coe College and the Iowa College Foundation; 
  
     
formerly, Director, Alliant Energy; formerly, Director, Federal 
  
     
Reserve Bank of Chicago; formerly, President and Chief Operating 
  
     
Officer, SCI Financial Group, Inc., a regional financial services firm. 
  
 
■ WILLIAM C. HUNTER
    
Dean, Tippie College of Business, University of Iowa (since 
  
3/6/48 
    
2006); Director (since 2004) of Xerox Corporation; Director 
  
333 W. Wacker Drive
Board Member 
2004
(since 2005), Beta Gamma Sigma International Honor Society; 
200
Chicago, IL 60606 
    
formerly, Dean and Distinguished Professor of Finance, School of 
  
     
Business at the University of Connecticut (2003-2006); previously, 
  
     
Senior Vice President and Director of Research at the Federal 
  
     
Reserve Bank of Chicago (1995-2003); Director, SS&C 
  
     
Technologies, Inc. (May 2005-October 2005); formerly, Director 
  
     
(1997-2007), Credit Research Center at Georgetown University. 
  
 
■ DAVID J. KUNDERT(2)
    
Director, Northwestern Mutual Wealth Management 
  
10/28/42 
    
Company; retired (since 2004) as Chairman, JPMorgan 
  
333 W. Wacker Drive
Board Member 
2005
Fleming Asset Management, President and CEO, Banc One 
200
Chicago, IL 60606 
    
Investment Advisors Corporation, and President, One Group 
  
     
Mutual Funds; prior thereto, Executive Vice President, Banc One 
  
     
Corporation and Chairman and CEO, Banc One Investment 
  
     
Management Group; Member, Board of Regents, Luther College; 
  
     
member of the Wisconsin Bar Association; member of Board of 
  
     
Directors, Friends of Boerner Botanical Gardens; member of Board 
  
     
of Directors and chair of Investment Committee, Greater 
  
     
Milwaukee Foundation. 
  
 
■ WILLIAM J. SCHNEIDER(2)
  
Chairman of Miller-Valentine Partners Ltd., a real estate investment 
  
9/24/44 
    
company; formerly, Senior Partner and Chief Operating Officer 
  
333 W. Wacker Drive
Board Member 
1997
(retired, 2004) of Miller-Valentine Group; member, University of 
200
Chicago, IL 60606 
    
Dayton Business School Advisory Council;member, Mid-America 
  
     
Health System board; formerly, member and chair, Dayton Philharmonic 
  
     
Orchestra Association; formerly, member, Business Advisory Council, 
  
     
Cleveland Federal Reserve Bank.
  

64 Nuveen Investments
 
 
 
 
 
 

         
Name,
Position(s) Held
Year First
Principal
Number
Birthdate
with the Funds
Elected or
Occupation(s)
of Portfolios
& Address
  
Appointed
Including other
in Fund Complex
   
and Term(1)
Directorships
Overseen by
     
During Past 5 Years
Board Member
Independent Board Members: 
      
       
■ JUDITH M. STOCKDALE
    
Executive Director, Gaylord and Dorothy Donnelley 
  
12/29/47 
    
Foundation (since 1994); prior thereto, Executive Director, 
  
333 W. Wacker Drive 
Board Member 
1997
Great Lakes Protection Fund (1990-1994). 
200
Chicago, IL 60606 
 
      
         
■ CAROLE E. STONE(2)
    
Director, Chicago Board Options Exchange (since 2006); Director, 
  
6/28/47 
    
C2 Options Exchange, Incorporated (since 2009); Commissioner, 
  
333 W. Wacker Drive
Board Member 
2007
New York State Commission on Public Authority Reform (since 
200
Chicago, IL 60606 
    
2005); formerly, Chair, New York Racing Association Oversight 
  
     
Board (2005-2007). 
  
■ TERENCE J. TOTH(2)
        
9/29/59 
    
Director, Legal & General Investment Management America, Inc. 
  
333 W. Wacker Drive
Board Member 
2008
(since 2008); Managing Partner, Promus Capital (since 2008); 
200
Chicago, IL 60606 
    
formerly, CEO and President, Northern Trust Global Investments 
  
     
(2004-2007); Executive Vice President, Quantitative Management 
  
     
& Securities Lending (2000-2004); prior thereto, various positions 
  
     
with Northern Trust Company (since 1994); member: Goodman 
  
     
Theatre Board (since 2004), Chicago Fellowship Boards (since 
  
     
2005), University of Illinois Leadership Council Board (since 2007) 
  
     
and Catalyst Schools of Chicago Board (since 2008); formerly, 
  
     
member: Northern Trust Mutual Funds Board (2005-2007), 
  
     
Northern Trust Global Investments Board (2004-2007), Northern 
  
     
Trust Japan Board (2004-2007), Northern Trust Securities Inc. 
  
     
Board (2003-2007) and Northern Trust Hong Kong Board 
  
     
(1997-2004). 
  
Interested Board Member: 
      
■ JOHN P. AMBOIAN(3)
    
Chief Executive Officer (since July 2007), Director (since 1999) 
  
6/14/61 
    
and Chairman (since 2007) of Nuveen Investments, Inc.; Chief 
  
333 W. Wacker Drive
Board Member 
2008
Executive Officer (since 2007) of Nuveen Asset Management, 
200
Chicago, IL 60606 
    
Nuveen Investments Advisors, Inc.; President (since 2005) of 
  
     
Nuveen Commodities Asset Management, LLC. 
  

 
Nuveen Investments 65
 
 
 
 
 
 
Board Members & Officers (Unaudited) (continued)
 
         
Name,
Position(s) Held
Year First
Principal
Number
Birthdate
with the Funds
Elected or
Occupation(s)
of Portfolios
and Address
 
Appointed(4)
During Past 5 Years
in Fund Complex
       
Overseen
       
by Officer
Officers of the Funds: 
        
■ GIFFORD R. ZIMMERMAN
  
Managing Director (since 2002), Assistant Secretary and 
  
9/9/56 
Chief 
  
Associate General Counsel of Nuveen Investments, LLC; 
  
333 W. Wacker Drive
Administrative
1988
Managing Director, Associate General Counsel and Assistant 
200
Chicago, IL 60606 
Officer 
  
Secretary, of Nuveen Asset Management (since 2002) and of 
  
     
Symphony Asset Management LLC, (since 2003); Vice President and 
  
     
Assistant Secretary of NWQ Investment Management Company, LLC. 
  
     
(since 2002), Nuveen Investments Advisers Inc. (since 2002), 
  
     
Tradewinds Global Investors, LLC, and Santa Barbara Asset 
  
     
Management, LLC (since 2006), Nuveen HydePark Group LLC and 
  
     
Nuveen Investment Solutions, Inc. (since 2007); Managing Director 
  
     
(since 2004) and Assistant Secretary (since 1994) of Nuveen 
  
     
Investments, Inc.; Managing Director (since 2005) of Nuveen 
  
     
Commodities Asset Management, LLC; Chartered Financial Analyst. 
  
         
■ WILLIAM ADAMS IV
    
Executive Vice President of Nuveen Investments, Inc.; Executive 
  
6/9/55 
    
Vice President, U.S. Structured Products of Nuveen Investments, 
  
333 W. Wacker Drive
Vice President 
2007
LLC, (since 1999), ; Executive Vice President (since 2005) of Nuveen 
125
Chicago, IL 60606 
    
Commodities Asset Management, LLC. 
  
         
■ CEDRIC H. ANTOSIEWICZ
  
Managing Director, (since 2004), previously, Vice President 
  
1/11/62 
    
(1993-2004) of Nuveen Investments, LLC. 
  
333 W. Wacker Drive
Vice President 
2007
  
125
Chicago, IL 60606 
 
      
         
■ NIZIDA ARRIAGA
    
Senior Vice President of Nuveen Investments, LLC (since 2010); 
  
6/1/68 
    
formerly, Vice President (2007-2010); previously, Portfolio Manager, 
  
333 W. Wacker Drive 
Vice President 
2009
Allstate Investments, LLC (1996-2006); Chartered Financial Analyst. 
200
Chicago, IL 60606 
 
      
         
■ MICHAEL T. ATKINSON
    
Vice President (since 2002) of Nuveen Investments, LLC.; 
  
2/3/66 
Vice President 
  
Vice President of Nuveen Asset Management (since 2005). 
  
333 W. Wacker Drive
and  Assistant 
2000
  
200
Chicago, IL 60606 
Secretary 
      
         
■ MARGO L. COOK
    
Executive Vice President (since Oct 2008) of Nuveen 
  
4/11/64 
    
Investments, Inc.; previously, Head of Institutional Asset 
  
333 W. Wacker Drive
Vice President 
2009
Management (2007-2008) of Bear Stearns Asset Management; 
200
Chicago, IL 60606 
    
Head of Institutional Asset Mgt (1986-2007) of Bank of NY 
  
     
Mellon; Chartered Financial Analyst. 
  
 
■ LORNA C. FERGUSON
    
Managing Director (since 2004) of Nuveen Investments, LLC and 
  
10/24/45 
    
Managing Director (since 2005) of Nuveen Asset Management. 
  
333 W. Wacker Drive
Vice President 
1998
  
200
Chicago, IL 60606 
        
         
■ STEPHEN D. FOY
    
Senior Vice President (since 2010), formerly, Vice President (1993- 
  
5/31/54 
Vice President 
  
2010) and Funds Controller (since 1998) of Nuveen Investments, 
  
333 W. Wacker Drive
and Controller 
1998
LLC; Senior Vice President (since 2010), formerly, Vice President 
200
Chicago, IL 60606 
    
(2005-2010) of Nuveen Asset Management; Certified Public Accountant. 
  
         
■ SCOTT S. GRACE
    
Managing Director, Corporate Finance & Development, Treasurer 
  
8/20/70 
Vice President 
  
(since 2009) of Nuveen Investments, LLC; Managing Director and 
  
333 W. Wacker Drive
and Treasurer 
2009
Treasurer of Nuveen Asset Management (since 2009); formerly, Treasurer 
200
Chicago, IL 60606 
    
(2006-2009), Senior Vice President (2008-2009), previously, Vice 
  
     
President (2006-2008) of Janus Capital Group, Inc.; formerly, Senior 
  
     
Associate in Morgan Stanley’s Global Financial Services Group (2000- 
  
     
2003); Chartered Accountant Designation. 
  

66     
Nuveen Investments
 
 
 
 

         
Name,
Position(s) Held
Year First
Principal
Number
Birthdate
with the Funds
Elected or
Occupation(s)
of Portfolios
and Address
 
Appointed(4)
During Past 5 Years
in Fund Complex
       
Overseen
       
by Officer
Officers of the Funds: 
        
■ WILLIAM T. HUFFMAN
    
Chief Operating Officer, Municipal Fixed Income (since 2008) 
  
5/7/69 
    
of Nuveen Asset Management; previously, Chairman, President 
  
333 W. Wacker Drive
Vice President 
2009
and Chief Executive Officer (2002 – 2007) of Northern Trust 
136
Chicago, IL 60606 
    
Global Advisors, Inc. and Chief Executive Officer (2007) of 
  
     
Northern Trust Global Investments Limited; Certified Public 
  
     
Accountant. 
  
 
■ WALTER M. KELLY
    
Senior Vice President (since 2008), Vice President (2006-2008) 
  
2/24/70 
Chief Compliance 
  
formerly, Assistant Vice President and Assistant General Counsel 
  
333 W. Wacker Drive
Officer and 
2003
(2003-2006) of Nuveen Investments, LLC; Senior Vice President 
200
Chicago, IL 60606 
Vice President 
  
(since 2008), formerly, Vice President (2006-2008) and Assistant 
  
     
Secretary (since 2008) of Nuveen Asset Management. 
  
 
■ DAVID J. LAMB
    
Senior Vice President (since 2009), formerly, Vice President 
  
3/22/63 
    
(2000-2009) of Nuveen Investments, LLC; Senior Vice President 
  
333 W. Wacker Drive
Vice President 
2000
(since 2010), formerly, Vice President (2005-2010) of Nuveen Asset 
200
Chicago, IL 60606 
    
Management; Certified Public Accountant. 
  
         
 
■ TINA M. LAZAR
    
Senior Vice President (since 2009), formerly, Vice President of Nuveen 
  
8/27/61 
    
Investments, LLC (1999-2009); Senior Vice President (since 2010), 
  
333 W. Wacker Drive
Vice President 
2002
formerly, Vice President (2005-2010) of Nuveen Asset Management. 
200
Chicago, IL 60606 
        
         
■ LARRY W. MARTIN
    
Senior Vice President (since 2010), formerly, Vice President (1993- 
  
7/27/51 
Vice President 
  
2010), Assistant Secretary and Assistant General Counsel of Nuveen 
  
333 W. Wacker Drive
and Assistant 
1988
Investments, LLC; Vice President (since 2005) and Assistant Secretary 
200
Chicago, IL 60606 
Secretary 
  
of Nuveen Investments, Inc.; Vice President (since 2005) and 
  
     
Assistant Secretary (since 1997) of Nuveen Asset Management; Vice 
  
     
President and Assistant Secretary of Nuveen Investments Advisers 
  
     
Inc. (since 2002); NWQ Investment Management Company, LLC 
  
     
(since 2002), Symphony Asset Management LLC (since 2003), 
  
     
Tradewinds Global Investors, LLC, Santa Barbara Asset Management 
  
     
LLC (since 2006) and of Nuveen HydePark Group, LLC and Nuveen 
  
     
Investment Solutions, Inc. (since 2007). 
  
 
■ KEVIN J. MCCARTHY
    
Managing Director (since 2008), formerly, Vice President 
  
3/26/66 
Vice President 
  
(2007-2008), Nuveen Investments, LLC; Managing Director 
  
333 W. Wacker Drive
and Secretary 
2007
(since 2008), formerly, Vice President, and Assistant Secretary, 
200
Chicago, IL 60606 
    
Nuveen Asset Management, and Nuveen Investments Holdings, Inc.; 
  
     
Vice President (since 2007) and Assistant Secretary, Nuveen 
  
     
Investment Advisers Inc., NWQ Investment Management Company, 
  
     
LLC, Tradewinds Global Investors LLC, NWQ Holdings, LLC, 
  
     
Symphony Asset Management LLC, Santa Barbara Asset 
  
     
Management LLC, Nuveen HydePark Group, LLC and Nuveen 
  
     
Investment Solutions, Inc. (since 2007); prior thereto, Partner, Bell, 
  
     
Boyd & Lloyd LLP (1997-2007). 
  
       
■ MICHELLE A. MCCARTHY
  
Managing Director, Director of Risk Management (since May, 2010), 
  
7/6/65 
    
Nuveen Investments, LLC; formerly, Chief Risk Officer (2009- 2010) of 
  
   333 West Wacker Drive Vice President 2010 Russell Investment Group; formerly, SVP (2003-2009), Chief Market &  200
Chicago, IL 60606 
    
Operational Risk Officer (2006-2009), Washington Mutual Bank. 
  
         
■ JOHN V. MILLER
    
Chief Investment Officer and Managing Director (since 2007), 
  
4/10/67 
    
formerly, Vice President (2002-2007) of Nuveen Asset 
  
333 W. Wacker Drive
Vice President 
2007
Management and Managing Director (since 2007), formerly 
136
Chicago, IL 60606 
    
Vice President (2002-2007) Nuveen Investments, LLC; 
  
     
Chartered Financial Analyst. 
  

 
Nuveen Investments 67
 
 
 
 
 
Board Members & Officers (Unaudited) (continued)
 
         
Name,
Position(s) Held
Year First
Principal
Number
Birthdate
with the Funds
Elected or
Occupation(s)
of Portfolios
and Address
 
Appointed(4)
During Past 5 Years
in Fund Complex
       
Overseen
       
by Officer
Officers of the Funds: 
        
■ GREGORY T. MINO
    
Senior Vice President (since 2010) of Nuveen Investments, LLC, 
  
1/4/71 
    
formerly, Vice President (2008-2010); previously, Director (2004- 
  
333 W. Wacker Drive
Vice President 
2009
2007) and Executive Director (2007-2008) of UBS Global Asset 
200
Chicago, IL 60606 
    
Management; previously, Vice President (2000-2003) and Director 
  
     
(2003-2004) of Merrill Lynch Investment Managers; Chartered 
  
     
Financial Analyst. 
  
         
■ CHRISTOPHER M. ROHRBACHER
  
Vice President, Nuveen Investments, LLC (since 2008); Vice 
  
8/1/71 
Vice President 
  
President and Assistant Secretary, Nuveen Asset Management 
  
333 W. Wacker Drive
   and Assistant 
2008
(since 2008); prior thereto, Associate, Skadden, Arps, Slate, 
200
Chicago, IL 60606 
Secretary 
  
Meagher & Flom LLP (2002-2008). 
  
         
■ JAMES F. RUANE
    
Vice President, Nuveen Investments, LLC (since 2007); prior 
  
7/3/62 
Vice President 
  
thereto, Partner, Deloitte & Touche USA LLP (2005-2007), 
  
333 W. Wacker Drive
   and Assistant 
2007
formerly, senior tax manager (2002-2005); Certified Public 
200
Chicago, IL 60606 
Secretary 
  
Accountant. 
  
         
■ MARK L. WINGET
    
Vice President, Nuveen Investments, LLC (since 2008); Vice 
  
12/21/68 
Vice President 
  
President and Assistant Secretary, Nuveen Asset Management 
  
333 W. Wacker Drive
   and Assistant 
2008
(since 2008); prior thereto, Counsel, Vedder Price P.C. 
200
Chicago, IL 60606 
Secretary 
  
(1997-2007). 
  
 
(1)
Board Members serve three year terms, except for two board members who are elected by the holders of Preferred Shares. The Board of Trustees is divided into three classes, Class I, Class II, and Class III, with each being elected to serve until the third succeeding annual shareholders’ meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed, except two board members are elected by the holders of Preferred Shares to serve until the next annual shareholders’ meeting subsequent to its election or thereafter in each case when its respective successors are duly elected or appointed. The first year elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex.
(2)
Also serves as a trustee of the Nuveen Diversified Commodity Fund, a Nuveen-sponsored commodity pool that has filed a registration statement on Form S-1 with the SEC for a proposed initial public offering. The S-1 has not been declared effective, and the commodity pool has not commenced operations.
(3) 
Mr. Amboian is an interested trustee because of his position with Nuveen Investments, Inc. and certain of its subsidiaries, which are affiliates of the Nuveen Funds. 
(4) 
Officers serve one year terms through August 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. 

68 Nuveen Investments
 
 
 
 
 
Annual Investment Management
Agreement Approval Process (Unaudited)
 
 
The Investment Company Act of 1940, as amended (the “1940 Act”), provides, in substance, that each investment advisory agreement between a fund and its investment adviser will continue in effect from year to year only if its continuance is approved at least annually by the fund’s board members, including by a vote of a majority of the board members who are not parties to the advisory agreement or “interested persons” of any parties (the “Independent Board Members”), cast in person at a meeting called for the purpose of considering such approval. In connection with such approvals, the fund’s board members must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the advisory agreement. Accordingly, at a meeting held on May 25-26, 2010 (the “May Meeting”), the Boards of Trustees or Directors (as the case may be) (each a “Board” and each Trustee or Director, a “Board Member”) of the Funds, including a majority of the Independent Board Members, considered and approved the continuation of the advisory agreements (each an “Advisory Agreement”) between each Fund and Nuveen Asset Management (“NAM”) for an additional one-year period. In preparation for their considerations at the May Meeting, the Board also held a separate meeting on April 21-22, 2010 (the “April Meeting”). Accordingly, the factors considered and determinations made regarding the renewals by the Independent Board Members include those made at the April Meeting.
 
In addition, in evaluating the Advisory Agreements, the Independent Board Members reviewed a broad range of information relating to the Funds and NAM, including absolute and comparative performance, fee and expense information for the Funds (as described in more detail below), the profitability of Nuveen for its advisory activities (which includes its wholly owned subsidiaries), and other information regarding the organization, personnel, and services provided by NAM. The Independent Board Members also met quarterly as well as at other times as the need arose during the year and took into account the information provided at such meetings and the knowledge gained therefrom. Prior to approving the renewal of the Advisory Agreements, the Independent Board Members reviewed the foregoing information with their independent legal counsel and with management, reviewed materials from independent legal counsel describing applicable law and their duties in reviewing advisory contracts, and met with independent legal counsel in private sessions without management present. The Independent Board Members considered the legal advice provided by independent legal counsel and relied upon their knowledge of NAM, its services and the Funds resulting from their meetings and other interactions throughout the year and their own business judgment in determining the factors to be considered in evaluating the Advisory Agreements. Each Board Member may have accorded different weight to the various factors in reaching his or her conclusions with respect to a Fund’s Advisory Agreement. The Independent Board Members did not identify any single factor as
 
 
Nuveen Investments 69
 
 
 
 
 
Annual Investment Management Agreement
Approval Process (Unaudited) (continued)
 
 
all-important or controlling. The Independent Board Members’ considerations were instead based on a comprehensive consideration of all the information presented. The principal factors considered by the Board and its conclusions are described below.
 
A. Nature, Extent and Quality of Services
 
In considering renewal of the Advisory Agreements, the Independent Board Members considered the nature, extent and quality of NAM’s services, including advisory services and administrative services. The Independent Board Members reviewed materials outlining, among other things, NAM’s organization and business; the types of services that NAM or its affiliates provide and are expected to provide to the Funds; the performance record of the applicable Fund (as described in further detail below); and any initiatives Nuveen had taken for the applicable fund product line, including continued activities to refinance auction rate preferred securities, manage leverage during periods of market turbulence and implement an enhanced leverage management process, modify investment mandates in light of market conditions and seek shareholder approval as necessary, maintain the fund share repurchase program and maintain shareholder communications to keep shareholders apprised of Nuveen’s efforts in refinancing preferred shares. In addition to the foregoing, the Independent Board Members also noted the additional services that NAM or its affiliates provide to closed-end funds, including, in particular, Nuveen’s continued commitment to supporting the secondary market for the common shares of its closed-end funds through a variety of programs designed to raise investor and analyst awareness and understanding of closed-end funds. These efforts include maintaining an investor relations program to provide timely information and education to financial advisers and investors; providing marketing for the closed-end funds; maintaining and enhancing a closed-end fund website; participating in conferences and having direct communications with analysts and financial advisors.
 
As part of their review, the Independent Board Members also evaluated the background, experience and track record of NAM’s investment personnel. In this regard, the Independent Board Members considered any changes in the personnel, and the impact on the level of services provided to the Funds, if any. The Independent Board Members also reviewed information regarding portfolio manager compensation arrangements to evaluate NAM’s ability to attract and retain high quality investment personnel, preserve stability, and reward performance but not provide an incentive for taking undue risks.
 
In addition to advisory services, the Independent Board Members considered the quality of administrative services provided by NAM and its affiliates including product management, fund administration, oversight of service providers, shareholder services, administration of Board relations, regulatory and portfolio compliance and legal support. Given the importance of compliance, the Independent Board Members also considered NAM’s compliance program, including the report of the chief compliance officer regarding the Funds’ compliance policies and procedures.
 
Based on their review, the Independent Board Members found that, overall, the nature, extent and quality of services provided (and expected to be provided) to the respective Funds under the Advisory Agreements were satisfactory.
 
70 Nuveen Investments
 
 
 
 
 
B. The Investment Performance of the Funds and NAM
 
The Board considered the performance results of each Fund over various time periods. The Board reviewed, among other things, each Fund’s historic investment performance as well as information comparing the Fund’s performance information with that of other funds (the “Performance Peer Group”) based on data provided by an independent provider of mutual fund data and with recognized and/or customized benchmarks. In this regard, the Board reviewed each Fund’s total return information compared to its Performance Peer Group for the quarter, one-, three- and five-year periods ending December 31, 2009 and for the same periods ending March 31, 2010. In addition, the Board reviewed each Fund’s total return information compared to recognized and/or customized benchmarks for the quarter, one- and three-year periods ending December 31, 2009 and for the same periods ending March 31, 2010. Moreover, the Board reviewed the peer ranking of the Nuveen municipal funds advised by NAM in the aggregate. The Independent Board Members also reviewed historic premium and discount levels. This information supplemented the Fund performance information provided to the Board at each of its quarterly meetings.
 
In reviewing peer comparison information, the Independent Board Members recognized that the Performance Peer Group of certain funds may not adequately represent the objectives and strategies of the funds, thereby limiting the usefulness of comparing a fund’s performance with that of its Performance Peer Group. In this regard, the Independent Board Members considered that the Performance Peer Groups of certain funds (including the Funds) were classified as having significant differences from such funds based on considerations such as special fund objectives, potential investable universe and the composition of the peer set (e.g., the number and size of competing funds and number of competing managers).
 
Based on their review, the Independent Board Members determined that each Fund’s investment performance over time had been satisfactory. The Independent Board Members noted that although each Fund underperformed the performance of its respective benchmark in the three-year period, it outperformed the performance of such benchmark in the one-year period.
 
C. Fees, Expenses and Profitability
1. Fees and Expenses
The Board evaluated the management fees and expenses of each Fund reviewing, among other things, such Fund’s gross management fees, net management fees and net expense ratios in absolute terms as well as compared to the fee and expenses of a comparable universe of funds based on data provided by an independent fund data provider (the “Peer Universe”) and in certain cases, to a more focused subset of funds in the Peer Universe (the “Peer Group”) and any expense limitations.
 
The Independent Board Members further reviewed the methodology regarding the construction of the applicable Peer Universe and/or Peer Group. In reviewing the comparisons of fee and expense information, the Independent Board Members took into account that in certain instances various factors such as: the asset level of a fund relative to peers; the limited size and particular composition of the Peer Universe or Peer Group; the investment objectives of the peers; expense anomalies; changes in
 
 
Nuveen Investments 71
 
 
 
 
 
 
Annual Investment Management Agreement
Approval Process (Unaudited) (continued)
 
 
the funds comprising the Peer Universe or Peer Group from year to year; levels of reimbursement; the timing of information used; the differences in the type and use of leverage; and differences in the states reflected in the Peer Universe or Peer Group may impact the comparative data, thereby limiting the ability to make a meaningful comparison with peers.
 
In reviewing the fee schedule for a Fund, the Independent Board Members also considered the fund-level and complex-wide breakpoint schedules (described in further detail below) and any fee waivers and reimbursements provided by Nuveen (applicable, in particular, for certain closed-end funds launched since 1999). The Independent Board Members noted that the Nuveen Arizona Dividend Advantage Municipal Fund 2 and Nuveen Arizona Dividend Advantage Municipal Fund 3 had net management fees and/or net expense ratios below, at or near (within 5 basis points or less) the peer averages of their Peer Group or Peer Universe. In addition, they noted, regarding the Nuveen Arizona Dividend Advantage Municipal Fund (with respect to its Peer Group), that although the net management fees of such Fund were above the peer average and the available peer set was limited, its net expense ratio was below or near the peer average. Finally, the Independent Board Members recognized that the Nuveen Arizona Premium Income Municipal Fund, Inc. and Nuveen Texas Quality Income Municipal Fund each had net advisory fees above the peer average but net expense ratios below, at or near the peer expense ratio average.
 
Based on their review of the fee and expense information provided, the Independent Board Members determined that each Fund’s management fees were reasonable in light of the nature, extent and quality of services provided to the Fund.
 
2. Comparisons with the Fees of Other Clients
The Independent Board Members further reviewed information regarding the nature of services and fee rates offered by NAM to other clients, including municipal separately managed accounts and passively managed municipal bond exchange traded funds (ETFs) that are sub-advised by NAM. In evaluating the comparisons of fees, the Independent Board Members noted that the fee rates charged to the Funds and other clients vary, among other things, because of the different services involved and the additional regulatory and compliance requirements associated with registered investment companies, such as the Funds. Accordingly, the Independent Board Members considered the differences in the product types, including, but not limited to, the services provided, the structure and operations, product distribution and costs thereof, portfolio investment policies, investor profiles, account sizes and regulatory requirements. The Independent Board Members noted, in particular, that the range of services provided to the Funds (as discussed above) is much more extensive than that provided to separately managed accounts. Given the inherent differences in the products, particularly the extensive services provided to the Funds, the Independent Board Members believe such facts justify the different levels of fees.
 
3. Profitability of Nuveen
In conjunction with its review of fees, the Independent Board Members also considered the profitability of Nuveen for its advisory activities (which incorporated Nuveen’s wholly-owned affiliated sub-advisers) and its financial condition. The Independent Board Members reviewed the revenues and expenses of Nuveen’s
 
72 Nuveen Investments
 
 
 
 
 
advisory activities for the last two years, the allocation methodology used in preparing the profitability data and an analysis of the key drivers behind the changes in revenues and expenses that impacted profitability in 2009. The Independent Board Members noted this information supplemented the profitability information requested and received during the year to help keep them apprised of developments affecting profitability (such as changes in fee waivers and expense reimbursement commitments). In this regard, the Independent Board Members noted that they had also appointed an Independent Board Member as a point person to review and keep them apprised of changes to the profitability analysis and/or methodologies during the year. The Independent Board Members also considered Nuveen’s revenues for advisory activities, expenses, and profit margin compared to that of various unaffiliated management firms with similar amounts of assets under management and relatively comparable asset composition prepared by Nuveen.
 
In reviewing profitability, the Independent Board Members recognized the subjective nature of determining profitability which may be affected by numerous factors including the allocation of expenses. Further, the Independent Board Members recognized the difficulties in making comparisons as the profitability of other advisers generally is not publicly available and the profitability information that is available for certain advisers or management firms may not be representative of the industry and may be affected by, among other things, the adviser’s particular business mix, capital costs, types of funds managed and expense allocations. Notwithstanding the foregoing, the Independent Board Members reviewed Nuveen’s methodology and assumptions for allocating expenses across product lines to determine profitability. In reviewing profitability, the Independent Board Members recognized Nuveen’s investment in its fund business. Based on their review, the Independent Board Members concluded that Nuveen’s level of profitability for its advisory activities was reasonable in light of the services provided.
 
In evaluating the reasonableness of the compensation, the Independent Board Members also considered other amounts paid to NAM by the Funds as well as any indirect benefits (such as soft dollar arrangements, if any) NAM and its affiliates receive, or are expected to receive, that are directly attributable to the management of the Funds, if any. See Section E below for additional information on indirect benefits NAM may receive as a result of its relationship with the Funds. Based on their review of the overall fee arrangements of each Fund, the Independent Board Members determined that the advisory fees and expenses of the respective Fund were reasonable.
 
D. Economies of Scale and Whether Fee Levels Reflect These Economies of Scale
With respect to economies of scale, the Independent Board Members have recognized the potential benefits resulting from the costs of a fund being spread over a larger asset base, although economies of scale are difficult to measure and predict with precision, particularly on a fund-by-fund basis. One method to help ensure the shareholders share in these benefits is to include breakpoints in the advisory fee schedule. Generally, management fees for funds in the Nuveen complex are comprised of a fund-level component and a
 
 
Nuveen Investments 73
 
 
 
 
 
Annual Investment Management Agreement
Approval Process (Unaudited) (continued)
 
complex-level component, subject to certain exceptions. Accordingly, the Independent Board Members reviewed and considered the applicable fund-level breakpoints in the advisory fee schedules that reduce advisory fees as asset levels increase. Further, the Independent Board Members noted that although closed-end funds may from time-to-time make additional share offerings, the growth of their assets will occur primarily through the appreciation of such funds’ investment portfolio.
 
In addition to fund-level advisory fee breakpoints, the Board also considered the Funds’ complex-wide fee arrangement. Pursuant to the complex-wide fee arrangement, the fees of the funds in the Nuveen complex are generally reduced as the assets in the fund complex reach certain levels. The complex-wide fee arrangement seeks to provide the benefits of economies of scale to fund shareholders when total fund complex assets increase, even if assets of a particular fund are unchanged or have decreased. The approach reflects the notion that some of Nuveen’s costs are attributable to services provided to all its funds in the complex and therefore all funds benefit if these costs are spread over a larger asset base.
 
Based on their review, the Independent Board Members concluded that the breakpoint schedules and complex-wide fee arrangement were acceptable and reflect economies of scale to be shared with shareholders when assets under management increase.
 
E. Indirect Benefits
In evaluating fees, the Independent Board Members received and considered information regarding potential “fall out” or ancillary benefits NAM or its affiliates may receive as a result of its relationship with each Fund. In this regard, the Independent Board Members considered any revenues received by affiliates of NAM for serving as agent at Nuveen’s trading desk and as co-manager in initial public offerings of new closed-end funds.
 
In addition to the above, the Independent Board Members considered whether NAM received any benefits from soft dollar arrangements whereby a portion of the commissions paid by a Fund for brokerage may be used to acquire research that may be useful to NAM in managing the assets of the Funds and other clients. The Independent Board Members noted that NAM does not currently have any soft dollar arrangements; however, to the extent certain bona fide agency transactions that occur on markets that traditionally trade on a principal basis and riskless principal transactions are considered as generating “commissions,” NAM intends to comply with the applicable safe harbor provisions.
 
Based on their review, the Independent Board Members concluded that any indirect benefits received by NAM as a result of its relationship with the Funds were reasonable and within acceptable parameters.
 
F. Other Considerations
The Independent Board Members did not identify any single factor discussed previously as all-important or controlling. The Board Members, including the Independent Board Members, unanimously concluded that the terms of the Advisory Agreements are fair and reasonable, that NAM’s fees are reasonable in light of the services provided to each Fund and that the Advisory Agreements be renewed.
 
74 Nuveen Investments
 
 
 
 
 
Reinvest Automatically,
Easily and Conveniently
 
 
Nuveen makes reinvesting easy. A phone call is all it takes to set up your reinvestment account.
 
Nuveen Closed-End Funds Automatic Reinvestment Plan
 
Your Nuveen Closed-End 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 greater of the net asset value or 95% of 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. If the Plan Agent begins purchasing Fund shares on the open market while shares are trading below net asset value, but the Fund’s shares subsequently trade at or above their net asset value before the Plan Agent is able to complete its purchases, the Plan Agent may cease open-market purchases and may invest the uninvested portion of the distribution in newly-issued Fund shares at a price equal to the greater of the shares’ net asset value or 95% of the shares’ market value on the last business day immediately prior to the purchase date. Dividends and distributions received to purchase shares in the open market will normally be invested shortly after the dividend payment date. No interest will be paid on dividends and distributions awaiting reinvestment. Because the market price of the shares may increase before purchases are completed, the average purchase price
 
 
Nuveen Investments 75
 
 
 
 
 
 
Reinvest Automatically,
Easily and Conveniently (continued)
 
 
per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions.
 
Flexible
 
You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change.
 
You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan.
 
The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time.
 
Call today to start reinvesting dividends and/or distributions
 
For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787.
 
76 Nuveen Investments
 
 
 
 
 
Glossary of Terms
Used in this Report
 
 
■ Auction Rate Bond: An auction rate bond is a security whose interest payments are 
adjusted periodically through an auction process, which process typically also serves 
as a means for buying and selling the bond. Auctions that fail to attract enough buyers 
for all the shares offered for sale are deemed to have “failed,” with current holders 
receiving a formula-based interest rate until the next scheduled auction. 
 
■ 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 that would have been necessary each year to equal the invest- 
ment’s actual cumulative performance (including change in NAV or market price 
and reinvested dividends and capital gains distributions, if any) over the time period 
being considered. 
 
■ Average Effective Maturity: The average of the number of years to maturity of the 
bonds in a Fund’s portfolio, computed by weighting each bond’s time to maturity (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 unless an 
escrow account has been established to redeem the bond before maturity. The 
market value weighting for an investment in an inverse floating rate security is the 
value of the portfolio’s residual interest in the inverse floating rate trust, and does not 
include the value of the floating rate securities issued by the trust. 
 
■ Inverse Floaters: Inverse floating rate securities, also known as inverse floaters, are 
created by depositing a municipal bond, typically with a fixed interest rate, into a 
special purpose trust created by a broker-dealer. This trust, in turn, (a) issues floating 
rate certificates typically paying short-term tax-exempt interest rates to third parties in 
amounts equal to some fraction of the deposited bond’s par amount or market value, 
and (b) issues an inverse floating rate certificate (sometimes referred to as an “inverse 
floater”) to an investor (such as a Fund) interested in gaining investment exposure to a 
long-term municipal bond. The income received by the holder of the inverse floater 
varies inversely with the short-term rate paid to the floating rate certificates’ holders, 
and in most circumstances the holder of the inverse floater bears substantially all of 
the underlying bond’s downside investment risk. The holder of the inverse floater typi- 
cally also benefits disproportionately from any potential appreciation of the underlying 
bond’s value. Hence, an inverse floater essentially represents an investment in the 
underlying bond on a leveraged basis. 

 
Nuveen Investments 77
 
 
 
 
 
 
Glossary of Terms
Used in this Report (continued)
 
 
■ Leverage-Adjusted Duration: Duration is a measure of the expected period 
over which a bond’s principal and interest will be paid, and consequently is a measure 
of the sensitivity of a bond’s or bond Fund’s value to changes when market interest 
rates change. Generally, the longer a bond’s 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 longer than the 
duration of the Fund’s portfolio of bonds. 
 
■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 per common share is calculated by subtracting 
the liabilities of the Fund (including any Preferred shares issued in order to leverage 
the Fund) from its total assets and then dividing the remainder by the number of 
common shares outstanding. Fund NAVs are calculated at the end of each 
business day. 
 
■Pre-refunding: Pre-refunding, also known as advanced refundings or refinancings, 
is a procedure used by state and local governments to refinance municipal bonds 
to lower interest expenses. The issuer sells new bonds with a lower yield and uses 
the proceeds to buy U.S. Treasury securities, the interest from which is used to make 
payments on the higher-yielding bonds. Because of this collateral, pre-refunding 
generally raises a bond’s credit rating and thus its value. 
 
■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. 
 
■Zero Coupon Bond: A zero coupon bond does not pay a regular interest coupon to its 
holders during the life of the bond. Tax-exempt income to the holder of the bond 
comes from accretion of the difference between the original purchase price of the 
bond at issuance and the par value of the bond at maturity and is effectively paid at 
maturity. The market prices of zero coupon bonds generally are more volatile than the 
market prices of bonds that pay interest periodically. 

78 Nuveen Investments

 
 
 
 
Notes
 
 
Nuveen Investments 79
 
 
 
 
 
 
Notes
 
80 Nuveen Investments
 
 
 
 
 
 
Other Useful Information
 
 
Board of
Directors/Trustees
John P. Amboian
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Judith M. Stockdale
Carole E. Stone
Terence J. Toth
 
Fund Manager
Nuveen Asset Management
333 West Wacker Drive
Chicago, IL 60606
 
Custodian
State Street Bank & Trust
Company Boston, MA
 
Transfer Agent and
Shareholder Services
State Street Bank & Trust Company
Nuveen Funds
P.O. Box 43071
Providence, RI 02940-3071
(800) 257-8787
 
Legal Counsel
Chapman and Cutler LLP
Chicago, IL
 
Independent Registered
Public Accounting Firm
Ernst & Young LLP
Chicago, IL
 
 
Quarterly Portfolio of Investments and Proxy Voting Information
 
You may obtain (i) each Fund’s quarterly portfolio of investments, (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the most recent twelve-month period ended June 30, and (iii) a description of the policies and procedures that the Funds used to determine how to vote proxies relating to portfolio securities without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen’s website at www.nuveen.com.
 
You may also obtain this and other Fund information directly from the Securities and Exchange Commission (“SEC”). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC’s Public Reference Room in Washington, D.C. Call the SEC at (202) 942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC’s Public References Section at 100 F Street NE, Washington, D.C. 20549.
 
CEO Certification Disclosure
 
Each Fund’s Chief Executive Officer has submitted to the New York Stock Exchange (“NYSE”) the annual CEO certification as required by Section 303A.12(a) of the NYSE Listed Company Manual.
 
Each Fund has filed with the SEC the certification of its Chief Executive Officer and Chief Financial Officer required by Section 302 of the Sarbanes-Oxley Act.
 
Common and Preferred Share Information
 
Each Fund intends to repurchase and/or redeem shares of its own common and/or preferred stock in the future at such times and in such amounts as is deemed advisable. During the period covered by this report, the Funds repurchased and/or redeemed shares of their common and/or preferred stock as shown in the accompanying table.
 
     
 
Common Shares 
Preferred Shares 
Fund 
Repurchased 
Redeemed
NAZ 
— 
— 
NFZ 
— 
— 
NKR 
— 
— 
NXE 
— 
— 
NTX 
— 
— 
 
Any future repurchases and/or redemptions will be reported to shareholders in the next annual or semi-annual report.
 
Nuveen Investments 81
 
 
 
 
 
 
Nuveen Investments:
Serving Investors for Generations
 
 
Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions through continued adherence to proven, long-term investing principles. Today, we offer a range of high quality equity and fixed-income solutions designed to be integral components of a well-diversified core portfolio.
 
Focused on meeting investor needs.
 
Nuveen Investments is a global investment management firm that seeks to help secure the long-term goals of institutions and high net worth investors as well as the consultants and financial advisors who serve them. We market our growing range of specialized investment solutions under the high-quality brands of HydePark, NWQ, Nuveen, Santa Barbara, Symphony, Tradewinds and Winslow Capital. In total, Nuveen Investments managed approximately $150 billion of assets on June 30, 2010.
 
Find out how we can help you.
 
To learn more about the products and services of Nuveen Investments may be able to help you meet your financial goals, talk to your financial advisor, or call us at (800) 257-8787. Please read the information provided carefully before you invest. Investors should consider the investment objective and policies, risk considerations, charges and expenses of any investment carefully. Where applicable, be sure to obtain a prospectus, which contains this and other relevant information. To obtain a prospectus, please contact your securities representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606. Please read the prospectus carefully before you invest or send money.
 
Learn more about Nuveen Funds at: www.nuveen.com/cef
 
Nuveen makes things e-simple.
 
It only takes a minute to sign up for e-Reports. Once enrolled, you’ll receive an e-mail as soon as your Nuveen Investments Fund information is ready. No more waiting for delivery by regular mail. Just click on the link within the e-mail to see the report and save it on your computer if you wish.
 
Free e-Reports right to your e-mail!
 
www.investordelivery.com
 
If you receive your Nuveen Fund dividends and statements from your financial advisor or brokerage account.
 
OR
 
www.nuveen.com/accountaccess
 
If you receive your Nuveen Fund dividends and statements directly from Nuveen.
 
 
Distributed by
Nuveen Investments, LLC
333 West Wacker Drive
Chicago, IL 60606
www.nuveen.com
 
 
EAN-A-0710D
 
 
 
 
 
 
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. There were no amendments to or waivers from the Code during the period covered by this report. The registrant has posted the code of ethics on its website at www.nuveen.com/CEF/Info/Shareholder. (To view the code, click on Fund Governance and then click on Code of Conduct.)

ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT.

The registrant's Board of Directors or Trustees ("Board") 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 Jack B. Evans, who is "independent" for purposes of Item 3 of Form N-CSR.

Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser ("SCI"). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and actively supervised the CFO's preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI's financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago.

ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES.

Nuveen Arizona Premium Income Municipal Fund, Inc.

The following tables show the amount of fees that Ernst & Young LLP, the Fund's auditor, billed to the Fund during the Fund's last two full fiscal years. For engagements with Ernst & Young LLP the Audit Committee approved in advance all audit services and non-audit services that Ernst & Young LLP provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the audit is completed.

The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee).

SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND

   
Audit Fees
Billed
    
Audit-Related
Fees
    
Tax
Fees
    
All Other
Fees
  
Fiscal Year Ended
  
to
Fund 1
    
Billed to
Fund 2
    
Billed to
Fund 3
    
Billed to
Fund 4
  
July 31, 2010
   $ 10,252     $ 0     $ 0     $ 3,400  
                                 
Percentage approved
     0 %     0 %     0 %     0 %
pursuant to
                                
pre-approval
                                
exception
                                
                                 
July 31, 2009
   $ 10,109     $ 0     $ 0     $ 3,400  
                                 
Percentage approved
     0 %     0 %     0 %     0 %
pursuant to
                                
pre-approval
                                
exception
                                
                                 
1 "Audit Fees" are the aggregate fees billed for professional services for the audit of the Fund's annual financial statements and services
  
provided in connection with statutory and regulatory filings or engagements.
                  
                                 
2 "Audit Related Fees" are the aggregate fees billed for assurance and related services reasonably related to the performance of the
  
audit or review of financial statements and are not reported under "Audit Fees".
                  
                                 
3 "Tax Fees" are the aggregate fees billed for professional services for tax advice, tax compliance, and tax planning.
          
                                 
4 "All Other Fees" are the aggregate fees billed for products and services for agreed upon procedures engagements performed for leveraged funds.
  

SERVICES THAT THE FUND'S AUDITOR BILLED TO THE ADVISER AND AFFILIATED FUND SERVICE PROVIDERS

The following tables show the amount of fees billed by Ernst & Young LLP to Nuveen Asset Management ("NAM" or the "Adviser"), and any entity controlling, controlled by or under common control with NAM that provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for engagements directly related to the Fund's operations and financial reporting, during the Fund's last two full fiscal years.

The tables also show the percentage of fees subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal year in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the Fund's audit is completed.

Fiscal Year Ended
  
Audit-Related
Fees
    
Tax Fees
Billed to
    
All Other
Fees
  
   
Billed to
Adviser and
    
Adviser
and
    
Billed to
Adviser
  
   
Affiliated Fund
    
Affiliated Fund
    
and Affiliated Fund
  
   
Service Providers
    
Service Providers
    
Service Providers
  
July 31, 2010
   $ 0     $ 0     $ 0  
                         
Percentage approved
     0 %     0 %     0 %
pursuant to
                        
pre-approval
                        
exception
                        
                         
July 31, 2009
   $ 0     $ 0     $ 0  
                         
Percentage approved
     0 %     0 %     0 %
pursuant to
                        
pre-approval
                        
exception
                        
 
NON-AUDIT SERVICES

The following table shows the amount of fees that Ernst & Young LLP billed during the Fund's last two full fiscal years for non-audit services. The Audit Committee is required to pre-approve non-audit services that Ernst & Young LLP provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund's operations and financial reporting (except for those subject to the pre-approval exception described above). The Audit Committee requested and received information from Ernst & Young LLP about any non-audit services that Ernst & Young LLP rendered during the Fund's last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating Ernst & Young LLP's independence.

Fiscal Year Ended
        
Total Non-Audit Fees
              
         
billed to
Adviser and
              
         
Affiliated Fund Service
    
Total
Non-Audit Fees
        
         
Providers (engagements
    
billed to
Adviser and
        
         
related directly
to the
    
Affiliated Fund Service
        
   
Total Non-Audit Fees
    
operations and financial
    
Providers
(all
       
   
Billed to
Fund
    
reporting of the Fund)
    
other
engagements)
    
Total
  
July 31, 2010
   $ 3,400     $ 0     $ 0     $ 3,400  
July 31, 2009
   $ 3,400     $ 0     $ 0     $ 3,400  
                                 
"Non-Audit Fees billed to Fund" for both fiscal year ends represent "Tax Fees" and "All Other Fees" billed to Fund in their respective
  
amounts from the previous table.
                                
 
Audit Committee Pre-Approval Policies and Procedures. Generally, the Audit Committee must approve (i) all non-audit services to be performed for the Fund by the Fund's independent accountants and (ii) all audit and non-audit services to be performed by the Fund's independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) such engagements will be (i) pre-approved by the Audit Committee if they are expected to be for amounts greater than $10,000; (ii) reported to the Audit Committee chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the Audit Committee at the next Audit Committee meeting if they are expected to be for an amount under $5,000.

ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS.

The registrant's Board has a separately designated Audit Committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner, Jack B. Evans, Terence J. Toth, William J. Schneider and David J. Kundert.

ITEM 6. SCHEDULE OF INVESTMENTS.

a) See Portfolio of Investments in Item 1.

b) Not applicable.

ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

The registrant invests its assets primarily in municipal bonds and cash management securities. On rare occasions the registrant may acquire, directly or through a special purpose vehicle, equity securities of a municipal bond issuer whose bonds the registrant already owns when such bonds have deteriorated or are expected shortly to deteriorate significantly in credit quality. The purpose of acquiring equity securities generally will be to acquire control of the municipal bond issuer and to seek to prevent the credit deterioration or facilitate the liquidation or other workout of the distressed issuer's credit problem. In the course of exercising control of a distressed municipal issuer, NAM may pursue the registrant's interests in a variety of ways, which may entail negotiating and executing consents, agreements and other arrangements, and otherwise influencing the management of the issuer. NAM does not consider such activities proxy voting for purposes of Rule 206(4)-6 under the 1940 Act, but nevertheless provides reports to the registrant's Board on its control activities on a quarterly basis.

In the rare event that a municipal issuer were to issue a proxy or that the registrant were to receive a proxy issued by a cash management security, NAM 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 registrant's Board or its representative. A member of NAM'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 provided to the registrant's Board and made available to shareholders as required by applicable rules.

 
 
 
ITEM 8. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES.

The Portfolio Manager
 
The following individual has primary responsibility for the day-to-day implementation of the registrant’s investment strategies:
 
Name
Fund
Scott R. Romans
Nuveen Arizona Premium Income Municipal Fund, Inc.

Other Accounts Managed. In addition to managing the registrant, the portfolio manager is also primarily responsible for the day-to-day portfolio management of the following accounts:
 
Portfolio Manager
Type of Account
Managed
Number of
Accounts
Assets*
 Scott R. Romans
Registered Investment Company
29
$5.697 billion
 
Other Pooled Investment Vehicles
0
$0
 
Other Accounts
2
$.526 million
*
Assets are as of July 31, 2010.  None of the assets in these accounts are subject to an advisory fee based on performance.

Compensation. Each portfolio manager’s compensation consists of three basic elements—base salary, cash bonus and long-term incentive compensation. The compensation strategy is to annually compare overall compensation to the market in order to create a compensation structure that is competitive and consistent with similar financial services companies. As discussed below, several factors are considered in determining each portfolio manager’s total compensation. In any year these factors may include, among others, the effectiveness of the investment strategies recommended by the portfolio manager’s investment team, the investment performance of the accounts managed by the portfolio manager, and the overall performance of Nuveen Investments, Inc. (the parent company of NAM). Although investment performance is a factor in determining the portfolio manager’s compensation, it is not necessarily a decisive factor. The portfolio manager’s performance is evaluated in part by comparing manager’s performance against a specified investment benchmark.  This fund-specific benchmark is a customized subset (limited to bonds in each Fund’s specific state and with certain maturity parameters) of the S&P/Investortools Municipal Bond index, an index comprised of bonds held by managed municipal bond fund customers of Standard & Poor’s Securities Pricing, Inc. that are priced daily and whose fund holdings aggregate at least $2 million.  As of August 31, 2010, the S&P/Investortools Municipal Bond index was comprised of 55,826 securities with an aggregate current market value of $1,217 billion.

Base salary. Each portfolio manager is paid a base salary that is set at a level determined by NAM in accordance with its overall compensation strategy discussed above. NAM is not under any current contractual obligation to increase a portfolio manager’s base salary.

Cash bonus. Each portfolio manager is also eligible to receive an annual cash bonus. The level of this bonus is based upon evaluations and determinations made by each portfolio manager’s supervisors, along with reviews submitted by his peers. These reviews and evaluations often take into account a number of factors, including the effectiveness of the investment strategies recommended to the NAM’s investment team, the performance of the accounts for which he serves as portfolio manager relative to any benchmarks established for those accounts, his effectiveness in communicating investment performance to stockholders and their representatives, and his contribution to the NAM’s investment process and to the execution of investment strategies. The cash bonus component is also impacted by the overall performance of Nuveen Investments, Inc. in achieving its business objectives.

Long-term incentive compensation.    In connection with the acquisition of Nuveen Investments, Inc., by a group of investors lead by Madison Dearborn Partners in November 2007, certain employees, including portfolio managers, received profit interests in Nuveen’s parent.  These profit interests entitle the holders to participate in the appreciation in the value of Nuveen beyond the issue date and vest over five to seven years, or earlier in the case of a liquidity event.  In addition, in July 2009, Nuveen Investments created and funded a trust, as part of a newly-established incentive program, which purchased shares of certain Nuveen Mutual Funds and awarded such shares, subject to vesting, to certain employees, including portfolio managers.

Material Conflicts of Interest. Each portfolio manager’s simultaneous management of the registrant and the other accounts noted above may present actual or apparent conflicts of interest with respect to the allocation and aggregation of securities orders placed on behalf of the Registrant and the other account. NAM, however, believes that such potential conflicts are mitigated by the fact that the NAM has adopted several policies that address potential conflicts of interest, including best execution and trade allocation policies that are designed to ensure (1) that portfolio management is seeking the best price for portfolio securities under the circumstances, (2) fair and equitable allocation of investment opportunities among accounts over time and (3) compliance with applicable regulatory requirements. All accounts are to be treated in a non-preferential manner, such that allocations are not based upon account performance, fee structure or preference of the portfolio manager. In addition, NAM has adopted a Code of Conduct that sets forth policies regarding conflicts of interest.

Beneficial Ownership of Securities. As of July 31, 2010 the portfolio manager beneficially owned the following dollar range of equity securities issued by the Registrant and other Nuveen Funds managed by NAM’s municipal investment team.
 
 
Name of Portfolio Manager
Fund
Dollar range of equity securities beneficially owned in Fund
  
Dollar range of equity securities beneficially owned in the remainder of Nuveen funds managed by NAM's municipal investment team
 Scott R. Romans
Nuveen Arizona Premium Income Municipal Fund, Inc.
$0
  
$0
 

PORTFOLIO MANAGER BIO:

Scott R. Romans, PhD joined Nuveen Investments in 2000 as a senior analyst covering higher education, charter schools and private secondary schools. In 2003, he was assigned management responsibility for several closed- and open-ended municipal bond funds most of which are state funds covering California and other western states.  He has been Senior Vice President since 2010, formerly, Vice President (2004-2010) of NAM.  Currently, he manages investments for 30 Nuveen-sponsored investment companies.
 
ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS.

Not applicable.

ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

There have been no material changes to the procedures by which shareholders may recommend nominees to the registrant's Board implemented after the registrant last provided disclosure in response to this item.

ITEM 11. CONTROLS AND PROCEDURES.

(a)
The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act") (17 CFR 240.13a-15(b) or 240.15d-15(b)).

(b)
There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting.

ITEM 12. 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 the code is posted on registrant's website at www.nuveen.com/CEF/Info/ Shareholder and there were no amendments during the period covered by this report. (To view the code, click on Fund Governance and then Code of Conduct.)

(a)(2)
A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT Attached hereto.

(a)(3)
Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable.

(b)
If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR 270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Ex-99.906 CERT attached hereto.


 
 
 

SIGNATURES


Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

(Registrant) Nuveen Arizona Premium Income Municipal Fund, Inc.

By (Signature and Title) /s/ Kevin J. McCarthy
Kevin J. McCarthy
Vice President and Secretary

Date: October 7, 2010

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.

By (Signature and Title) /s/ Gifford R. Zimmerman
Gifford R. Zimmerman
Chief Administrative Officer
(principal executive officer)

Date: October 7, 2010

By (Signature and Title) /s/ Stephen D. Foy
Stephen D. Foy
Vice President and Controller
(principal financial officer)

Date: October 7, 2010