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 811-21449
---------------------
Nuveen Municipal High Income Opportunity Fund
--------------------------------------------------------------------------------
(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: October 31
------------------
Date of reporting period: October 31, 2007
------------------
Form N-CSR is to be used by management investment companies to file reports with
the Commission not later than 10 days after the transmission to stockholders of
any report that is required to be transmitted to stockholders under Rule 30e-1
under the Investment Company Act of 1940 (17 CFR 270.30e-1). The Commission may
use the information provided on Form N-CSR in its regulatory, disclosure review,
inspection, and policymaking roles.
A registrant is required to disclose the information specified by Form N-CSR,
and the Commission will make this information public. A registrant is not
required to respond to the collection of information contained in Form N-CSR
unless the Form displays a currently valid Office of Management and Budget
("OMB") control number. Please direct comments concerning the accuracy of the
information collection burden estimate and any suggestions for reducing the
burden to Secretary, Securities and Exchange Commission, 450 Fifth Street, NW,
Washington, DC 20549-0609. The OMB has reviewed this collection of information
under the clearance requirements of 44 U.S.C. ss. 3507.
ITEM 1. REPORTS TO STOCKHOLDERS.
ANNUAL REPORT
October 31, 2007
Nuveen Investments
MUNICIPAL CLOSED-END FUNDS
Photo of: Small child
NUVEEN INVESTMENT
QUALITY MUNICIPAL
FUND, INC.
NQM
NUVEEN SELECT
QUALITY MUNICIPAL
FUND, INC.
NQS
NUVEEN QUALITY
INCOME MUNICIPAL
FUND, INC.
NQU
NUVEEN PREMIER
MUNICIPAL INCOME
FUND, INC.
NPF
NUVEEN MUNICIPAL
HIGH INCOME
OPPORTUNITY FUND
NMZ
IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R)
LOGO: NUVEEN Investments
Photo of: Man working on computer
LIFE IS COMPLEX.
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.
Logo: NUVEEN Investments
Photo of: Timothy R. Schwertfeger
Chairman's
LETTER TO SHAREHOLDERS
Photo of: Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
Once again, I am pleased to report that over the twelve-month period covered by
this report your Fund continued to provide you with attractive monthly tax-free
income. For more details about the management strategy and performance of your
Fund, please read the Portfolio Managers' Comments, the Dividend and Share Price
Information, and the Performance Overview sections of this report.
I also wanted to take this opportunity to report some important news about
Nuveen Investments. The firm recently was acquired by a group led by Madison
Dearborn Partners, LLC. While this affects the corporate structure of Nuveen
Investments, it has no impact on the investment objectives, portfolio management
strategies or dividend policy of your Fund.
With the recent volatility in the stock market, many have begun to wonder which
way the market is headed, and whether they need to adjust their holdings of
investments. No one knows what the future will bring, which is why we think a
well-balanced portfolio that is structured and carefully monitored with the help
of an investment professional is an important component in achieving your
long-term financial goals. A well-diversified portfolio may actually help to
reduce your overall investment risk, and we believe that investments like your
Nuveen Investments Fund can be important building blocks in a portfolio crafted
to perform well through a variety of market conditions.
We also are pleased to be able to offer you a choice concerning how you receive
your shareholder reports and other Fund information. As an alternative to mailed
copies, you can sign up to receive future Fund reports and other Fund
information by e-mail and the internet. The inside front cover of this report
contains information on how you can sign up.
We are grateful that you have chosen us as a partner as you pursue your
financial goals and we look forward to continuing to earn your trust in the
months and years ahead. At Nuveen Investments, our mission continues to be to
assist you and your financial advisor by offering investment services and
products that can help you to secure your financial objectives.
Sincerely,
/s/ Timothy R. Schwertfeger
Timothy R. Schwertfeger
Chairman of the Board
December 14, 2007
Portfolio Managers' COMMENTS
Nuveen Investments Municipal Closed-End Funds
NQM, NQS, NQU,
NPF, NMZ
Portfolio managers Paul Brennan, Tom Spalding, and John Miller discuss U.S.
economic and municipal market conditions, key investment strategies, and the
annual performance of these five national Funds. With 18 years of industry
experience, Paul assumed portfolio management responsibility for NQM and NPF in
2006. A 31-year veteran of Nuveen, Tom has managed NQS and NQU since 2003. John,
who has 14 years of municipal market experience, has managed NMZ since its
inception in 2003.
WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL
REPORTING PERIOD ENDED OCTOBER 31, 2007?
Between November 1, 2006, and October 31, 2007, the yield on the benchmark
10-year U.S. Treasury note dropped 14 basis points to end the reporting period
at 4.47%. In the municipal bond interest rate market, the yield on the Bond
Buyer 25 Revenue Bond Index, a widely followed measure of longer-term municipal
bond interest market rates, fell to 4.67% at the end of October 2007, a decline
of 11 basis points from the end of October 2006. These numbers, however, do not
hint at the dynamic nature of these markets during this period, particularly
during the summer of 2007, when financial developments led to increased price
volatility in the bond markets, tightening liquidity and a flight to quality.
This was particularly evident in August, when market concerns about defaults on
subprime mortgages resulted in a liquidity crisis across all fixed income asset
classes.
After fourteen months of remaining on the sidelines, the Federal Reserve
responded to credit market volatility by cutting the fed funds rate by 50 basis
points--from 5.25% to 4.75%--in September 2007 and another 25 basis points--to
4.50%--in October 2007. A corresponding decline in short-term municipal bond
interest rates helped produce a steepening of the yield curve late in the
reporting period. For the annual period, bonds with longer maturities generally
underperformed shorter maturity bonds. In addition, as the markets repriced
risk, credit spreads (the difference in yield between higher-rated and
lower-rated bonds) widened and higher quality bonds generally outperformed lower
quality credits.
Discussions of specific investments are for illustrative purposes only and are
not intended as recommendations of individual investments. The views expressed
in this commentary represent those of the portfolio managers as of the date of
this report and are subject to change at any time, based on market conditions
and other factors. The Funds disclaim any obligation to advise shareholders of
such changes.
4
The U.S. gross domestic product (GDP), a closely watched measure of economic
growth, expanded at below-trend levels of 2.1% in the fourth quarter of 2006 and
0.6% in the first quarter of 2007 before rebounding sharply to 3.8% in the
second quarter of 2007 (all GDP numbers are annualized). In the third quarter of
2007, increases in consumer spending, business investment, and exports helped
GDP growth climb to 4.9%, overcoming a 20% decline in residential investment.
Driven largely by higher energy and food prices, the Consumer Price Index (CPI)
registered a 3.5% year-over-year gain as of October 2007. The labor market
continued to be tight. October 2007 marked the 50th consecutive month of
employment growth, the longest such stretch in U.S. history.
Over the twelve months ended October 2007, municipal bond issuance nationwide
totaled $487.9 billion, an increase of 27% from the previous twelve months. One
factor in this increased volume was an increase in advance refundings,1 driven
by attractive borrowing rates for issuers during the earlier part of this
period. For the majority of the period, the strength and diversity of demand for
municipal bonds were as important as supply, as the surge in issuance was
absorbed by a broad-based universe of traditional and nontraditional buyers,
including retail investors, property and casualty insurance companies, hedge
funds and arbitragers and overseas investors.
WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THIS REPORTING
PERIOD?
With the substantial increase in municipal issuance nationwide during this
reporting period, our investment strategies continued to focus on finding
opportunities in undervalued sectors and individual securities with the
potential to add value to the Funds and keep our portfolios well diversified.
The majority of purchases were bonds at the longer end of the yield curve (i.e.,
bonds with at least 20 years to maturity). These purchases helped to offset the
shortening of the Funds' portfolio durations due to bond calls and the natural
tendency of bond durations to shorten as time passes. In addition, as the yield
curve steepened, bonds at this end of the curve generally provided incremental
yield to support the Funds' dividends.
Given the market events over the past twelve months, the Funds generally placed
greater priority on higher quality bonds. In NQM and NPF, for example, we added
several new hospital issues, taking advantage of the number of uninsured health
care credits--mostly rated AA--that came to market at attractive prices. As
credit spreads widened, we believed that these AA rated hospital credits offered
a good alternative to lower-rated bonds, providing us with an opportunity to add
both quality and attractive yields that could help to support the Funds' income
streams.
1 Advance refundings, also known as pre-refundings or refinancings, occur when
an issuer sells new bonds and uses the proceeds to fund principal and interest
payments of older existing bonds. This process often results in lower borrowing
costs for bond issuers.
5
During the latter part of this period, we also took advantage of opportunities
to add lower-quality credits. Since we viewed some of the recent widening of
credit spreads as a function of liquidity constraints and supply/demand factors
rather than credit risk, we believed this situation represented a good
opportunity to find new issues for our portfolios at attractive values. All five
Funds participated in the $5.5 billion Ohio Buckeye Tobacco Settlement Financing
Authority offering, the largest tobacco settlement financing deal ever issued.
Tobacco bonds in general were being offered at attractive spreads wider than the
national norm, and NQM, NPF and NMZ purchased some additional tobacco securities
in order to bring the tobacco exposure of these Funds closer to the market
average.
In addition to the purchases previously mentioned, NMZ, which was established as
a high yield Fund that can invest up to 50% of its portfolio in
sub-investment-grade quality municipal credits, also bought several hospital
credits as well as charter schools, private schools and land-secured issues.
To generate cash for purchases, all of these Funds selectively sold pre-refunded
holdings. NQM and NPF also sold some bonds that were nearing their redemption
dates. Overall, however, selling was more limited during this period,
particularly in NQS and NQU, where the majority of new purchases were funded
with proceeds from called or matured bonds and sinking fund payments. In all of
these Funds, proceeds were reinvested out longer on the yield curve to help
maintain the Funds' durations within our preferred strategic range and improve
the Funds' overall call protection profile.
In the municipal bond interest rate environment over the past twelve months, we
also continued to emphasize a disciplined approach to duration2 management and
yield curve positioning. As part of our duration management strategy, we used
inverse floating rate securities,3 a type of derivative financial instrument, in
all five of these Funds. These inverse floaters had the dual benefit of bringing
the Funds' durations closer to our preferred strategic target and enhancing
their income-generation capabilities. In addition, NPF used forward interest
rate swaps, another type of derivative financial instrument. The goal of this
strategy was to help us manage net asset value (NAV) volatility without having a
negative impact on income streams or common share dividends over the short term.
2 Duration is a measure of a bond's price sensitivity as interest rates change,
with longer duration bonds displaying more sensitivity to these changes than
bonds with shorter durations.
3 An inverse floating rate security is a financial instrument 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 securities in which the Funds
invested during the reporting period, are further defined within the "Notes to
Financial Statements" and "Glossary of Terms Used in This Report" sections of
this shareholder report.
6
HOW DID THE FUNDS PERFORM?
Individual results for these Funds, as well as relevant index and peer group
information, are presented in the accompanying table.
Total Returns on Net Asset Value*
For periods ended 10/31/07
1-Year 5-Year 10-Year
NQM 0.82% 5.60% 5.85%
NQS 1.70% 6.36% 6.16%
NQU 1.31% 6.34% 5.83%
NPF 0.48% 5.39% 5.72%
Lehman Brothers
Municipal
Bond Index4 2.91% 4.46% 5.29%
Lipper General
Leveraged
Municipal Debt
Funds Average5 0.70% 6.31% 5.76%
NMZ 2.14% N/A N/A
Lehman Brothers
High-Yield
Municipal Bond Index4 2.26% N/A N/A
Lipper High-Yield
Municipal Debt
Funds Average5 1.44% N/A N/A
For the twelve months ended October 31, 2007, the total returns on NAV for NQM,
NQS, NQU and NPF underperformed the return on the Lehman Brothers Municipal Bond
Index. NQM, NQS and NQU exceeded the average return for their Lipper General
Municipal Debt Funds Average, while NPF trailed the peer group average. The
return for NMZ slightly trailed the Lehman Brothers High-Yield Municipal Bond
Index and outperformed the Lipper High-Yield Municipal Debt Funds Average for
the period. We should note that the Lehman Brothers High-Yield Municipal Bond
Index is composed of 100% high-yield bonds, while NMZ comprises a maximum of 50%
subinvestment-grade bonds, with the remainder invested in investment-grade
credits. This difference can have an effect on NMZ's performance relative to the
index.
One of the key factors in the performance of these Funds relative to that of the
unleveraged Lehman Brothers Municipal Bond Index and Lehman Brothers High-Yield
Municipal Bond Index over this period was the use of financial leverage. The
returns of all of these Funds were negatively impacted by their use of leverage.
Although leveraging provides opportunities for additional income and total
returns for common shareholders, it can also expose shareholders to additional
risk when market conditions
*Annualized.
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.
4 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged national
index comprising a broad range of investment-grade municipal bonds. The Lehman
Brothers High-Yield Municipal Bond Index is an unleveraged, unmanaged national
index comprising municipal bonds rated below investment grade (i.e., below Baa
by Moody's Investors Service and below BBB by Standard & Poor's or Fitch
Ratings). Results for the Lehman indexes do not reflect any expenses.
5 The Lipper General Leveraged Municipal Debt Funds Average category is
calculated using the returns of all closed-end funds in this category for each
period as follows: 1 year, 54 funds; 5 years, 52 funds; and 10 years, 38 funds.
Fund and Lipper returns assume reinvestment of dividends. The Lipper High-Yield
Municipal Debt Funds Average category is calculated using the returns of all 15
closed-end funds in this category for the one-year period. Fund and Lipper
returns assume reinvestment of dividends.
7
are unfavorable. With the dramatic increases in yields on longer municipal
bonds, the impact of valuation changes in these bonds was magnified by the use
of leverage. However, we firmly believe that the use of this strategy should
work to the benefit of the Funds over the long term. This is demonstrated by
each Fund's longer-term return performance--both in absolute terms and relative
to the unmanaged (and expense-free) Lehman Brothers Municipal Bond Index.
Other factors that influenced the Funds' returns included sector allocations,
advance refundings, yield curve and duration positioning, the use of derivatives
and credit exposure.
Sectors of the market that performed well during this twelve-month period
included transportation, special tax-backed issues and water and sewer. We also
continued to see positive contributions from advance refunding activity, which
benefited these Funds through price appreciation and enhanced credit quality.
NQM, NQS, NQU and NMZ saw pre-refundings of tobacco settlement holdings issued
by New Jersey, and both NPF and NMZ had advance refundings of bonds issued by
Golden State Tobacco Securitization Corporation (California). NMZ also benefited
from the advance refunding of credits issued by West Penn Allegheny Health
System and Pima County (Arizona) Heritage Elementary School.
During this period, bonds in the Lehman Brothers Municipal Bond Index with
maturities between one and eight years, especially those maturing in
approximately three years, benefited the most from changes in the interest rate
environment. As a result, these bonds generally outperformed credits with longer
maturities. Bonds having the longest maturities (22 years and longer) posted the
worst returns for the period. Varying levels of exposure to the longer part of
the yield curve accounted for some of the performance differential among these
five Funds. In general, the greater a Fund's exposure to the underperforming
longer part of the curve, the greater the negative impact on the Fund's return
for this period. Overall, NQS and NQU, which had relatively more exposure to the
shorter end of the yield curve, were slightly better positioned in terms of
duration than NQM, NPF and NMZ.
Because they effectively increased duration during a period when shorter
durations were in favor in the market, the inverse floaters in place in these
five Funds had a negative overall impact on the return performance of these
Funds for the period. At the same time, however, the inverse floaters benefited
these Funds by helping to support their income streams. We believe that, over
time, these derivative financial instruments should be positive contributors to
the Funds.
While yield curve and duration positioning played an important role in
performance, especially during the last part of this period, credit exposure was
also a dominant factor over this period. As the markets repriced risk lower
credit quality bonds generally underperformed the municipal bond interest rate
market as a whole for the first time in several years. As of October 31, 2007,
allocations of bonds rated BBB and lower and non-rated bonds accounted for
approximately 11% of NQU's portfolio, 12% of NPF,
8
13% of NQM and 16% of NQS. In addition to its 11% holding of bonds rated BBB,
NMZ held approximately 18% in bonds rated BB or lower (sub-investment-grade) and
39% in non-rated bonds, some of which Nuveen has determined to be of
investment-grade quality. The Funds' weightings in bonds rated AAA and AA were
generally positive for performance during this twelve-month period.
Bonds backed by the 1998 master tobacco settlement agreement performed poorly,
due to the overall lower credit quality of the tobacco sector as well as the
ample supply of these bonds in the marketplace. As of October 31, 2007, these
bonds comprised approximately 4% to 6% of the portfolios of NQM, NQS, NQU, NPF
and NMZ. NMZ held a non-rated multifamily housing credit--Pickwick Apartments in
Kansas City, Missouri--that experienced some financial stress was subsequently
sold out of the portfolio.
9
Dividend and Share Price
INFORMATION
As previously noted, all of the Funds in this report use leverage to potentially
enhance opportunities for additional income for common shareholders. Although
the Funds' use of this strategy continued to provide incremental income, the
extent of this benefit was reduced due to short-term interest rates that
remained relatively high during most of this period. This, in turn, kept the
Funds' borrowing costs high. The Funds' income streams were also impacted as the
proceeds from older, higher-yielding bonds that matured or were called were
reinvested into bonds currently available in the market, which generally offered
lower yields during the majority of this period. These factors resulted in one
monthly dividend reduction in NQM, NQS and NQU over the twelve-month period
ended October 31, 2007. The dividends of NPF and NMZ remained stable throughout
this reporting period.
Due to normal portfolio activity, common shareholders of NMZ received a
long-term capital gains distribution of $0.0045 per share and a net ordinary
income distribution of $0.0002 at the end of December 2006.
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 October 31, 2007, NQM, NQU
and NPF had negative UNII balances for financial statement purposes and positive
UNII balances for tax purposes. NQS and NMZ had positive UNII balances for both
financial statement and tax purposes.
SHARE REPURCHASE AND SHARE PRICE INFORMATION
On July 10, 2007, the Board of Directors of NPF approved an open market share
repurchase program. This was part of a broad, ongoing effort designed to support
the market prices of the Fund's common shares. Repurchases not only help to
support the market price but, because such purchases are made at a discount to
NAV, they have the effect of augmenting NAV. Under the terms of the program, NPF
may repurchase up to 10% of its outstanding common shares. As of October 31,
2007, NPF had repurchased 182,300 common shares, representing 1% of the Fund's
total common shares outstanding.
10
SHELF EQUITY PROGRAM
On September 24, 2007, a registration statement filed by NMZ became effective.
This registration statement permits the Fund to issue up to 2,400,000 of
additional shares of common stock through a shelf offering. Under this equity
shelf program, the Fund, subject to market conditions, may raise additional
equity capital from time to time in varying amounts and offering methods at a
net price at or above the Fund's net asset value per common share. NMZ issued
197,111 shares during the reporting period at an average price of $8.04 and an
average premium to NAV of 4.32% per common share.
As of October 31, 2007, the Funds' share prices were trading at premiums or
discounts to their NAVs as shown in the accompanying chart:
10/31/07 Twelve-Month
Premium/Discount Average Premium/Discount
NQM -7.65% -0.77%
NQS -0.33% +1.81%
NQU -8.70% -3.96%
NPF -10.07% -8.63%
NMZ +2.99% +8.15%
11
NQM
Performance
OVERVIEW
Nuveen Investment Quality Municipal
Fund, Inc.
as of October 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S. Guaranteed 68%
AA 10%
A 9%
BBB 10%
BB or Lower 1%
N/R 2%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share
Nov 0.0675
Dec 0.0675
Jan 0.0675
Feb 0.0675
Mar 0.0675
Apr 0.0675
May 0.0675
Jun 0.0675
Jul 0.0675
Aug 0.0675
Sep 0.0645
Oct 0.0645
Line Chart:
Share Price Performance -- Weekly Closing Price
11/01/06 15.6
15.51
15.38
15.39
15.31
15.6199
15.73
15.58
15.44
15.47
15.56
15.53
15.42
15.55
15.68
15.5
15.51
15.51
15.73
15.76
15.62
15.68
15.62
15.63
15.55
15.56
15.73
15.7
15.66
15.62
15.48
15.46
15.13
14.89
14.92
14.89
14.877
14.75
14.75
14.67
14.7201
14.6
14.78
14.49
14.47
14.65
14.5
14.37
14.4
14.53
14.54
14.69
13.82
10/31/07 13.88
FUND SNAPSHOT
------------------------------------
Common Share Price $13.88
------------------------------------
Common Share Net Asset Value $15.03
------------------------------------
Premium/(Discount) to NAV -7.65%
------------------------------------
Market Yield 5.58%
------------------------------------
Taxable-Equivalent Yield1 7.75%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $538,266
------------------------------------
Average Effective Maturity on
Securities (Years) 15.09
------------------------------------
Leverage-Adjusted Duration 10.62
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 6/21/90)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -6.17% 0.82%
------------------------------------
5-Year 5.07% 5.60%
------------------------------------
10-Year 5.43% 5.85%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
California 13.3%
------------------------------------
New York 10.4%
------------------------------------
Texas 9.5%
------------------------------------
Illinois 7.6%
------------------------------------
Washington 5.5%
------------------------------------
Minnesota 4.8%
------------------------------------
District of Columbia 4.2%
------------------------------------
Nevada 3.2%
------------------------------------
Georgia 2.9%
------------------------------------
Colorado 2.9%
------------------------------------
Michigan 2.6%
------------------------------------
Louisiana 2.5%
------------------------------------
Florida 2.5%
------------------------------------
Indiana 2.1%
------------------------------------
Massachusetts 2.1%
------------------------------------
Wisconsin 2.0%
------------------------------------
Oklahoma 2.0%
------------------------------------
Other 19.9%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 26.8%
------------------------------------
Health Care 14.6%
------------------------------------
Tax Obligation/General 13.3%
------------------------------------
Tax Obligation/Limited 10.8%
------------------------------------
Transportation 10.6%
------------------------------------
Water and Sewer 6.4%
------------------------------------
Consumer Staples 4.4%
------------------------------------
Other 13.1%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
12
NQS
Performance
OVERVIEW
Nuveen Select
Quality Municipal
Fund, Inc.
as of October 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S. Guaranteed 74%
AA 6%
A 4%
BBB 11%
BB or Lower 4%
N/R 1%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share
Nov 0.0705
Dec 0.0705
Jan 0.0705
Feb 0.0705
Mar 0.0705
Apr 0.0705
May 0.0705
Jun 0.067
Jul 0.067
Aug 0.067
Sep 0.067
Oct 0.067
Line Chart:
Share Price Performance -- Weekly Closing Price
11/01/06 15.5
15.7
15.87
15.81
16
16.24
16.33
16.11
15.9
16.2
16.25
16.08
16
15.94
15.94
16.07
16.2
16.25
16.21
16.21
15.9299
15.88
15.81
16.16
16.19
16.45
16.31
16.6
16.6
16.36
16
15.84
15.54
14.96
14.84
14.97
14.84
14.76
15.01
14.77
14.74
14.62
14.4
14.5
14.83
14.93
14.76
14.72
14.86
14.8
14.74
15.1
15.15
10/31/07 15
FUND SNAPSHOT
------------------------------------
Common Share Price $15.00
------------------------------------
Common Share Net Asset Value $15.05
------------------------------------
Premium/(Discount) to NAV -0.33%
------------------------------------
Market Yield 5.36%
------------------------------------
Taxable-Equivalent Yield1 7.44%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $511,670
------------------------------------
Average Effective Maturity on
Securities (Years) 14.50
------------------------------------
Leverage-Adjusted Duration 8.75
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 3/21/91)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 2.31% 1.70%
------------------------------------
5-Year 7.35% 6.36%
------------------------------------
10-Year 6.31% 6.16%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Illinois 11.6%
------------------------------------
Texas 9.9%
------------------------------------
Colorado 7.0%
------------------------------------
New York 6.9%
------------------------------------
South Carolina 6.1%
------------------------------------
Michigan 5.1%
------------------------------------
Nevada 4.7%
------------------------------------
New Jersey 4.5%
------------------------------------
California 4.1%
------------------------------------
Ohio 4.0%
------------------------------------
Tennessee 4.0%
------------------------------------
New Mexico 3.0%
------------------------------------
Utah 2.5%
------------------------------------
North Carolina 2.4%
------------------------------------
Washington 2.1%
------------------------------------
District of Columbia 2.1%
------------------------------------
Alabama 2.0%
------------------------------------
Wisconsin 2.0%
------------------------------------
Other 16.0%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 32.1%
------------------------------------
Utilities 14.7%
------------------------------------
Health Care 13.0%
------------------------------------
Transportation 12.5%
------------------------------------
Tax Obligation/General 8.4%
------------------------------------
Tax Obligation/Limited 6.5%
------------------------------------
Consumer Staples 5.9%
------------------------------------
Other 6.9%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
13
NQU
Performance
OVERVIEW
Nuveen Quality
Income Municipal
Fund, Inc.
as of October 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S. Guaranteed 79%
AA 6%
A 4%
BBB 6%
BB or Lower 4%
N/R 1%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share
Nov 0.0635
Dec 0.0635
Jan 0.0635
Feb 0.0635
Mar 0.0635
Apr 0.0635
May 0.0635
Jun 0.0605
Jul 0.0605
Aug 0.0605
Sep 0.0605
Oct 0.0605
Line Chart:
Share Price Performance -- Weekly Closing Price
11/01/06 14.75
14.7
14.96
14.94
14.93
15.09
15.02
14.9
14.82
14.92
14.97
14.85
14.87
14.83
14.94
15
15.02
15.02
15.15
15.19
15.1
15.09
15.1
15.1
15.19
15.3
15.52
15.59
15.47
15.22
15.13
15.04
14.7
14.1
13.92
13.96
13.94
13.72
13.72
13.75
13.81
13.56
13.5
13.65
13.8
14.24
13.89
13.65
13.72
13.66
13.74
13.97
13.62
12/31/07 13.64
FUND SNAPSHOT
------------------------------------
Common Share Price $13.64
------------------------------------
Common Share Net Asset Value $14.94
------------------------------------
Premium/(Discount) to NAV -8.70%
------------------------------------
Market Yield 5.32%
------------------------------------
Taxable-Equivalent Yield1 7.39%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $810,086
------------------------------------
Average Effective Maturity on
Securities (Years) 12.89
------------------------------------
Leverage-Adjusted Duration 8.65
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 6/19/91)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -2.54% 1.31%
------------------------------------
5-Year 5.67% 6.34%
------------------------------------
10-Year 4.69% 5.83%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
Texas 11.4%
------------------------------------
New York 10.9%
------------------------------------
Illinois 9.6%
------------------------------------
California 7.7%
------------------------------------
Washington 6.5%
------------------------------------
South Carolina 5.8%
------------------------------------
Massachusetts 5.1%
------------------------------------
Nevada 4.6%
------------------------------------
Oklahoma 4.4%
------------------------------------
New Jersey 3.2%
------------------------------------
Ohio 2.7%
------------------------------------
Pennsylvania 2.4%
------------------------------------
Colorado 2.3%
------------------------------------
Louisiana 2.2%
------------------------------------
Alabama 2.0%
------------------------------------
Other 19.2%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
U.S. Guaranteed 38.9%
------------------------------------
Tax Obligation/General 14.7%
------------------------------------
Transportation 13.2%
------------------------------------
Utilities 9.5%
------------------------------------
Health Care 7.9%
------------------------------------
Consumer Staples 4.1%
------------------------------------
Other 11.7%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
14
NPF
Performance
OVERVIEW
Nuveen Premier
Municipal Income
Fund, Inc.
as of October 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S. Guaranteed 62%
AA 15%
A 11%
BBB 11%
N/R 1%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share
Nov 0.056
Dec 0.056
Jan 0.056
Feb 0.056
Mar 0.056
Apr 0.056
May 0.056
Jun 0.056
Jul 0.056
Aug 0.056
Sep 0.056
Oct 0.056
Line Chart:
Share Price Performance -- Weekly Closing Price
11/01/06 13.68
13.75
13.85
13.8699
13.87
14.02
14.06
13.8001
13.73
13.85
13.85
13.8233
13.94
13.87
13.95
14.01
14.16
14.14
14.27
14.33
14.21
14.15
14.12
14.2
14.23
14.17
14.13
14.19
14.16
14.12
13.93
13.88
13.61
13.48
13.5
13.61
13.5
13.43
13.461
13.49
13.66
13.25
13.15
13.05
13.4
13.58
13.54
13.28
13.3
13.26
13.2
13.21
13.2109
10/31/07 13.3
FUND SNAPSHOT
------------------------------------
Common Share Price $13.30
------------------------------------
Common Share Net Asset Value $14.79
------------------------------------
Premium/(Discount) to NAV -10.07%
------------------------------------
Market Yield 5.05%
------------------------------------
Taxable-Equivalent Yield1 7.01%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $294,378
------------------------------------
Average Effective Maturity on
Securities (Years) 15.92
------------------------------------
Leverage-Adjusted Duration 11.14
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 12/19/91)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year 2.28% 0.48%
------------------------------------
5-Year 4.59% 5.39%
------------------------------------
10-Year 4.27% 5.72%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
California 13.2%
------------------------------------
New York 13.1%
------------------------------------
Illinois 7.9%
------------------------------------
Washington 5.2%
------------------------------------
South Carolina 4.7%
------------------------------------
Colorado 4.1%
------------------------------------
Arizona 4.1%
------------------------------------
Texas 3.7%
------------------------------------
Louisiana 3.6%
------------------------------------
New Jersey 3.5%
------------------------------------
Wisconsin 3.5%
------------------------------------
Minnesota 3.0%
------------------------------------
Georgia 2.5%
------------------------------------
North Carolina 2.4%
------------------------------------
Michigan 2.4%
------------------------------------
Indiana 1.9%
------------------------------------
Florida 1.9%
------------------------------------
Other 19.3%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Tax Obligation/Limited 16.1%
------------------------------------
Utilities 13.8%
------------------------------------
U.S. Guaranteed 13.6%
------------------------------------
Tax Obligation/General 13.5%
------------------------------------
Health Care 13.1%
------------------------------------
Transportation 9.1%
------------------------------------
Water and Sewer 5.5%
------------------------------------
Consumer Staples 4.5%
------------------------------------
Other 10.8%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
15
NMZ
Performance
OVERVIEW
Nuveen Municipal
High Income
Opportunity Fund
as of October 31, 2007
Pie Chart:
Credit Quality (as a % of total investments)
AAA/U.S. Guaranteed 23%
A 9%
BBB 11%
BB or Lower 18%
N/R 39%
Bar Chart:
2006-2007 Monthly Tax-Free Dividends Per Share
Nov 0.0815
Dec 0.0815
Jan 0.0815
Feb 0.0815
Mar 0.0815
Apr 0.0815
May 0.0815
Jun 0.0815
Jul 0.0815
Aug 0.0815
Sep 0.0815
Oct 0.0815
Line Chart:
2006-2007 Monthly Tax-Free Dividends Per Share(2)
11/01/06 17.23
17.15
17.25
17.1
17.19
16.93
17.3
17.3
17.71
17.71
17.49
17.49
17.51
17.64
17.55
17.62
17.7
17.6599
17.89
17.82
17.72
17.6799
17.75
17.67
18.05
18.06
18.2
18.1112
18.16
17.82
17.69
17.6
16.65
16.44
16.9
17.06
16.99
16.74
16.31
16.15
16.2001
16.29
15.33
16.01
16.5
16.81
16.45
16.21
16.17
16.07
16.11
16
15.85
10/31/07 15.82
FUND SNAPSHOT
------------------------------------
Common Share Price $15.82
------------------------------------
Common Share Net Asset Value $15.36
------------------------------------
Premium/(Discount) to NAV 2.99%
------------------------------------
Market Yield 6.18%
------------------------------------
Taxable-Equivalent Yield1 8.58%
------------------------------------
Net Assets Applicable to
Common Shares ($000) $361,484
------------------------------------
Average Effective Maturity on
Securities (Years) 19.10
------------------------------------
Leverage-Adjusted Duration 10.22
------------------------------------
AVERAGE ANNUAL TOTAL RETURN
(Inception 11/19/03)
------------------------------------
ON SHARE PRICE ON NAV
------------------------------------
1-Year -2.68% 2.14%
------------------------------------
Since
Inception 8.10% 8.81%
------------------------------------
STATES
(as a % of total investments)
------------------------------------
California 9.2%
------------------------------------
Texas 7.2%
------------------------------------
Indiana 6.3%
------------------------------------
Ohio 5.8%
------------------------------------
Colorado 5.7%
------------------------------------
Florida 5.7%
------------------------------------
Illinois 4.7%
------------------------------------
Louisiana 4.1%
------------------------------------
Wisconsin 4.0%
------------------------------------
Arizona 3.6%
------------------------------------
Michigan 3.5%
------------------------------------
New Jersey 3.3%
------------------------------------
Virginia 3.2%
------------------------------------
Pennsylvania 3.2%
------------------------------------
Oklahoma 2.4%
------------------------------------
Washington 2.3%
------------------------------------
Nebraska 2.3%
------------------------------------
Maryland 2.2%
------------------------------------
Nevada 2.2%
------------------------------------
Other 19.1%
------------------------------------
INDUSTRIES
(as a % of total investments)
------------------------------------
Health Care 17.0%
------------------------------------
U.S. Guaranteed 16.5%
------------------------------------
Tax Obligation/Limited 15.6%
------------------------------------
Housing/Multifamily 7.8%
------------------------------------
Utilities 7.7%
------------------------------------
Transportation 7.0%
------------------------------------
Education and Civic
Organizations 4.9%
------------------------------------
Materials 4.5%
------------------------------------
Industrials 4.3%
------------------------------------
Other 14.7%
------------------------------------
1 Taxable-Equivalent Yield represents the yield that must be earned on a
fully taxable investment in order to equal the yield of the Fund on an
after-tax basis. It is based on a federal income tax rate of 28%. When
comparing this Fund to investments that generate qualified dividend income,
the Taxable-Equivalent Yield is lower.
2 The Fund paid shareholders capital gains and net ordinary income
distributions in December 2006 of $0.0047 per share.
16
NQM
NQS
NQU
Shareholder MEETING REPORT
The annual meeting of shareholders was held on July 31, 2007, at The Northern
Trust Company, 50 South La Salle Street, Chicago, IL 60675; at this meeting
shareholders were asked to vote on the election of Board Members. Additionally a
special meeting of shareholders was held in the offices of Nuveen Investments on
October 12, 2007; at this meeting shareholders were asked to vote on a New
Investment Management Agreement and to ratify the selection of Ernst and Young
LLP as the fund's independent registered public accounting firm; the meetings
for Nuveen Premier Municipal Income Fund (NPF) and Nuveen Municipal High Income
Opportunity Fund (NMZ) were subsequently adjourned to October 22, 2007.
NQM NQS NQU
------------------------------------------------------------------------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT:
Common and Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred
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 and as a class
====================================================================================================================================
For 18,710,215 -- 17,412,252 -- 27,796,332 --
Against 742,905 -- 822,446 -- 1,303,489 --
Abstain 627,387 -- 676,277 -- 1,034,593 --
Broker Non-Votes 5,433,261 -- 5,232,193 -- 8,545,494 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,513,768 -- 24,143,168 -- 38,679,908 --
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Robert P. Bremner
For 31,784,243 -- 30,577,770 -- 48,217,096 --
Withhold 453,120 -- 560,139 -- 796,320 --
------------------------------------------------------------------------------------------------------------------------------------
Total 32,237,363 -- 31,137,909 -- 49,013,416 --
====================================================================================================================================
Jack B. Evans
For 31,797,350 -- 30,586,990 -- 48,208,590 --
Withhold 440,013 -- 550,919 -- 804,826 --
------------------------------------------------------------------------------------------------------------------------------------
Total 32,237,363 -- 31,137,909 -- 49,013,416 --
====================================================================================================================================
William C. Hunter
For 31,797,389 -- 30,589,958 -- 48,219,424 --
Withhold 439,974 -- 547,951 -- 793,992 --
------------------------------------------------------------------------------------------------------------------------------------
Total 32,237,363 -- 31,137,909 -- 49,013,416 --
====================================================================================================================================
David J. Kundert
For 31,792,378 -- 30,590,909 -- 48,219,278 --
Withhold 444,985 -- 547,000 -- 794,138 --
------------------------------------------------------------------------------------------------------------------------------------
Total 32,237,363 -- 31,137,909 -- 49,013,416 --
====================================================================================================================================
William J. Schneider
For -- 11,138 -- 10,348 -- 16,325
Withhold -- 29 -- 50 -- 517
------------------------------------------------------------------------------------------------------------------------------------
Total -- 11,167 -- 10,398 -- 16,842
====================================================================================================================================
Timothy R. Schwertfeger
For -- 11,138 -- 10,342 -- 16,325
Withhold -- 29 -- 56 -- 517
------------------------------------------------------------------------------------------------------------------------------------
Total -- 11,167 -- 10,398 -- 16,842
====================================================================================================================================
Judith M. Stockdale
For 31,819,307 -- 30,564,356 -- 48,204,941 --
Withhold 418,056 -- 573,553 -- 808,475 --
------------------------------------------------------------------------------------------------------------------------------------
Total 32,237,363 -- 31,137,909 -- 49,013,416 --
====================================================================================================================================
Carole E. Stone
For 31,816,728 -- 30,566,419 -- 48,207,322 --
Withhold 420,635 -- 571,490 -- 806,094 --
------------------------------------------------------------------------------------------------------------------------------------
Total 32,237,363 -- 31,137,909 -- 49,013,416 --
====================================================================================================================================
Eugene S. Sunshine(1)
For 31,788,442 -- 30,588,455 -- 48,208,070 --
Withhold 448,921 -- 549,454 -- 805,346 --
------------------------------------------------------------------------------------------------------------------------------------
Total 32,237,363 -- 31,137,909 -- 49,013,416 --
====================================================================================================================================
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR:
For 24,840,169 -- 23,455,004 -- 37,590,468 --
Against 335,618 -- 365,690 -- 516,701 --
Abstain 337,981 -- 322,474 -- 572,739 --
------------------------------------------------------------------------------------------------------------------------------------
Total 25,513,768 -- 24,143,168 -- 38,679,908 --
====================================================================================================================================
(1) Mr. Sunshine resigned from the Funds' Board of Directors on July 31, 2007.
17
NPF
NMZ
Shareholder MEETING REPORT (continued)
NPF NMZ
------------------------------------------------------------------------------------------------------------------------------------
TO APPROVE A NEW INVESTMENT MANAGEMENT AGREEMENT:
Common and Common and
MuniPreferred MuniPreferred MuniPreferred MuniPreferred
shares voting shares voting shares voting shares voting
together together together together
as a class as a class as a class and as a class
====================================================================================================================================
For 9,914,117 -- 12,109,311 --
Against 890,905 -- 600,024 --
Abstain 385,987 -- 490,749 --
Broker Non-Votes 3,277,510 -- 4,708,127 --
------------------------------------------------------------------------------------------------------------------------------------
Total 14,468,519 -- 17,908,211 --
====================================================================================================================================
APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS:
Robert P. Bremner
For 17,020,180 -- -- --
Withhold 651,312 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 17,671,492 -- -- --
====================================================================================================================================
Jack B. Evans
For 17,018,050 -- -- --
Withhold 653,442 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 17,671,492 -- -- --
====================================================================================================================================
William C. Hunter
For 17,032,053 -- -- --
Withhold 639,439 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 17,671,492 -- -- --
====================================================================================================================================
David J. Kundert
For 17,024,698 -- -- --
Withhold 646,794 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 17,671,492 -- -- --
====================================================================================================================================
William J. Schneider
For -- 5,898 -- 5,425
Withhold -- 67 -- 213
------------------------------------------------------------------------------------------------------------------------------------
Total -- 5,965 -- 5,638
====================================================================================================================================
Timothy R. Schwertfeger
For -- 5,898 -- 5,425
Withhold -- 67 -- 213
------------------------------------------------------------------------------------------------------------------------------------
Total -- 5,965 -- 5,638
====================================================================================================================================
Judith M. Stockdale
For 17,027,993 -- 22,398,385 --
Withhold 643,499 -- 261,737 --
------------------------------------------------------------------------------------------------------------------------------------
Total 17,671,492 -- 22,660,122 --
====================================================================================================================================
Carole E. Stone
For 17,024,913 -- 22,391,658 --
Withhold 646,579 -- 268,464 --
------------------------------------------------------------------------------------------------------------------------------------
Total 17,671,492 -- 22,660,122 --
====================================================================================================================================
Eugene S. Sunshine(1)
For 17,023,669 -- -- --
Withhold 647,823 -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Total 17,671,492 -- -- --
====================================================================================================================================
TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE INDEPENDENT
REGISTERED PUBLIC ACCOUNTING FIRM FOR THE CURRENT FISCAL YEAR:
For 14,074,606 -- 17,333,691 --
Against 178,064 -- 270,283 --
Abstain 215,849 -- 304,237 --
------------------------------------------------------------------------------------------------------------------------------------
Total 14,468,519 -- 17,908,211 --
====================================================================================================================================
(1) Mr. Sunshine resigned from the Funds' Board of Directors on July 31, 2007.
18
Report of
INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS
NUVEEN INVESTMENT QUALITY MUNICIPAL FUND, INC.
NUVEEN SELECT QUALITY MUNICIPAL FUND, INC.
NUVEEN QUALITY INCOME MUNICIPAL FUND, INC.
NUVEEN PREMIER MUNICIPAL INCOME FUND, INC.
NUVEEN MUNICIPAL HIGH INCOME OPPORTUNITY FUND
We have audited the accompanying statements of assets and liabilities, including
the portfolios of investments, of Nuveen Investment Quality Municipal Fund,
Inc., Nuveen Select Quality Municipal Fund, Inc., Nuveen Quality Income
Municipal Fund, Inc., Nuveen Premier Municipal Income Fund, Inc. and Nuveen
Municipal High Income Opportunity Fund (the "Funds") as of October 31, 2007, and
the related statements of operations and cash flows (Nuveen Premier Municipal
Income Fund, Inc. only) 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 periods indicated therein. These financial statements
and financial highlights are the responsibility of the Funds' management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements and financial highlights are free of material misstatement. 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 October 31, 2007, 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 Investment Quality Municipal Fund, Inc., Nuveen Select Quality Municipal
Fund, Inc., Nuveen Quality Income Municipal Fund, Inc., Nuveen Premier Municipal
Income Fund, Inc., and Nuveen Municipal High Income Opportunity Fund at October
31, 2007, the results of their operations and cash flows (Nuveen Premier
Municipal Income Fund, Inc. only) for the year then ended, changes in their net
assets for each of the two years in the period then ended, and the financial
highlights for each of the periods indicated therein in conformity with U.S.
generally accepted accounting principles.
/s/ Ernst & Young LLP
Chicago, Illinois
December 21, 2007
19
NQM
Nuveen Investment Quality Municipal Fund, Inc.
Portfolio of INVESTMENTS
October 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.3% (0.8% OF TOTAL INVESTMENTS)
$ 3,800 Alabama Special Care Facilities Financing Authority, Revenue 11/16 at 100.00 AA $ 3,820,520
Bonds, Ascension Health, Series 2006C-2, 5.000%, 11/15/36
Birmingham Special Care Facilities Financing Authority, Alabama,
Revenue Bonds, Baptist Health System Inc., Series 2005A:
1,200 5.250%, 11/15/20 11/15 at 100.00 Baa1 1,230,408
800 5.000%, 11/15/30 11/15 at 100.00 Baa1 779,168
1,250 Courtland Industrial Development Board, Alabama, Pollution 6/15 at 100.00 BBB 1,227,713
Control Revenue Bonds, International Paper Company,
Series 2005A, 5.000%, 6/01/25
------------------------------------------------------------------------------------------------------------------------------------
7,050 Total Alabama 7,057,809
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 1.7% (1.1% OF TOTAL INVESTMENTS)
4,000 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/10 at 100.00 AAA 4,299,440
Settlement Asset-Backed Bonds, Series 2000, 6.500%, 6/01/31
(Pre-refunded 6/01/10)
Northern Tobacco Securitization Corporation, Alaska, Tobacco
Settlement Asset-Backed Bonds, Series 2006A:
4,000 5.000%, 6/01/32 6/14 at 100.00 Baa3 3,538,080
1,500 5.000%, 6/01/46 6/14 at 100.00 Baa3 1,276,455
------------------------------------------------------------------------------------------------------------------------------------
9,500 Total Alaska 9,113,975
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 0.6% (0.4% OF TOTAL INVESTMENTS)
Glendale Industrial Development Authority, Arizona, Revenue
Bonds, John C. Lincoln Health Network, Series 2005B:
200 5.250%, 12/01/24 12/15 at 100.00 BBB 202,950
265 5.250%, 12/01/25 12/15 at 100.00 BBB 268,381
3,335 Mesa, Arizona, Utility System Revenue Bonds, Reset Option 7/17 at 100.00 AAA 2,762,481
Longs, Series 11032- 11034, 5.258%, 7/01/31 (IF)
------------------------------------------------------------------------------------------------------------------------------------
3,800 Total Arizona 3,233,812
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 2.3% (1.5% OF TOTAL INVESTMENTS)
1,295 Arkansas Development Finance Authority, Home Mortgage 7/08 at 101.50 AAA 1,309,167
Revenue Bonds, FNMA/GNMA Mortgage-Backed Securities
Program, Series 1998A, 5.150%, 7/01/17
University of Arkansas, Pine Bluff Campus, Revenue Bonds,
Series 2005A:
3,290 5.000%, 12/01/30 - AMBAC Insured 12/15 at 100.00 Aaa 3,424,068
2,000 5.000%, 12/01/35 - AMBAC Insured 12/15 at 100.00 Aaa 2,069,120
Van Buren County, Arkansas, Sales and Use Tax Revenue Refunding
and Construction Bonds, Series 2000:
1,055 5.600%, 12/01/25 - AMBAC Insured 12/10 at 100.00 Aaa 1,104,152
3,545 5.650%, 12/01/31 - AMBAC Insured 12/10 at 100.00 Aaa 3,716,543
1,000 Washington County, Arkansas, Hospital Revenue Bonds, 2/15 at 100.00 BBB 982,140
Washington Regional Medical Center, Series 2005B,
5.000%, 2/01/30
------------------------------------------------------------------------------------------------------------------------------------
12,185 Total Arkansas 12,605,190
------------------------------------------------------------------------------------------------------------------------------------
20
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 21.0% (13.3% OF TOTAL INVESTMENTS)
$ 3,000 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 AA+ $ 3,046,380
University of Southern California, Series 2005, 4.750%, 10/01/28
1,000 California Educational Facilities Authority, Revenue Bonds, 11/15 at 100.00 A2 1,016,810
University of the Pacific, Series 2006, 5.000%, 11/01/30
2,500 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 2,530,475
Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/27
4,285 California Health Facilities Financing Authority, Revenue Bonds, 4/16 at 100.00 A+ 4,289,199
Kaiser Permanante System, Series 2006, 5.000%, 4/01/37
5,500 California Health Facilities Financing Authority, Revenue Bonds, 11/16 at 100.00 AA- 5,501,870
Sutter Health, Series 2007A, 5.000%, 11/15/42
California Statewide Community Development Authority, Revenue
Bonds, Daughters of Charity Health System, Series 2005A:
1,000 5.250%, 7/01/30 7/15 at 100.00 BBB+ 1,003,990
1,000 5.000%, 7/01/39 7/15 at 100.00 BBB+ 951,920
10,000 California, General Obligation Bonds, Series 2003, 5.250%, 2/01/25 8/13 at 100.00 A+ 10,517,700
1,900 Chula Vista, California, Industrial Development Revenue Bonds, 6/14 at 102.00 A2 1,969,369
San Diego Gas and Electric Company, Series 1996A,
5.300%, 7/01/21
2,675 Commerce Joint Power Financing Authority, California, No Opt. Call AA 2,677,434
Tax Allocation Refunding Bonds, Redevelopment Projects 2 and 3,
Series 2003A, 5.000%, 8/01/28 - RAAI Insured
Golden State Tobacco Securitization Corporation, California,
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-1:
3,000 5.000%, 6/01/33 6/17 at 100.00 BBB 2,672,760
610 5.125%, 6/01/47 6/17 at 100.00 BBB 536,605
9,740 Huntington Park Redevelopment Agency, California, No Opt. Call AAA 13,426,785
Single Family Residential Mortgage Revenue Refunding Bonds,
Series 1986A, 8.000%, 12/01/19 (ETM)
1,030 Natomas Union School District, Sacramento County, California, No Opt. Call AAA 1,201,165
General Obligation Refunding Bonds, Series 1999,
5.950%, 9/01/21 - MBIA Insured
15,770 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 21,078,495
County, California, Revenue Refunding Bonds, Redevelopment
Project 1, Series 1995, 7.400%, 8/01/25 - MBIA Insured
13,145 Perris, California, GNMA Mortgage-Backed Securities Program No Opt. Call AAA 18,257,616
Single Family Mortgage Revenue Bonds, Series 1988B,
8.200%, 9/01/23 (Alternative Minimum Tax) (ETM)
3,415 Rancho Mirage Joint Powers Financing Authority, California, 7/14 at 100.00 A3 (4) 3,881,387
Revenue Bonds, Eisenhower Medical Center, Series 2004,
5.875%, 7/01/26 (Pre-refunded 7/01/14)
5,000 Riverside Unified School District, Riverside County, California, 2/12 at 101.00 AAA 5,199,550
General Obligation Bonds, Series 2002A, 5.000%, 2/01/27 -
FGIC Insured
San Diego County, California, Certificates of Participation,
Burnham Institute, Series 2006:
250 5.000%, 9/01/21 9/15 at 102.00 Baa3 250,908
275 5.000%, 9/01/23 9/15 at 102.00 Baa3 274,236
San Joaquin Hills Transportation Corridor Agency, Orange County,
California, Toll Road Revenue Refunding Bonds, Series 1997A:
6,175 0.000%, 1/15/28 - MBIA Insured No Opt. Call AAA 2,372,806
8,135 0.000%, 1/15/34 - MBIA Insured No Opt. Call AAA 2,305,378
17,195 0.000%, 1/15/35 - MBIA Insured No Opt. Call AAA 4,644,026
3,185 University of California, General Revenue Bonds, Series 2005G, 5/13 at 101.00 AAA 3,216,117
4.750%, 5/15/31 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
119,785 Total California 112,822,981
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 4.5% (2.9% OF TOTAL INVESTMENTS)
1,000 Colorado Health Facilities Authority, Revenue Bonds, Evangelical 6/16 at 100.00 A- 990,190
Lutheran Good Samaritan Society, Series 2005, 5.000%, 6/01/29
400 Colorado Health Facilities Authority, Revenue Bonds, Poudre 3/15 at 100.00 BBB+ 393,824
Valley Health Care, Series 2005F, 5.000%, 3/01/25
21
NQM
Nuveen Investment Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 20 Colorado Housing Finance Authority, Single Family Program 11/07 at 105.00 Aaa $ 20,322
Senior Bonds, Series 1996B, 7.450%, 11/01/27
12,450 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AAA 13,106,489
Refunding Bonds, Series 2000A, 6.000%, 11/15/19 -
AMBAC Insured (Alternative Minimum Tax)
7,865 El Paso County School District 11, Colorado Springs, Colorado, 12/07 at 125.00 AA- (4) 9,847,295
General Obligation Improvement Bonds, Series 1996,
7.125%, 12/01/21 (Pre-refunded 12/01/07)
------------------------------------------------------------------------------------------------------------------------------------
21,735 Total Colorado 24,358,120
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 6.6% (4.2% OF TOTAL INVESTMENTS)
23,745 District of Columbia Water and Sewerage Authority, Public 4/09 at 160.00 AAA 26,874,589
Utility Revenue Bonds, Series 1998, 5.500%, 10/01/23 -
FSA Insured
3,000 District of Columbia, General Obligation Bonds, Series 1998B, No Opt. Call AAA 3,450,270
6.000%, 6/01/16 - MBIA Insured
15,950 District of Columbia, Revenue Bonds, Georgetown University, 4/11 at 31.03 AAA 4,351,479
Series 2001A, 0.000%, 4/01/31 (Pre-refunded 4/01/11) -
MBIA Insured
1,200 Washington Convention Center Authority, District of Columbia, 10/16 at 100.00 AAA 1,106,916
Senior Lien Dedicated Tax Revenue Bonds, Series 2007,
Residuals 1606, 6.094%, 10/01/30 - AMBAC Insured (IF)
------------------------------------------------------------------------------------------------------------------------------------
43,895 Total District of Columbia 35,783,254
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.9% (2.5% OF TOTAL INVESTMENTS)
1,000 Board of Regents, Florida State University, Housing Facility 5/15 at 101.00 AAA 1,038,210
Revenue Bonds, Series 2005A, 5.000%, 5/01/27 - MBIA Insured
4,230 Brevard County Health Facilities Authority, Florida, Revenue 4/16 at 100.00 A 4,299,541
Bonds, Health First Inc. Project, Series 2005, 5.000%, 4/01/24
1,580 Escambia County Health Facilities Authority, Florida, Health 10/08 at 101.00 BBB+ 1,591,834
Facility Revenue Refunding Bonds, Baptist Hospital and
Baptist Manor, Series 1998, 5.125%, 10/01/19
3,200 Hillsborough County Industrial Development Authority, Florida, 4/10 at 101.00 N/R 3,354,016
Exempt Facilities Remarketed Revenue Bonds, National Gypsum
Company, Apollo Beach Project, Series 2000B, 7.125%, 4/01/30
(Alternative Minimum Tax)
1,000 Miami-Dade County, Florida, Aviation Revenue Bonds, Miami 10/17 at 100.00 AAA 961,000
International Airport Hub, Series 2007B, 4.500%, 10/01/31 -
MBIA Insured
4,335 Miami-Dade County, Florida, Aviation Revenue Bonds, Residuals 10/17 at 100.00 AAA 3,827,892
Series 1016, 6.002%, 10/01/31 - MBIA Insured (IF)
5,895 South Miami Health Facilities Authority, Florida, Hospital Revenue, 8/17 at 100.00 AA- 5,860,868
Baptist Health System Obligation Group, Series 2007,
5.000%, 8/15/42
------------------------------------------------------------------------------------------------------------------------------------
21,240 Total Florida 20,933,361
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 4.6% (2.9% OF TOTAL INVESTMENTS)
10,000 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 10,542,900
Series 2000A, 5.600%, 1/01/30 (Pre-refunded 1/01/10) -
FGIC Insured
2,710 Atlanta, Georgia, Water and Wastewater Revenue Bonds, 11/14 at 100.00 AAA 2,822,790
Series 2004, 5.000%, 11/01/23 - FSA Insured
2,000 Dalton Development Authority, Georgia, Revenue Certificates, No Opt. Call AAA 2,239,460
Hamilton Health Care System Inc., Series 1996,
5.500%, 8/15/26 - MBIA Insured
5,980 Fulton County Development Authority, Georgia, Revenue Bonds, 9/11 at 102.00 AAA 6,407,092
Georgia State University - TUFF/Atlanta Housing LLC,
Series 2001A, 5.500%, 9/01/22 - AMBAC Insured
2,250 Georgia Municipal Electric Authority, Project One Special No Opt. Call A+ 2,645,910
Obligation Bonds, Fourth Crossover Series 1997E,
6.500%, 1/01/20
------------------------------------------------------------------------------------------------------------------------------------
22,940 Total Georgia 24,658,152
------------------------------------------------------------------------------------------------------------------------------------
22
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 1.1% (0.7% OF TOTAL INVESTMENTS)
$ 4,810 Boise City, Idaho, Revenue Refunding Bonds, Series 2001A, 12/11 at 100.00 Aaa $ 5,060,409
5.375%, 12/01/31 - MBIA Insured
Madison County, Idaho, Hospital Revenue Certificates of
Participation, Madison Memorial Hospital, Series 2006:
500 5.250%, 9/01/26 9/16 at 100.00 BBB- 496,710
500 5.250%, 9/01/30 9/16 at 100.00 BBB- 488,585
------------------------------------------------------------------------------------------------------------------------------------
5,810 Total Idaho 6,045,704
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 12.0% (7.6% OF TOTAL INVESTMENTS)
4,705 Bourbonnais, Illinois, Revenue Bonds, Olivet Nazarene University, 3/10 at 101.00 AA (4) 5,029,598
Series 2000, 6.250%, 3/01/20 (Pre-refunded 3/01/10) -
RAAI Insured
14,600 Chicago Greater Metropolitan Area Sanitary District, Illinois, 12/16 at 100.00 AAA 15,975,758
General Obligation Bonds, Series 2006, 5.000%, 12/01/35 (UB)
4,775 Chicago Public Building Commission, Illinois, General Obligation 3/13 at 100.00 AAA 5,162,396
Lease Bonds, Chicago Transit Authority, Series 2003,
5.250%, 3/01/23 (Pre-refunded 3/01/13) - AMBAC Insured
2,110 Illinois Development Finance Authority, Local Government 1/11 at 100.00 Aaa 2,267,026
Program Revenue Bonds, DuPage and Cook Counties
Community Unit School District 205 - Elmhurst, Series 2000,
6.000%, 1/01/19 (Pre-refunded 1/01/11) - FSA Insured
Illinois Finance Authority, Revenue Bonds, OSF Healthcare
System, Series 2004:
2,500 5.250%, 11/15/21 5/14 at 100.00 A 2,576,575
1,000 5.250%, 11/15/22 5/14 at 100.00 A 1,028,370
395 Illinois Finance Authority, Revenue Bonds, Proctor Hospital, 1/16 at 100.00 BBB- 387,025
Series 2006, 5.125%, 1/01/25
2,600 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 2,620,150
Medical Center, Series 2002, 5.500%, 5/15/32
12,725 Kane, Cook and DuPage Counties School District 46, Elgin, No Opt. Call Aaa 14,756,165
Illinois, General Obligation School Bonds, Series 1997,
7.800%, 1/01/12 - FSA Insured
6,300 Madison County Community Unit School District 7, No Opt. Call AAA 6,858,684
Edwardsville, Illinois, School Building Bonds, Series 1994,
5.850%, 2/01/13 - FGIC Insured (ETM)
6,015 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 3,204,070
Refunding Bonds, McCormick Place Expansion Project,
Series 1996A, 0.000%, 12/15/21 - MBIA Insured
Will County High School District 204, Joliet, Illinois, General
Obligation Bonds, Series 2001:
1,145 8.700%, 12/01/13 - FSA Insured No Opt. Call AAA 1,453,326
1,300 8.700%, 12/01/14 - FSA Insured No Opt. Call AAA 1,694,810
1,180 Will County School District 17, Channahon, Illinois, General No Opt. Call Aaa 1,478,634
Obligation School Building Bonds, Series 2001,
8.400%, 12/01/13 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
61,350 Total Illinois 64,492,587
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.3% (2.1% OF TOTAL INVESTMENTS)
5,530 Allen County Jail Building Corporation, Indiana, First Mortgage 4/11 at 101.00 Aa3 (4) 5,977,266
Bonds, Series 2000, 5.750%, 4/01/20 (Pre-refunded 4/01/11)
1,880 Indianapolis, Indiana, GNMA Collateralized Multifamily Housing 7/10 at 102.00 Aaa 1,966,574
Mortgage Revenue Bonds, Cloverleaf Apartments Project
Phase I, Series 2000, 6.000%, 1/20/31
2,495 Shelbyville, Indiana, GNMA Collateralized Multifamily Housing 7/10 at 102.00 Aaa 2,609,121
Revenue Bonds, Blueridge Terrace Project, Series 2000,
6.050%, 1/20/36
St. Joseph County Hospital Authority, Indiana, Revenue Bonds,
Madison Center Inc., Series 2005:
1,550 5.250%, 2/15/23 2/15 at 100.00 BBB 1,564,353
2,500 5.375%, 2/15/34 2/15 at 100.00 BBB 2,507,250
2,765 Wayne County Jail Holding Corporation, Indiana, First Mortgage 1/13 at 101.00 AAA 3,069,786
Bonds, Series 2001, 5.750%, 7/15/14 (Pre-refunded 1/15/13) -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
16,720 Total Indiana 17,694,350
------------------------------------------------------------------------------------------------------------------------------------
23
NQM
Nuveen Investment Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.4% (0.9% OF TOTAL INVESTMENTS)
$ 8,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement 6/15 at 100.00 BBB $ 7,424,640
Revenue Bonds, Series 2005C, 5.500%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 1.1% (0.7% OF TOTAL INVESTMENTS)
1,000 Kansas Development Finance Authority, Health Facilities Revenue 11/15 at 100.00 A2 1,022,220
Bonds, Hays Medical Center Inc., Series 2005L,
5.000%, 11/15/22
620 Sedgwick and Shawnee Counties, Kansas, GNMA No Opt. Call Aaa 650,380
Mortgage-Backed Securities Program Single Family Revenue
Bonds, Series 1997A-1, 6.950%, 6/01/29 (Alternative
Minimum Tax)
3,400 Topeka, Kansas, Industrial Revenue Refunding Bonds, Sunwest 8/16 at 100.00 AAA 4,300,796
Hotel Corporation, Series 1988, 9.500%, 10/01/16
(Pre-refunded 8/15/16) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
5,020 Total Kansas 5,973,396
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,000 Jefferson County, Kentucky, Health Facilities Revenue Refunding 1/08 at 101.00 AAA 2,040,360
Bonds, Jewish Hospital HealthCare Services Inc.,
Series 1996, 5.700%, 1/01/21 - AMBAC Insured
510 Louisville and Jefferson County Metropolitan Government, 10/16 at 100.00 N/R 498,347
Kentucky, Industrial Building Revenue Bonds, Sisters of
Mercy of the Americas, Series 2006, 5.000%, 10/01/35
------------------------------------------------------------------------------------------------------------------------------------
2,510 Total Kentucky 2,538,707
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.9% (2.5% OF TOTAL INVESTMENTS)
870 East Baton Rouge Mortgage Finance Authority, Louisiana, 4/08 at 102.00 Aaa 878,378
GNMA/FNMA Mortgage-Backed Securities Program Family
Mortgage Revenue Refunding Bonds, Series 1997D,
5.900%, 10/01/30 (Alternative Minimum Tax)
Jefferson Parish Home Mortgage Authority, Louisiana, Single
Family Mortgage Revenue Bonds, Series 2000G-2:
1,030 6.300%, 6/01/32 (Alternative Minimum Tax) 12/10 at 102.00 Aaa 1,073,456
685 5.550%, 6/01/32 (Alternative Minimum Tax) 12/10 at 102.00 Aaa 690,720
445 Jefferson Parish Home Mortgage Authority, Louisiana, 12/09 at 103.00 Aaa 465,617
Single Family Mortgage Revenue Refunding Bonds,
Series 2000A-2, 7.500%, 12/01/30 (Alternative Minimum Tax)
3,000 Louisiana Public Facilities Authority, Hospital Revenue Bonds, 8/15 at 100.00 A+ 3,054,450
Franciscan Missionaries of Our Lady Health System,
Series 2005A, 5.250%, 8/15/31
2,500 Louisiana Public Facilities Authority, Revenue Bonds, Ochsner 5/17 at 100.00 A3 2,519,875
Clinic Foundation Project, Series 2007A, 5.500%, 5/15/47
11,545 Orleans Parish School Board, Louisiana, General Obligation No Opt. Call AAA 12,313,204
Refunding Bonds, Series 1987, 9.000%, 2/01/09 -
MBIA Insured (ETM)
------------------------------------------------------------------------------------------------------------------------------------
20,075 Total Louisiana 20,995,700
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,500 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A3 2,573,500
Revenue Bonds, MedStar Health, Series 2004,
5.375%, 8/15/24
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 3.3% (2.1% OF TOTAL INVESTMENTS)
5,010 Massachusetts Development Financing Authority, Assisted 12/09 at 102.00 N/R 5,151,382
Living Revenue Bonds, Prospect House Apartments,
Series 1999, 7.000%, 12/01/31
1,105 Massachusetts Health and Educational Facilities Authority, 1/09 at 101.00 BBB 1,120,879
Revenue Bonds, Caritas Christi Obligated Group,
Series 1999A, 5.625%, 7/01/20
1,875 Massachusetts Health and Educational Facilities Authority, 7/11 at 100.00 BBB 1,974,731
Revenue Bonds, UMass Memorial Health Care, Series 2001C,
6.500%, 7/01/21
2,000 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 2,044,860
Revenue Refunding Bonds, Ogden Haverhill Project,
Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax)
5,100 Massachusetts School Building Authority, Dedicated Sales Tax 8/15 at 100.00 AAA 5,356,224
Revenue Bonds, Series 2005A, 5.000%, 8/15/23 - FSA Insured
24
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS (continued)
$ 1,000 Massachusetts Water Resources Authority, General Revenue 8/17 at 100.00 AAA $ 1,079,490
Bonds, Series 2005A, 5.250%, 8/01/26 - MBIA Insured
1,040 Massachusetts Water Resources Authority, General Revenue 2/17 at 100.00 AAA 888,992
Bonds, Series 2007, Residual Trust 7039, 6.272%, 8/01/46 -
FSA Insured (IF)
------------------------------------------------------------------------------------------------------------------------------------
17,130 Total Massachusetts 17,616,558
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.1% (2.6% OF TOTAL INVESTMENTS)
4,250 Detroit City School District, Wayne County, Michigan, Unlimited 5/12 at 100.00 AAA 4,596,460
Tax School Building and Site Improvement Bonds, Series 2001A,
5.500%, 5/01/20 (Pre-refunded 5/01/12) - FSA Insured
10,215 Detroit, Michigan, Water Supply System Revenue Refunding No Opt. Call AAA 11,911,814
Bonds, Series 1993, 6.500%, 7/01/15 - FGIC Insured
1,800 Kent Hospital Finance Authority, Michigan, Revenue Bonds, 7/15 at 100.00 BBB 1,885,896
Metropolitan Hospital, Series 2005A, 6.000%, 7/01/35
1,350 Michigan State Building Authority, Revenue Bonds, Facilities 10/15 at 100.00 AAA 1,423,305
Program, Series 2005II, 5.000%, 10/15/22 - AMBAC Insured
2,000 Michigan State Hospital Finance Authority, Revenue Bonds, 12/16 at 100.00 Aa2 2,026,880
Trinity Health Care Group, Series 2006A, 5.000%, 12/01/31
340 Monroe County Hospital Finance Authority, Michigan, 6/16 at 100.00 BBB- 336,413
Mercy Memorial Hospital Corporation Revenue Bonds,
Series 2006, 5.500%, 6/01/35
------------------------------------------------------------------------------------------------------------------------------------
19,955 Total Michigan 22,180,768
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 7.5% (4.8% OF TOTAL INVESTMENTS)
8,250 Cohasset, Minnesota, Pollution Control Revenue Bonds, 7/14 at 100.00 A- 8,292,240
Allete Inc., Series 2004, 4.950%, 7/01/22
5,000 Dakota and Washington Counties Housing and Redevelopment No Opt. Call AAA 6,972,050
Authority, Minnesota, GNMA Mortgage-Backed Securities
Program Single Family Residential Mortgage Revenue Bonds,
Series 1988, 8.450%, 9/01/19 (Alternative Minimum Tax) (ETM)
620 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A 654,007
Healthcare System Revenue Bonds, Fairview Hospital and
Healthcare Services, Series 2000A, 6.375%, 11/15/29
19,380 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A (4) 21,173,617
Healthcare System Revenue Bonds, Fairview Hospital and
Healthcare Services, Series 2000A, 6.375%, 11/15/29
(Pre-refunded 11/15/10)
700 Minnesota Higher Education Facilities Authority, St. John's 10/15 at 100.00 A2 724,955
University Revenue Bonds, Series 2005-6G, 5.000%, 10/01/22
1,665 Rochester, Minnesota, Health Care Facilities Revenue Bonds, 5/16 at 100.00 AA 1,695,669
Series 2006, 5.000%, 11/15/36
1,000 St. Paul Housing and Redevelopment Authority, Minnesota, 11/15 at 100.00 Baa3 1,051,660
Revenue Bonds, Healtheast Inc., Series 2005,
6.000%, 11/15/25
------------------------------------------------------------------------------------------------------------------------------------
36,615 Total Minnesota 40,564,198
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,275 Mississippi Hospital Equipment and Facilities Authority, 9/14 at 100.00 N/R 2,305,713
Revenue Bonds, Baptist Memorial Healthcare, Series 2004B-1,
5.000%, 9/01/24
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.6% (0.4% OF TOTAL INVESTMENTS)
200 Hannibal Industrial Development Authority, Missouri, Health 3/16 at 100.00 BBB+ 198,672
Facilities Revenue Bonds, Hannibal Regional Hospital,
Series 2006, 5.000%, 3/01/22
1,000 Jackson County Reorganized School District R-7, Lees Summit, 3/16 at 100.00 Aaa 1,069,140
Missouri, General Obligation Bonds, Series 2006,
5.250%, 3/01/26 - MBIA Insured
Missouri Development Finance Board, Infrastructure Facilities
Revenue Bonds, Branson Landing Project, Series 2005A:
780 6.000%, 6/01/20 No Opt. Call BBB+ 859,451
1,225 5.000%, 6/01/35 6/15 at 100.00 BBB+ 1,171,137
------------------------------------------------------------------------------------------------------------------------------------
3,205 Total Missouri 3,298,400
------------------------------------------------------------------------------------------------------------------------------------
25
NQM
Nuveen Investment Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 0.5% (0.3% OF TOTAL INVESTMENTS)
$ 3,000 Montana Board of Housing, Single Family Program Bonds, 6/14 at 100.00 AA+ $ 2,956,320
Series 2005-RA-1, 4.750%, 6/01/44
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 1.1% (0.7% OF TOTAL INVESTMENTS)
4,000 Lincoln Electric System, Nebraska, Electric System Revenue 9/17 at 100.00 AAA 3,644,520
Bonds, Series 2007A, Residuals 07-1007-9, 5.973%, 9/01/37 -
FGIC Insured (IF)
2,145 NebHelp Inc., Nebraska, Revenue Bonds, Student Loan Program, 3/08 at 100.00 AAA 2,160,616
Series 1993B, 5.875%, 6/01/14 - MBIA Insured (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
6,145 Total Nebraska 5,805,136
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 5.1% (3.2% OF TOTAL INVESTMENTS)
11,000 Clark County School District, Nevada, General Obligation Bonds, 6/12 at 100.00 AAA 11,918,720
Series 2002C, 5.500%, 6/15/19 (Pre-refunded 6/15/12) -
MBIA Insured
14,530 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 AAA 15,268,851
Revenue Bonds, Las Vegas Monorail Project, First Tier,
Series 2000, 5.625%, 1/01/34 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
25,530 Total Nevada 27,187,571
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 2.3% (1.5% OF TOTAL INVESTMENTS)
New Jersey Economic Development Authority, School Facilities
Construction Bonds, Series 2005P:
1,325 5.250%, 9/01/24 9/15 at 100.00 AA- 1,410,145
1,000 5.250%, 9/01/26 9/15 at 100.00 AA- 1,060,160
1,080 New Jersey Educational Facilities Authority, Revenue Bonds, 7/17 at 100.00 AAA 1,026,346
Rowan College, Series 2007B, 4.250%, 7/01/34 - FGIC Insured
3,425 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AA- 3,775,686
System Bonds, Series 2006A, 5.250%, 12/15/20
1,645 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 AAA 1,764,756
Tobacco Settlement Asset-Backed Bonds, Series 2002,
5.750%, 6/01/32 (Pre-refunded 6/01/12)
4,000 Tobacco Settlement Financing Corporation, New Jersey, 6/17 at 100.00 BBB 3,337,280
Tobacco Settlement Asset-Backed Bonds, Series 2007-1A,
4.750%, 6/01/34
------------------------------------------------------------------------------------------------------------------------------------
12,475 Total New Jersey 12,374,373
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.4% (0.3% OF TOTAL INVESTMENTS)
Farmington, New Mexico, Hospital Revenue Bonds, San Juan
Regional Medical Center Inc., Series 2004A:
880 5.125%, 6/01/17 6/14 at 100.00 A3 909,990
1,295 5.125%, 6/01/19 6/14 at 100.00 A3 1,328,010
------------------------------------------------------------------------------------------------------------------------------------
2,175 Total New Mexico 2,238,000
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 16.5% (10.4% OF TOTAL INVESTMENTS)
1,665 Dormitory Authority of the State of New York, State Personal 3/15 at 100.00 AAA 1,742,706
Income Tax Revenue Bonds, Series 2005F, 5.000%, 3/15/24 -
AMBAC Insured
25 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AAA 21,608
Bonds, Driver Trust 1649, 2006, 6.058%, 2/15/47 -
MBIA Insured (IF)
3,980 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AAA 3,799,985
Bonds, Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB)
3,000 Long Island Power Authority, New York, Electric System 11/16 at 100.00 AAA 2,801,070
Revenue Bonds, Series 2006F, 4.250%, 5/01/33 -
MBIA Insured (UB)
2,250 Metropolitan Transportation Authority, New York, Transportation 11/15 at 100.00 AAA 2,339,753
Revenue Bonds, Series 2005B, 5.000%, 11/15/30 -
AMBAC Insured
3,200 Metropolitan Transportation Authority, New York, Transportation 11/15 at 100.00 A 3,310,144
Revenue Bonds, Series 2005F, 5.000%, 11/15/30
7,800 New York City Municipal Water Finance Authority, New York, 12/14 at 100.00 AAA 8,114,574
Water and Sewerage System Revenue Bonds, Fiscal
Series 2005B, 5.000%, 6/15/28 - AMBAC Insured
26
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
$ 5,570 New York City Transitional Finance Authority, New York, Future 2/14 at 100.00 AAA $ 5,872,451
Tax Secured Bonds, Fiscal Series 2004C, 5.000%, 2/01/22
1,745 New York City, New York, General Obligation Bonds, Fiscal 6/13 at 100.00 AA 1,880,185
Series 2003J, 5.500%, 6/01/20
3,255 New York City, New York, General Obligation Bonds, Fiscal 6/13 at 100.00 Aa3 (4) 3,579,882
Series 2003J, 5.500%, 6/01/20 (Pre-refunded 6/01/13)
5,000 New York City, New York, General Obligation Bonds, Fiscal 8/14 at 100.00 AA 5,308,500
Series 2004C, 5.250%, 8/15/20
4,200 New York City, New York, General Obligation Bonds, Fiscal 3/15 at 100.00 AA 4,341,624
Series 2005J, 5.000%, 3/01/25
7,000 New York City, New York, General Obligation Bonds, Fiscal 4/15 at 100.00 AA 7,247,380
Series 2005M, 5.000%, 4/01/24
5,000 New York State Municipal Bond Bank Agency, Special School 6/13 at 100.00 A+ 5,318,800
Purpose Revenue Bonds, Series 2003C, 5.250%, 12/01/19
3,000 New York State Thruway Authority, General Revenue Bonds, 7/15 at 100.00 AAA 3,045,090
Series 2005G, 4.750%, 1/01/29 - FSA Insured
5,400 New York State Tobacco Settlement Financing Corporation, 6/10 at 100.00 AA- 5,617,620
Tobacco Settlement Asset-Backed and State Contingency
Contract-Backed Bonds, Series 2003A-1, 5.500%, 6/01/16
4,205 New York State Urban Development Corporation, State Personal 3/14 at 100.00 AAA 4,380,433
Income Tax Revenue Bonds, Series 2004A-1, 5.000%, 3/15/23 -
FGIC Insured
16,445 Port Authority of New York and New Jersey, Special Project Bonds, No Opt. Call AAA 18,800,580
JFK International Air Terminal LLC, Sixth Series 1997,
7.000%, 12/01/12 - MBIA Insured (Alternative Minimum Tax)
1,000 Rensselaer County Industrial Development Agency, New York, 3/16 at 100.00 A 1,041,780
Civic Facility Revenue Bonds, Rensselaer Polytechnic Institute,
Series 2006, 5.000%, 3/01/26
------------------------------------------------------------------------------------------------------------------------------------
83,740 Total New York 88,564,165
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.5% (0.9% OF TOTAL INVESTMENTS)
7,420 North Carolina Medical Care Commission, Health System 10/11 at 101.00 AA (4) 7,954,537
Revenue Bonds, Mission St. Joseph's Health System,
Series 2001, 5.250%, 10/01/26 (Pre-refunded 10/01/11)
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.8% (1.7% OF TOTAL INVESTMENTS)
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien,
Series 2007A-2:
3,520 5.125%, 6/01/24 6/17 at 100.00 BBB 3,397,856
530 5.875%, 6/01/30 6/17 at 100.00 BBB 523,444
525 5.750%, 6/01/34 6/17 at 100.00 BBB 506,625
1,180 5.875%, 6/01/47 6/17 at 100.00 BBB 1,145,579
8,650 Cuyahoga County, Ohio, Hospital Revenue and Improvement Bonds, 2/09 at 101.00 A- (4) 9,022,469
MetroHealth System, Series 1999, 6.150%, 2/15/29
(Pre-refunded 2/15/09)
250 Port of Greater Cincinnati Development Authority, Ohio, Economic 10/16 at 100.00 N/R 250,793
Development Revenue Bonds, Sisters of Mercy of the Americas,
Series 2006, 5.000%, 10/01/25
------------------------------------------------------------------------------------------------------------------------------------
14,655 Total Ohio 14,846,766
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 3.2% (2.0% OF TOTAL INVESTMENTS)
Norman Regional Hospital Authority, Oklahoma, Hospital Revenue
Bonds, Series 2005:
500 5.375%, 9/01/29 9/16 at 100.00 BBB 502,055
750 5.375%, 9/01/36 9/16 at 100.00 BBB 746,670
Oklahoma Development Finance Authority, Revenue Bonds,
Saint John Health System, Series 2007:
6,100 5.000%, 2/15/37 2/17 at 100.00 AA- 6,133,306
2,480 5.000%, 2/15/42 2/17 at 100.00 AA- 2,482,554
3,940 Tulsa County Industrial Authority, Oklahoma, Health Care 12/16 at 100.00 AA 3,961,276
Revenue Bonds, Saint Francis Health System, Series 2006,
5.000%, 12/15/36
3,300 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B 3,301,683
Bonds, American Airlines Inc., Series 2000B, 6.000%, 6/01/35
(Mandatory put 12/01/08) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
17,070 Total Oklahoma 17,127,544
------------------------------------------------------------------------------------------------------------------------------------
27
NQM
Nuveen Investment Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 2.8% (1.8% OF TOTAL INVESTMENTS)
$ 500 Bucks County Industrial Development Authority, Pennsylvania, 3/17 at 100.00 BBB $ 463,405
Charter School Revenue Bonds, School Lane Charter School,
Series 2007A, 5.000%, 3/15/37
3,000 Commonwealth Financing Authority, Pennsylvania, State 6/16 at 100.00 AAA 3,137,249
Appropriation Lease Bonds, Series 2006A, 5.000%, 6/01/26 -
FSA Insured
5,125 Pennsylvania Public School Building Authority, Lease Revenue 12/16 at 100.00 AAA 5,009,227
Bonds, School District of Philadelphia, Series 2006B,
4.500%, 6/01/32 - FSA Insured (UB)
5,000 Philadelphia, Pennsylvania, General Obligation Bonds, 3/11 at 100.00 AAA 5,228,000
Series 2001, 5.250%, 9/15/18 - FSA Insured
1,000 St. Mary Hospital Authority, Pennsylvania, Health System 11/14 at 100.00 A1 (4) 1,109,650
Revenue Bonds, Catholic Health East, Series 2004B,
5.500%, 11/15/24 (Pre-refunded 11/15/14)
------------------------------------------------------------------------------------------------------------------------------------
14,625 Total Pennsylvania 14,947,531
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.5% (0.3% OF TOTAL INVESTMENTS)
1,500 Puerto Rico Infrastructure Financing Authority, Special 10/10 at 101.00 AAA 1,582,530
Obligation Bonds, Series 2000A, 5.500%, 10/01/40
1,225 Puerto Rico Municipal Finance Agency, Series 2005C, No Opt. Call AAA 1,365,716
5.250%, 8/01/21 - CIFG Insured
------------------------------------------------------------------------------------------------------------------------------------
2,725 Total Puerto Rico 2,948,246
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.5% (1.0% OF TOTAL INVESTMENTS)
2,410 Rhode Island Health and Educational Building Corporation, 11/07 at 102.00 AAA 2,461,839
Hospital Financing Revenue Bonds, Lifespan Obligated Group,
Series 1996, 5.750%, 5/15/23 - MBIA Insured
5,610 Rhode Island Tobacco Settlement Financing Corporation, Tobacco 6/12 at 100.00 BBB 5,763,770
Settlement Asset-Backed Bonds, Series 2002A, 6.000%, 6/01/23
------------------------------------------------------------------------------------------------------------------------------------
8,020 Total Rhode Island 8,225,609
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 2.5% (1.6% OF TOTAL INVESTMENTS)
2,000 Berkeley County School District, South Carolina, Installment 12/13 at 100.00 A- 2,068,220
Purchase Revenue Bonds, Securing Assets for Education,
Series 2003, 5.250%, 12/01/24
4,405 Dorchester County School District 2, South Carolina, Installment 12/14 at 100.00 A 4,565,474
Purchase Revenue Bonds, GROWTH, Series 2004,
5.250%, 12/01/23
6,500 South Carolina JOBS Economic Development Authority, Economic 11/12 at 100.00 A- 6,705,075
Development Revenue Bonds, Bon Secours Health System Inc.,
Series 2002A, 5.625%, 11/15/30
------------------------------------------------------------------------------------------------------------------------------------
12,905 Total South Carolina 13,338,769
------------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.3% (0.2% OF TOTAL INVESTMENTS)
1,750 South Dakota Health and Educational Facilities Authority, 11/14 at 100.00 AA- 1,826,335
Revenue Bonds, Sioux Valley Hospitals, Series 2004A,
5.500%, 11/01/31
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.6% (1.0% OF TOTAL INVESTMENTS)
3,200 Johnson City Health and Educational Facilities Board, Tennessee, 7/16 at 100.00 BBB+ 3,244,864
Revenue Bonds, Mountain States Health Alliance, Series 2006A,
5.500%, 7/01/36
3,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Ba2 3,058,350
Tennessee, Hospital Revenue Bonds, Baptist Health System
of East Tennessee Inc., Series 2002, 6.500%, 4/15/31
Sumner County Health, Educational, and Housing Facilities Board,
Tennessee, Revenue Refunding Bonds, Sumner Regional Health
System Inc., Series 2007:
700 5.500%, 11/01/37 11/17 at 100.00 N/R 708,323
1,700 5.500%, 11/01/46 11/17 at 100.00 N/R
------------------------------------------------------------------------------------------------------------------------------------
8,600 Total Tennessee 8,717,113
------------------------------------------------------------------------------------------------------------------------------------
28
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 14.9% (9.5% OF TOTAL INVESTMENTS)
$ 3,135 Austin Housing Finance Corporation, Texas, GNMA Collateralized 12/10 at 105.00 Aaa $ 3,399,252
Mortgage Loan Multifamily Housing Revenue Bonds, Santa
Maria Village Project, Series 2000A, 7.375%, 6/20/35
(Alternative Minimum Tax)
5,000 Board of Regents, University of Texas System, Financing System 2/17 at 100.00 AAA 4,578,150
Revenue Bonds, Series 2006F, 4.250%, 8/15/36 (UB)
635 Clear Creek Independent School District, Galveston and Harris 2/10 at 100.00 AAA 657,286
Counties, Texas, Unlimited Tax Schoolhouse and Refunding
Bonds, Series 2000, 5.500%, 2/15/22
18,075 Clear Creek Independent School District, Galveston and Harris 2/10 at 100.00 AAA 18,892,892
Counties, Texas, Unlimited Tax Schoolhouse and Refunding
Bonds, Series 2000, 5.500%, 2/15/22 (Pre-refunded 2/15/10)
3,865 Harris County Hospital District, Texas, Revenue Refunding Bonds, No Opt. Call AAA 4,044,645
Series 1990, 7.400%, 2/15/10 - AMBAC Insured
1,310 Harris County Hospital District, Texas, Revenue Refunding Bonds, No Opt. Call AAA 1,355,156
Series 1990, 7.400%, 2/15/10 - AMBAC Insured (ETM)
2,256 Heart of Texas Housing Finance Corporation, GNMA Collateralized 6/10 at 105.00 Aaa 2,428,900
Mortgage Loan Revenue Bonds, Robinson Garden Project,
Series 2000A, 7.375%, 6/20/35 (Alternative Minimum Tax)
11,950 Houston, Texas, Junior Lien Water and Sewerage System No Opt. Call AAA 6,044,669
Revenue Refunding Bonds, Series 1998A, 0.000%, 12/01/22 -
FSA Insured (ETM)
4,680 Houston, Texas, Junior Lien Water and Sewerage System Revenue No Opt. Call AAA 2,356,848
Refunding Bonds, Series 1998A, 0.000%, 12/01/22 - FSA Insured
Kerrville Health Facilities Development Corporation, Texas,
Revenue Bonds, Sid Peterson Memorial Hospital Project, Series 2005:
800 5.250%, 8/15/21 No Opt. Call BBB- 808,232
1,000 5.125%, 8/15/26 No Opt. Call BBB- 982,170
1,000 Sabine River Authority, Texas, Pollution Control Revenue Bonds, 11/15 at 100.00 Caa1 902,860
TXU Electric Company, Series 2001C, 5.200%, 5/01/28
3,960 Stafford Economic Development Corporation, Texas, Sales Tax 9/15 at 100.00 AAA 4,268,840
Revenue Bonds, Series 2000, 5.500%, 9/01/30 - FGIC Insured
6,100 Tarrant County Cultural & Educational Facilities Financing 2/17 at 100.00 AA- 6,124,278
Corporation, Texas, Revenue Bonds, Series 2007A, 5.000%, 2/15/36
5,215 Tarrant County Health Facilities Development Corporation, Texas, 12/10 at 105.00 Aaa 5,780,306
GNMA Collateralized Mortgage Loan Revenue Bonds, Eastview
Nursing Home, Ebony Lake Nursing Center, Ft. Stockton Nursing
Center, Lynnhaven Nursing Center and Mission Oaks Manor,
Series 2000A-1, 7.500%, 12/20/22
Texas Turnpike Authority, First Tier Revenue Bonds, Central Texas
Turnpike System, Series 2002A:
10,000 0.000%, 8/15/21 - AMBAC Insured No Opt. Call AAA 5,406,600
12,000 0.000%, 8/15/23 - AMBAC Insured No Opt. Call AAA 5,843,280
2,500 Tomball Hospital Authority, Texas, Hospital Revenue Bonds, 7/15 at 100.00 Baa3 2,470,975
Tomball Regional Hospital, Series 2005, 5.000%, 7/01/20
3,965 Tyler Health Facilities Development Corporation, Texas, Hospital 12/07 at 102.00 AAA 4,050,922
Revenue Bonds, East Texas Medical Center Regional Healthcare
Center, Series 1997C, 5.600%, 11/01/27 (Pre-refunded
12/05/07) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
97,446 Total Texas 80,396,261
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 0.6% (0.4% OF TOTAL INVESTMENTS)
1,000 Amherst Industrial Development Authority, Virginia, Revenue 9/16 at 100.00 BBB 999,330
Bonds, Sweet Briar College, Series 2006, 5.000%, 9/01/26
1,905 Virginia Beach Development Authority, Virginia, Multifamily 10/14 at 102.00 N/R 2,097,405
Residential Rental Housing Revenue Bonds, Hamptons and
Hampton Court Apartments, Series 1999, 7.500%, 10/01/39
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
2,905 Total Virginia 3,096,735
------------------------------------------------------------------------------------------------------------------------------------
29
NQM
Nuveen Investment Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 8.8% (5.5% OF TOTAL INVESTMENTS)
$ 11,345 Chelan County Public Utility District 1, Washington, Columbia No Opt. Call AAA $ 6,737,228
River-Rock Island Hydro-Electric System Revenue Refunding
Bonds, Series 1997A, 0.000%, 6/01/19 - MBIA Insured
17,075 Port of Seattle, Washington, Limited Tax General Obligation 12/10 at 100.00 AAA 17,819,641
Bonds, Series 2000B, 5.750%, 12/01/25 (Alternative
Minimum Tax)
16,750 Port of Seattle, Washington, Revenue Bonds, Series 2000A, 8/10 at 100.00 AAA 17,697,883
5.625%, 2/01/30 (Pre-refunded 8/01/10) - MBIA Insured
5,000 Port of Seattle, Washington, Revenue Bonds, Series 2001B, 10/11 at 100.00 AAA 5,264,800
5.625%, 4/01/17 - FGIC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
50,170 Total Washington 47,519,552
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.9% (0.5% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,049,650
Appalachian Power Company, Series 2003L, 5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 3.3% (2.0% OF TOTAL INVESTMENTS)
6,790 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 7,021,879
Tobacco Settlement Asset-Backed Bonds, Series 2002,
6.125%, 6/01/27
315 Wisconsin Health and Educational Facilities Authority, Revenue 5/16 at 100.00 BBB 292,147
Bonds, Divine Savior Healthcare, Series 2006, 5.000%, 5/01/32
Wisconsin Health and Educational Facilities Authority,
Revenue Bonds, Eagle River Memorial Hospital Inc., Series 2000:
1,000 5.750%, 8/15/20 - RAAI Insured 8/10 at 101.00 AA 1,035,320
3,000 5.875%, 8/15/30 - RAAI Insured 8/10 at 101.00 AA 3,098,160
1,150 Wisconsin Health and Educational Facilities Authority, Revenue 5/14 at 100.00 BBB+ 1,192,527
Bonds, Fort Healthcare Inc., Series 2004, 5.750%, 5/01/24
4,600 Wisconsin State, General Obligation Bonds, Series 2006A, 5/16 at 100.00 AAA 4,714,770
4.750%, 5/01/25 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
16,855 Total Wisconsin 17,354,803
------------------------------------------------------------------------------------------------------------------------------------
WYOMING - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,500 Sweetwater County, Wyoming, Solid Waste Disposal Revenue 12/15 at 100.00 BBB 2,546,200
Bonds, FMC Corporation, Series 2005, 5.600%, 12/01/35
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 859,006 Total Investments (cost $810,344,010) - 157.8% 849,292,091
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (3.9)% (21,105,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.0% 11,078,804
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (55.9)% (301,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 538,265,895
====================================================================================================================
The Fund may 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. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(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 higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's 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.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
30
NQS
Nuveen Select Quality Municipal Fund, Inc.
Portfolio of INVESTMENTS
October 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 3.1% (2.0% OF TOTAL INVESTMENTS)
$ 10,000 Lauderdale County and Florence Health Authority, Alabama, 7/10 at 102.00 AAA $ 10,683,100
Revenue Bonds, Coffee Health Group, Series 2000A,
6.000%, 7/01/29 - MBIA Insured
5,155 Phenix City Industrial Development Board, Alabama, 5/12 at 100.00 BBB 5,338,157
Environmental Improvement Revenue Bonds, MeadWestvaco
Corporation, Series 2002A, 6.350%, 5/15/35
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
15,155 Total Alabama 16,021,257
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.4% (0.3% OF TOTAL INVESTMENTS)
2,000 Kenai Peninsula Borough, Alaska, Revenue Bonds, Central 8/13 at 100.00 Aaa 2,088,640
Kenai Peninsula Hospital Service Area, Series 2003,
5.000%, 8/01/23 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.7% (1.1% OF TOTAL INVESTMENTS)
3,750 Salt River Project Agricultural Improvement and Power District, 12/13 at 100.00 AAA 3,925,013
Arizona, Electric System Revenue Bonds, Series 2003,
5.000%, 12/01/18 - MBIA Insured
5,000 Salt Verde Financial Corporation, Arizona, Senior Gas Revenue No Opt. Call Aa1 4,793,550
Bonds, Series 2007, 5.000%, 12/01/37
------------------------------------------------------------------------------------------------------------------------------------
8,750 Total Arizona 8,718,563
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.0% (0.7% OF TOTAL INVESTMENTS)
4,500 Little Rock, Arkansas, Hotel and Restaurant Gross Receipts No Opt. Call A3 5,202,990
Tax Refunding Bonds, Series 1993, 7.375%, 8/01/15
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 6.2% (4.1% OF TOTAL INVESTMENTS)
Calexico Unified School District, Imperial County, California,
General Obligation Bonds, Series 2005B:
3,685 0.000%, 8/01/31 - FGIC Insured No Opt. Call AAA 1,188,965
4,505 0.000%, 8/01/33 - FGIC Insured No Opt. Call AAA 1,314,874
550 California Pollution Control Financing Authority, Remarketed 4/11 at 102.00 AAA 578,397
Revenue Bonds, Pacific Gas and Electric Company, Series 1996A,
5.350%, 12/01/16 - MBIA Insured (Alternative Minimum Tax)
1,000 Coachella Valley Unified School District, Riverside County, No Opt. Call AAA 339,900
California, General Obligation Bonds, Series 2005A,
0.000%, 8/01/30 - FGIC Insured
Colton Joint Unified School District, San Bernardino County,
California, General Obligation Bonds, Series 2006C:
3,200 0.000%, 2/01/30 - FGIC Insured 2/15 at 45.69 AAA 1,014,240
6,800 0.000%, 2/01/35 - FGIC Insured 2/15 at 34.85 AAA 1,636,964
Cupertino Union School District, Santa Clara County, California,
General Obligation Bonds, Series 2003B:
8,100 0.000%, 8/01/24 - FGIC Insured 8/13 at 58.68 AAA 3,565,134
11,430 0.000%, 8/01/27 - FGIC Insured 8/13 at 49.98 AAA 4,268,419
7,000 Golden State Tobacco Securitization Corporation, California, 6/15 at 100.00 AAA 7,377,020
Enhanced Tobacco Settlement Revenue Bonds, Residual
Series 2040, 7.550%, 6/01/45 - FGIC Insured (IF)
1,045 Lake Tahoe Unified School District, El Dorado County, California, No Opt. Call Aaa 350,733
General Obligation Bonds, Series 2001B, 0.000%, 8/01/31 -
MBIA Insured
6,000 Placentia-Yorba Linda Unified School District, Orange County, No Opt. Call AAA 1,638,840
California, Certificates of Participation, Series 2006,
0.000%, 10/01/34 - FGIC Insured
31
NQS
Nuveen Select Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 5,000 Riverside County Asset Leasing Corporation, California, Leasehold No Opt. Call AAA $ 2,171,500
Revenue Bonds, Riverside County Hospital Project, Series 1997,
0.000%, 6/01/25 - MBIA Insured
14,605 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 3,944,518
California, Toll Road Revenue Refunding Bonds, Series 1997A,
0.000%, 1/15/35 - MBIA Insured
5,000 Santa Monica Community College District, Los Angeles County, No Opt. Call AAA 1,973,500
California, General Obligation Bonds, Series 2005C,
0.000%, 8/01/26 - MBIA Insured
2,000 Yuma Community College District, California, General Obligation 8/17 at 45.45 AAA 540,000
Bonds, B.Series 200, 0.000%, 8/01/33 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
79,920 Total California 31,903,004
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 10.7% (7.0% OF TOTAL INVESTMENTS)
11,000 Colorado Department of Transportation, Revenue Anticipation 6/10 at 100.50 AAA 11,754,380
Bonds, Series 2000, 6.000%, 6/15/15 (Pre-refunded 6/15/10) -
AMBAC Insured
9,250 Colorado Health Facilities Authority, Remarketed Revenue Bonds, 12/07 at 101.50 AAA 9,401,423
Kaiser Permanente System, Series 1994A,
5.350%, 11/01/16 (ETM)
16,995 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AAA 17,651,857
Refunding Bonds, Series 2000A, 5.625%, 11/15/23 -
AMBAC Insured (Alternative Minimum Tax)
1,500 Denver Convention Center Hotel Authority, Colorado, Senior 11/16 at 100.00 AAA 1,468,680
Revenue Bonds, Convention Center Hotel, Series 2006,
4.625%, 12/01/30 - XLCA Insured
E-470 Public Highway Authority, Colorado, Senior Revenue
Bonds, Series 1997B:
1,420 0.000%, 9/01/23 - MBIA Insured No Opt. Call AAA 686,868
8,515 0.000%, 9/01/25 - MBIA Insured No Opt. Call AAA 3,718,671
7,500 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 2,651,250
Bonds, Series 2000B, 0.000%, 9/01/29 - MBIA Insured
13,000 E-470 Public Highway Authority, Colorado, Toll Revenue Bonds, 9/20 at 45.40 AAA 3,120,000
Series 2004B, 0.000%, 9/01/34 - MBIA Insured
12,355 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 40.52 AAA 4,283,726
Senior Lien Revenue Bonds, Series 2001B, 0.000%, 6/15/26 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
81,535 Total Colorado 54,736,855
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 3.2% (2.1% OF TOTAL INVESTMENTS)
2,865 District of Columbia Tobacco Settlement Corporation, Tobacco 5/11 at 101.00 BBB 2,968,885
Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24
District of Columbia, General Obligation Bonds, Series 1998B:
5,000 6.000%, 6/01/19 - MBIA Insured No Opt. Call AAA 5,831,100
7,265 5.250%, 6/01/26 - FSA Insured 6/08 at 101.00 AAA 7,387,996
------------------------------------------------------------------------------------------------------------------------------------
15,130 Total District of Columbia 16,187,981
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 2.3% (1.5% OF TOTAL INVESTMENTS)
Lee County, Florida, Airport Revenue Bonds, Series 2000A:
3,075 5.875%, 10/01/18 - FSA Insured (Alternative Minimum Tax) 10/10 at 101.00 AAA 3,246,893
4,860 5.875%, 10/01/19 - FSA Insured (Alternative Minimum Tax) 10/10 at 101.00 AAA 5,131,674
3,335 South Miami Health Facilities Authority, Florida, Revenue Bonds, 8/17 at 100.00 AA- 3,277,071
Baptist Health Systems of South Florida, Series 2007,
ROLS 11151, 7.568%, 8/15/42 (IF)
------------------------------------------------------------------------------------------------------------------------------------
11,270 Total Florida 11,655,638
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 0.8% (0.5% OF TOTAL INVESTMENTS)
3,750 Atlanta, Georgia, Airport General Revenue Bonds, Series 2000B, 1/10 at 101.00 AAA 3,887,663
5.625%, 1/01/30 - FGIC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
32
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 17.9% (11.6% OF TOTAL INVESTMENTS)
$ 7,555 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA $ 7,715,317
Obligation Bonds, Dedicated Tax Revenues, Series 1997A,
5.250%, 12/01/27 (Pre-refunded 12/01/07) - AMBAC Insured
Chicago Board of Education, Illinois, Unlimited Tax General
Obligation Bonds, Dedicated Tax Revenues, Series 1997:
4,000 5.750%, 12/01/20 (Pre-refunded 12/01/07) - AMBAC Insured 12/07 at 102.00 AAA 4,086,520
9,230 5.750%, 12/01/27 (Pre-refunded 12/01/07) - AMBAC Insured 12/07 at 102.00 AAA 9,429,645
1,070 5.750%, 12/01/27 (Pre-refunded 12/01/07) - AMBAC Insured 12/07 at 102.00 AAA 1,093,144
Chicago Board of Education, Illinois, Unlimited Tax General
Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1:
3,855 0.000%, 12/01/25 - FGIC Insured No Opt. Call AAA 1,678,891
2,925 0.000%, 12/01/31 - FGIC Insured No Opt. Call AAA 933,280
5,865 Chicago, Illinois, General Obligation Bonds, Neighborhoods 7/10 at 101.00 AAA 6,374,141
Alive 21 Program, Series 2000A, 6.500%, 1/01/35
(Pre-refunded 7/01/10) - FGIC Insured
15,000 Chicago, Illinois, Second Lien Passenger Facility Charge Revenue 1/11 at 101.00 AAA 15,319,500
Bonds, O'Hare International Airport, Series 2001A,
5.375%, 1/01/32 - AMBAC Insured (Alternative Minimum Tax)
Chicago, Illinois, Second Lien Passenger Facility Charge Revenue
Bonds, O'Hare International Airport, Series 2001C:
3,770 5.100%, 1/01/26 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 3,821,951
5,460 5.250%, 1/01/32 - AMBAC Insured (Alternative Minimum Tax) 1/11 at 101.00 AAA 5,536,986
3,975 Illinois Finance Authority, Revenue Bonds, Sherman Health 8/17 at 100.00 A- 3,991,019
Systems, Series 2007A, 5.500%, 8/01/37
10,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 10,286,700
Medical Center, Series 2002, 5.750%, 5/15/22
2,000 Illinois Health Facilities Authority, Revenue Bonds, Midwest Care 2/11 at 102.00 Aaa 2,103,260
Center I Inc., Series 2001, 5.950%, 2/20/36
8,945 Lake and McHenry Counties Community Unit School District 118, 1/15 at 74.44 Aaa 4,756,504
Wauconda, Illinois, General Obligation Bonds, Series 2005B,
0.000%, 1/01/21 - FSA Insured
9,000 McHenry County Community Unit School District 200, Woodstock, No Opt. Call Aaa 4,467,240
Illinois, General Obligation Bonds, Series 2006B,
0.000%, 1/15/23 - FGIC Insured
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Bonds, McCormick Place Expansion Project, Series 2002A:
6,700 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 3,223,504
2,920 5.000%, 12/15/28 - MBIA Insured 6/12 at 101.00 AAA 3,002,607
1,100 0.000%, 12/15/35 - MBIA Insured No Opt. Call AAA 286,616
7,500 Valley View Public Schools, Community Unit School District 365U No Opt. Call AAA 3,267,300
of Will County, Illinois, General Obligation Bonds, Series 2005,
0.000%, 11/01/25 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
110,870 Total Illinois 91,374,125
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 2.2% (1.4% OF TOTAL INVESTMENTS)
765 Indiana Housing Finance Authority, Single Family Mortgage 1/10 at 100.00 Aaa 774,501
Revenue Bonds, Series 2000D-3, 5.950%, 7/01/26
(Alternative Minimum Tax)
2,225 Indiana Municipal Power Agency, Power Supply Revenue Bonds, 1/17 at 100.00 AAA 2,279,935
Series 2007A, 5.000%, 1/01/42 - MBIA Insured
7,660 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/11 at 100.00 AAA 8,157,440
Memorial Health System, Series 2000, 5.625%, 8/15/33
(Pre-refunded 2/15/11) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
10,650 Total Indiana 11,211,876
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.8% (0.5% OF TOTAL INVESTMENTS)
3,790 Kansas Department of Transportation, Highway Revenue Bonds, 3/14 at 100.00 AAA 3,951,530
Series 2004A, 5.000%, 3/01/23
------------------------------------------------------------------------------------------------------------------------------------
33
NQS
Nuveen Select Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.5% (1.0% OF TOTAL INVESTMENTS)
$ 7,500 Maryland Health and Higher Educational Facilities Authority, 7/09 at 101.00 AA (4) $ 7,883,250
Revenue Bonds, Johns Hopkins University, Series 1999,
6.000%, 7/01/39 (Pre-refunded 7/01/09)
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 0.1% (0.1% OF TOTAL INVESTMENTS)
950 Massachusetts Educational Finance Authority, Student Loan 12/09 at 101.00 AAA 971,461
Revenue Refunding Bonds, Series 2000G, 5.700%, 12/01/11 -
MBIA Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 7.9% (5.1% OF TOTAL INVESTMENTS)
10,000 Detroit, Michigan, Sewerage Disposal System Revenue Bonds, 1/10 at 101.00 AAA 10,569,600
Series 1999A, 5.750%, 7/01/26 (Pre-refunded 1/01/10) -
FGIC Insured
6,475 Michigan State Hospital Finance Authority, Hospital Revenue 11/09 at 101.00 AAA 6,824,067
Bonds, Ascension Health Credit Group, Series 1999A,
5.750%, 11/15/16 (Pre-refunded 11/15/09) - MBIA Insured
3,275 Michigan State Hospital Finance Authority, Revenue Refunding 2/08 at 100.00 BB- 3,276,146
Bonds, Detroit Medical Center Obligated Group, Series 1993A,
6.500%, 8/15/18
6,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/11 at 100.00 A3 6,160,980
Pollution Control Revenue Refunding Bonds, Fixed Rate
Conversion, Detroit Edison Company, Series 1999C,
5.650%, 9/01/29 (Alternative Minimum Tax)
7,500 Michigan Strategic Fund, Limited Obligation Revenue Refunding 12/12 at 100.00 AAA 7,736,850
Bonds, Detroit Edison Company, Series 2002C,
5.450%, 12/15/32 - XLCA Insured (Alternative Minimum Tax)
5,900 Royal Oak Hospital Finance Authority, Michigan, Hospital 11/11 at 100.00 AAA 6,040,833
Revenue Bonds, William Beaumont Hospital, Series 2001M,
5.250%, 11/15/35 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
39,150 Total Michigan 40,608,476
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 2.0% (1.3% OF TOTAL INVESTMENTS)
7,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 7,364,910
Minnesota, Airport Revenue Bonds, Series 2001A,
5.250%, 1/01/32 (Pre-refunded 1/01/11) - FGIC Insured
2,545 Minnesota Housing Finance Agency, Single Family Mortgage 7/09 at 100.00 AA+ 2,643,822
Revenue Bonds, Series 2000C, 6.100%, 7/01/30
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,545 Total Minnesota 10,008,732
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.5% (0.3% OF TOTAL INVESTMENTS)
2,475 Mississippi Hospital Equipment and Facilities Authority, Revenue 9/14 at 100.00 N/R 2,508,413
Bonds, Baptist Memorial Healthcare, Series 2004B-1,
5.000%, 9/01/24
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 0.7% (0.4% OF TOTAL INVESTMENTS)
5,000 Kansas City Municipal Assistance Corporation, Missouri, No Opt. Call AAA 1,917,750
Leasehold Revenue Bonds, Series 2004B-1, 0.000%, 4/15/28 -
AMBAC Insured
1,500 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 1,540,095
Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink
Cross County Extension Project, Series 2002B, 5.000%,
10/01/32 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
6,500 Total Missouri 3,457,845
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 7.2% (4.7% OF TOTAL INVESTMENTS)
4,885 Clark County, Nevada, Limited Tax General Obligation Bank Bonds, 7/10 at 100.00 AA+ (4) 5,140,974
Series 2000, 5.500%, 7/01/18 (Pre-refunded 7/01/10)
7,500 Clark County, Nevada, Subordinate Lien Airport Revenue Bonds, 7/10 at 101.00 AAA 8,056,275
Series 1999A, 6.000%, 7/01/29 (Pre-refunded 7/01/10) -
MBIA Insured
1,950 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 AAA 2,049,158
Revenue Bonds, Las Vegas Monorail Project, First Tier,
Series 2000, 5.625%, 1/01/32 - AMBAC Insured
10,000 Reno, Nevada, Health Facilities, Revenue Bonds, Catholic 7/17 at 100.00 A 10,196,800
Healthcare West, Series 2007A, 5.250%, 7/01/31 (UB)
34
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEVADA (continued)
$ 10,750 Truckee Meadows Water Authority, Nevada, Water Revenue Bonds, 7/11 at 100.00 AAA $ 11,393,495
Series 2001A, 5.250%, 7/01/34 (Pre-refunded 7/01/11) -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
35,085 Total Nevada 36,836,702
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 7.0% (4.5% OF TOTAL INVESTMENTS)
2,400 New Jersey Health Care Facilities Financing Authority, Revenue 7/10 at 101.00 BBB- (4) 2,659,248
Bonds, Trinitas Hospital Obligated Group, Series 2000,
7.500%, 7/01/30 (Pre-refunded 7/01/10)
14,865 New Jersey Housing and Mortgage Finance Agency, Home Buyer 10/10 at 100.00 AAA 15,384,532
Program Revenue Bonds, Series 2000CC, 5.850%, 10/01/25 -
MBIA Insured (Alternative Minimum Tax)
1,905 New Jersey Housing and Mortgage Finance Agency, Multifamily 11/07 at 101.50 AAA 1,935,804
Housing Revenue Bonds, Series 1997A, 5.550%, 5/01/27 -
AMBAC Insured (Alternative Minimum Tax)
20,000 New Jersey Transportation Trust Fund Authority, Transportation No Opt. Call AAA 5,778,400
System Bonds, Series 2006C, 0.000%, 12/15/33 - FSA Insured
7,690 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/12 at 100.00 AAA 8,249,832
Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32
(Pre-refunded 6/01/12)
2,000 Tobacco Settlement Financing Corporation, New Jersey, Tobacco 6/17 at 100.00 BBB 1,716,160
Settlement Asset-Backed Bonds, Series 2007-1A,
5.000%, 6/01/41
------------------------------------------------------------------------------------------------------------------------------------
48,860 Total New Jersey 35,723,976
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 4.7% (3.0% OF TOTAL INVESTMENTS)
8,500 Farmington, New Mexico, Pollution Control Revenue Refunding 4/08 at 100.00 BBB 8,550,915
Bonds, Public Service Company of New Mexico - San Juan
Project, Series 1997B, 5.800%, 4/01/22
New Mexico Hospital Equipment Loan Council, Hospital Revenue
Bonds, Presbyterian Healthcare Services, Series 2001A:
8,000 5.500%, 8/01/25 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 8,611,440
6,200 5.500%, 8/01/30 (Pre-refunded 8/01/11) 8/11 at 101.00 AA- (4) 6,673,866
------------------------------------------------------------------------------------------------------------------------------------
22,700 Total New Mexico 23,836,221
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 10.7% (6.9% OF TOTAL INVESTMENTS)
5,650 Dormitory Authority of the State of New York, Improvement 8/09 at 101.00 AAA 5,848,824
Revenue Bonds, Mental Health Services Facilities, Series 1999D,
5.250%, 8/15/24 - FSA Insured
10,000 Dormitory Authority of the State of New York, New York City, 5/10 at 101.00 AA- (4) 10,722,700
Lease Revenue Bonds, Court Facilities, Series 1999,
6.000%, 5/15/39 (Pre-refunded 5/15/10)
7,000 Metropolitan Transportation Authority, New York, State Service 7/12 at 100.00 AA- 7,211,540
Contract Refunding Bonds, Series 2002A, 5.125%, 1/01/29
5,000 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 5,116,950
Water and Sewerage System Revenue Bonds, Fiscal
Series 1999B, 5.000%, 6/15/29 - FSA Insured
2,255 New York City Transit Authority, New York, Metropolitan 1/10 at 101.00 AAA 2,386,354
Transportation Authority, Triborough Bridge and Tunnel Authority,
Certificates of Participation, Series 2000A, 5.750%, 1/01/20
(Pre-refunded 1/01/10) -AMBAC Insured
9,750 New York City Transitional Finance Authority, New York, Future 5/10 at 101.00 AAA 10,454,633
Tax Secured Bonds, Fiscal Series 2000B, 6.000%, 11/15/29
(Pre-refunded 5/15/10)
5,400 New York State Mortgage Agency, Homeowner Mortgage 3/09 at 101.00 Aa1 5,511,834
Revenue Bonds, Series 79, 5.300%, 4/01/29
(Alternative Minimum Tax)
New York State Urban Development Corporation, Subordinate Lien
Corporate Purpose Refunding Bonds, Series 1996:
4,490 5.500%, 7/01/26 (Pre-refunded 7/01/08) 7/08 at 100.00 Aaa 4,551,872
3,055 5.500%, 7/01/26 (Pre-refunded 7/01/08) 7/08 at 100.00 AAA 3,097,098
------------------------------------------------------------------------------------------------------------------------------------
52,600 Total New York 54,901,805
------------------------------------------------------------------------------------------------------------------------------------
35
NQS
Nuveen Select Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 3.6% (2.4% OF TOTAL INVESTMENTS)
$ 18,555 North Carolina Eastern Municipal Power Agency, Power System 1/08 at 100.00 AAA $ 18,582,272
Revenue Refunding Bonds, Series 1993B, 5.500%, 1/01/17 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
NORTH DAKOTA - 2.1% (1.3% OF TOTAL INVESTMENTS)
10,490 Grand Forks, North Dakota, Sales Tax Revenue Bonds, Aurora 12/07 at 100.00 AAA 10,514,652
Project, Series 1997A, 5.625%, 12/15/29 (Pre-refunded
12/15/07) - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 6.2% (4.0% OF TOTAL INVESTMENTS)
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien,
Series 2007A-2:
270 5.125%, 6/01/24 6/17 at 100.00 BBB 260,631
2,700 5.875%, 6/01/30 6/17 at 100.00 BBB 2,666,601
2,635 5.750%, 6/01/34 6/17 at 100.00 BBB 2,542,775
5,895 5.875%, 6/01/47 6/17 at 100.00 BBB 5,723,043
5,150 Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco 6/22 at 100.00 BBB 3,776,186
Settlement Asset-Backed Revenue Bonds, Senior Lien,
Series 2007A-3, 0.000%, 6/01/37
Montgomery County, Ohio, Hospital Facilities Revenue Bonds,
Kettering Medical Center, Series 1999:
5,000 6.750%, 4/01/18 (Pre-refunded 4/01/10) 4/10 at 101.00 A (4) 5,422,250
5,000 6.750%, 4/01/22 (Pre-refunded 4/01/10) 4/10 at 101.00 A (4) 5,422,250
245 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 254,102
Securities Program Residential Mortgage Revenue Bonds,
Series 2000C, 6.050%, 3/01/32 (Alternative Minimum Tax)
4,550 Ohio State Higher Educational Facilities Commission, Revenue 1/15/17 AAA 5,476,107
Bonds, University Hospitals Project, Residual Series 2007- 1033,
8.165%, 1/15/46 - AMBAC Insured (IF)
------------------------------------------------------------------------------------------------------------------------------------
31,445 Total Ohio 31,543,945
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.4% (1.5% OF TOTAL INVESTMENTS)
2,235 Oklahoma Development Finance Authority, Revenue Bonds, 12/08 at 100.00 AA- 2,272,816
St. John Health System, Series 2004, 5.000%, 2/15/24
10,000 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B 9,968,900
Bonds, American Airlines Inc., Series 2001B, 5.650%, 12/01/35
(Mandatory put 12/01/08) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
12,235 Total Oklahoma 12,241,716
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 0.6% (0.4% OF TOTAL INVESTMENTS)
95 Delaware River Port Authority, New Jersey and Pennsylvania, 1/10 at 100.00 AAA 99,317
Revenue Bonds, Series 1999, 5.750%, 1/01/15 - FSA Insured
3,250 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/16 at 100.00 AA+ 3,055,520
Revenue Bonds, Series 96A, 4.650%, 10/01/31 (Alternative
Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
3,345 Total Pennsylvania 3,154,837
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 0.5% (0.3% OF TOTAL INVESTMENTS)
3,000 Puerto Rico Public Buildings Authority, Guaranteed Government 7/17 at 100.00 AAA 2,591,160
Facilities Revenue Refunding Bonds, Series 2002D,
0.000%, 7/01/31 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 0.3% (0.2% OF TOTAL INVESTMENTS)
665 Rhode Island Housing & Mortgage Finance Corporation, 4/17 at 100.00 AA+ 697,332
Homeownership Opportunity Bond Program, 2007 Series 57-B,
Residual 1038, 8.134%, 10/01/32 (Alternative Minimum Tax) (IF)
1,000 Rhode Island Housing & Mortgage Finance Corporation, 4/17 at 100.00 AA+ 1,054,720
Homeownership Opportunity Bond Program, Residual
Trust 1038, 8.175%, 10/01/27 (Alternative Minimum Tax) (IF)
------------------------------------------------------------------------------------------------------------------------------------
1,665 Total Rhode Island 1,752,052
------------------------------------------------------------------------------------------------------------------------------------
36
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 9.5% (6.1% OF TOTAL INVESTMENTS)
Greenville County School District, South Carolina, Installment
Purchase Revenue Bonds, Series 2002:
$ 5,500 6.000%, 12/01/21 (Pre-refunded 12/01/12) 12/12 at 101.00 AA- (4) $ 6,168,855
4,500 6.000%, 12/01/21 (Pre-refunded 12/01/12) 12/12 at 101.00 AA- (4) 5,047,245
3,750 Greenwood County, South Carolina, Hospital Revenue Bonds, 10/11 at 100.00 A 3,815,775
Self Memorial Hospital, Series 2001, 5.500%, 10/01/31
2,500 Lexington County Health Service District, South Carolina, 11/13 at 100.00 A+ (4) 2,778,475
Hospital Revenue Refunding and Improvement Bonds,
Series 2003, 5.750%, 11/01/28 (Pre-refunded 11/01/13)
2,825 Medical University Hospital Authority, South Carolina, 8/14 at 100.00 AAA 2,983,935
FHA-Insured Mortgage Revenue Bonds, Series 2004A,
5.250%, 2/15/22 - MBIA Insured
21,565 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call AAA 7,486,721
Revenue Bonds, Series 2004A-2, 0.000%, 1/01/30 -
AMBAC Insured
1,250 South Carolina Housing Finance and Development Authority, 6/10 at 100.00 Aaa 1,254,475
Mortgage Revenue Bonds, Series 2000A-2, 6.000%, 7/01/20 -
FSA Insured (Alternative Minimum Tax)
Tobacco Settlement Revenue Management Authority,
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B:
11,530 6.000%, 5/15/22 5/11 at 101.00 BBB 11,852,033
4,000 6.375%, 5/15/28 5/11 at 101.00 BBB 4,113,760
3,000 6.375%, 5/15/30 No Opt. Call BBB 3,079,770
------------------------------------------------------------------------------------------------------------------------------------
60,420 Total South Carolina 48,581,044
------------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 2.1% (1.3% OF TOTAL INVESTMENTS)
5,195 Sioux Falls, South Dakota, Industrial Revenue Refunding Bonds, 10/14 at 100.00 AAA 6,278,106
Great Plains Hotel Corporation, Series 1989, 8.500%, 11/01/16
(Pre-refunded 10/15/14) (Alternative Minimum Tax)
2,410 South Dakota Education Loans Inc., Revenue Bonds, Subordinate 6/08 at 102.00 A2 2,471,696
Series 1998-1K, 5.600%, 6/01/20 (Alternative Minimum Tax)
1,750 South Dakota Health and Educational Facilities Authority, 11/14 at 100.00 AA- 1,826,335
Revenue Bonds, Sioux Valley Hospitals, Series 2004A,
5.500%, 11/01/31
------------------------------------------------------------------------------------------------------------------------------------
9,355 Total South Dakota 10,576,137
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 6.1% (4.0% OF TOTAL INVESTMENTS)
5,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Ba2 5,097,250
Tennessee, Hospital Revenue Bonds, Baptist Health System of
East Tennessee Inc., Series 2002, 6.500%, 4/15/31
20,060 Knox County Health, Educational and Housing Facilities Board, 1/13 at 80.49 AAA 12,953,544
Tennessee, Hospital Revenue Refunding Bonds, Covenant Health,
Series 2002A, 0.000%, 1/01/17 - FSA Insured
12,500 Metropolitan Government of Nashville-Davidson County Health 11/09 at 101.00 AAA 13,196,875
and Educational Facilities Board, Tennessee, Revenue Bonds,
Ascension Health Credit Group, Series 1999A, 5.875%, 11/15/28
(Pre-refunded 11/15/09) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
37,560 Total Tennessee 31,247,669
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 15.3% (9.9% OF TOTAL INVESTMENTS)
5,110 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 Caa1 5,527,436
Refunding Bonds, TXU Electric Company, Series 1999C,
7.700%, 3/01/32 (Alternative Minimum Tax)
7,925 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call Caa1 7,831,168
Refunding Bonds, TXU Electric Company, Series 2001C,
5.750%, 5/01/36 (Mandatory put 11/01/11)
(Alternative Minimum Tax)
4,500 Brazos River Authority, Texas, Revenue Bonds, Reliant Energy Inc., 12/08 at 102.00 BBB- 4,654,170
Series 1999B, 7.750%, 12/01/18
4,080 Central Texas Regional Mobility Authority, Travis and Williamson 1/15 at 100.00 AAA 4,169,678
Counties, Toll Road Revenue Bonds, Series 2005,
5.000%, 1/01/35 - FGIC Insured
5,500 Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax Revenue 12/11 at 100.00 AAA 5,812,290
Bonds, Series 2001, 5.000%, 12/01/31 (Pre-refunded 12/01/11) -
AMBAC Insured
37
NQS
Nuveen Select Quality Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 2,000 Ennis Independent School District, Ellis County, Texas, General 8/16 at 54.64 Aaa $ 703,220
Obligation Bonds, Series 2006, 0.000%, 8/15/28
1,550 Gulf Coast Waste Disposal Authority, Texas, Waste Disposal 4/11 at 101.00 BBB 1,620,820
Revenue Bonds, Valero Energy Corporation, Series 2001,
6.650%, 4/01/32 (Alternative Minimum Tax)
5,000 Houston Community College, Texas, Limited Tax General Obligation 2/13 at 100.00 AAA 5,141,050
Bonds, Series 2003, 5.000%, 2/15/26 - AMBAC Insured
4,590 Houston, Texas, Subordinate Lien Airport System Revenue Bonds, 7/10 at 100.00 AAA 4,739,634
Series 2000A, 5.625%, 7/01/30 - FSA Insured
(Alternative Minimum Tax)
9,000 Matagorda County Navigation District 1, Texas, Collateralized No Opt. Call AAA 9,538,020
Revenue Refunding Bonds, Houston Light and Power Company,
Series 1997, 5.125%, 11/01/28 - AMBAC Insured (Alternative
Minimum Tax)
775 Panhandle Regional Housing Finance Corporation, Texas, 11/07 at 100.00 AAA 786,478
GNMA Mortgage-Backed Securities Program Single Family
Mortgage Revenue Bonds, Series 1991A, 7.500%, 5/01/24
(Alternative Minimum Tax)
2,110 Richardson Hospital Authority, Texas, Revenue Bonds, Richardson 12/13 at 100.00 BBB 2,251,855
Regional Medical Center, Series 2004, 6.000%, 12/01/19
4,700 Sam Rayburn Municipal Power Agency, Texas, Power Supply 10/12 at 100.00 Baa2 4,888,893
System Revenue Refunding Bonds, Series 2002A,
6.000%, 10/01/21
5,500 Spring Independent School District, Harris County, Texas, 8/11 at 100.00 AAA 5,618,470
Unlimited Tax Schoolhouse Bonds, Series 2001, 5.000%, 8/15/26
2,920 Tarrant County Cultural and Education Facilities Financing 11/17 at 100.00 AA- 2,824,078
Corporation, Texas, Revenue Bonds, Tarrant County Health
Resources, Series 2007B, Residuals 1830, 7.506%, 11/15/47 (IF)
4,520 Texas, General Obligation Bonds, Water Financial Assistance, 8/09 at 100.00 Aa1 4,636,254
State Participation Program, Series 1999C, 5.500%, 8/01/35
White Settlement Independent School District, Tarrant County,
Texas, General Obligation Bonds, Series 2006:
9,110 0.000%, 8/15/36 8/15 at 33.75 AAA 2,064,326
9,110 0.000%, 8/15/41 8/15 at 25.73 AAA 1,571,384
7,110 0.000%, 8/15/45 8/15 at 20.76 AAA 988,574
2,305 Winter Garden Housing Finance Corporation, Texas, 4/08 at 100.00 AAA 2,334,965
GNMA/FNMA Mortgage-Backed Securities Program Single
Family Mortgage Revenue Bonds, Series 1994, 6.950%, 10/01/27
(Alternative Minimum Tax)
2,000 Wylie Independent School District, Taylor County, Texas, General 8/15 at 57.10 AAA 775,540
Obligation Bonds, Series 2005, 0.000%, 8/15/26
------------------------------------------------------------------------------------------------------------------------------------
99,415 Total Texas 78,478,303
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 3.9% (2.5% OF TOTAL INVESTMENTS)
3,565 Utah Associated Municipal Power Systems, Revenue Bonds, 4/13 at 100.00 AAA 3,714,730
Payson Power Project, Series 2003A, 5.000%, 4/01/24 - FSA Insured
16,050 Utah County, Utah, Hospital Revenue Bonds, IHC Health Services 12/07 at 101.00 AAA 16,232,649
Inc., Series 1997, 5.250%, 8/15/26 - MBIA Insured (ETM)
------------------------------------------------------------------------------------------------------------------------------------
19,615 Total Utah 19,947,379
------------------------------------------------------------------------------------------------------------------------------------
VERMONT - 2.0% (1.3% OF TOTAL INVESTMENTS)
Vermont Educational and Health Buildings Financing Agency,
Revenue Bonds, Fletcher Allen Health Care Inc., Series 2000A:
3,720 6.125%, 12/01/15 - AMBAC Insured 12/10 at 101.00 AAA 4,030,657
4,265 6.250%, 12/01/16 - AMBAC Insured 12/10 at 101.00 AAA 4,615,796
1,395 Vermont Housing Finance Agency, Single Family Housing Bonds, 11/09 at 100.00 AAA 1,408,071
Series 2000-13A, 5.950%, 11/01/25 - FSA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
9,380 Total Vermont 10,054,524
------------------------------------------------------------------------------------------------------------------------------------
38
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 3.3% (2.1% OF TOTAL INVESTMENTS)
$ 8,810 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA $ 9,281,159
Consolidated System Revenue Bonds, Series 2001A,
5.600%, 1/01/36 - MBIA Insured (Alternative Minimum Tax)
7,225 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 7,583,721
Terminal 18, Series 1999B, 6.000%, 9/01/20 - MBIA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
16,035 Total Washington 16,864,880
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.0% (0.6% OF TOTAL INVESTMENTS)
5,000 Mason County, West Virginia, Pollution Control Revenue Bonds, 10/11 at 100.00 BBB 5,049,650
Appalachian Power Company, Series 2003L, 5.500%, 10/01/22
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 3.0% (2.0% OF TOTAL INVESTMENTS)
7,965 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 8,237,005
Tobacco Settlement Asset-Backed Bonds, Series 2002,
6.125%, 6/01/27
5,000 Madison, Wisconsin, Industrial Development Revenue Refunding 4/12 at 100.00 AA- 5,224,150
Bonds, Madison Gas and Electric Company Projects,
Series 2002A, 5.875%, 10/01/34 (Alternative Minimum Tax)
2,100 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A- 2,010,099
Revenue Bonds, Wheaton Franciscan Services Inc., Series 2003A,
5.125%, 8/15/33
------------------------------------------------------------------------------------------------------------------------------------
15,065 Total Wisconsin 15,471,254
------------------------------------------------------------------------------------------------------------------------------------
$ 925,265 Total Investments (cost $751,747,642) - 154.5% 790,328,477
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (1.3)% (6,665,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 1.3% 7,006,990
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (54.5)% (279,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 511,670,467
====================================================================================================================
The Fund may 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. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(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 higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's 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.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
39
NQU
Nuveen Quality Income Municipal Fund, Inc.
Portfolio of INVESTMENTS
October 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 3.2% (2.0% OF TOTAL INVESTMENTS)
$ 3,500 Bessemer Governmental Utility Services Corporation, Alabama, 6/08 at 102.00 AAA $ 3,596,495
Water Supply Revenue Bonds, Series 1998, 5.200%, 6/01/24 -
MBIA Insured
Jefferson County, Alabama, Sewer Revenue Capitol Improvement
Warrants, Series 2001A:
7,475 5.500%, 2/01/31 (Pre-refunded 2/01/11) - FGIC Insured 2/11 at 101.00 AAA 7,998,026
6,340 5.500%, 2/01/31 (Pre-refunded 2/01/11) - FGIC Insured 2/11 at 101.00 AAA 6,775,558
6,970 5.500%, 2/01/31 (Pre-refunded 2/01/11) - FGIC Insured 2/11 at 101.00 AAA 7,457,691
------------------------------------------------------------------------------------------------------------------------------------
24,285 Total Alabama 25,827,770
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 0.9% (0.6% OF TOTAL INVESTMENTS)
6,110 Alaska Housing Finance Corporation, General Housing Purpose 12/14 at 100.00 AAA 6,310,164
Bonds, Series 2005A, 5.000%, 12/01/27 - FGIC Insured
1,500 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/14 at 100.00 Baa3 1,276,455
Settlement Asset-Backed Bonds, Series 2006A, 5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
7,610 Total Alaska 7,586,619
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 1.9% (1.2% OF TOTAL INVESTMENTS)
5,350 Arizona Tourism and Sports Authority, Tax Revenue Bonds, 7/13 at 100.00 Aaa 5,505,097
Multipurpose Stadium Facility Project, Series 2003A,
5.000%, 7/01/28 - MBIA Insured
1,000 Mesa, Arizona, Utility System Revenue Refunding Bonds, No Opt. Call AAA 1,104,410
Series 2002, 5.250%, 7/01/17 - FGIC Insured
8,010 Salt River Project Agricultural Improvement and Power District, 1/12 at 101.00 Aa1 8,388,312
Arizona, Electric System Revenue Refunding Bonds,
Series 2002A, 5.125%, 1/01/27
------------------------------------------------------------------------------------------------------------------------------------
14,360 Total Arizona 14,997,819
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 0.9% (0.6% OF TOTAL INVESTMENTS)
Arkansas Development Finance Authority, Tobacco Settlement
Revenue Bonds, Arkansas Cancer Research Center Project,
Series 2006:
2,500 0.000%, 7/01/36 - AMBAC Insured No Opt. Call Aaa 600,125
19,800 0.000%, 7/01/46 - AMBAC Insured No Opt. Call Aaa 2,749,032
4,000 University of Arkansas, Fayetteville, Revenue Bonds, Medical 11/14 at 100.00 Aaa 4,125,000
Sciences Campus, Series 2004B, 5.000%, 11/01/34 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
26,300 Total Arkansas 7,474,157
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 12.2% (7.7% OF TOTAL INVESTMENTS)
1,000 California Department of Water Resources, Power Supply Revenue 5/12 at 101.00 Aaa 1,104,340
Bonds, Series 2002A, 5.750%, 5/01/17 (Pre-refunded 5/01/12)
6,000 California Health Facilities Financing Authority, Health Facility 3/13 at 100.00 A 6,014,880
Revenue Bonds, Adventist Health System/West, Series 2003A,
5.000%, 3/01/33
3,450 California Infrastructure Economic Development Bank, Revenue 10/11 at 101.00 A- 3,500,543
Bonds, J. David Gladstone Institutes, Series 2001,
5.250%, 10/01/34
25,000 California, General Obligation Bonds, Series 2005, 3/16 at 100.00 AAA 25,075,500
4.750%, 3/01/35 - MBIA Insured (UB)
5,335 California State, Variable Purpose General Obligation Bonds, 6/17 at 100.00 A+ 5,559,550
Series 2007, Lehman Municipal Trust Receipts FC5,
7.690%, 6/01/37 (IF)
40
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 1,360 California Statewide Community Development Authority, Revenue 7/15 at 100.00 BBB+ $ 1,365,426
Bonds, Daughters of Charity Health System, Series 2005A,
5.250%, 7/01/30
14,600 California, General Obligation Bonds, Series 2003, 5.250%, 2/01/28 8/13 at 100.00 A+ 15,264,884
10,000 California, Various Purpose General Obligation Bonds, Series 1999, 4/09 at 101.00 AAA 10,041,500
4.750%, 4/01/29 - MBIA Insured
8,500 Foothill/Eastern Transportation Corridor Agency, California, 1/10 at 100.00 AAA 8,663,625
Toll Road Revenue Bonds, Series 1995A, 5.000%, 1/01/35 -
MBIA Insured
Golden State Tobacco Securitization Corporation, California,
Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2007A-1:
10,000 5.000%, 6/01/33 6/17 at 100.00 BBB 8,909,200
1,500 5.125%, 6/01/47 6/17 at 100.00 BBB 1,319,520
30,000 San Joaquin Hills Transportation Corridor Agency, Orange County, No Opt. Call AAA 8,102,400
California, Toll Road Revenue Refunding Bonds, Series 1997A,
0.000%, 1/15/35 - MBIA Insured
1,500 San Jose Redevelopment Agency, California, Tax Allocation Bonds, 8/10 at 101.00 AAA 1,577,790
Merged Area Redevelopment Project, Series 2002,
5.000%, 8/01/32 (Pre-refunded 8/01/10) - MBIA Insured
3,000 San Mateo County Community College District, California, No Opt. Call AAA 1,015,680
General Obligation Bonds, Series 2006C, 0.000%, 9/01/30 -
MBIA Insured
1,500 Tobacco Securitization Authority of Northern California, Tobacco 6/15 at 100.00 BBB 1,406,445
Settlement Asset-Backed Bonds, Series 2005A-1, 5.500%, 6/01/45
------------------------------------------------------------------------------------------------------------------------------------
122,745 Total California 98,921,283
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 3.7% (2.3% OF TOTAL INVESTMENTS)
10,000 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AAA 10,386,500
Refunding Bonds, Series 2000A, 5.625%, 11/15/23 - AMBAC
Insured (Alternative Minimum Tax)
5,385 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, No Opt. Call AAA 2,228,528
Series 1997B, 0.000%, 9/01/26 - MBIA Insured
14,400 E-470 Public Highway Authority, Colorado, Senior Revenue Bonds, 9/10 at 65.63 AAA 8,517,888
Series 2000B, 0.000%, 9/01/17 (Pre-refunded 9/01/10) - MBIA Insured
8,740 Larimer County School District R1, Poudre, Colorado, General 12/10 at 100.00 AAA 9,173,417
Obligation Bonds, Series 2000, 5.125%, 12/15/19
(Pre-refunded 12/15/10) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
38,525 Total Colorado 30,306,333
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.6% (0.4% OF TOTAL INVESTMENTS)
4,395 Bridgeport, Connecticut, General Obligation Bonds, Series 2001C, 8/11 at 100.00 AAA 4,695,266
5.375%, 8/15/17 (Pre-refunded 8/15/11) - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
DISTRICT OF COLUMBIA - 0.6% (0.4% OF TOTAL INVESTMENTS)
5,000 Washington Convention Center Authority, District of Columbia, 10/08 at 101.00 AAA 5,129,950
Senior Lien Dedicated Tax Revenue Bonds, Series 1998,
5.250%, 10/01/17 (Pre-refunded 10/01/08) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 0.7% (0.4% OF TOTAL INVESTMENTS)
5,000 Orange County Health Facilities Authority, Florida, Hospital 11/10 at 101.00 A+ (4) 5,473,000
Revenue Bonds, Adventist Health System/Sunbelt Obligated
Group, Series 2000, 6.500%, 11/15/30 (Pre-refunded 11/15/10)
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 1.3% (0.8% OF TOTAL INVESTMENTS)
10,000 Hawaii Department of Transportation, Airport System Revenue 7/10 at 101.00 AAA 10,561,700
Refunding Bonds, Series 2000B, 5.750%, 7/01/21 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
41
NQU
Nuveen Quality Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 15.4% (9.6% OF TOTAL INVESTMENTS)
Chicago Board of Education, Illinois, Unlimited Tax General
Obligation Bonds, Dedicated Revenues, Series 2001C:
$ 1,000 5.500%, 12/01/18 (Pre-refunded 12/01/11) - FSA Insured 12/11 at 100.00 AAA $ 1,075,650
3,690 5.000%, 12/01/19 (Pre-refunded 12/01/11) - FSA Insured 12/11 at 100.00 AAA 3,899,518
3,000 5.000%, 12/01/20 (Pre-refunded 12/01/11) - FSA Insured 12/11 at 100.00 AAA 3,170,340
2,000 5.000%, 12/01/21 (Pre-refunded 12/01/11) - FSA Insured 12/11 at 100.00 AAA 2,113,560
Chicago Board of Education, Illinois, Unlimited Tax General
Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1:
9,400 0.000%, 12/01/14 - FGIC Insured No Opt. Call AAA 7,145,034
4,400 0.000%, 12/01/15 - FGIC Insured No Opt. Call AAA 3,182,212
32,670 Chicago, Illinois, General Obligation Bonds, City Colleges, No Opt. Call AAA 10,358,350
Series 1999, 0.000%, 1/01/32 - FGIC Insured
Chicago, Illinois, General Obligation Bonds, Neighborhoods Alive 21
Program, Series 2000A:
680 6.000%, 1/01/28 (Pre-refunded 7/01/10) - FGIC Insured 7/10 at 101.00 AAA 730,436
4,320 6.000%, 1/01/28 (Pre-refunded 7/01/10) - FGIC Insured 7/10 at 101.00 AAA 4,640,414
6,380 Chicago, Illinois, General Obligation Bonds, Series 2002A, 7/12 at 100.00 AAA 6,675,075
5.000%, 1/01/18 - AMBAC Insured
70 Chicago, Illinois, General Obligation Bonds, Series 2002A, 7/12 at 100.00 AAA 74,404
5.000%, 1/01/18 (Pre-refunded 7/01/12) - AMBAC Insured
5,045 Chicago, Illinois, General Obligation Refunding Bonds, 1/10 at 101.00 AAA 5,282,115
Series 2000D, 5.750%, 1/01/30 - FGIC Insured
13,190 Chicago, Illinois, Revenue Bonds, Midway Airport, Series 1998A, 1/09 at 101.00 AAA 13,255,950
5.125%, 1/01/35 - MBIA Insured (Alternative Minimum Tax)
Chicago, Illinois, Second Lien Wastewater Transmission Revenue
Bonds, Series 2000:
8,000 5.750%, 1/01/25 (Pre-refunded 1/01/10) - MBIA Insured 1/10 at 101.00 AAA 8,459,120
7,750 6.000%, 1/01/30 (Pre-refunded 1/01/10) - MBIA Insured 1/10 at 101.00 AAA 8,234,918
Illinois Educational Facilities Authority, Student Housing Revenue
Bonds, Educational Advancement Foundation Fund, University
Center Project, Series 2002:
3,000 6.625%, 5/01/17 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 3,406,830
1,800 6.000%, 5/01/22 (Pre-refunded 5/01/12) 5/12 at 101.00 Aaa 1,997,694
1,050 Illinois Finance Authority, General Obligation Debt Certificates, 12/14 at 100.00 Aaa 1,098,027
Local Government Program - Kankakee County, Series 2005B,
5.000%, 12/01/20 - AMBAC Insured
15,000 Illinois Finance Authority, Illinois, Northwestern University, 12/15 at 100.00 Aaa 15,365,100
Revenue Bonds, Series 2006, 5.000%, 12/01/42 (UB)
5,000 Illinois Finance Authority, Revenue Bonds, Northwestern Memorial 8/14 at 100.00 AA+ 5,242,850
Hospital, Series 2004A, 5.500%, 8/15/43
10,000 Illinois Health Facilities Authority, Revenue Bonds, Iowa Health 2/10 at 101.00 AAA 10,536,900
System, Series 2000, 5.875%, 2/15/30 - AMBAC Insured (ETM)
5,000 Illinois, General Obligation Bonds, Illinois FIRST Program, 12/10 at 100.00 AAA 5,253,950
Series 2000, 5.450%, 12/01/21 - MBIA Insured
2,270 Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, 6/12 at 101.00 AAA 2,334,218
McCormick Place Expansion Project, Series 2002A,
5.000%, 12/15/28 - MBIA Insured
1,000 Montgomery, Illinois, Lakewood Creek Project Special Assessment 3/16 at 100.00 AA 945,950
Bonds, Series 2007, 4.700%, 3/01/30 - RAAI Insured
------------------------------------------------------------------------------------------------------------------------------------
145,715 Total Illinois 124,478,615
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 1.8% (1.1% OF TOTAL INVESTMENTS)
2,000 Indiana Health Facility Financing Authority, Hospital Revenue 3/14 at 100.00 AAA 2,088,100
Bonds, Deaconess Hospital Inc., Series 2004A, 5.375%, 3/01/34 -
AMBAC Insured
3,240 Indiana Health Facility Financing Authority, Hospital Revenue 7/12 at 100.00 AAA 3,437,122
Bonds, Marion General Hospital, Series 2002, 5.625%, 7/01/19 -
AMBAC Insured
2,400 Indiana Health Facility Financing Authority, Revenue Bonds, 5/15 at 100.00 AAA 2,451,912
Community Hospitals of Indiana, Series 2005A, 5.000%, 5/01/35 -
AMBAC Insured
42
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA (continued)
$ 6,540 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/08 at 101.00 AAA $ 6,513,644
Memorial Health System, Series 1998A, 4.625%, 8/15/28 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
14,180 Total Indiana 14,490,778
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.9% (1.2% OF TOTAL INVESTMENTS)
8,585 Iowa Finance Authority, Hospital Facilities Revenue Bonds, 7/08 at 102.00 AAA 8,847,873
Iowa Health System, Series 1998A, 5.125%, 1/01/28
(Pre-refunded 7/01/08) - MBIA Insured
7,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement 6/15 at 100.00 BBB 6,611,780
Revenue Bonds, Series 2005C, 5.625%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
15,585 Total Iowa 15,459,653
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.8% (0.5% OF TOTAL INVESTMENTS)
4,585 Johnson County Unified School District 232, Kansas, General 9/10 at 100.00 Aaa 4,746,621
Obligation Bonds, Series 2000, 4.750%, 9/01/19
(Pre-refunded 9/01/10) - FSA Insured
1,750 Wamego, Kansas, Pollution Control Revenue Bonds, Kansas Gas 6/14 at 100.00 AAA 1,833,703
and Electric Company, Series 2004, 5.300%, 6/01/31 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
6,335 Total Kansas 6,580,324
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.3% (0.2% OF TOTAL INVESTMENTS)
2,500 Kentucky State Property and Buildings Commission, Revenue 2/12 at 100.00 AAA 2,680,925
Refunding Bonds, Project 74, Series 2002, 5.375%, 2/01/18
(Pre-refunded 2/01/12) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 3.6% (2.2% OF TOTAL INVESTMENTS)
10,000 Louisiana Public Facilities Authority, Hospital Revenue Bonds, No Opt. Call AAA 11,360,200
Franciscan Missionaries of Our Lady Health System,
Series 1998A, 5.750%, 7/01/25 - FSA Insured
5,500 Louisiana Public Facilities Authority, Revenue Bonds, Tulane 7/12 at 100.00 AAA 5,841,165
University, Series 2002A, 5.000%, 7/01/32 (Pre-refunded
7/01/12) - AMBAC Insured
9,000 Louisiana Public Facilities Authority, Revenue Bonds, Ochsner 5/17 at 100.00 A3 9,071,550
Clinic Foundation Project, Series 2007A, 5.500%, 5/15/47
2,600 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 2,600,936
Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
27,100 Total Louisiana 28,873,851
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 8.1% (5.1% OF TOTAL INVESTMENTS)
7,405 Massachusetts Health and Educational Facilities Authority, No Opt. Call AAA 8,641,561
Revenue Bonds, Massachusetts Institute of Technology,
Series 2002K, 5.500%, 7/01/32
6,000 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 6,134,580
Revenue Refunding Bonds, Ogden Haverhill Project,
Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax)
13,500 Massachusetts Turnpike Authority, Metropolitan Highway 1/08 at 101.00 AAA 13,574,250
System Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 -
MBIA Insured
13,500 Massachusetts Turnpike Authority, Metropolitan Highway 1/09 at 101.00 AAA 13,605,165
System Revenue Bonds, Subordinate Series 1999A,
5.000%, 1/01/39 - AMBAC Insured
1,375 Massachusetts Water Pollution Abatement Trust, Revenue Bonds, 8/09 at 101.00 AAA 1,441,963
MWRA Loan Program, Subordinate Series 1999A,
5.750%, 8/01/29 (Pre-refunded 8/01/09)
5,570 Massachusetts Water Pollution Abatement Trust, Revenue Bonds, 8/09 at 101.00 AAA 5,796,309
MWRA Loan Program, Subordinate Series 1999A,
5.750%, 8/01/29
10,000 Massachusetts Water Resources Authority, General Revenue 8/10 at 101.00 AAA 10,692,200
Bonds, Series 2000A, 5.750%, 8/01/39 (Pre-refunded 8/01/10) -
FGIC Insured
5,730 University of Massachusetts Building Authority, Senior Lien 11/10 at 100.00 AAA 6,025,725
Project Revenue Bonds, Series 2000-2, 5.250%, 11/01/20
(Pre-refunded 11/01/10) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
63,080 Total Massachusetts 65,911,753
------------------------------------------------------------------------------------------------------------------------------------
43
NQU
Nuveen Quality Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 2.1% (1.3% OF TOTAL INVESTMENTS)
$ 5,000 Detroit, Michigan, Second Lien Sewerage Disposal System 7/15 at 100.00 AAA $ 5,135,800
Revenue Bonds, Series 2005A, 5.000%, 7/01/35 - MBIA Insured
3,790 Michigan Municipal Bond Authority, General Obligation Bonds, 6/15 at 100.00 AAA 3,971,238
Detroit City School District, Series 2005, 5.000%, 6/01/20 -
FSA Insured
7,425 Michigan State Hospital Finance Authority, Hospital Revenue 11/09 at 101.00 A1 (4) 7,854,017
Bonds, Henry Ford Health System, Series 1999A,
6.000%, 11/15/24 (Pre-refunded 11/15/09)
------------------------------------------------------------------------------------------------------------------------------------
16,215 Total Michigan 16,961,055
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 1.6% (1.0% OF TOTAL INVESTMENTS)
Chaska, Minnesota, Electric Revenue Bonds, Generating Facility
Project, Series 2000A:
1,930 6.000%, 10/01/20 (Pre-refunded 10/01/10) 10/10 at 100.00 A3 (4) 2,066,219
2,685 6.000%, 10/01/25 (Pre-refunded 10/01/10) 10/10 at 100.00 A3 (4) 2,874,507
3,655 Dakota and Washington Counties Housing and Redevelopment No Opt. Call AAA 5,096,569
Authority, Minnesota, GNMA Mortgage-Backed Securities
Program Single Family Residential Mortgage Revenue Bonds,
Series 1988, 8.450%, 9/01/19 (Alternative Minimum Tax) (ETM)
3,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/08 at 101.00 AAA 3,037,260
Minnesota, Airport Revenue Bonds, Series 1998A,
5.000%, 1/01/30 (Pre-refunded 1/01/08) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
11,270 Total Minnesota 13,074,555
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.6% (0.4% OF TOTAL INVESTMENTS)
1,875 Mississippi Hospital Equipment and Facilities Authority, Revenue 9/14 at 100.00 N/R 1,900,313
Bonds, Baptist Memorial Healthcare, Series 2004B-1,
5.000%, 9/01/24
2,500 Mississippi Hospital Equipment and Facilities Authority, Revenue 1/11 at 101.00 Aaa 2,669,750
Bonds, Forrest County General Hospital, Series 2000,
5.500%, 1/01/27 (Pre-refunded 1/01/11) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
4,375 Total Mississippi 4,570,063
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.6% (1.0% OF TOTAL INVESTMENTS)
15,000 Kansas City Municipal Assistance Corporation, Missouri, No Opt. Call AAA 5,753,250
Leasehold Revenue Bonds, Series 2004B-1, 0.000%, 4/15/28 -
AMBAC Insured
2,400 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 2,507,256
Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink
Cross County Extension Project, Series 2002B, 5.000%,
10/01/23 - FSA Insured
15,350 Springfield Public Building Corporation, Missouri, Lease Revenue No Opt. Call AAA 4,976,931
Bonds, Jordan Valley Park Projects, Series 2000A,
0.000%, 6/01/30 - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
32,750 Total Missouri 13,237,437
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 7.3% (4.6% OF TOTAL INVESTMENTS)
Clark County School District, Nevada, General Obligation Bonds,
Series 2002C:
34,470 5.000%, 6/15/20 (Pre-refunded 6/15/12) - MBIA Insured 6/12 at 100.00 AAA 36,619,891
10,380 5.000%, 6/15/22 (Pre-refunded 6/15/12) - MBIA Insured 6/12 at 100.00 AAA 11,027,401
1,275 Nevada, General Obligation Refunding Bonds, Municipal Bond 5/08 at 100.00 AAA 1,282,523
Bank Projects 65 and R-6, Series 1998, 5.000%, 5/15/22 -
MBIA Insured
10,000 Reno, Nevada, Health Facilities, Revenue Bonds, Catholic 7/17 at 100.00 A 10,196,800
Healthcare West, Series 2007A, 5.250%, 7/01/31 (UB)
------------------------------------------------------------------------------------------------------------------------------------
56,125 Total Nevada 59,126,615
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 5.2% (3.2% OF TOTAL INVESTMENTS)
1,000 New Jersey Building Authority, State Building Revenue Bonds, 12/12 at 100.00 AAA 1,069,020
Series 2002A, 5.000%, 12/15/21 (Pre-refunded 12/15/12) -
FSA Insured
2,150 New Jersey Health Care Facilities Financing Authority, Revenue 7/10 at 101.00 BBB- (4) 2,382,243
Bonds, Trinitas Hospital Obligated Group, Series 2000,
7.500%, 7/01/30 (Pre-refunded 7/01/10)
44
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY (continued)
$ 2,025 New Jersey Transportation Trust Fund Authority, Transportation 12/11 at 100.00 AAA $ 2,218,894
System Bonds, Series 2001B, 6.000%, 12/15/19
(Pre-refunded 12/15/11) - MBIA Insured
3,200 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA 3,514,528
System Bonds, Series 2003C, 5.500%, 6/15/22
(Pre-refunded 6/15/13)
New Jersey Transportation Trust Fund Authority, Transportation
System Bonds, Series 2006C:
20,000 0.000%, 12/15/33 - FSA Insured No Opt. Call AAA 5,778,400
20,000 0.000%, 12/15/35 - AMBAC Insured No Opt. Call AAA 5,211,200
20,000 0.000%, 12/15/36 - AMBAC Insured No Opt. Call AAA 4,968,000
Tobacco Settlement Financing Corporation, New Jersey, Tobacco
Settlement Asset-Backed Bonds,
Series 2002:
2,340 5.750%, 6/01/32 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 2,510,352
1,000 6.125%, 6/01/42 (Pre-refunded 6/01/12) 6/12 at 100.00 AAA 1,106,000
Tobacco Settlement Financing Corporation, New Jersey, Tobacco
Settlement Asset-Backed Bonds, Series 2003:
9,420 6.750%, 6/01/39 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 10,905,817
1,850 6.250%, 6/01/43 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 2,095,404
------------------------------------------------------------------------------------------------------------------------------------
82,985 Total New Jersey 41,759,857
------------------------------------------------------------------------------------------------------------------------------------
NEW MEXICO - 0.8% (0.5% OF TOTAL INVESTMENTS)
5,925 New Mexico Hospital Equipment Loan Council, Hospital Revenue 8/11 at 101.00 AA- (4) 6,377,848
Bonds, Presbyterian Healthcare Services, Series 2001A,
5.500%, 8/01/21 (Pre-refunded 8/01/11)
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 17.4% (10.9% OF TOTAL INVESTMENTS)
15 Dormitory Authority of the State of New York, Improvement 2/09 at 100.00 AA- 15,322
Revenue Bonds, Mental Health Services Facilities,
Series 1997A, 5.750%, 2/15/27
65 Dormitory Authority of the State of New York, Improvement 2/10 at 100.00 AAA 67,998
Revenue Bonds, Mental Health Services Facilities, Series 2000B,
6.000%, 2/15/30 - MBIA Insured
Dormitory Authority of the State of New York, Improvement
Revenue Bonds, Mental Health Services Facilities, Series 2000B:
100 6.000%, 2/15/30 (Pre-refunded 2/15/10) - MBIA Insured 2/10 at 100.00 Aaa 105,707
1,005 6.000%, 2/15/30 (Pre-refunded 2/15/10) - MBIA Insured 2/10 at 100.00 AAA 1,062,355
8,830 6.000%, 2/15/30 (Pre-refunded 2/15/10) - MBIA Insured 2/10 at 100.00 AAA 9,333,928
275 Dormitory Authority of the State of New York, Insured Revenue 7/08 at 101.00 AAA 279,565
Bonds, Fordham University, Series 1998, 5.000%, 7/01/28 -
MBIA Insured
2,250 Dormitory Authority of the State of New York, Insured Revenue No Opt. Call AAA 2,444,085
Bonds, Mount Sinai School of Medicine, Series 1994A,
5.150%, 7/01/24 - MBIA Insured
20,000 Erie County Tobacco Asset Securitization Corporation, New York, 7/10 at 101.00 AAA 21,547,999
Senior Tobacco Settlement Asset-Backed Bonds, Series 2000,
6.125%, 7/15/30 (Pre-refunded 7/15/10)
1,320 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AAA 1,260,296
Bonds, Series 2006A, 4.500%, 2/15/47 - MBIA Insured
1,130 Long Island Power Authority, New York, Electric System General 9/11 at 100.00 AAA 1,208,049
Revenue Bonds, Series 2001A, 5.375%, 9/01/25
(Pre-refunded 9/01/11)
15,000 Metropolitan Transportation Authority, New York, Dedicated Tax 4/10 at 100.00 AAA 15,902,400
Fund Bonds, Series 2000A, 6.000%, 4/01/30
(Pre-refunded 4/01/10) - FGIC Insured
90 Metropolitan Transportation Authority, New York, Transportation 11/16 at 100.00 AAA 86,204
Revenue Bonds, Series 2006B, Drivers 1662, 6.055%, 11/15/32 -
FSA Insured (IF)
13,335 Metropolitan Transportation Authority, New York, Transportation 11/16 at 100.00 AAA 13,147,510
Revenue Bonds, Series 2006B, 4.500%, 11/15/32 -
FSA Insured (UB)
12,500 Nassau County Tobacco Settlement Corporation, New York, 7/09 at 101.00 AAA 13,221,750
Tobacco Settlement Asset-Backed Bonds, Series 1999A,
6.400%, 7/15/33 (Pre-refunded 7/15/09)
45
NQU
Nuveen Quality Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
New York City Transitional Finance Authority, New York, Future Tax
Secured Bonds, Fiscal Series 2000B:
$ 8,035 5.750%, 11/15/19 (Pre-refunded 5/15/10) 5/10 at 101.00 AAA $ 8,571,336
2,065 5.750%, 11/15/19 (Pre-refunded 5/15/10) 5/10 at 101.00 AAA 2,202,839
New York City, New York, General Obligation Bonds,
Fiscal Series 2002G:
950 5.000%, 8/01/17 8/12 at 100.00 AA 987,041
6,555 5.750%, 8/01/18 8/12 at 100.00 AA 7,072,779
3,990 New York City, New York, General Obligation Bonds, Fiscal 8/12 at 100.00 Aa3 (4) 4,384,092
Series 2002G, 5.750%, 8/01/18 (Pre-refunded 8/01/12)
5,000 New York City, New York, General Obligation Bonds, Fiscal 8/12 at 100.00 AA 5,444,700
Series 2003A, 5.750%, 8/01/16
New York State Environmental Facilities Corporation, State Clean
Water and Drinking Water Revolving Funds Revenue Bonds, New York
City Municipal Water Finance Authority Projects, Second
Resolution Bonds, Series 2001C:
6,035 5.000%, 6/15/20 6/11 at 100.00 AAA 6,291,125
6,575 5.000%, 6/15/22 6/11 at 100.00 AAA 6,828,072
2,685 Penfield-Crown Oak Housing Development Corporation, New York, 2/08 at 100.00 AAA 2,705,997
FHA-Insured Section 8 Assisted Multifamily Mortgage Revenue
Refunding Bonds, Crown Oak Estates, Series 1991A,
7.350%, 8/01/23
13,620 Port Authority of New York and New Jersey, Consolidated 11/12 at 101.00 AAA 14,448,368
Revenue Bonds, One Hundred Twenty-Eighth Series 2002,
5.000%, 11/01/20 - FSA Insured
2,250 United Nations Development Corporation, New York, Senior Lien 1/08 at 100.00 A3 2,254,545
Revenue Bonds, Series 2004A, 5.250%, 7/01/21
------------------------------------------------------------------------------------------------------------------------------------
133,675 Total New York 140,874,062
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 3.1% (1.9% OF TOTAL INVESTMENTS)
4,000 North Carolina Medical Care Commission, Health System Revenue 10/17 at 100.00 AA 3,796,440
Bonds, Mission St. Joseph's Health System, Series 2007,
4.500%, 10/01/31
665 North Carolina Medical Care Commission, Hospital Revenue 12/08 at 101.00 AAA 666,962
Bonds, Pitt County Memorial Hospital, Series 1998A,
4.750%, 12/01/28 - MBIA Insured
12,405 North Carolina Medical Care Commission, Hospital Revenue 12/08 at 101.00 AAA 12,700,239
Bonds, Pitt County Memorial Hospital, Series 1998A,
4.750%, 12/01/28 (Pre-refunded 12/01/08) - MBIA Insured
7,500 North Carolina Municipal Power Agency 1, Catawba Electric 1/13 at 100.00 AAA 7,963,875
Revenue Bonds, Series 2003A, 5.250%, 1/01/19 - MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
24,570 Total North Carolina 25,127,516
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 4.3% (2.7% OF TOTAL INVESTMENTS)
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien,
Series 2007A-2:
180 5.125%, 6/01/24 6/17 at 100.00 BBB 173,754
1,800 5.875%, 6/01/30 6/17 at 100.00 BBB 1,777,734
1,740 5.750%, 6/01/34 6/17 at 100.00 BBB 1,679,100
3,930 5.875%, 6/01/47 6/17 at 100.00 BBB 3,815,362
Cincinnati City School District, Hamilton County, Ohio, General
Obligation Bonds, Series 2002:
2,165 5.250%, 6/01/19 - FSA Insured 12/12 at 100.00 AAA 2,307,262
2,600 5.250%, 6/01/21 - FSA Insured 12/12 at 100.00 AAA 2,770,846
2,000 5.000%, 12/01/22 - FSA Insured 12/12 at 100.00 AAA 2,091,100
10,000 Columbus City School District, Franklin County, Ohio, General 12/16 at 100.00 AAA 9,460,600
Obligation Bonds, Series 2006, 4.250%, 12/01/32 -
FSA Insured (UB)
10,350 Ohio Water Development Authority, Solid Waste Disposal Revenue 9/08 at 102.00 N/R 10,437,458
Bonds, Bay Shore Power, Series 1998A, 5.875%, 9/01/20
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
34,765 Total Ohio 34,513,216
------------------------------------------------------------------------------------------------------------------------------------
46
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 7.0% (4.4% OF TOTAL INVESTMENTS)
$ 2,000 Oklahoma Municipal Power Authority, Power Supply System 1/17 at 100.00 AAA $ 1,905,220
Revenue Bonds, Series 2007, 4.500%, 1/01/47 - FGIC Insured
17,510 Pottawatomie County Home Finance Authority, Oklahoma, No Opt. Call AAA 19,764,413
Single Family Mortgage Revenue Bonds, Series 1991A,
8.625%, 7/01/10 (ETM)
11,750 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B 11,755,993
Bonds, American Airlines Inc., Series 2000B, 6.000%, 6/01/35
(Mandatory put 12/01/08) (Alternative Minimum Tax)
23,005 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B 22,933,453
Bonds, American Airlines Inc., Series 2001B, 5.650%, 12/01/35
(Mandatory put 12/01/08) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
54,265 Total Oklahoma 56,359,079
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 0.4% (0.2% OF TOTAL INVESTMENTS)
3,000 Deschutes County School District 1, Bend-La Pine, Oregon, 6/11 at 100.00 Aaa 3,202,860
General Obligation Bonds, Series 2001A, 5.500%, 6/15/18
(Pre-refunded 6/15/11) - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 3.8% (2.4% OF TOTAL INVESTMENTS)
3,985 Carbon County Industrial Development Authority, Pennsylvania, No Opt. Call BBB- 4,137,347
Resource Recovery Revenue Refunding Bonds, Panther Creek
Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative
Minimum Tax)
2,070 Falls Township Hospital Authority, Pennsylvania, FHA-Insured 2/08 at 100.00 AAA 2,082,524
Revenue Refunding Bonds, Delaware Valley Medical Center,
Series 1992, 7.000%, 8/01/22
1,500 Pennsylvania Housing Finance Agency, Single Family Mortgage 10/16 at 100.00 AA+ 1,410,240
Revenue Bonds, Series 96A, 4.650%, 10/01/31 (Alternative
Minimum Tax)
2,600 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/14 at 100.00 AAA 2,826,200
Series 2004A, 5.500%, 12/01/31 - AMBAC Insured
7,800 Philadelphia Gas Works, Pennsylvania, Revenue Bonds, General 8/13 at 100.00 AAA 7,973,316
Ordinance, Fourth Series 1998, 5.000%, 8/01/32 - FSA Insured
Philadelphia School District, Pennsylvania, General Obligation
Bonds, Series 2002B:
6,000 5.625%, 8/01/19 (Pre-refunded 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 6,546,300
5,500 5.625%, 8/01/20 (Pre-refunded 8/01/12) - FGIC Insured 8/12 at 100.00 AAA 6,000,775
------------------------------------------------------------------------------------------------------------------------------------
29,455 Total Pennsylvania 30,976,702
------------------------------------------------------------------------------------------------------------------------------------
PUERTO RICO - 2.3% (1.4% OF TOTAL INVESTMENTS)
5,000 Puerto Rico Infrastructure Financing Authority, Special Tax No Opt. Call AAA 918,500
Revenue Bonds, Series 2005A, 0.000%, 7/01/42 - FGIC Insured
5,000 Puerto Rico Municipal Finance Agency, Series 2002A, 8/12 at 100.00 AAA 5,211,850
5.000%, 8/01/27 - FSA Insured
1,500 Puerto Rico Public Buildings Authority, Guaranteed Government 7/12 at 100.00 BBB- 1,545,015
Facilities Revenue Refunding Bonds, Series 2002D,
5.125%, 7/01/20
5,000 Puerto Rico Sales Tax Financing Corporation, Sales Tax Revenue 8/17 at 100.00 A1 5,513,600
Bonds, Series 2007A, Lehman Municipal Trust Receipts FC8,
8.252%, 8/01/57 (IF)
1,500 Puerto Rico, General Obligation and Public Improvement Bonds, No Opt. Call BBB- 1,639,305
Series 2001A, 5.500%, 7/01/29
3,840 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 3,839,885
Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33
------------------------------------------------------------------------------------------------------------------------------------
21,840 Total Puerto Rico 18,668,155
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 9.2% (5.8% OF TOTAL INVESTMENTS)
24,725 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- (4) 27,161,401
Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/22
(Pre-refunded 12/01/12)
Horry County School District, South Carolina, General Obligation
Bonds, Series 2001A:
5,840 5.000%, 3/01/20 3/12 at 100.00 Aa1 6,101,807
5,140 5.000%, 3/01/21 3/12 at 100.00 Aa1 5,370,426
47
NQU
Nuveen Quality Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA (continued)
Medical University Hospital Authority, South Carolina, FHA-Insured
Mortgage Revenue Bonds, Series 2004A:
$ 5,240 5.250%, 8/15/20 - MBIA Insured 8/14 at 100.00 AAA $ 5,553,771
3,000 5.250%, 2/15/24 - MBIA Insured 8/14 at 100.00 AAA 3,159,750
13,615 South Carolina Transportation Infrastructure Bank, Junior Lien 10/11 at 100.00 Aaa 14,420,327
Revenue Bonds, Series 2001B, 5.125%, 10/01/21
(Pre-refunded 10/01/11) - AMBAC Insured
12,600 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 12,958,344
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.375%, 5/15/28
------------------------------------------------------------------------------------------------------------------------------------
70,160 Total South Carolina 74,725,826
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.3% (0.8% OF TOTAL INVESTMENTS)
3,000 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Ba2 3,062,040
Tennessee, Hospital Revenue Bonds, Baptist Health System of
East Tennessee Inc., Series 2002, 6.375%, 4/15/22
7,415 Memphis, Tennessee, General Improvement Bonds, Series 2002, 11/10 at 101.00 A1 (4) 7,810,071
5.000%, 11/01/20 (Pre-refunded 11/01/10)
------------------------------------------------------------------------------------------------------------------------------------
10,415 Total Tennessee 10,872,111
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 18.1% (11.4% OF TOTAL INVESTMENTS)
535 Alamo Community College District, Bexar County, Texas, 11/11 at 100.00 AAA 570,085
Combined Fee Revenue Refunding Bonds, Series 2001,
5.375%, 11/01/16 - FSA Insured
465 Alamo Community College District, Bexar County, Texas, 11/11 at 100.00 Aaa 497,373
Combined Fee Revenue Refunding Bonds, Series 2001,
5.375%, 11/01/16 (Pre-refunded 11/01/11) - FSA Insured
6,500 Bell County Health Facilities Development Corporation, Texas, 11/08 at 101.00 AAA 6,679,985
Retirement Facility Revenue Bonds, Buckner Retirement
Services Inc. Obligated Group, Series 1998, 5.250%, 11/15/19
(Pre-refunded 11/15/08)
11,255 Brazos River Authority, Texas, Pollution Control Revenue Refunding No Opt. Call Caa1 11,121,741
Bonds, TXU Electric Company, Series 2001C, 5.750%, 5/01/36
(Mandatory put 11/01/11) (Alternative Minimum Tax)
5,500 Central Texas Regional Mobility Authority, Travis and Williamson 1/15 at 100.00 AAA 5,580,685
Counties, Toll Road Revenue Bonds, Series 2005,
5.000%, 1/01/45 - FGIC Insured
5,000 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 5,249,500
Refunding and Improvement Bonds, Series 2001A,
5.625%, 11/01/21 - FGIC Insured (Alternative Minimum Tax)
2,500 Harris County Health Facilities Development Corporation, Texas, 11/13 at 100.00 AAA 2,559,425
Thermal Utility Revenue Bonds, TECO Project, Series 2003,
5.000%, 11/15/30 - MBIA Insured
2,700 Harris County-Houston Sports Authority, Texas, Senior Lien 11/11 at 100.00 AAA 2,822,634
Revenue Bonds, Series 2001G, 5.250%, 11/15/30 -
MBIA Insured
22,500 Houston, Texas, Junior Lien Water and Sewerage System 12/10 at 100.00 AAA 23,684,399
Revenue Refunding Bonds, Series 2000B, 5.250%, 12/01/30
(Pre-refunded 12/01/10) - FGIC Insured
6,000 Leander Independent School District, Williamson and Travis 8/14 at 33.33 AAA 1,419,660
Counties, Texas, General Obligation Bonds, Series 2006,
0.000%, 8/15/34
Lubbock Health Facilities Development Corporation, Texas,
Revenue Bonds, St. Joseph Health System, Series 1998:
4,900 5.250%, 7/01/15 7/08 at 101.00 AA- 4,996,481
8,495 5.250%, 7/01/16 7/08 at 101.00 AA- 8,646,126
17,655 Matagorda County Navigation District 1, Texas, Revenue 11/08 at 102.00 AAA 18,176,529
Refunding Bonds, Houston Industries Inc., Series 1998B,
5.150%, 11/01/29 - MBIA Insured
7,650 Port of Corpus Christi Authority, Nueces County, Texas, Revenue 11/07 at 100.00 BBB 7,665,071
Refunding Bonds, Union Pacific Corporation, Series 1992,
5.350%, 11/01/10
2,000 Sam Rayburn Municipal Power Agency, Texas, Power Supply 10/12 at 100.00 AA 2,124,020
System Revenue Refunding Bonds, Series 2002A,
5.750%, 10/01/21 - RAAI Insured
14,680 San Antonio Independent School District, Bexar County, Texas, 8/09 at 100.00 AAA 15,279,091
General Obligation Bonds, Series 1999, 5.800%, 8/15/29
(Pre-refunded 8/15/09)
48
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 11,300 San Antonio, Texas, Electric and Gas System Revenue Refunding No Opt. Call AAA $ 12,104,447
Bonds, New Series 1992, 5.000%, 2/01/17 (ETM)
3,750 Spring Branch Independent School District, Harris County, 2/11 at 100.00 AAA 3,936,038
Texas, Limited Tax Schoolhouse and Refunding Bonds,
Series 2001, 5.125%, 2/01/23 (Pre-refunded 2/01/11)
2,920 Tarrant County Cultural and Education Facilities Financing 11/17 at 100.00 AA- 2,824,078
Corporation, Texas, Revenue Bonds, Tarrant County Health
Resources, Series 2007B, Residuals 1831, 7.506%, 11/15/47 (IF)
White Settlement Independent School District, Tarrant County,
Texas, General Obligation Bonds, Series 2006:
9,110 0.000%, 8/15/38 8/15 at 30.30 AAA 1,851,699
9,110 0.000%, 8/15/39 8/15 at 28.63 AAA 1,751,124
6,610 0.000%, 8/15/42 8/15 at 24.42 AAA 1,082,189
7,110 0.000%, 8/15/43 8/15 at 23.11 AAA 1,100,984
5,000 Wichita Falls, Wichita County, Texas, Priority Lien Water and 8/11 at 100.00 AAA 5,262,050
Sewerage System Revenue Bonds, Series 2001,
5.000%, 8/01/22 (Pre-refunded 8/01/11) - AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
173,245 Total Texas 146,985,414
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 1.6% (1.0% OF TOTAL INVESTMENTS)
5,800 Carbon County, Utah, Solid Waste Disposal Revenue Refunding 2/08 at 100.00 BB- 5,841,296
Bonds, Laidlaw/ECDC Project, Guaranteed by Allied Waste
Industries, Series 1995, 7.500%, 2/01/10 (Alternative
Minimum Tax)
7,155 Utah Associated Municipal Power Systems, Revenue Bonds, 4/13 at 100.00 AAA 7,432,328
Payson Power Project, Series 2003A, 5.000%, 4/01/25 -
FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
12,955 Total Utah 13,273,624
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 2.1% (1.3% OF TOTAL INVESTMENTS)
4,000 Norfolk Airport Authority, Virginia, Airport Revenue Refunding 7/11 at 100.00 AAA 4,038,960
Bonds, Series 2001B, 5.125%, 7/01/31 - FGIC Insured
(Alternative Minimum Tax)
11,040 Suffolk Redevelopment and Housing Authority, Virginia, No Opt. Call Aaa 11,490,322
FNMA Multifamily Housing Revenue Refunding Bonds,
Windsor at Potomac Vista L.P. Project, Series 2001,
4.850%, 7/01/31 (Mandatory put 7/01/11)
665 Virginia Housing Development Authority, Rental Housing Bonds, 5/09 at 101.00 AA+ 677,588
Series 1999F, 5.000%, 5/01/15 (Alternative Minimum Tax)
Virginia Resources Authority, Water System Revenue Refunding
Bonds, Series 2002:
500 5.000%, 4/01/18 4/12 at 102.00 AA 530,510
500 5.000%, 4/01/19 4/12 at 102.00 AA 529,045
------------------------------------------------------------------------------------------------------------------------------------
16,705 Total Virginia 17,266,425
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 10.4% (6.5% OF TOTAL INVESTMENTS)
6,750 Energy Northwest, Washington, Electric Revenue Refunding 7/12 at 100.00 AAA 7,182,810
Bonds, Columbia Generating Station - Nuclear Project 2,
Series 2002B, 5.350%, 7/01/18 - FSA Insured
2,500 Energy Northwest, Washington, Electric Revenue Refunding 7/12 at 100.00 AAA 2,709,875
Bonds, Columbia Generating Station - Nuclear Project 2,
Series 2002C, 5.750%, 7/01/17 - MBIA Insured
6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 8/10 at 100.00 AAA 7,197,768
5.625%, 2/01/24 - MBIA Insured (Alternative Minimum Tax)
13,400 Seattle, Washington, Municipal Light and Power Revenue Bonds, 12/10 at 100.00 Aa3 13,934,660
Series 2000, 5.400%, 12/01/25
9,440 Tacoma, Washington, Electric System Revenue Refunding Bonds, 1/11 at 101.00 AAA 10,156,968
Series 2001A, 5.750%, 1/01/18 (Pre-refunded 1/01/11) -
FSA Insured
5,000 Washington State Healthcare Facilities Authority, Revenue Bonds, 10/16 at 100.00 AAA 4,894,250
Providence Health Care Services, Series 2006A,
4.625%, 10/01/34 - FGIC Insured
49
NQU
Nuveen Quality Income Municipal Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON (continued)
$ 3,290 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB $ 3,453,381
Settlement Asset-Backed Revenue Bonds, Series 2002,
6.500%, 6/01/26
18,145 Washington, General Obligation Bonds, Series 2001-02A, 7/11 at 100.00 AAA 18,769,732
5.000%, 7/01/23 - FSA Insured
Washington, Motor Vehicle Fuel Tax General Obligation Bonds,
Series 2002C:
7,000 5.000%, 1/01/21 - FSA Insured 1/12 at 100.00 AAA 7,302,680
7,960 5.000%, 1/01/22 - FSA Insured 1/12 at 100.00 AAA 8,259,216
------------------------------------------------------------------------------------------------------------------------------------
80,435 Total Washington 83,861,340
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 1.4% (1.0% OF TOTAL INVESTMENTS)
180 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 186,147
Tobacco Settlement Asset-Backed Bonds, Series 2002,
6.125%, 6/01/27
7,545 La Crosse, Wisconsin, Pollution Control Revenue Refunding 12/08 at 102.00 AAA 7,835,483
Bonds, Dairyland Power Cooperative, Series 1997A,
5.450%, 9/01/14 - AMBAC Insured
3,000 Wisconsin Health and Educational Facilities Authority, Revenue 5/14 at 100.00 BBB+ 3,087,539
Bonds, Fort Healthcare Inc., Series 2004, 5.750%, 5/01/29
------------------------------------------------------------------------------------------------------------------------------------
10,725 Total Wisconsin 11,109,169
------------------------------------------------------------------------------------------------------------------------------------
$ 1,418,570 Total Investments (cost $1,225,967,368) - 159.5% 1,292,372,725
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (6.0)% (48,875,000)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.3% 18,588,283
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (55.8)% (452,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 810,086,008
====================================================================================================================
The Fund may 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. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(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 higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's 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.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
50
NPF
Nuveen Premier Municipal Income Fund, Inc.
Portfolio of INVESTMENTS
October 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 1.3% (0.7% OF TOTAL INVESTMENTS)
$ 1,000 Alabama Special Care Facilities Financing Authority, Revenue 11/16 at 100.00 AA $ 1,004,380
Bonds, Ascension Health, Series 2006C-2, 5.000%, 11/15/39
Birmingham Special Care Facilities Financing Authority, Alabama,
Revenue Bonds, Baptist Health System Inc., Series 2005A:
1,200 5.250%, 11/15/20 11/15 at 100.00 Baa1 1,230,408
400 5.000%, 11/15/30 11/15 at 100.00 Baa1 389,584
1,000 Montgomery BMC Special Care Facilities Financing Authority, 11/14 at 100.00 A3 (4) 1,094,290
Alabama, Revenue Bonds, Baptist Medical Center, Series 2004C,
5.250%, 11/15/29 (Pre-refunded 11/15/14)
------------------------------------------------------------------------------------------------------------------------------------
3,600 Total Alabama 3,718,662
------------------------------------------------------------------------------------------------------------------------------------
ALASKA - 1.0% (0.6% OF TOTAL INVESTMENTS)
2,000 Alaska Housing Finance Corporation, General Mortgage Revenue 6/09 at 101.00 AAA 2,056,320
Bonds, Series 1999A, 6.000%, 6/01/49 - MBIA Insured
1,000 Northern Tobacco Securitization Corporation, Alaska, Tobacco 6/14 at 100.00 Baa3 850,970
Settlement Asset-Backed Bonds, Series 2006A, 5.000%, 6/01/46
------------------------------------------------------------------------------------------------------------------------------------
3,000 Total Alaska 2,907,290
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 6.9% (4.1% OF TOTAL INVESTMENTS)
Glendale Industrial Development Authority, Arizona, Revenue
Bonds, John C. Lincoln Health Network, Series 2005B:
100 5.250%, 12/01/24 12/15 at 100.00 BBB 101,475
135 5.250%, 12/01/25 12/15 at 100.00 BBB 136,723
7,000 Phoenix, Arizona, Civic Improvement Revenue Bonds, Civic Plaza, No Opt. Call AAA 5,945,380
Series 2005B, 0.000%, 7/01/39 - FGIC Insured
7,500 Salt River Project Agricultural Improvement and Power District, 1/13 at 100.00 Aa1 7,787,625
Arizona, Electric System Revenue Bonds, Series 2002B,
5.000%, 1/01/25
6,000 Salt River Project Agricultural Improvement and Power District, 1/12 at 101.00 Aa1 6,419,280
Arizona, Electric System Revenue Refunding Bonds,
Series 2002A, 5.250%, 1/01/15
------------------------------------------------------------------------------------------------------------------------------------
20,735 Total Arizona 20,390,483
------------------------------------------------------------------------------------------------------------------------------------
ARKANSAS - 1.7% (1.0% OF TOTAL INVESTMENTS)
4,655 Arkansas Development Finance Authority, State Facility Revenue 11/15 at 100.00 AAA 4,840,036
Bonds, Department of Correction Special Needs Unit Project,
Series 2005B, 5.000%, 11/01/25 - FSA Insured
17 Stuttgart Public Facilities Board, Arkansas, Single Family 3/08 at 100.00 Aaa 17,535
Mortgage Revenue Refunding Bonds, Series 1993A,
7.900%, 9/01/11
------------------------------------------------------------------------------------------------------------------------------------
4,672 Total Arkansas 4,857,571
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 22.3% (13.2% OF TOTAL INVESTMENTS)
3,335 Anaheim Public Finance Authority, California, Public Improvement 9/17 at 100.00 AAA 2,736,368
Project Lease Revenue Bonds, UBS Residual Series 07 1011-1013,
5.869%, 3/01/37 - FGIC Insured (IF)
5,690 California Department of Veterans Affairs, Home Purchase 6/12 at 101.00 AAA 6,014,102
Revenue Bonds, Series 2002A, 5.300%, 12/01/21 -
AMBAC Insured
1,800 California Educational Facilities Authority, Revenue Bonds, 10/15 at 100.00 AA+ 1,827,828
University of Southern California, Series 2005, 4.750%, 10/01/28
51
NPF
Nuveen Premier Municipal Income Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 1,975 California Health Facilities Financing Authority, Revenue Bonds, No Opt. Call A $ 2,062,572
Catholic Healthcare West, Series 2004I, 4.950%, 7/01/26
(Mandatory put 7/01/14)
2,500 California Health Facilities Financing Authority, Revenue Bonds, 11/15 at 100.00 A2 2,530,475
Cedars-Sinai Medical Center, Series 2005, 5.000%, 11/15/27
8,000 California Infrastructure Economic Development Bank, First Lien No Opt. Call AAA 8,721,280
Revenue Bonds, San Francisco Bay Area Toll Bridge,
Series 2003A, 5.000%, 7/01/33 (Pre-refunded 1/01/28) -
AMBAC Insured (ETM) (UB)
500 California Statewide Community Development Authority, Revenue 7/15 at 100.00 BBB+ 475,960
Bonds, Daughters of Charity Health System, Series 2005A,
5.000%, 7/01/39
1,600 California Statewide Community Development Authority, 8/16 at 100.00 A+ 1,636,480
Revenue Bonds, Kaiser Permanente System, Series 2001C,
5.250%, 8/01/31
California, General Obligation Bonds, Series 2004:
4,000 5.000%, 2/01/23 2/14 at 100.00 A+ 4,170,680
4,900 5.000%, 6/01/23 - AMBAC Insured 12/14 at 100.00 AAA 5,127,164
1,000 Chula Vista, California, Industrial Development Revenue Bonds, 6/14 at 102.00 A2 1,036,510
San Diego Gas and Electric Company, Series 1996A,
5.300%, 7/01/21
28,000 Foothill/Eastern Transportation Corridor Agency, California, No Opt. Call AAA 19,318,595
Toll Road Revenue Bonds, Series 1995A, 0.000%, 1/01/17 (ETM)
3,500 Golden State Tobacco Securitization Corporation, California, 6/17 at 100.00 BBB 3,078,880
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-1, 5.125%, 6/01/47
450 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 521,226
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39 (Pre-refunded 6/01/13)
6,005 Los Angeles Unified School District, California, General Obligation 7/15 at 100.00 AAA 6,320,803
Bonds, Series 2005E, 5.000%, 7/01/22 - AMBAC Insured
San Diego County, California, Certificates of Participation,
Burnham Institute, Series 2006:
100 5.000%, 9/01/21 9/15 at 102.00 Baa3 100,363
110 5.000%, 9/01/23 9/15 at 102.00 Baa3 109,694
------------------------------------------------------------------------------------------------------------------------------------
73,465 Total California 65,788,980
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 6.8% (4.1% OF TOTAL INVESTMENTS)
1,000 Colorado Health Facilities Authority, Revenue Bonds, 6/16 at 100.00 A- 990,190
Evangelical Lutheran Good Samaritan Society, Series 2005,
5.000%, 6/01/29
1,150 Colorado Health Facilities Authority, Revenue Bonds, Parkview 9/14 at 100.00 A3 1,157,441
Medical Center, Series 2004, 5.000%, 9/01/25
400 Colorado Health Facilities Authority, Revenue Bonds, Poudre 3/15 at 100.00 BBB+ 393,824
Valley Health Care, Series 2005F, 5.000%, 3/01/25
1,000 Colorado Health Facilities Authority, Revenue Bonds, Poudre 12/09 at 101.00 Aaa 1,054,820
Valley Healthcare Inc., Series 1999A, 5.750%, 12/01/23
(Pre-refunded 12/01/09) - FSA Insured
750 Colorado Health Facilities Authority, Revenue Bonds, Vail Valley 1/15 at 100.00 BBB+ 758,767
Medical Center, Series 2004, 5.000%, 1/15/17
Denver City and County, Colorado, Airport Revenue Bonds,
Series 2006:
3,680 5.000%, 11/15/23 - FGIC Insured (IF) 11/16 at 100.00 AAA 4,184,712
2,270 5.000%, 11/15/24 - FGIC Insured (IF) 11/16 at 100.00 AAA 2,581,331
8,930 5.000%, 11/15/25 - FGIC Insured (UB) 11/16 at 100.00 AAA 9,329,260
------------------------------------------------------------------------------------------------------------------------------------
19,180 Total Colorado 20,450,345
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.7% (0.4% OF TOTAL INVESTMENTS)
2,000 Connecticut Development Authority, Pollution Control Revenue 10/08 at 102.00 Baa1 2,055,460
Refunding Bonds, Connecticut Light and Power Company,
Series 1993A, 5.850%, 9/01/28
------------------------------------------------------------------------------------------------------------------------------------
52
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 3.2% (1.9% OF TOTAL INVESTMENTS)
$ 4,000 Dade County, Florida, Aviation Revenue Bonds, Series 1996A, 4/08 at 101.00 AAA $ 4,045,040
5.750%, 10/01/18 - MBIA Insured (Alternative Minimum Tax)
1,700 Hillsborough County Industrial Development Authority, Florida, 4/10 at 101.00 N/R 1,781,821
Exempt Facilities Remarketed Revenue Bonds, National Gypsum
Company, Apollo Beach Project, Series 2000B, 7.125%, 4/01/30
(Alternative Minimum Tax)
2,500 Hillsborough County Industrial Development Authority, Florida, 10/12 at 100.00 Baa2 2,573,750
Pollution Control Revenue Bonds, Tampa Electric Company
Project, Series 2002, 5.100%, 10/01/13
1,000 South Miami Health Facilities Authority, Florida, Hospital 8/17 at 100.00 AA- 994,210
Revenue, Baptist Health System Obligation Group, Series 2007,
5.000%, 8/15/42
------------------------------------------------------------------------------------------------------------------------------------
9,200 Total Florida 9,394,821
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 4.3% (2.5% OF TOTAL INVESTMENTS)
8,000 George L. Smith II World Congress Center Authority, Atlanta, 7/10 at 101.00 AAA 8,331,920
Georgia, Revenue Refunding Bonds, Domed Stadium Project,
Series 2000, 5.500%, 7/01/20 - MBIA Insured
(Alternative Minimum Tax)
4,105 Municipal Electric Authority of Georgia, Combustion Turbine 11/13 at 100.00 AAA 4,394,361
Revenue Bonds, Series 2003A, 5.125%, 11/01/17 -
MBIA Insured
------------------------------------------------------------------------------------------------------------------------------------
12,105 Total Georgia 12,726,281
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.8% (0.5% OF TOTAL INVESTMENTS)
2,250 Hawaii Department of Budget and Finance, Special Purpose 1/09 at 101.00 AAA 2,325,960
Revenue Bonds, Hawaiian Electric Company Inc., Series 1999D,
6.150%, 1/01/20 - AMBAC Insured (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
IDAHO - 0.2% (0.1% OF TOTAL INVESTMENTS)
95 Idaho Housing and Finance Association, Single Family Mortgage 1/08 at 101.00 Aa1 97,115
Bonds, Series 1996E, 6.350%, 7/01/14 (Alternative Minimum Tax)
500 Madison County, Idaho, Hospital Revenue Certificates of 9/16 at 100.00 BBB- 496,710
Participation, Madison Memorial Hospital, Series 2006,
5.250%, 9/01/26
------------------------------------------------------------------------------------------------------------------------------------
595 Total Idaho 593,825
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 13.4% (7.9% OF TOTAL INVESTMENTS)
8,300 Chicago Greater Metropolitan Area Sanitary District, Illinois, 12/16 at 100.00 AAA 9,082,109
General Obligation Bonds, Series 2006, 5.000%, 12/01/35 (UB)
725 Chicago Public Building Commission, Illinois, General Obligation No Opt. Call AAA 804,786
Lease Certificates, Chicago Board of Education, Series 1990B,
7.000%, 1/01/15 - MBIA Insured (ETM)
8,670 Chicago, Illinois, General Obligation Bonds, City Colleges, No Opt. Call AAA 4,136,630
Series 1999, 0.000%, 1/01/24 - FGIC Insured
8,500 Chicago, Illinois, Senior Lien Water Revenue Bonds, No Opt. Call AAA 10,019,459
Series 2001, 5.750%, 11/01/30 - AMBAC Insured (5)
200 Illinois Finance Authority, Revenue Bonds, Proctor Hospital, 1/16 at 100.00 BBB- 195,962
Series 2006, 5.125%, 1/01/25
1,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 1,007,750
Medical Center, Series 2002, 5.500%, 5/15/32
1,500 Illinois, General Obligation Bonds, Illinois FIRST Program, 2/12 at 100.00 AAA 1,600,935
Series 2002, 5.500%, 2/01/17 - FGIC Insured
Lombard Public Facilities Corporation, Illinois, Second Tier
Conference Center and Hotel Revenue Bonds, Series 2005B:
850 5.250%, 1/01/25 1/16 at 100.00 AA- 875,245
1,750 5.250%, 1/01/30 1/16 at 100.00 AA- 1,781,850
Metropolitan Pier and Exposition Authority, Illinois, Revenue
Refunding Bonds, McCormick Place Expansion Project,
Series 1996A:
10,575 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 5,087,844
10,775 0.000%, 12/15/24 - MBIA Insured No Opt. Call AAA 4,920,943
------------------------------------------------------------------------------------------------------------------------------------
52,845 Total Illinois 39,513,513
------------------------------------------------------------------------------------------------------------------------------------
53
NPF
Nuveen Premier Municipal Income Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 3.3% (1.9% OF TOTAL INVESTMENTS)
$ 2,275 Anderson School Building Corporation, Madison County, Indiana, 1/14 at 100.00 AAA $ 2,511,350
First Mortgage Bonds, Series 2003, 5.500%, 7/15/23
(Pre-refunded 1/15/14) - FSA Insured
6,180 Crown Point Multi-School Building Corporation, Indiana, No Opt. Call AAA 3,076,651
First Mortgage Bonds, Crown Point Community School
Corporation, Series 2000, 0.000%, 1/15/23 - MBIA Insured
1,250 Portage, Indiana, Revenue Bonds, Series 2006, 5.000%, 7/15/23 7/16 at 100.00 BBB+ 1,243,850
1,000 St. Joseph County Hospital Authority, Indiana, Revenue Bonds, 2/15 at 100.00 BBB 1,001,420
Madison Center Inc., Series 2005, 5.250%, 2/15/28
1,760 St. Joseph County PHM Elementary/Middle School Building No Opt. Call A 1,791,715
Corporation, Indiana, First Mortgage Bonds, Series 1994,
6.300%, 1/15/09
------------------------------------------------------------------------------------------------------------------------------------
12,465 Total Indiana 9,624,986
------------------------------------------------------------------------------------------------------------------------------------
IOWA - 1.3% (0.7% OF TOTAL INVESTMENTS)
4,000 Iowa Tobacco Settlement Authority, Asset Backed Settlement 6/15 at 100.00 BBB 3,712,320
Revenue Bonds, Series 2005C, 5.500%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
KENTUCKY - 0.2% (0.1% OF TOTAL INVESTMENTS)
510 Louisville and Jefferson County Metropolitan Government, 10/16 at 100.00 N/R 498,347
Kentucky, Industrial Building Revenue Bonds, Sisters of Mercy
of the Americas, Series 2006, 5.000%, 10/01/35
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 6.0% (3.6% OF TOTAL INVESTMENTS)
1,310 Louisiana Housing Finance Agency, GNMA Collateralized 3/08 at 101.00 AAA 1,325,641
Mortgage Revenue Bonds, St. Dominic Assisted Care Facility,
Series 1995, 6.850%, 9/01/25
Louisiana State, Gasoline and Fuels Tax Revenue Bonds,
Series 2006:
825 4.750%, 5/01/39 - FSA Insured (UB) 5/16 at 100.00 AAA 826,436
8,880 4.500%, 5/01/41 - FGIC Insured (UB) 5/16 at 100.00 AAA 8,531,194
5 Louisiana State, Gasoline Tax Revenue Bonds, Series 2006, 5/16 at 100.00 AAA 4,411
Residuals 660-3, 5.939%, 5/01/41 - FGIC Insured (IF)
1,500 Louisiana Public Facilities Authority, Revenue Bonds, Ochsner 5/17 at 100.00 A3 1,511,925
Clinic Foundation Project, Series 2007A, 5.500%, 5/15/47
3,950 Morehouse Parish, Louisiana, Pollution Control Revenue Bonds, No Opt. Call BBB 4,198,139
International Paper Company, Series 2002A, 5.700%, 4/01/14
1,375 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 1,375,495
Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
17,845 Total Louisiana 17,773,241
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 1.4% (0.8% OF TOTAL INVESTMENTS)
4,035 Maine State Housing Authority, Single Family Mortgage Purchase 5/13 at 100.00 AA+ 4,098,471
Bonds, Series 2004A-2, 5.000%, 11/15/21
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 1.2% (0.7% OF TOTAL INVESTMENTS)
2,000 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 A3 2,058,800
Revenue Bonds, MedStar Health, Series 2004, 5.375%, 8/15/24
1,550 Maryland Health and Higher Educational Facilities Authority, 7/16 at 100.00 AAA 1,553,736
Revenue Bonds, Western Maryland Health, Series 2006A,
4.750%, 7/01/36 - MBIA Insured (UB)
------------------------------------------------------------------------------------------------------------------------------------
3,550 Total Maryland 3,612,536
------------------------------------------------------------------------------------------------------------------------------------
54
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.5% (0.9% OF TOTAL INVESTMENTS)
$ 1,000 Massachusetts Development Finance Authority, Revenue Bonds, 10/14 at 100.00 BBB $ 1,035,830
Hampshire College, Series 2004, 5.625%, 10/01/24
3,000 Massachusetts, Special Obligation Dedicated Tax Revenue Bonds, 1/14 at 100.00 AAA 3,260,160
Series 2004, 5.250%, 1/01/24 (Pre-refunded 1/01/14) -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
4,000 Total Massachusetts 4,295,990
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 4.1% (2.4% OF TOTAL INVESTMENTS)
2,925 Detroit, Michigan, General Obligation Bonds, Series 2003A, 4/13 at 100.00 AAA 3,099,915
5.250%, 4/01/17 - XLCA Insured
4,600 Detroit, Michigan, Sewer Disposal System Revenue Bonds, 7/16 at 100.00 AAA 4,516,694
Second Lien, Series 2006B, 4.625%, 7/01/34 - FGIC Insured
1,000 Michigan State Hospital Finance Authority, Revenue Bonds, 12/16 at 100.00 Aa2 1,013,440
Trinity Health Care Group, Series 2006A, 5.000%, 12/01/31
170 Monroe County Hospital Finance Authority, Michigan, 6/16 at 100.00 BBB- 168,207
Mercy Memorial Hospital Corporation Revenue Bonds,
Series 2006, 5.500%, 6/01/35
3,025 Wayne County, Michigan, Airport Revenue Refunding Bonds, 12/12 at 100.00 AAA 3,233,876
Detroit Metropolitan Airport, Series 2002C, 5.375%, 12/01/19 -
FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
11,720 Total Michigan 12,032,132
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 5.1% (3.0% OF TOTAL INVESTMENTS)
4,350 Cohasset, Minnesota, Pollution Control Revenue Bonds, 7/14 at 100.00 A- 4,372,272
Allete Inc., Series 2004, 4.950%, 7/01/22
1,000 Duluth Economic Development Authority, Minnesota, Healthcare 2/14 at 100.00 A- 1,029,020
Facilities Revenue Bonds, Benedictine Health System -
St. Mary's Duluth Clinic, Series 2004, 5.250%, 2/15/21
2,290 Minneapolis-St. Paul Housing and Redevelopment Authority, 12/13 at 100.00 Baa1 2,417,942
Minnesota, Revenue Bonds, HealthPartners Inc., Series 2003,
6.000%, 12/01/20
Minnesota Higher Education Facilities Authority, Revenue Bonds,
University of St. Thomas, Series 2004-5Y:
530 5.250%, 10/01/19 10/14 at 100.00 A2 557,560
1,500 5.250%, 10/01/34 10/14 at 100.00 A2 1,534,830
665 Minnesota Higher Education Facilities Authority, Revenue Bonds, 4/16 at 100.00 A2 686,174
University of St. Thomas, Series 2006-6I, 5.000%, 4/01/23
1,000 Minnesota Municipal Power Agency, Electric Revenue Bonds, 10/14 at 100.00 A3 1,053,530
Series 2004A, 5.250%, 10/01/19
3,000 St. Paul Port Authority, Minnesota, Lease Revenue Bonds, 12/13 at 100.00 AA+ 3,221,550
Office Building at Cedar Street, Series 2003, 5.250%, 12/01/20
------------------------------------------------------------------------------------------------------------------------------------
14,335 Total Minnesota 14,872,878
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.8% (0.5% OF TOTAL INVESTMENTS)
2,325 Mississippi Hospital Equipment and Facilities Authority, 9/14 at 100.00 N/R 2,356,388
Revenue Bonds, Baptist Memorial Healthcare, Series 2004B-1,
5.000%, 9/01/24
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 1.0% (0.6% OF TOTAL INVESTMENTS)
100 Hannibal Industrial Development Authority, Missouri, Health 3/16 at 100.00 BBB+ 99,336
Facilities Revenue Bonds, Hannibal Regional Hospital,
Series 2006, 5.000%, 3/01/22
2,880 Joplin Industrial Development Authority, Missouri, Health 2/15 at 102.00 BBB+ 2,980,310
Facilities Revenue Bonds, Freeman Health System, Series 2004,
5.500%, 2/15/24
------------------------------------------------------------------------------------------------------------------------------------
2,980 Total Missouri 3,079,646
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 2.9% (1.7% OF TOTAL INVESTMENTS)
1,580 Douglas County Hospital Authority 2, Nebraska, Health Facilities No Opt. Call A1 1,655,445
Revenue Bonds, Nebraska Medical Center, Series 2003,
5.000%, 11/15/16
1,760 Grand Island, Nebraska, Electric System Revenue Bonds, 3/08 at 100.00 AAA 1,872,094
Series 1977, 6.100%, 9/01/12 (ETM)
55
NPF
Nuveen Premier Municipal Income Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA (continued)
$ 2,350 NebHelp Inc., Nebraska, Senior Subordinate Bonds, Student No Opt. Call Aaa $ 2,510,482
Loan Program, Series 1993A-5B, 6.250%, 6/01/18 -
MBIA Insured (Alternative Minimum Tax)
2,300 Omaha Public Power District, Nebraska, Separate Electric 2/17 at 100.00 AAA 2,369,736
System Revenue Bonds, Nebraska City 2, Series 2006A,
5.000%, 2/01/49 - AMBAC Insured (UB)
------------------------------------------------------------------------------------------------------------------------------------
7,990 Total Nebraska 8,407,757
------------------------------------------------------------------------------------------------------------------------------------
NEW HAMPSHIRE - 1.8% (1.1% OF TOTAL INVESTMENTS)
5,000 New Hampshire Housing Finance Authority, FHLMC Multifamily 7/10 at 101.00 Aaa 5,158,300
Housing Remarketed Revenue Bonds, Countryside LP,
Series 1994, 6.100%, 7/01/24 (Alternative Minimum Tax)
190 New Hampshire Municipal Bond Bank, Revenue Bonds, No Opt. Call N/R 193,333
Coe-Brown Northwood Academy, Series 1994, 7.250%, 5/01/09
------------------------------------------------------------------------------------------------------------------------------------
5,190 Total New Hampshire 5,351,633
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 6.0% (3.5% OF TOTAL INVESTMENTS)
1,000 New Jersey Economic Development Authority, School Facilities 9/15 at 100.00 AA- 1,064,261
Construction Bonds, Series 2005P, 5.250%, 9/01/24
New Jersey Transportation Trust Fund Authority, Transportation
System Bonds, Series 2006C:
25,000 0.000%, 12/15/35 - AMBAC Insured (UB) No Opt. Call AAA 6,514,000
10,000 0.000%, 12/15/36 - AMBAC Insured (UB) No Opt. Call AAA 2,484,000
3,000 New Jersey Transportation Trust Fund Authority, Transportation 6/13 at 100.00 AAA 3,294,874
System Bonds, Series 2003C, 5.500%, 6/15/24
(Pre-refunded 6/15/13)
1,500 New Jersey Turnpike Authority, Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 1,580,355
5.000%, 1/01/19 - FGIC Insured
2,500 New Jersey Turnpike Authority, Revenue Bonds, Series 2005A, 1/15 at 100.00 AAA 2,610,725
5.000%, 1/01/25 - FSA Insured
------------------------------------------------------------------------------------------------------------------------------------
43,000 Total New Jersey 17,548,215
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 22.3% (13.1% OF TOTAL INVESTMENTS)
10,000 Dormitory Authority of the State of New York, Revenue Bonds, 5/10 at 101.00 AAA 10,602,099
State University Educational Facilities Revenue Bonds,
1999 Resolution, Series 2000B, 5.500%, 5/15/30
(Pre-refunded 5/15/10) - FSA Insured
1,500 Dormitory Authority of the State of New York, State and Local 7/14 at 100.00 AA- 1,594,246
Appropriation Lease Bonds, Upstate Community Colleges,
Series 2004B, 5.250%, 7/01/19
10 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AAA 8,643
Bonds, Driver Trust 1649, 2006, 6.058%, 2/15/47 -
MBIA Insured (IF)
2,180 Hudson Yards Infrastructure Corporation, New York, Revenue 2/17 at 100.00 AAA 2,081,399
Bonds, Series 2006A, 4.500%, 2/15/47 - MBIA Insured (UB)
7,500 Long Island Power Authority, New York, Electric System 6/16 at 100.00 AAA 7,870,500
Revenue Bonds, Series 2006A, 5.000%, 12/01/25 -
XLCA Insured (UB)
3,200 Metropolitan Transportation Authority, New York, Transportation 11/15 at 100.00 A 3,310,144
Revenue Bonds, Series 2005F, 5.000%, 11/15/30
5,000 Metropolitan Transportation Authority, New York, Transportation 11/12 at 100.00 AAA 5,299,950
Revenue Refunding Bonds, Series 2002A, 5.125%, 11/15/21 -
FGIC Insured
4,000 New York City Municipal Water Finance Authority, New York, 12/14 at 100.00 AAA 4,191,280
Water and Sewerage System Revenue Bonds, Fiscal
Series 2005B, 5.000%, 6/15/23 - AMBAC Insured
4,265 New York City, New York, General Obligation Bonds, 10/13 at 100.00 AA 4,486,098
Fiscal Series 2003D, 5.250%, 10/15/22
1,200 New York City, New York, General Obligation Bonds, 8/14 at 100.00 AA 1,296,876
Fiscal Series 2004B, 5.250%, 8/01/15
4,000 New York City, New York, General Obligation Bonds, 8/14 at 100.00 AA 4,246,800
Fiscal Series 2004C, 5.250%, 8/15/20
3,650 New York Convention Center Development Corporation, 11/15 at 100.00 AAA 3,734,571
Hotel Unit Fee Revenue Bonds, Series 2005, 5.000%, 11/15/44 -
AMBAC Insured (UB)
3,250 New York State Municipal Bond Bank Agency, Special 6/13 at 100.00 A+ 3,439,703
School Purpose Revenue Bonds, Series 2003C,
5.250%, 6/01/22
56
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
New York State Thruway Authority, General Revenue Bonds,
Series 2005G:
$ 6,460 5.000%, 1/01/25 - FSA Insured (UB) 7/15 at 100.00 AAA $ 6,758,775
2,580 5.000%, 1/01/26 - FSA Insured (UB) 7/15 at 100.00 AAA 2,697,596
1,850 New York State Urban Development Corporation, Service 3/15 at 100.00 AAA 1,936,339
Contract Revenue Bonds, Series 2005B, 5.000%, 3/15/24 -
FSA Insured
1,000 New York State Urban Development Corporation, Subordinate 7/14 at 100.00 A 1,047,620
Lien Corporate Purpose Bonds, Series 2004A, 5.125%, 1/01/22
1,000 Rensselaer County Industrial Development Agency, New York, 3/16 at 100.00 A 1,041,780
Civic Facility Revenue Bonds, Rensselaer Polytechnic Institute,
Series 2006, 5.000%, 3/01/26
------------------------------------------------------------------------------------------------------------------------------------
62,645 Total New York 65,644,419
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 4.1% (2.4% OF TOTAL INVESTMENTS)
10,300 North Carolina Eastern Municipal Power Agency, Power System No Opt. Call AAA 12,112,593
Revenue Refunding Bonds, Series 1993B, 6.000%, 1/01/22 -
CAPMAC Insured
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 2.9% (1.7% OF TOTAL INVESTMENTS)
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien,
Series 2007A-2:
105 5.125%, 6/01/24 6/17 at 100.00 BBB 101,357
1,050 5.875%, 6/01/30 6/17 at 100.00 BBB 1,037,012
1,055 5.750%, 6/01/34 6/17 at 100.00 BBB 1,018,075
2,355 5.875%, 6/01/47 6/17 at 100.00 BBB 2,286,305
4,000 Ohio, Solid Waste Revenue Bonds, Republic Services Inc., No Opt. Call BBB+ 3,919,560
Series 2004, 4.250%, 4/01/33 (Mandatory put 4/01/14)
(Alternative Minimum Tax)
250 Port of Greater Cincinnati Development Authority, Ohio, Economic 10/16 at 100.00 N/R 250,793
Development Revenue Bonds, Sisters of Mercy of the Americas,
Series 2006, 5.000%, 10/01/25
------------------------------------------------------------------------------------------------------------------------------------
8,815 Total Ohio 8,613,102
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 2.5% (1.4% OF TOTAL INVESTMENTS)
Norman Regional Hospital Authority, Oklahoma, Hospital Revenue
Bonds, Series 2005:
500 5.375%, 9/01/29 9/16 at 100.00 BBB 502,055
450 5.375%, 9/01/36 9/16 at 100.00 BBB 448,002
Oklahoma Development Finance Authority, Revenue Bonds,
Saint John Health System, Series 2007:
2,900 5.000%, 2/15/37 2/17 at 100.00 AA- 2,915,834
1,305 5.000%, 2/15/42 2/17 at 100.00 AA- 1,306,344
2,035 Tulsa County Industrial Authority, Oklahoma, Health Care 12/16 at 100.00 AA 2,045,989
Revenue Bonds, Saint Francis Health System, Series 2006,
5.000%, 12/15/36
------------------------------------------------------------------------------------------------------------------------------------
7,190 Total Oklahoma 7,218,224
------------------------------------------------------------------------------------------------------------------------------------
OREGON - 1.3% (0.8% OF TOTAL INVESTMENTS)
Oregon, General Obligation Bonds, State Board of Higher
Education, Series 2004A:
1,795 5.000%, 8/01/21 8/14 at 100.00 AA 1,893,958
1,990 5.000%, 8/01/23 8/14 at 100.00 AA 2,076,068
------------------------------------------------------------------------------------------------------------------------------------
3,785 Total Oregon 3,970,026
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 1.2% (0.7% OF TOTAL INVESTMENTS)
2,000 Allegheny County Sanitary Authority, Pennsylvania, Sewerage 12/15 at 100.00 AAA 2,100,940
Revenue Bonds, Series 2005A, 5.000%, 12/01/23 -
MBIA Insured
1,385 Falls Township Hospital Authority, Pennsylvania, FHA-Insured 2/08 at 100.00 AAA 1,393,379
Revenue Refunding Bonds, Delaware Valley Medical Center,
Series 1992, 7.000%, 8/01/22
------------------------------------------------------------------------------------------------------------------------------------
3,385 Total Pennsylvania 3,494,319
------------------------------------------------------------------------------------------------------------------------------------
57
NPF
Nuveen Premier Municipal Income Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 2.7% (1.6% OF TOTAL INVESTMENTS)
$ 7,655 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB $ 7,864,824
Tobacco Settlement Asset-Backed Bonds, Series 2002A,
6.000%, 6/01/23
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 8.0% (4.7% OF TOTAL INVESTMENTS)
2,500 Berkeley County School District, South Carolina, Installment 12/13 at 100.00 A- 2,585,275
Purchase Revenue Bonds, Securing Assets for Education,
Series 2003, 5.250%, 12/01/24
4,405 Dorchester County School District 2, South Carolina, Installment 12/14 at 100.00 A 4,565,474
Purchase Revenue Bonds, GROWTH, Series 2004,
5.250%, 12/01/23
3,340 Greenville County School District, South Carolina, Installment 12/13 at 100.00 AA- 3,516,352
Purchase Revenue Bonds, Series 2003, 5.250%, 12/01/19
3,620 Greenville, South Carolina, Hospital Facilities Revenue Refunding 5/13 at 100.00 AAA 3,791,371
Bonds, Series 2003A, 5.250%, 5/01/21 - AMBAC Insured
1,500 South Carolina JOBS Economic Development Authority, Economic 11/12 at 100.00 A- 1,547,325
Development Revenue Bonds, Bon Secours Health System Inc.,
Series 2002A, 5.625%, 11/15/30
South Carolina JOBS Economic Development Authority, Hospital
Refunding and Improvement Revenue Bonds, Palmetto Health
Alliance, Series 2003C:
4,895 6.375%, 8/01/34 (Pre-refunded 8/01/13) 8/13 at 100.00 BBB+ (4) 5,576,825
605 6.375%, 8/01/34 (Pre-refunded 8/01/13) 8/13 at 100.00 BBB+ (4) 688,260
1,145 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 1,176,980
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.000%, 5/15/22
------------------------------------------------------------------------------------------------------------------------------------
22,010 Total South Carolina 23,447,862
------------------------------------------------------------------------------------------------------------------------------------
SOUTH DAKOTA - 0.6% (0.4% OF TOTAL INVESTMENTS)
1,750 South Dakota Health and Educational Facilities Authority, 11/14 at 100.00 AA- 1,826,335
Revenue Bonds, Sioux Valley Hospitals, Series 2004A,
5.500%, 11/01/31
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 1.4% (0.8% OF TOTAL INVESTMENTS)
2,060 Johnson City Health and Educational Facilities Board, 7/23 at 100.00 AAA 2,108,080
Tennessee, Hospital Revenue Refunding and Improvement
Bonds, Johnson City Medical Center, Series 1998C,
5.125%, 7/01/25 (Pre-refunded 7/01/23) - MBIA Insured
1,600 Johnson City Health and Educational Facilities Board, 7/16 at 100.00 BBB+ 1,622,432
Tennessee, Revenue Bonds, Mountain States Health
Alliance, Series 2006A, 5.500%, 7/01/36
400 Sumner County Health, Educational, and Housing Facilities 11/17 at 100.00 N/R 404,756
Board, Tennessee, Revenue Refunding Bonds, Sumner
Regional Health System Inc., Series 2007, 5.500%, 11/01/37
------------------------------------------------------------------------------------------------------------------------------------
4,060 Total Tennessee 4,135,268
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 6.2% (3.7% OF TOTAL INVESTMENTS)
1,075 Brazos River Authority, Texas, Pollution Control Revenue Bonds, 10/13 at 101.00 Caa1 1,106,745
TXU Energy Company LLC Project, Series 2003C,
6.750%, 10/01/38 (Alternative Minimum Tax)
3,000 Houston, Texas, First Lien Combined Utility System Revenue 5/14 at 100.00 AAA 3,177,030
Bonds, Series 2004A, 5.250%, 5/15/25 - MBIA Insured
Kerrville Health Facilities Development Corporation, Texas,
Revenue Bonds, Sid Peterson Memorial Hospital Project, Series
2005:
400 5.250%, 8/15/21 No Opt. Call BBB- 404,116
500 5.125%, 8/15/26 No Opt. Call BBB- 491,085
2,265 Lower Colorado River Authority, Texas, Contract Revenue 5/13 at 100.00 AAA 2,403,233
Refunding Bonds, Transmission Services Corporation,
Series 2003C, 5.250%, 5/15/25 - AMBAC Insured
290 Mansfield Independent School District, Tarrant County, Texas, 2/11 at 100.00 AAA 302,064
General Obligation Bonds, Series 2001, 5.375%, 2/15/26
1,710 Mansfield Independent School District, Tarrant County, Texas, 2/11 at 100.00 Aaa 1,808,975
General Obligation Bonds, Series 2001, 5.375%, 2/15/26
(Pre-refunded 2/15/11)
58
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 1,000 Sabine River Authority, Texas, Pollution Control Revenue Bonds, 11/15 at 100.00 Caa1 $ 902,860
TXU Electric Company, Series 2001C, 5.200%, 5/01/28
1,600 Tarrant County Cultural & Educational Facilities Financing 2/17 at 100.00 AA- 1,606,368
Corporation, Texas, Revenue Bonds, Series 2007A,
5.000%, 2/15/36
Texas Tech University, Financing System Revenue Bonds,
9th Series 2003:
3,525 5.250%, 2/15/18 - AMBAC Insured 8/13 at 100.00 AAA 3,764,559
2,250 5.250%, 2/15/19 - AMBAC Insured 8/13 at 100.00 AAA 2,402,910
------------------------------------------------------------------------------------------------------------------------------------
17,615 Total Texas 18,369,945
------------------------------------------------------------------------------------------------------------------------------------
UTAH - 0.2% (0.1% OF TOTAL INVESTMENTS)
525 Utah Housing Corporation, Single Family Mortgage Bonds, 7/11 at 100.00 Aaa 531,815
Series 2001D, 5.500%, 1/01/21 (Alternative Minimum Tax)
25 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/08 at 101.00 AA 25,582
Series 1996C, 6.450%, 7/01/14 (Alternative Minimum Tax)
145 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/08 at 101.50 AA 147,290
Series 1997F, 5.750%, 7/01/15 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
695 Total Utah 704,687
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 8.9% (5.2% OF TOTAL INVESTMENTS)
2,500 Energy Northwest, Washington, Electric Revenue Refunding 7/12 at 100.00 AAA 2,709,875
Bonds, Columbia Generating Station - Nuclear Project 2,
Series 2002C, 5.750%, 7/01/17 - MBIA Insured
7,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa 7,551,180
Bonds, Nuclear Project 1, Series 2003A, 5.500%, 7/01/16
6,160 King County Public Hospital District 2, Washington, Limited 6/11 at 101.00 AAA 6,396,975
Tax General Obligation Bonds, Evergreen Hospital Medical
Center, Series 2001A, 5.250%, 12/01/24 - AMBAC Insured
1,000 Skagit County Public Hospital District 1, Washington, Revenue No Opt. Call Baa2 1,047,310
Bonds, Skagit Valley Hospital, Series 2003, 6.000%, 12/01/23
8,045 Washington, General Obligation Refunding Bonds, Series 1992A No Opt. Call Aa1 8,398,095
and 1992AT-6, 6.250%, 2/01/11
------------------------------------------------------------------------------------------------------------------------------------
24,705 Total Washington 26,103,435
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 1.9% (1.1% OF TOTAL INVESTMENTS)
2,000 West Virginia Water Development Authority, Infrastructure 10/13 at 101.00 AAA 2,220,960
Revenue Bonds, Series 2003A, 5.500%, 10/01/23
(Pre-refunded 10/01/13) - AMBAC Insured
3,150 West Virginia Water Development Authority, Loan Program II 11/13 at 101.00 AAA 3,379,887
Revenue Bonds, Series 2003B, 5.250%, 11/01/23 -
AMBAC Insured
------------------------------------------------------------------------------------------------------------------------------------
5,150 Total West Virginia 5,600,847
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 5.9% (3.5% OF TOTAL INVESTMENTS)
5,670 Wisconsin Health and Educational Facilities Authority, 7/11 at 100.00 A- 5,866,012
Revenue Bonds, Agnesian Healthcare Inc., Series 2001,
6.000%, 7/01/30
160 Wisconsin Health and Educational Facilities Authority, Revenue 5/16 at 100.00 BBB 148,392
Bonds, Divine Savior Healthcare, Series 2006, 5.000%, 5/01/32
1,000 Wisconsin Health and Educational Facilities Authority, Revenue 5/14 at 100.00 BBB+ 1,028,130
Bonds, Fort Healthcare Inc., Series 2004, 5.375%, 5/01/18
205 Wisconsin Health and Educational Facilities Authority, Revenue 10/11 at 101.00 AA- 216,117
Bonds, Froedtert and Community Health Obligated Group,
Series 2001, 5.375%, 10/01/30
2,145 Wisconsin Health and Educational Facilities Authority, Revenue 10/11 at 101.00 N/R (4) 2,305,189
Bonds, Froedtert and Community Health Obligated Group,
Series 2001, 5.375%, 10/01/30 (Pre-refunded 10/01/11)
59
NPF
Nuveen Premier Municipal Income Fund, Inc. (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN (continued)
$ 5,000 Wisconsin Health and Educational Facilities Authority, Revenue 2/10 at 101.00 AA $ 5,245,300
Bonds, Marshfield Clinic, Series 1999, 6.250%, 2/15/18 -
RAAI Insured
2,500 Wisconsin State, General Obligation Bonds, Series 2006A, 5/16 at 100.00 AAA 2,562,375
4.750%, 5/01/25 - FGIC Insured
------------------------------------------------------------------------------------------------------------------------------------
16,680 Total Wisconsin 17,371,515
------------------------------------------------------------------------------------------------------------------------------------
WYOMING - 0.5% (0.3% OF TOTAL INVESTMENTS)
1,350 Sweetwater County, Wyoming, Solid Waste Disposal Revenue 12/15 at 100.00 BBB 1,374,948
Bonds, FMC Corporation, Series 2005, 5.600%, 12/01/35
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
$ 535,382 Total Investments (cost $481,650,918) - 169.8% 499,840,080
=============-----------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (16.1)% (47,354,500)
--------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - 2.4% 6,892,246
--------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (56.1)% (165,000,000)
--------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 294,377,826
====================================================================================================================
FORWARD SWAPS OUTSTANDING AT OCTOBER 31, 2007:
FUND FIXED RATE UNREALIZED
NOTIONAL PAY/RECEIVE FLOATING RATE FIXED RATE PAYMENT EFFECTIVE TERMINATION APPRECIATION
COUNTERPARTY AMOUNT FLOATING RATE INDEX (ANNUALIZED) FREQUENCY DATE (6) DATE (DEPRECIATION)
------------------------------------------------------------------------------------------------------------------------------------
Morgan Stanley $28,000,000 Receive SIFM 3.690% Quarterly 11/06/07 11/06/17 $(34,042)
Morgan Stanley 14,000,000 Receive 3-Month USD-LIBOR 5.262 Semi-Annually 11/15/07 11/15/34 163,801
------------------------------------------------------------------------------------------------------------------------------------
$129,759
====================================================================================================================================
USD-LIBOR (United States Dollar-London Inter-Bank Offered Rate)
SIFM-The daily arithmetic average of the weekly SIFM (Securities Industry and
Financial Markets) Municipal Swap Index.
The Fund may 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. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(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 higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's 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) Portion of investment, with an aggregate market value of
$188,602, has been pledged to collateralize the net payment
obligations under forward swap contracts.
(6) Effective date represents the date on which both the Fund
and counterparty commence interest payment accruals on each
forward swap contract.
N/R Not rated.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
60
NMZ
Nuveen Municipal High Income Opportunity Fund
Portfolio of INVESTMENTS
October 31, 2007
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NATIONAL - 2.1% (1.4% OF TOTAL INVESTMENTS)
Charter Mac Equity Issuer Trust, Preferred Shares, Series 2004A-4:
$ 5,000 6.000%, 12/31/45 (Mandatory put 4/30/19) 10/19 at 100.00 A3 $ 5,434,350
(Alternative Minimum Tax)
1,000 5.750%, 12/31/45 (Mandatory put 4/30/15) 10/15 at 100.00 A3 1,069,970
(Alternative Minimum Tax)
1,000 GMAC Municipal Mortgage Trust, Series B-1, 5.600%, 10/31/39 No Opt. Call Baa1 1,023,640
(Mandatory put 10/31/19) (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,000 Total National 7,527,960
------------------------------------------------------------------------------------------------------------------------------------
ALABAMA - 2.6% (1.7% OF TOTAL INVESTMENTS)
6,200 Baldwin County Eastern Shore Healthcare Authority, Alabama, 4/08 at 102.00 N/R (4) 6,375,026
Hospital Revenue Bonds, Thomas Hospital, Series 1998,
5.750%, 4/01/27 (Pre-refunded 4/01/08)
2,000 Bessemer, Alabama, General Obligation Warrants, Series 2007, 2/17 at 102.00 N/R 1,898,520
6.500%, 2/01/37
1,000 Birmingham Special Care Facilities Financing Authority, Alabama, 11/15 at 100.00 Baa1 973,960
Revenue Bonds, Baptist Health System Inc., Series 2005A,
5.000%, 11/15/30
------------------------------------------------------------------------------------------------------------------------------------
9,200 Total Alabama 9,247,506
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA - 5.4% (3.6% OF TOTAL INVESTMENTS)
515 Estrella Mountain Ranch Community Facilities District, Goodyear, 7/10 at 102.00 N/R 551,683
Arizona, Special Assessment Lien Bonds, Series 2001A,
7.875%, 7/01/25
2,000 Maricopa County Industrial Development Authority, Arizona, 11/07 at 103.00 N/R 1,996,800
Multifamily Housing Revenue Bonds, Privado Park Apartments
Project, Series 2006A, 5.250%, 11/01/41 (Mandatory put 11/01/11)
(Alternative Minimum Tax)
6,720 Maricopa County Industrial Development Authority, Arizona, 1/11 at 103.00 BB 6,774,902
Senior Living Facility Revenue Bonds, Christian Care Mesa II Inc.,
Series 2004A, 6.625%, 1/01/34 (Alternative Minimum Tax)
Phoenix Industrial Development Authority, Arizona, Educational
Revenue Bonds, Keystone Montessori School, Series 2004A:
275 6.375%, 11/01/13 11/11 at 103.00 N/R 282,010
790 7.250%, 11/01/23 11/11 at 103.00 N/R 839,731
1,715 7.500%, 11/01/33 11/11 at 103.00 N/R 1,820,335
1,000 Pima County Industrial Development Authority, Arizona, 7/16 at 100.00 N/R 956,030
Charter School Revenue Bonds, Franklin Phonetic Charter
School, Series 2006, 5.750%, 7/01/36
1,645 Pima County Industrial Development Authority, Arizona, Charter 7/14 at 100.00 N/R (4) 1,957,353
School Revenue Bonds, Heritage Elementary School,
Series 2004, 7.500%, 7/01/34 (Pre-refunded 7/01/14)
550 Pima County Industrial Development Authority, Arizona, Charter 12/14 at 100.00 BBB- 568,194
School Revenue Bonds, Noah Webster Basic Schools Inc.,
Series 2004, 6.125%, 12/15/34
500 Pima County Industrial Development Authority, Arizona, Charter No Opt. Call AAA 577,405
School Revenue Bonds, Pointe Educational Services Charter
School, Series 2004, 6.250%, 7/01/14 (ETM)
1,000 Pima County Industrial Development Authority, Arizona, Charter 7/14 at 100.00 N/R (4) 1,180,250
School Revenue Bonds, Pointe Educational Services Charter
School, Series 2004, 7.125%, 7/01/24 (Pre-refunded 7/01/14)
61
NMZ
Nuveen Municipal High Income Opportunity Fund (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ARIZONA (continued)
$ 1,150 Pinal County Industrial Development Authority, Arizona, 10/12 at 100.00 A $ 1,162,098
Correctional Facilities Contract Revenue Bonds, Florence
West Prison LLC, Series 2002A, 5.250%, 10/01/22 - ACA Insured
1,000 Tucson Industrial Development Authority, Arizona, Charter School 9/14 at 100.00 BBB- 1,030,990
Revenue Bonds, Arizona Agribusiness and Equine Center
Charter School, Series 2004A, 5.850%, 9/01/24
------------------------------------------------------------------------------------------------------------------------------------
18,860 Total Arizona 19,697,781
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA - 14.2% (9.2% OF TOTAL INVESTMENTS)
8,000 Alameda Public Finance Authority, California, Revenue Bond No Opt. Call N/R 7,995,998
Anticipation Notes, Alameda Power and Telecom, Series 2004,
7.000%, 6/01/09
940 California Health Facilities Financing Authority, Hospital Revenue 11/07 at 100.00 BB 937,133
Bonds, Downey Community Hospital, Series 1993, 5.750%, 5/15/15
4,000 California Statewide Communities Development Authority, Revenue No Opt. Call BB 3,640,480
Bonds, EnerTech Regional Biosolids Project, Series 2007A,
5.500%, 12/01/33 (Alternative Minimum Tax)
2,925 California Statewide Community Development Authority, Revenue 3/14 at 102.00 N/R 3,090,584
Bonds, Epidaurus Project, Series 2004A, 7.750%, 3/01/34
1,005 California Statewide Community Development Authority, 1/14 at 100.00 N/R 1,058,376
Subordinate Lien Multifamily Housing Revenue Bonds,
Corona Park Apartments, Series 2004I-S, 7.750%, 1/01/34
(Alternative Minimum Tax)
1,000 Golden State Tobacco Securitization Corporation, California, 6/17 at 100.00 BBB 960,100
Enhanced Tobacco Settlement Asset-Backed Bonds,
Series 2007A-1, 5.750%, 6/01/47
5,500 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 6,370,540
Tobacco Settlement Asset-Backed Bonds, Series 2003A-1,
6.750%, 6/01/39 (Pre-refunded 6/01/13)
1,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 1,214,170
Tobacco Settlement Asset-Backed Revenue Bonds,
Series 2003A-2, 7.900%, 6/01/42 (Pre-refunded 6/01/13)
Huntington Beach, California, Special Tax Bonds, Community
Facilities District 2003-1, Huntington Center, Series 2004:
500 5.800%, 9/01/23 9/14 at 100.00 N/R 515,790
1,000 5.850%, 9/01/33 9/14 at 100.00 N/R 1,011,960
2,500 Independent Cities Lease Finance Authority, California, 5/14 at 100.00 N/R 2,611,475
Revenue Bonds, El Granada Mobile Home Park, Series 2004A,
6.450%, 5/15/44
1,015 Independent Cities Lease Finance Authority, California, 5/14 at 100.00 N/R 1,035,767
Subordinate Lien Revenue Bonds, El Granada Mobile Home
Park, Series 2004B, 6.500%, 5/15/44
1,200 Lake Elsinore, California, Special Tax Bonds, Community 9/13 at 102.00 N/R 1,222,800
Facilities District 2003-2 Improvement Area A, Canyon Hills,
Series 2004A, 5.950%, 9/01/34
3,400 Lee Lake Water District, Riverside County, California, Special 9/13 at 102.00 N/R 3,464,600
Tax Bonds, Community Facilities District 3, Series 2004,
5.950%, 9/01/34
300 Los Angeles Regional Airports Improvement Corporation, 12/12 at 102.00 B 326,157
California, Sublease Revenue Bonds, Los Angeles International
Airport, American Airlines Inc. Terminal 4 Project, Series 2002B,
7.500%, 12/01/24 (Alternative Minimum Tax)
2,950 Los Angeles Regional Airports Improvement Corporation, 12/12 at 102.00 B 3,207,211
California, Sublease Revenue Bonds, Los Angeles International
Airport, American Airlines Inc. Terminal 4 Project, Series 2002C,
7.500%, 12/01/24 (Alternative Minimum Tax)
Moreno Valley Unified School District, Riverside County,
California, Special Tax Bonds, Community Facilities District,
Series 2004:
800 5.550%, 9/01/29 9/14 at 100.00 N/R 789,872
1,250 5.650%, 9/01/34 9/14 at 100.00 N/R 1,240,838
62
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
CALIFORNIA (continued)
$ 995 Oceanside, California, Special Tax Revenue Bonds, Community 3/14 at 100.00 N/R $ 1,004,094
Facilities District - Morro Hills, Series 2004, 5.750%, 9/01/28
Orange County, California, Special Tax Bonds, Community Facilities
District 03-1 of Ladera Ranch, Series 2004A:
500 5.500%, 8/15/23 8/12 at 101.00 N/R 510,250
1,625 5.600%, 8/15/28 8/12 at 101.00 N/R 1,658,053
1,000 5.625%, 8/15/34 8/12 at 101.00 N/R 1,018,170
2,250 San Diego County, California, Certificates of Participation, 9/12 at 100.00 BBB- 2,281,703
San Diego-Imperial Counties Developmental Services
Foundation Project, Series 2002, 5.500%, 9/01/27
3,895 West Patterson Financing Authority, California, Special Tax 9/13 at 103.00 N/R 4,063,186
Bonds, Community Facilities District 2001-1, Series 2004A,
6.125%, 9/01/39
------------------------------------------------------------------------------------------------------------------------------------
49,550 Total California 51,229,307
------------------------------------------------------------------------------------------------------------------------------------
COLORADO - 8.8% (5.7% OF TOTAL INVESTMENTS)
925 Bradburn Metropolitan District 3, Colorado, General Obligation 12/13 at 101.00 N/R 981,120
Bonds, Series 2003, 7.500%, 12/01/33
5,594 Buffalo Ridge Metropolitan District, Colorado, Limited Obligation 12/13 at 101.00 N/R 5,933,388
Assessment Bonds, Series 2003, 7.500%, 12/01/33
400 Colorado Educational and Cultural Facilities Authority, Charter 12/10 at 101.00 BBB (4) 443,296
School Revenue Bonds, Academy Charter School - Douglas
County School District Re. 1, Series 2000, 6.875%, 12/15/20
(Pre-refunded 12/15/10)
650 Colorado Educational and Cultural Facilities Authority, Charter 9/11 at 100.00 Ba1 (4) 735,631
School Revenue Bonds, Bromley East Charter School,
Series 2000A, 7.250%, 9/15/30 (Pre-refunded 9/15/11)
900 Colorado Educational and Cultural Facilities Authority, Charter 7/08 at 100.00 N/R (4) 925,236
School Revenue Bonds, Compass Montessori Elementary
Charter School, Series 2000, 7.750%, 7/15/31
(Pre-refunded 7/15/08)
3,500 Colorado Educational and Cultural Facilities Authority, Charter 5/14 at 101.00 N/R 3,671,430
School Revenue Bonds, Denver Arts and Technology Academy,
Series 2003, 8.000%, 5/01/34
Colorado Educational and Cultural Facilities Authority, Charter
School Revenue Bonds, Excel Academy Charter School,
Series 2003:
470 7.300%, 12/01/23 (Pre-refunded 12/01/11) 12/11 at 100.00 AAA 536,717
875 7.500%, 12/01/33 (Pre-refunded 12/01/11) 12/11 at 100.00 AAA 1,005,804
1,784 Colorado Educational and Cultural Facilities Authority, Charter 2/10 at 100.00 AAA 1,945,916
School Revenue Bonds, Jefferson County School District R-1 -
Compass Montessori Secondary School, Series 2002,
8.000%, 2/15/32 (Pre-refunded 2/15/10)
1,000 Colorado Educational and Cultural Facilities Authority, Charter 2/16 at 101.00 N/R 924,890
School Revenue Bonds, Jefferson County School District R-1 -
Compass Montessori Secondary School, Series 2006,
5.625%, 2/15/36
1,240 Colorado Educational and Cultural Facilities Authority, Charter 6/11 at 100.00 Ba1 (4) 1,365,240
School Revenue Bonds, Weld County School District 6 -
Frontier Academy, Series 2001, 7.250%, 6/01/20
(Pre-refunded 6/01/11)
1,500 Colorado Educational and Cultural Facilities Authority, Independent 6/14 at 100.00 N/R 1,302,600
School Improvement Revenue Bonds, Heritage Christian School
of Northern Colorado, Series 2004A, 7.500%, 6/01/34 (5)
4,300 Denver Health and Hospitals Authority, Colorado, Revenue Bonds, 12/14 at 100.00 BBB (4) 4,958,803
Series 2004A, 6.250%, 12/01/33 (Pre-refunded 12/01/14)
1,000 Denver, Colorado, FHA-Insured Multifamily Housing Mortgage 7/08 at 102.00 AAA 1,013,660
Loan Revenue Bonds, Garden Court Community Project,
Series 1998, 5.400%, 7/01/39
1,250 Mesa County, Colorado, Residential Care Facilities Mortgage 12/11 at 101.00 AA 1,274,488
Revenue Bonds, Hilltop Community Resources Inc. Obligated
Group, Series 2001A, 5.250%, 12/01/21 - RAAI Insured
63
NMZ
Nuveen Municipal High Income Opportunity Fund (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
COLORADO (continued)
$ 1,000 Mountain Shadows Metropolitan District, Colorado, General 12/13 at 100.00 N/R $ 839,930
Obligation Limited Tax Bonds, Series 2007, 5.500%, 12/01/27
1,995 Park Creek Metropolitan District, Colorado, Limited Tax Obligation 6/14 at 100.00 N/R 2,189,333
Revenue Bonds, Series 2003CR-2, 7.875%, 12/01/32
(Mandatory put 12/01/13)
Tallyn's Reach Metropolitan District 2, Aurora, Colorado, Limited
Tax General Obligation Bonds, Series 2004:
250 6.000%, 12/01/18 12/13 at 100.00 N/R 256,830
315 6.375%, 12/01/23 12/13 at 100.00 N/R 324,724
Tallyn's Reach Metropolitan District 3, Aurora, Colorado, Limited
Tax General Obligation Bonds, Series 2004:
500 6.625%, 12/01/23 12/13 at 100.00 N/R 521,770
500 6.750%, 12/01/33 12/13 at 100.00 N/R 518,460
------------------------------------------------------------------------------------------------------------------------------------
29,948 Total Colorado 31,669,266
------------------------------------------------------------------------------------------------------------------------------------
CONNECTICUT - 0.6% (0.4% OF TOTAL INVESTMENTS)
1,025 Eastern Connecticut Resource Recovery Authority, Solid Waste 1/08 at 100.00 BBB 1,025,451
Revenue Bonds, Wheelabrator Lisbon Project, Series 1993A,
5.500%, 1/01/20 (Alternative Minimum Tax)
1,000 Mashantucket Western Pequot Tribe, Connecticut, Subordinate 9/16 at 100.00 Baa3 999,200
Special Revenue Bonds, Series 2006A, 5.500%, 9/01/36
------------------------------------------------------------------------------------------------------------------------------------
2,025 Total Connecticut 2,024,651
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA - 8.7% (5.7% OF TOTAL INVESTMENTS)
2,000 Aberdeen Community Development District, Florida, Special 5/14 at 100.00 N/R 1,697,660
Assessment Bonds, Series 2005, 5.500%, 5/01/36
4,320 Bartram Springs Community Development District, Duval County, 5/13 at 102.00 N/R (4) 4,894,603
Florida, Special Assessment Bonds, Series 2003A,
6.650%, 5/01/34 (Pre-refunded 5/01/13)
1,000 Bartram Springs Community Development District, Duval County, 5/16 at 100.00 N/R 796,640
Florida, Special Assessment Bonds, Series 2006, 4.750%, 5/01/34
700 Broward County, Florida, Airport Facility Revenue Bonds, Learjet 11/14 at 101.00 Ba2 776,321
Inc., Series 2000, 7.500%, 11/01/20 (Alternative Minimum Tax)
1,160 Century Gardens Community Development District, Miami-Dade 5/14 at 101.00 N/R 1,178,595
County, Florida, Special Assessment Revenue Bonds,
Series 2004, 5.900%, 5/01/34
455 Islands at Doral Northeast Community Development District, 5/14 at 101.00 N/R 498,198
Miami-Dade County, Florida, Special Assessment Bonds,
Series 2004, 6.125%, 5/01/24
3,000 Jacksonville, Florida, Economic Development Commission 9/17 at 100.00 N/R 3,099,810
Health Care Facilities Revenue Bonds, The Florida Proton
Therapy Institute Project, Series 2007, 6.250%, 9/01/27
620 Lexington Community Development District, Florida, Special 5/14 at 101.00 N/R 631,551
Assessment Revenue Bonds, Series 2004, 6.125%, 5/01/34
3,816 MMA Financial CDD Junior Securitization Trust, Florida, 11/07 at 100.00 N/R 3,829,150
Pass-Through Certificates, Class A, Series 2003I,
8.000%, 11/01/13
3,820 Palm Beach County Housing Finance Authority, Florida, 7/09 at 103.00 N/R 3,891,090
Multifamily Housing Revenue Bonds, Lake Delray Apartments,
Series 1999A, 6.400%, 1/01/31 (Alternative Minimum Tax)
1,000 Sarasota County Health Facility Authority, Florida, Revenue 7/17 at 100.00 N/R 980,290
Bonds, Sarasota-Manatee Jewish Housing Council, Inc.,
Series 2007, 5.750%, 7/01/45
64
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
FLORIDA (continued)
$ 1,700 South-Dade Venture Community Development District, Florida, 5/14 at 101.00 N/R $ 1,716,252
Special Assessment Revenue Bonds, Series 2004, 6.125%, 5/01/34
Stonegate Community Development District, Florida, Special
Assessment Revenue Bonds, Series 2004:
455 6.000%, 5/01/24 5/14 at 101.00 N/R 491,031
500 6.125%, 5/01/34 5/14 at 101.00 N/R 543,060
1,000 Tolomato Community Development District, Florida, Special 5/14 at 101.00 N/R 880,670
Assessment Bonds, Series 2006, 5.400%, 5/01/37
1,715 Tolomato Community Development District, Florida, Special 5/18 at 100.00 N/R 1,717,830
Assessment Bonds, Series 2007, 6.650%, 5/01/40
Westchester Community Development District 1, Florida, Special
Assessment Bonds, Series 2003:
140 6.000%, 5/01/23 5/13 at 101.00 N/R 139,511
3,745 6.125%, 5/01/35 5/13 at 101.00 N/R 3,695,978
------------------------------------------------------------------------------------------------------------------------------------
31,146 Total Florida 31,458,240
------------------------------------------------------------------------------------------------------------------------------------
GEORGIA - 1.2% (0.8% OF TOTAL INVESTMENTS)
500 Effingham County Development Authority, Georgia, Solid Waste 7/08 at 102.00 B 485,145
Disposal Revenue Bonds, Ft. James Project, Series 1998,
5.625%, 7/01/18 (Alternative Minimum Tax) (6)
900 Fulton County Residential Care Facilities Authority, Georgia, 2/09 at 100.00 N/R 915,390
Revenue Bonds, Canterbury Court, Series 2004A,
6.125%, 2/15/34
1,000 Fulton County Residential Care Facilities Authority, Georgia, 7/17 at 100.00 N/R 881,830
Revenue Bonds, Elderly Care, Lenbrook Square Project,
Series 2006A, 5.125%, 7/01/37
1,935 Fulton County Residential Care Facilities Authority, Georgia, 12/13 at 102.00 N/R 2,130,570
Revenue Bonds, St. Anne's Terrace, Series 2003,
7.625%, 12/01/33
------------------------------------------------------------------------------------------------------------------------------------
4,335 Total Georgia 4,412,935
------------------------------------------------------------------------------------------------------------------------------------
HAWAII - 0.8% (0.5% OF TOTAL INVESTMENTS)
2,000 Hawaii State Department of Budget and Finance, Private School No Opt. Call N/R 1,983,400
Revenue Bonds, Island Pacific Academy Project, Series 2007,
6.375%, 3/01/34
1,000 Hawaii State Department of Budget and Finance, Private School 2/17 at 100.00 N/R 943,890
Revenue Bonds, Montessori of Maui, Series 2007,
5.500%, 1/01/37
------------------------------------------------------------------------------------------------------------------------------------
3,000 Total Hawaii 2,927,290
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS - 7.2% (4.7% OF TOTAL INVESTMENTS)
2,000 Chicago, Illinois, Certificates of Participation Tax Increment 12/08 at 100.00 N/R 2,036,220
Revenue Notes, Chicago/Kingsbury Redevelopment Project,
Series 2004A, 6.570%, 2/15/13
1,000 Chicago, Illinois, Certificates of Participation, Tax Increment 7/11 at 100.00 N/R 1,042,260
Allocation Revenue Bonds, Diversey-Narragansett Project,
Series 2006, 7.460%, 2/15/26
2,000 Illinois Finance Authority, Revenue Bonds, Midwest Regional 10/16 at 100.00 N/R 1,982,180
Medical Center Galena-Stauss Hospital, Series 2006,
6.750%, 10/01/46
1,350 Illinois Health Facilities Authority, FHA-Insured Mortgage 8/13 at 100.00 AAA 1,374,287
Revenue Refunding Bonds, Sinai Health System, Series 2003,
5.150%, 2/15/37
1,000 Illinois Health Facilities Authority, Revenue Bonds, Condell Medical 5/12 at 100.00 Baa2 1,007,750
Center, Series 2002, 5.500%, 5/15/32
8,800 Illinois Health Facilities Authority, Revenue Bonds, Lake Forest 7/12 at 100.00 A- 9,124,720
Hospital, Series 2016, 5.750%, 7/01/29 (UB)
65
NMZ
Nuveen Municipal High Income Opportunity Fund (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
ILLINOIS (continued)
$ 1,400 Illinois Health Facilities Authority, Revenue Bonds, Midwest 11/08 at 102.00 N/R $ 1,375,808
Physicians Group Ltd., Series 1998, 5.500%, 11/15/19
1,650 Lombard Public Facilities Corporation, Illinois, First Tier 1/16 at 100.00 N/R 1,762,250
Conference Center and Hotel Revenue Bonds, Series 2005A-1,
7.125%, 1/01/36
1,154 Lombard Public Facilities Corporation, Illinois, Third Tier 1/08 at 100.00 N/R 1,132,131
Conference Center and Hotel Revenue Bonds, Series 2005C-3,
4.000%, 1/01/36
2,055 Plano Special Service Area 1, Illinois, Special Tax Bonds, 3/14 at 102.00 N/R 2,114,657
Lakewood Springs Project, Series 2004A, 6.200%, 3/01/34
998 Volo Village, Illinois, Special Service Area 3 Special Tax Bonds, 3/16 at 102.00 N/R 975,974
Symphony Meadows Project 1, Series 2006, 6.000%, 3/01/36
(Mandatory put 2/29/16)
1,000 Yorkville United City Business District, Illinois, Storm Water and 1/17 at 102.00 N/R 947,540
Water Improvement Project Revenue Bonds, Series 2007,
6.000%, 1/01/26
1,000 Yorkville, Illinois, Special Service Area 2005-108 Assessment 3/16 at 102.00 N/R 977,930
Bonds, Autumn Creek Project, Series 2006, 6.000%, 3/01/36
------------------------------------------------------------------------------------------------------------------------------------
25,407 Total Illinois 25,853,707
------------------------------------------------------------------------------------------------------------------------------------
INDIANA - 9.7% (6.3% OF TOTAL INVESTMENTS)
6,360 Carmel Redevelopment District, Indiana, Tax Increment 7/12 at 103.00 N/R 6,632,780
Revenue Bonds, Series 2004A, 6.650%, 1/15/24
22,770 Indiana Finance Authority, Water Facilities Refunding Revenue 10/16 at 100.00 AAA 22,132,895
Bonds, Indian-American Water Company Inc. Project,
Series 2006, 4.875%, 10/01/36 - AMBAC Insured (UB)
Indiana Health Facility Financing Authority, Hospital Revenue
Bonds, Community Foundation of Northwest Indiana, Series 2004A:
500 6.250%, 3/01/25 3/14 at 101.00 BBB- 533,960
2,500 6.000%, 3/01/34 3/14 at 101.00 BBB- 2,599,225
200 Jasper County, Indiana, Economic Development Revenue 4/10 at 101.00 B2 202,564
Refunding Bonds, Georgia Pacific Corporation Project,
Series 2000, 6.700%, 4/01/29 (Alternative Minimum Tax)
1,000 St. Joseph County, Indiana, Economic Development Revenue 7/15 at 103.00 N/R 1,053,130
Bonds, Chicago Trail Village Apartments, Series 2005A,
7.500%, 7/01/35
1,735 Whitley County, Indiana, Solid Waste and Sewerage Disposal 11/10 at 102.00 N/R 1,840,783
Revenue Bonds, Steel Dynamics Inc., Series 1998,
7.250%, 11/01/18 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
35,065 Total Indiana 34,995,337
------------------------------------------------------------------------------------------------------------------------------------
KANSAS - 0.5% (0.4% OF TOTAL INVESTMENTS)
2,000 Fredonia, Kansas, Hospital Revenue Bonds, Series 2007, 8/17 at 100.00 N/R 1,984,880
6.125%, 8/15/37
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA - 6.3% (4.1% OF TOTAL INVESTMENTS)
1,000 Carter Marina Community Development District, Louisiana, 10/12 at 100.00 N/R 1,001,400
Special Assessment Bonds, Series 2007, 6.250%, 10/01/22
1,940 Carter Plantation Community Development District, Livingston 11/07 at 100.00 N/R 1,960,991
Parish, Louisiana, Special Assessment Bonds, Series 2004,
5.500%, 5/01/16
8,500 Hodge, Louisiana, Combined Utility System Revenue Bonds, No Opt. Call B- 9,950,861
Smurfit-Stone Container Corporation, Series 2003,
7.450%, 3/01/24 (Alternative Minimum Tax)
1,000 Louisiana Local Government Environmental Facilities and 9/16 at 100.00 N/R 981,620
Community Development Authority, Carter Plantation Hotel
Project Revenue Bonds, Series 2006A, 6.000%, 9/01/36
1,000 Louisiana Local Government Environmental Facilities and 6/16 at 101.00 N/R 997,830
Community Development Authority, Revenue Bonds, CDF
Healthcare of Louisiana LLC, Series 2006A, 7.000%, 6/01/36
66
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
LOUISIANA (continued)
Ouachita Parish Industrial Development Authority, Louisiana,
Solid Waste Disposal Revenue Bonds, White Oaks Project, Series
2004A:
$ 865 8.250%, 3/01/19 (Alternative Minimum Tax) 3/10 at 102.00 N/R $ 900,707
805 8.500%, 3/01/24 (Alternative Minimum Tax) 3/10 at 102.00 N/R 840,541
5,125 St. James Parish, Louisiana, Solid Waste Disposal Revenue Bonds, 4/08 at 100.00 N/R 5,208,589
Freeport McMoran Project, Series 1992, 7.700%, 10/01/22
(Alternative Minimum Tax)
1,000 Tobacco Settlement Financing Corporation, Louisiana, Tobacco 5/11 at 101.00 BBB 1,000,360
Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39
------------------------------------------------------------------------------------------------------------------------------------
21,235 Total Louisiana 22,842,899
------------------------------------------------------------------------------------------------------------------------------------
MAINE - 0.9% (0.6% OF TOTAL INVESTMENTS)
3,155 Portland Housing Development Corporation, Maine, Section 8 2/14 at 102.00 Baa2 3,244,476
Assisted Senior Living Revenue Bonds, Avesta Housing
Development Corporation, Series 2004A, 6.000%, 2/01/34
------------------------------------------------------------------------------------------------------------------------------------
MARYLAND - 3.3% (2.2% OF TOTAL INVESTMENTS)
2,000 Maryland Energy Financing Administration, Revenue Bonds, 12/07 at 100.00 N/R 2,005,220
AES Warrior Run Project, Series 1995, 7.400%, 9/01/19
(Alternative Minimum Tax)
3,850 Maryland Health and Higher Educational Facilities Authority, 8/14 at 100.00 N/R 3,938,242
Revenue Bonds, MedStar Health, Series 2004, 5.500%, 8/15/33
7,435 Prince George's County, Maryland, Revenue Bonds, Dimensions 1/08 at 100.00 B3 6,073,875
Health Corporation, Series 1994, 5.300%, 7/01/24
------------------------------------------------------------------------------------------------------------------------------------
13,285 Total Maryland 12,017,337
------------------------------------------------------------------------------------------------------------------------------------
MASSACHUSETTS - 1.1% (0.7% OF TOTAL INVESTMENTS)
580 Massachusetts Development Finance Agency, Pioneer Valley No Opt. Call N/R 578,272
Resource Recovery Revenue Bonds, Eco/Springfield LLC,
Series 2006, 5.875%, 7/01/14 (Alternative Minimum Tax)
2,000 Massachusetts Development Finance Agency, Revenue Bonds, 10/12 at 102.00 BBB- 1,898,760
Orchard Cove, Series 2007, 5.250%, 10/01/26
1,350 Massachusetts Health and Educational Facilities Authority, 7/14 at 100.00 BB- 1,406,660
Revenue Bonds, Northern Berkshire Community Services Inc.,
Series 2004B, 6.375%, 7/01/34
------------------------------------------------------------------------------------------------------------------------------------
3,930 Total Massachusetts 3,883,692
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN - 5.4% (3.5% OF TOTAL INVESTMENTS)
1,265 Countryside Charter School, Berrien County, Michigan, Charter 4/09 at 100.00 N/R 1,283,988
School Revenue Bonds, Series 1999, 7.000%, 4/01/29
885 Countryside Charter School, Berrien County, Michigan, Charter 4/09 at 100.00 N/R 911,594
School Revenue Bonds, Series 2000, 8.000%, 4/01/29
Detroit Local Development Finance Authority, Michigan, Tax
Increment Bonds, Series 1998A:
1,435 5.500%, 5/01/21 5/09 at 101.00 BB- 1,430,265
15 5.500%, 5/01/21 - ACA Insured 5/09 at 101.00 A 15,185
1,000 Garden City Hospital Finance Authority, Michigan, Revenue 8/17 at 100.00 N/R 880,520
Bonds, Garden City Hospital Obligated Group, Series 2007A,
5.000%, 8/15/38
3,580 Michigan State Hospital Finance Authority, Hospital Revenue 2/08 at 100.00 BB- 3,403,864
Refunding Bonds, Detroit Medical Center Obligated Group,
Series 1993B, 5.500%, 8/15/23
500 Michigan State Hospital Finance Authority, Revenue Bonds, 5/15 at 100.00 BBB 470,065
Chelsea Community Hospital, Series 2005, 5.000%, 5/15/30
1,500 Michigan State Hospital Finance Authority, Revenue Bonds, 11/15 at 102.00 N/R 1,556,385
Hills and Dales General Hospital, Series 2005A,
6.750%, 11/15/38
67
NMZ
Nuveen Municipal High Income Opportunity Fund (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MICHIGAN (continued)
$ 1,970 Midland County Economic Development Corporation, Michigan, 1/08 at 101.00 BB- $ 1,973,802
Subordinated Pollution Control Limited Obligation Revenue
Refunding Bonds, Midland Cogeneration Project, Series 2000A,
6.875%, 7/23/09 (Alternative Minimum Tax)
2,665 Nataki Talibah Schoolhouse, Wayne County, Michigan, 6/10 at 102.00 N/R 2,745,723
Certificates of Participation, Series 2000, 8.250%, 6/01/30
Pontiac Hospital Finance Authority, Michigan, Hospital Revenue
Refunding Bonds, NOMC Obligated Group, Series 1993:
985 6.000%, 8/01/13 2/08 at 100.00 B 940,911
1,500 6.000%, 8/01/18 2/08 at 100.00 B 1,354,710
1,800 6.000%, 8/01/23 2/08 at 100.00 B 1,543,302
1,000 Summit Academy North Charter School, Michigan, Charter 11/15 at 100.00 BB+ 951,810
School Revenue Bonds, Series 2005, 5.500%, 11/01/30
------------------------------------------------------------------------------------------------------------------------------------
20,100 Total Michigan 19,462,124
------------------------------------------------------------------------------------------------------------------------------------
MINNESOTA - 2.9% (1.9% OF TOTAL INVESTMENTS)
Minneapolis, Minnesota, Student Housing Revenue Bonds,
Riverton Community Housing Project, Series 2000:
100 7.200%, 7/01/14 (Pre-refunded 7/01/10) 7/10 at 100.00 N/R (4) 108,482
100 7.300%, 7/01/15 (Pre-refunded 7/01/10) 7/10 at 100.00 N/R (4) 108,723
1,325 Ramsey, Anoka County, Minnesota, Charter School Lease 6/14 at 102.00 N/R 1,401,280
Revenue Bonds, PACT Charter School, Series 2004A,
6.750%, 12/01/33
5,000 St. Louis Park, Minnesota, Revenue Bonds, Park Nicollet 7/14 at 100.00 A 5,099,600
Health Services, Series 2003B, 5.250%, 7/01/30
1,430 St. Paul Housing and Redevelopment Authority, Minnesota, 6/14 at 102.00 N/R 1,491,619
Charter School Revenue Bonds, Higher Ground Academy
Charter School, Series 2004A, 6.625%, 12/01/23
1,100 St. Paul Housing and Redevelopment Authority, Minnesota, 6/14 at 102.00 N/R 1,148,268
Charter School Revenue Bonds, HOPE Community Academy
Charter School, Series 2004A, 6.750%, 12/01/33
1,000 St. Paul Port Authority, Minnesota, Lease Revenue Bonds, 5/15 at 100.00 N/R 1,005,390
HealthEast Midway Campus, Series 2005B, 6.000%, 5/01/30
------------------------------------------------------------------------------------------------------------------------------------
10,055 Total Minnesota 10,363,362
------------------------------------------------------------------------------------------------------------------------------------
MISSISSIPPI - 0.3% (0.2% OF TOTAL INVESTMENTS)
976 Mississippi Home Corporation, Multifamily Housing Revenue 10/19 at 101.00 N/R 977,711
Bonds, Tupelo Personal Care Apartments, Series 2004-2,
6.125%, 9/01/34 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
MISSOURI - 2.7% (1.7% OF TOTAL INVESTMENTS)
2,000 Branson Regional Airport Transportation Development District, 7/17 at 100.00 N/R 1,967,680
Missouri, Project Revenue Bonds, Series 2007B,
6.000%, 7/01/37 (Alternative Minimum Tax)
5,935 Missouri Environmental Improvement and Energy Resources 12/16 at 100.00 AAA 5,547,088
Authority, Water Facility Revenue Bonds, Missouri-American
Water Company, Series 2006, 4.600%, 12/01/36 -
AMBAC Insured (Alternative Minimum Tax) (UB)
1,300 Saint Louis Industrial Development Authority, Missouri, 12/10 at 102.00 Caa2 1,303,640
Saint Louis Convention Center Headquarters Hotel Project,
Series 2000A, 7.250%, 12/15/35 (Alternative Minimum Tax)
830 Saint Louis, Missouri, Tax Increment Financing Revenue Bonds, 12/07 at 100.00 N/R 786,193
Grace Lofts Redevelopment Projects, Series 2007A,
6.000%, 3/27/26
------------------------------------------------------------------------------------------------------------------------------------
10,065 Total Missouri 9,604,601
------------------------------------------------------------------------------------------------------------------------------------
MONTANA - 2.0% (1.3% OF TOTAL INVESTMENTS)
5,200 Montana Board of Investments, Exempt Facility Revenue Bonds, 7/10 at 101.00 B2 5,269,420
Stillwater Mining Company, Series 2000, 8.000%, 7/01/20
(Alternative Minimum Tax)
68
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
MONTANA (continued)
$ 2,080 Montana Board of Investments, Resource Recovery Revenue No Opt. Call N/R $ 2,052,981
Bonds, Yellowstone Energy LP, Series 1993, 7.000%, 12/31/19
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,280 Total Montana 7,322,401
------------------------------------------------------------------------------------------------------------------------------------
NEBRASKA - 3.5% (2.3% OF TOTAL INVESTMENTS)
8,670 Omaha Public Power District, Nebraska, Separate Electric 2/17 at 100.00 AAA 9,458,621
System Revenue Bonds, Nebraska City 2, Series 2006A,
Residuals 1508-2, 7.446%, 2/01/49 - AMBAC Insured (IF)
3,000 Omaha Public Power District, Nebraska, Separate Electric 2/17 at 100.00 AAA 3,090,960
System Revenue Bonds, Nebraska City 2, Series 2006A,
5.000%, 2/01/49 - AMBAC Insured (UB)
------------------------------------------------------------------------------------------------------------------------------------
11,670 Total Nebraska 12,549,581
------------------------------------------------------------------------------------------------------------------------------------
NEVADA - 3.3% (2.2% OF TOTAL INVESTMENTS)
3,670 Clark County, Nevada, Industrial Development Revenue Bonds, 1/08 at 100.00 B 3,546,505
Nevada Power Company Project, Series 1995C,
5.500%, 10/01/30
2,000 Clark County, Nevada, Industrial Development Revenue Bonds, 1/08 at 100.00 B 2,006,500
Nevada Power Company, Series 1995A, 5.600%, 10/01/30
(Alternative Minimum Tax)
500 Clark County, Nevada, Industrial Development Revenue Bonds, 11/07 at 100.00 B 500,075
Nevada Power Company, Series 1997A, 5.900%, 11/01/32
(Alternative Minimum Tax)
1,485 Clark County, Nevada, Local Improvement Bonds, Mountain's 8/16 at 100.00 N/R 1,532,015
Edge Special Improvement District 142, Series 2003,
6.375%, 8/01/23
4,500 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 N/R 4,345,740
Revenue Bonds, Las Vegas Monorail Project, Second Tier,
Series 2000, 7.375%, 1/01/40
------------------------------------------------------------------------------------------------------------------------------------
12,155 Total Nevada 11,930,835
------------------------------------------------------------------------------------------------------------------------------------
NEW JERSEY - 5.1% (3.3% OF TOTAL INVESTMENTS)
1,000 New Jersey Economic Development Authority, Revenue Bonds, 1/08 at 102.00 BB+ 930,100
United Methodist Homes of New Jersey Obligated Group,
Series 1998, 5.125%, 7/01/25
3,510 New Jersey Economic Development Authority, Special Facilities 9/09 at 101.00 B 3,551,664
Revenue Bonds, Continental Airlines Inc., Series 1999,
6.250%, 9/15/29 (Alternative Minimum Tax)
500 New Jersey Economic Development Authority, Special Facilities 11/10 at 101.00 B 518,775
Revenue Bonds, Continental Airlines Inc., Series 2000,
7.000%, 11/15/30 (Alternative Minimum Tax)
500 New Jersey Health Care Facilities Financing Authority, 7/10 at 101.00 BBB- (4) 554,010
Revenue Bonds, Trinitas Hospital Obligated Group,
Series 2000, 7.500%, 7/01/30 (Pre-refunded 7/01/10)
Tobacco Settlement Financing Corporation, New Jersey,
Tobacco Settlement Asset-Backed Bonds, Series 2003:
7,825 6.750%, 6/01/39 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 9,059,235
2,760 7.000%, 6/01/41 (Pre-refunded 6/01/13) 6/13 at 100.00 AAA 3,228,427
500 Tobacco Settlement Financing Corporation, New Jersey, 6/17 at 100.00 BBB 429,040
Tobacco Settlement Asset-Backed Bonds, Series 2007-1A,
5.000%, 6/01/41
------------------------------------------------------------------------------------------------------------------------------------
16,595 Total New Jersey 18,271,251
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK - 2.3% (1.5% OF TOTAL INVESTMENTS)
4,000 Dormitory Authority of the State of New York, Revenue Bonds, 7/11 at 101.00 Ba2 4,020,880
Lenox Hill Hospital Obligated Group, Series 2001,
5.500%, 7/01/30
1,000 New York City Industrial Development Agency, New York, 8/16 at 101.00 B 1,135,690
American Airlines-JFK International Airport Special Facility
Revenue Bonds, Series 2005, 7.750%, 8/01/31
(Alternative Minimum Tax)
500 New York City Industrial Development Agency, New York, Liberty 3/09 at 103.00 N/R 521,870
Revenue Bonds, 7 World Trade Center, Series 2005A,
6.250%, 3/01/15
69
NMZ
Nuveen Municipal High Income Opportunity Fund (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
NEW YORK (continued)
$ 1,700 New York City Industrial Development Agency, New York, 2/08 at 100.00 CCC+ $ 1,703,434
Special Facilities Revenue Bonds, American Airlines Inc.,
Series 1994, 6.900%, 8/01/24 (Alternative Minimum Tax)
750 New York City Industrial Development Agency, New York, No Opt. Call B 822,593
Special Facilities Revenue Bonds, JFK Airport - American
Airlines Inc., Series 2002A, 8.000%, 8/01/12
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
7,950 Total New York 8,204,467
------------------------------------------------------------------------------------------------------------------------------------
NORTH CAROLINA - 1.5% (1.0% OF TOTAL INVESTMENTS)
5,500 North Carolina Capital Facilities Finance Agency, Solid Waste 7/12 at 106.00 N/R 5,554,560
Facilities Revenue Bonds, Liberty Tire Services of
North Carolina LLC, Series 2004A, 6.750%, 7/01/29
------------------------------------------------------------------------------------------------------------------------------------
OHIO - 8.9% (5.8% OF TOTAL INVESTMENTS)
Belmont County, Ohio, Revenue Bonds, Ohio Valley Health
Services and Education Corporation, Series 1998:
500 5.700%, 1/01/13 1/08 at 102.00 B 500,860
400 5.800%, 1/01/18 1/08 at 102.00 B 396,336
Buckeye Tobacco Settlement Financing Authority, Ohio, Tobacco
Settlement Asset-Backed Revenue Bonds, Senior Lien, Series
2007A-2:
355 5.125%, 6/01/24 6/17 at 100.00 BBB 342,682
3,570 5.875%, 6/01/30 6/17 at 100.00 BBB 3,525,839
3,375 5.750%, 6/01/34 6/17 at 100.00 BBB 3,256,875
7,855 5.875%, 6/01/47 6/17 at 100.00 BBB 7,625,870
3,375 Cleveland-Cuyahoga County Port Authority, Ohio, Development 5/14 at 102.00 N/R 3,376,080
Revenue Bonds, Bond Fund Program - Garfield Heights Project,
Series 2004D, 5.250%, 5/15/23
7,000 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 7,059,150
Revenue Bonds, Bay Shore Power, Series 1998A,
5.875%, 9/01/20 (Alternative Minimum Tax)
1,000 Ohio, Environmental Facilities Revenue Bonds, Ford Motor 4/15 at 100.00 Ba1 957,450
Company, Series 2005, 5.750%, 4/01/35
(Alternative Minimum Tax)
1,275 Trumbull County, Ohio, Sewerage Disposal Revenue Bonds, No Opt. Call B- 1,309,884
General Motors Corporation, Series 1994, 6.750%, 7/01/14
(Alternative Minimum Tax)
4,000 Western Reserve Port Authority, Ohio, Solid Waste Facility 7/17 at 102.00 N/R 3,943,520
Revenue Bonds, Central Waste Inc., Series 2007A,
6.350%, 7/01/27 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
32,705 Total Ohio 32,294,546
------------------------------------------------------------------------------------------------------------------------------------
OKLAHOMA - 3.6% (2.4% OF TOTAL INVESTMENTS)
1,000 Okeene Municipal Hospital and Schallmo Authority, Oklahoma, 1/16 at 101.00 N/R 1,003,830
Revenue Bonds, Series 2006, 7.000%, 1/01/35
Oklahoma Development Finance Authority, Revenue Refunding
Bonds, Hillcrest Healthcare System, Series 1999A:
1,200 5.750%, 8/15/15 (Pre-refunded 8/15/09) 8/09 at 101.00 AAA 1,258,380
6,680 5.625%, 8/15/29 (Pre-refunded 8/15/09) 8/09 at 101.00 AAA 6,990,620
850 Tulsa Industrial Authority, Oklahoma, Student Housing Revenue 10/16 at 100.00 A2 851,173
Bonds, University of Tulsa, Series 2006, 5.000%, 10/01/37
1,335 Tulsa Municipal Airport Trust, Oklahoma, Revenue Bonds, 12/07 at 100.00 B 1,335,160
American Airlines Inc., Series 1995, 6.250%, 6/01/20
1,500 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding No Opt. Call Caa1 1,659,120
Bonds, American Airlines Inc., Series 2004A, 7.750%, 6/01/35
(Mandatory put 12/01/14)
------------------------------------------------------------------------------------------------------------------------------------
12,565 Total Oklahoma 13,098,283
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA - 4.9% (3.2% OF TOTAL INVESTMENTS)
Allegheny County Hospital Development Authority, Pennsylvania,
Revenue Bonds, West Penn Allegheny Health System, Series 2000B:
695 9.250%, 11/15/22 (Pre-refunded 11/15/10) 11/10 at 102.00 AAA 820,865
6,455 9.250%, 11/15/30 (Pre-refunded 11/15/10) 11/10 at 102.00 AAA 7,624,001
70
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
PENNSYLVANIA (continued)
$ 500 Allentown Area Hospital Authority, Pennsylvania, Revenue Bonds, No Opt. Call BB+ $ 502,755
Sacred Heart Hospital, Series 2005, 6.000%, 11/15/16
1,000 Berks County Industrial Development Authority, Pennsylvania, 11/17 at 101.00 N/R 983,160
First Mortgage Revenue Bonds, One Douglassville Properties
Project, Series 2007A, 6.125%, 11/01/34
(Alternative Minimum Tax)
2,000 Chester County Health and Education Facilities Authority, 10/15 at 102.00 N/R 1,964,880
Pennsylvania, Revenue Bonds, Immaculata University,
Series 2005, 5.750%, 10/15/37
500 New Morgan Industrial Development Authority, Pennsylvania, 4/08 at 100.00 BB- 500,620
Solid Waste Disposal Revenue Bonds, New Morgan Landfill
Company Inc., Series 1994, 6.500%, 4/01/19
(Alternative Minimum Tax)
400 Pennsylvania Economic Development Financing Authority, 12/09 at 103.00 B2 428,832
Exempt Facilities Revenue Bonds, Reliant Energy Inc.,
Series 2002A, 6.750%, 12/01/36 (Alternative Minimum Tax)
600 Pennsylvania Economic Development Financing Authority, 12/09 at 103.00 B2 643,248
Exempt Facilities Revenue Bonds, Reliant Energy Inc.,
Series 2003A, 6.750%, 12/01/36 (Alternative Minimum Tax)
4,000 Pennsylvania Economic Development Financing Authority, 6/12 at 102.00 A 4,176,280
Revenue Bonds, Amtrak 30th Street Station Parking Garage,
Series 2002, 5.800%, 6/01/23 - ACA Insured
(Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
16,150 Total Pennsylvania 17,644,641
------------------------------------------------------------------------------------------------------------------------------------
RHODE ISLAND - 1.3% (0.8% OF TOTAL INVESTMENTS)
1,500 Central Falls Detention Facility Corporation, Rhode Island, 7/15 at 103.00 N/R 1,646,595
Detention Facility Revenue Bonds, Series 2005,
7.250%, 7/15/35
3,000 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 3,040,860
Tobacco Settlement Asset-Backed Bonds, Series 2002A,
6.250%, 6/01/42
------------------------------------------------------------------------------------------------------------------------------------
4,500 Total Rhode Island 4,687,455
------------------------------------------------------------------------------------------------------------------------------------
SOUTH CAROLINA - 1.2% (0.8% OF TOTAL INVESTMENTS)
4,000 Lancaster County, South Carolina, Assessment Bonds, 11/17 at 100.00 N/R 4,000,000
Edgewater II Improvement District, Series 2007A,
7.750%, 11/01/39 (WI/DD, Settling 11/19/07)
490 Tobacco Settlement Revenue Management Authority, No Opt. Call BBB 503,029
South Carolina, Tobacco Settlement Asset-Backed Bonds,
Series 2001B, 6.375%, 5/15/30
------------------------------------------------------------------------------------------------------------------------------------
4,490 Total South Carolina 4,503,029
------------------------------------------------------------------------------------------------------------------------------------
TENNESSEE - 2.5% (1.6% OF TOTAL INVESTMENTS)
3,500 Knox County Health, Educational and Housing Facilities Board, 4/12 at 101.00 Ba2 3,568,075
Tennessee, Hospital Revenue Bonds, Baptist Health System
of East Tennessee Inc., Series 2002, 6.500%, 4/15/31
1,500 Maury County Industrial Development Board, Tennessee, 3/08 at 100.00 B- 1,487,865
Multi-Modal Interchangeable Rate Pollution Control Revenue
Refunding Bonds, Saturn Corporation, Series 1994,
6.500%, 9/01/24
Sumner County Health, Educational, and Housing Facilities
Board, Tennessee, Revenue Refunding Bonds, Sumner Regional
Health System Inc., Series 2007:
2,000 5.500%, 11/01/37 11/17 at 100.00 N/R 2,023,780
1,000 5.500%, 11/01/46 11/17 at 100.00 N/R 1,003,280
1,000 Wilson County Health and Educational Facilities Board, 7/17 at 100.00 N/R 976,300
Tennessee, Senior Living Revenue Bonds, Rutland Place,
Series 2007A, 6.300%, 7/01/37
------------------------------------------------------------------------------------------------------------------------------------
9,000 Total Tennessee 9,059,300
------------------------------------------------------------------------------------------------------------------------------------
TEXAS - 11.1% (7.2% OF TOTAL INVESTMENTS)
1,000 Austin Convention Enterprises Inc., Texas, Convention Center 1/17 at 100.00 BB 982,780
Hotel Revenue Bonds, First Tier Series 2006B, 5.750%, 1/01/34
2,000 Austin Convention Enterprises Inc., Texas, Convention Center 1/11 at 100.00 N/R 2,041,980
Hotel Revenue Bonds, First Tier Series 2001A, 9.750%, 1/01/26
71
NMZ
Nuveen Municipal High Income Opportunity Fund (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
TEXAS (continued)
$ 765 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call Caa1 $ 755,942
Refunding Bonds, TXU Electric Company, Series 2001C,
5.750%, 5/01/36 (Mandatory put 11/01/11)
(Alternative Minimum Tax)
2,705 Dallas-Ft. Worth International Airport Facility Improvement 11/07 at 100.00 CCC+ 2,680,087
Corporation, Texas, Revenue Bonds, American Airlines Inc.,
Series 1995, 6.000%, 11/01/14
1,750 Dallas-Ft. Worth International Airport Facility Improvement 11/12 at 100.00 CCC+ 1,606,938
Corporation, Texas, Revenue Bonds, American Airlines Inc.,
Series 2007, 5.500%, 11/01/30 (Alternative Minimum Tax)
Decatur Hospital Authority, Texas, Revenue Bonds, Wise Regional
Health System, Series 2004A:
1,840 7.000%, 9/01/25 9/14 at 100.00 N/R 1,951,210
6,600 7.125%, 9/01/34 9/14 at 100.00 N/R 6,987,750
585 Gulf Coast Industrial Development Authority, Texas, Solid Waste 4/12 at 100.00 Baa3 648,256
Disposal Revenue Bonds, Citgo Petroleum Corporation Project,
Series 1998, 8.000%, 4/01/28 (Alternative Minimum Tax)
1,000 Heart of Texas Education Finance Corporation, Texas, Gateway 8/16 at 100.00 N/R 956,060
Charter Academy, Series 2006A, 6.000%, 2/15/36
Houston Health Facilities Development Corporation, Texas,
Revenue Bonds, Buckingham Senior Living Community Inc.,
Series 2004A:
250 7.000%, 2/15/23 (Pre-refunded 2/15/14) 2/14 at 101.00 N/R (4) 297,183
1,400 7.125%, 2/15/34 (Pre-refunded 2/15/14) 2/14 at 101.00 N/R (4) 1,673,070
2,020 Houston, Texas, Airport System Special Facilities Revenue Bonds, 7/09 at 101.00 B- 1,903,608
Continental Air Lines Inc., Series 1998B, 5.700%, 7/15/29
(Alternative Minimum Tax)
975 Houston, Texas, Airport System Special Facilities Revenue Bonds, 7/09 at 101.00 B- 918,821
Continental Air Lines Inc., Series 1998C, 5.700%, 7/15/29
(Alternative Minimum Tax)
Houston, Texas, Airport System Special Facilities Revenue Bonds,
Continental Air Lines Inc., Series 2001E:
600 7.375%, 7/01/22 (Alternative Minimum Tax) 7/11 at 101.00 B- 634,896
5,350 6.750%, 7/01/29 (Alternative Minimum Tax) 7/11 at 101.00 B- 5,546,934
1,000 La Vernia Education Financing Corporation, Texas, Charter 8/11 at 100.00 N/R 923,020
School Revenue Bonds, Riverwalk Education Foundation,
Series 2007A, 5.450%, 8/15/36
500 Mission Economic Development Corporation, Texas, Solid Waste 4/12 at 100.00 B+ 492,830
Disposal Revenue Bonds, Allied Waste Industries, Inc.,
Series 2007A, 5.200%, 4/01/18 (Alternative Minimum Tax)
2,000 Sea Breeze Public Facility Corporation, Texas, Multifamily 1/21 at 100.00 N/R 1,954,300
Housing Revenue Bonds, Sea Breeze Senior Apartments,
Series 2006, 6.500%, 1/01/46 (Alternative Minimum Tax)
5,785 Texas Department of Housing and Community Affairs, 7/21 at 100.00 N/R 5,812,768
Multifamily Housing Revenue Bonds, Humble Parkway
Townhomes, Series 2004, 6.600%, 1/01/41
(Alternative Minimum Tax)
1,000 Texas Public Finance Authority, Charter School Finance 2/15 at 100.00 BB+ 931,730
Corporation Revenue Bonds, Cosmos Foundation Inc.,
Series 2007A, 5.375%, 2/15/37
340 Trinity River Authority of Texas, Pollution Control Revenue 5/13 at 101.00 Caa1 340,286
Refunding Bonds, TXU Electric Company, Series 2003,
6.250%, 5/01/28 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
39,465 Total Texas 40,040,449
------------------------------------------------------------------------------------------------------------------------------------
VIRGIN ISLANDS - 2.4% (1.6% OF TOTAL INVESTMENTS)
5,000 Virgin Islands Public Finance Authority, Revenue Bonds, 1/14 at 100.00 BBB 5,170,350
Refinery Project - Hovensa LLC, Series 2003, 6.125%, 7/01/22
(Alternative Minimum Tax)
3,300 Virgin Islands Public Finance Authority, Senior Secured Lien 7/14 at 100.00 BBB 3,441,801
Revenue Bonds, Refinery Project - Hovensa LLC, Series 2004,
5.875%, 7/01/22
------------------------------------------------------------------------------------------------------------------------------------
8,300 Total Virgin Islands 8,612,151
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA - 4.9% (3.2% OF TOTAL INVESTMENTS)
1,940 Isle of Wight County Industrial Development Authority, Virginia, 3/17 at 100.00 BBB 1,720,702
Environmental Improvement Revenue Bonds, International
Paper Company Project, Series 2007A, 4.700%, 3/01/31
(Alternative Minimum Tax)
72
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
VIRGINIA (continued)
Pocahontas Parkway Association, Virginia, Senior Lien Revenue
Bonds, Route 895 Connector Toll Road, Series 1998A:
$ 2,000 0.000%, 8/15/14 (Pre-refunded 8/15/08) 8/08 at 73.23 AAA $ 1,424,520
4,250 5.500%, 8/15/28 (Pre-refunded 8/15/08) 8/08 at 102.00 AAA 4,400,238
1,850 0.000%, 8/15/30 (Pre-refunded 8/15/08) 8/08 at 28.38 AAA 510,693
Pocahontas Parkway Association, Virginia, Senior Lien Revenue
Bonds, Route 895 Connector Toll Road, Series 1998B:
2,000 0.000%, 8/15/12 (Pre-refunded 8/15/08) 8/08 at 82.10 AAA 1,597,100
3,000 0.000%, 8/15/15 (Pre-refunded 8/15/08) 8/08 at 68.82 AAA 2,008,260
9,000 0.000%, 8/15/19 (Pre-refunded 8/15/08) 8/08 at 54.38 AAA 4,760,550
605 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (4) 692,689
Horse Center Revenue Bonds, Series 2001A, 7.400%, 7/15/21
(Pre-refunded 7/15/11)
950 Rockbridge County Industrial Development Authority, Virginia, 7/11 at 105.00 B2 (4) 1,074,564
Horse Center Revenue Refunding Bonds, Series 2001C,
6.850%, 7/15/21 (Pre-refunded 7/15/11)
------------------------------------------------------------------------------------------------------------------------------------
25,595 Total Virginia 18,189,316
------------------------------------------------------------------------------------------------------------------------------------
WASHINGTON - 3.6% (2.3% OF TOTAL INVESTMENTS)
3,000 Skagit County Public Hospital District 1, Washington, Revenue 12/13 at 100.00 Baa2 3,164,400
Bonds, Skagit Valley Hospital, Series 2003, 6.000%, 12/01/18
Vancouver Downtown Redevelopment Authority, Washington,
Revenue Bonds, Conference Center Project, Series 2003A:
1,750 6.000%, 1/01/28 - ACA Insured 1/14 at 100.00 A 1,824,305
4,725 6.000%, 1/01/34 - ACA Insured 1/14 at 100.00 A 4,892,879
2,500 5.250%, 1/01/34 - ACA Insured 1/14 at 100.00 A 2,459,625
1,000 Washington State Economic Development Finance Authority, 12/17 at 100.00 N/R 988,250
Revenue Bonds, Coeur D'Alene Fiber Project, Series 2007G,
7.000%, 12/01/27 (Alternative Minimum Tax)
------------------------------------------------------------------------------------------------------------------------------------
12,975 Total Washington 13,329,459
------------------------------------------------------------------------------------------------------------------------------------
WEST VIRGINIA - 0.3% (0.2% OF TOTAL INVESTMENTS)
500 Ohio County Commission, West Virginia, Special District Excise 3/16 at 100.00 N/R 486,500
Tax Revenue Bonds, Fort Henry Economic Development,
Series 2006B, 5.625%, 3/01/36
500 Ohio County Commission, West Virginia, Tax Increment Revenue No Opt. Call N/R 496,970
Bonds, Fort Henry Centre Financing District, Series 2007A,
5.850%, 6/01/34
------------------------------------------------------------------------------------------------------------------------------------
1,000 Total West Virginia 983,470
------------------------------------------------------------------------------------------------------------------------------------
73
NMZ
Nuveen Municipal High Income Opportunity Fund (continued)
Portfolio of INVESTMENTS October 31, (2007)
PRINCIPAL OPTIONAL CALL
AMOUNT (000) DESCRIPTION (1) PROVISIONS (2) RATINGS (3) VALUE
------------------------------------------------------------------------------------------------------------------------------------
WISCONSIN - 6.2% (4.0% OF TOTAL INVESTMENTS)
$ 550 Lac Courte Oreilles Band of Lake Superior Chippewa Indians, 12/14 at 101.00 N/R (4) $ 688,969
Wisconsin, Revenue Bonds, Series 2003A, 7.750%, 6/01/16
(Pre-refunded 12/01/14)
Wisconsin Health and Educational Facilities Authority, Revenue
Bonds, Aurora Health Care Inc., Series 1999A:
9,485 5.600%, 2/15/29 2/09 at 101.00 BBB+ 9,557,558
2,300 5.600%, 2/15/29 - ACA Insured 2/09 at 101.00 A 2,315,617
Wisconsin Health and Educational Facilities Authority, Revenue
Bonds, Southwest Health Center Inc., Series 2004A:
875 6.125%, 4/01/24 4/14 at 100.00 N/R 902,755
1,000 6.250%, 4/01/34 4/14 at 100.00 N/R 1,012,560
7,995 Wisconsin Health and Educational Facilities Authority, Revenue 8/16 at 100.00 A- 7,985,726
Bonds, Wheaton Fransciscan Health, 5.250%, 8/15/26 (UB)
------------------------------------------------------------------------------------------------------------------------------------
22,205 Total Wisconsin 22,463,185
------------------------------------------------------------------------------------------------------------------------------------
$ 550,437 Total Investments (cost $529,773,951) - 153.3% 554,163,441
------------------------------------------------------------------------------------------------------------------------------------
Floating Rate Obligations - (9.1)% $ (32,995,000)
------------------------------------------------------------------------------------------------------------------------------------
Other Assets Less Liabilities - (1.3)% (4,684,858)
------------------------------------------------------------------------------------------------------------------------------------
Preferred Shares, at Liquidation Value - (42.9)% (155,000,000)
------------------------------------------------------------------------------------------------------------------------------------
Net Assets Applicable to Common Shares - 100% $ 361,483,583
====================================================================================================================
The Fund may 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. Such
securities are included in the Portfolio of Investments with
a 0.000% coupon rate in their description. The market prices
of zero coupon securities generally are more volatile than
the market prices of securities that pay interest
periodically.
(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 higher of Standard &
Poor's Group ("Standard & Poor's") or Moody's Investor
Service, Inc. ("Moody's") rating. Ratings below BBB by
Standard & Poor's or Baa by Moody's 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) Non-income producing security, in the case of a bond,
generally denotes that the issuer has defaulted on the
payment of principal or interest or has filed for
bankruptcy.
(6) The issuer has received a formal adverse determination from
the Internal Revenue Service (the "IRS") regarding the
tax-exempt status of the bonds' coupon payments. The Fund
will continue to treat coupon payments as tax-exempt income
until such time that it is formally determined that the
interest on the bonds should be treated as taxable.
N/R Not rated.
WI/DD Purchased on a when-issued or delayed delivery basis.
(ETM) Escrowed to maturity.
(IF) Inverse floating rate investment.
(UB) Underlying bond of an inverse floating rate trust reflected
as a financing transaction pursuant to the provisions of
SFAS No. 140.
See accompanying notes to financial statements.
74
Statement of
ASSETS & LIABILITIES
October 31, 2007
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
(NQM) (NQS) (NQU) (NPF) (NMZ)
------------------------------------------------------------------------------------------------------------------------------------
ASSETS
Investments, at value (cost $810,344,010,
$751,747,642, $1,225,967,368, $481,650,918
and $529,773,951, respectively) $849,292,091 $790,328,477 $1,292,372,725 $499,840,080 $554,163,441
Cash 839,883 -- 2,454,281 59,050 --
Unrealized appreciation on forward swaps -- -- -- 129,759 --
Receivables:
Fund shares sold -- -- -- -- 52,971
Interest 13,117,539 11,947,050 20,056,104 7,174,213 9,698,911
Investments sold 15,000 4,710,537 30,000 891,508 2,734,163
Deferred shelf offering cost -- -- -- -- 110,224
Other assets 83,077 96,657 118,432 56,617 27,550
------------------------------------------------------------------------------------------------------------------------------------
Total assets 863,347,590 807,082,721 1,315,031,542 508,151,227 566,787,260
------------------------------------------------------------------------------------------------------------------------------------
LIABILITIES
Cash overdraft -- 7,034,856 -- -- 8,965,318
Floating rate obligations 21,105,000 6,665,000 48,875,000 47,354,500 32,995,000
Payable for investments purchased 309,556 -- -- -- 6,093,476
Accrued expenses:
Management fees 434,329 409,910 645,417 241,807 174,188
Shelf offering costs -- -- -- -- 65,000
Other 134,797 215,462 360,229 161,225 133,557
Common share dividends payable 1,992,227 1,988,680 2,885,060 970,441 1,834,736
Preferred share dividends payable 105,786 98,346 179,828 45,428 42,402
------------------------------------------------------------------------------------------------------------------------------------
Total liabilities 24,081,695 16,412,254 52,945,534 48,773,401 50,303,677
------------------------------------------------------------------------------------------------------------------------------------
Preferred shares, at liquidation value 301,000,000 279,000,000 452,000,000 165,000,000 155,000,000
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $538,265,895 $511,670,467 $ 810,086,008 $294,377,826 $361,483,583
====================================================================================================================================
Common shares outstanding 35,820,767 34,004,236 54,219,374 19,908,718 23,541,031
====================================================================================================================================
Net asset value per Common share outstanding (net
assets applicable to Common
shares, divided by
Common shares outstanding) $ 15.03 $ 15.05 $ 14.94 $ 14.79 $ 15.36
====================================================================================================================================
NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF:
------------------------------------------------------------------------------------------------------------------------------------
Common shares, $.01 par value per share $ 358,208 $ 340,042 $ 542,194 $ 199,087 $ 235,410
Paid-in surplus 499,419,993 473,671,931 755,310,592 276,648,209 333,684,307
Undistributed (Over-distribution of)
net investment income (80,632) 124,715 (333,918) (632,067) 505,752
Accumulated net realized gain (loss)
from investments and
derivative transactions (379,755) (1,047,056) (11,838,217) (156,324) 2,668,624
Net unrealized appreciation
(depreciation) of investments
and derivative transactions 38,948,081 38,580,835 66,405,357 18,318,921 24,389,490
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares $538,265,895 $511,670,467 $ 810,086,008 $294,377,826 $361,483,583
====================================================================================================================================
Authorized shares:
Common 200,000,000 200,000,000 200,000,000 200,000,000 Unlimited
Preferred 1,000,000 1,000,000 1,000,000 1,000,000 Unlimited
====================================================================================================================================
See accompanying notes to financial statements.
75
Statement of
OPERATIONS
Year Ended October 31, 2007
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
(NQM) (NQS) (NQU) (NPF) (NMZ)
------------------------------------------------------------------------------------------------------------------------------------
INVESTMENT INCOME $ 43,873,398 $ 42,419,337 $ 65,941,005 $ 24,583,332 $ 32,516,509
------------------------------------------------------------------------------------------------------------------------------------
EXPENSES
Management fees 5,167,522 4,871,125 7,665,407 2,890,054 3,755,391
Preferred shares - auction fees 752,499 697,500 1,130,000 412,501 362,567
Preferred shares - dividend disbursing agent fees 50,000 50,000 60,000 30,000 28,830
Shareholders' servicing agent fees and expenses 54,500 48,810 81,749 30,436 2,384
Interest expense on floating rate obligations 839,868 133,900 1,706,466 1,922,377 807,475
Custodian's fees and expenses 199,152 179,055 264,035 87,201 239,887
Directors'/Trustees' fees and expenses 20,055 18,865 29,817 11,020 12,136
Professional fees 46,430 43,880 62,101 25,129 181,084
Shareholders' reports - printing and
mailing expenses 86,804 83,772 134,690 49,829 60,120
Stock exchange listing fees 12,854 12,357 19,490 9,666 1,980
Investor relations expense 87,920 83,834 133,936 49,054 54,898
Other expenses 49,843 49,149 65,608 36,519 36,386
------------------------------------------------------------------------------------------------------------------------------------
Total expenses before custodian fee credit and expense
reimbursement and legal fee refund 7,367,447 6,272,247 11,353,299 5,553,786 5,543,138
Custodian fee credit (100,592) (51,607) (120,042) (59,879) (19,348)
Expense reimbursement -- -- -- -- (1,676,178)
Legal fee refund -- -- -- (4,129) --
------------------------------------------------------------------------------------------------------------------------------------
Net expenses 7,266,855 6,220,640 11,233,257 5,489,778 3,847,612
------------------------------------------------------------------------------------------------------------------------------------
Net investment income 36,606,543 36,198,697 54,707,748 19,093,554 28,668,897
------------------------------------------------------------------------------------------------------------------------------------
REALIZED AND UNREALIZED GAIN (LOSS)
Net realized gain (loss) from:
Investments 1,949,305 1,994,624 1,756,386 53,881 2,665,874
Forward swaps -- -- -- 178,000 --
Change in net unrealized appreciation
(depreciation) of:
Investments (23,427,097) (19,571,728) (29,728,496) (12,901,205) (17,903,629)
Forward swaps -- -- -- 636,942 --
------------------------------------------------------------------------------------------------------------------------------------
Net realized and unrealized gain (loss) (21,477,792) (17,577,104) (27,972,110) (12,032,382) (15,237,755)
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO PREFERRED SHAREHOLDERS
From net investment income (10,668,647) (9,950,399) (16,132,468) (5,895,868) (5,501,664)
From accumulated net realized gains -- -- -- -- (19,807)
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to Common shares
from distributions to Preferred shareholders (10,668,647) (9,950,399) (16,132,468) (5,895,868) (5,521,471)
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets applicable to
Common shares from operations $ 4,460,104 $ 8,671,194 $ 10,603,170 $ 1,165,304 $ 7,909,671
====================================================================================================================================
See accompanying notes to financial statements.
76
Statement of
CHANGES in NET ASSETS
INVESTMENT QUALITY (NQM) SELECT QUALITY (NQS)
----------------------------- ------------------------------
YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED
10/31/07 10/31/06 10/31/07 10/31/06
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 36,606,543 $ 37,550,921 $ 36,198,697 $ 36,194,734
Net realized gain (loss) from:
Investments 1,949,305 (2,340,524) 1,994,624 (1,691,751)
Forward swaps -- -- -- --
Change in net unrealized
appreciation (depreciation) of:
Investments (23,427,097) 17,200,976 (19,571,728) 9,521,291
Forward swaps -- -- -- --
Distributions to Preferred Shareholders:
From net investment income (10,668,647) (8,562,468) (9,950,399) (8,877,061)
From accumulated net realized gains -- (957,218) -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 4,460,104 42,891,687 8,671,194 35,147,213
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (28,773,137) (30,152,759) (28,151,510) (29,818,961)
From accumulated net realized gains -- (5,124,321) -- --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (28,773,137) (35,277,080) (28,151,510) (29,818,961)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from shelf offering -- -- -- --
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions 1,107,500 -- 1,154,896 673,438
Cost of repurchases -- -- -- --
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from
capital share transactions 1,107,500 -- 1,154,896 673,438
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares (23,205,533) 7,614,607 (18,325,420) 6,001,690
Net assets applicable to Common shares
at the beginning of year 561,471,428 553,856,821 529,995,887 523,994,197
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable to Common shares
at the end of year $538,265,895 $561,471,428 $511,670,467 $529,995,887
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income
at the end of year $ (80,632) $ 2,769,331 $ 124,715 $ 2,057,255
====================================================================================================================================
See accompanying notes to financial statements.
77
Statement of
CHANGES in NET ASSETS (continued)
HIGH INCOME
QUALITY INCOME (NQU) PREMIER INCOME (NPF) OPPORTUNITY (NMZ)
----------------------------- ----------------------------- ------------------------------
YEAR YEAR YEAR YEAR YEAR YEAR
ENDED ENDED ENDED ENDED ENDED ENDED
10/31/07 10/31/06 10/31/07 10/31/06 10/31/07 10/31/06
------------------------------------------------------------------------------------------------------------------------------------
OPERATIONS
Net investment income $ 54,707,748 $ 54,758,299 $ 19,093,554 $ 18,901,380 $ 28,668,897 $ 28,131,297
Net realized gain (loss) from:
Investments 1,756,386 1,142,647 53,881 197,145 2,665,874 538,187
Forward swaps -- -- 178,000 -- -- --
Change in net unrealized
appreciation (depreciation) of:
Investments (29,728,496) 15,255,701 (12,901,205) 10,303,176 (17,903,629) 14,643,108
Forward swaps -- -- 636,942 (507,183) -- --
Distributions to Preferred Shareholders:
From net investment income (16,132,468) (14,224,057) (5,895,868) (5,143,710) (5,501,664) (4,487,444)
From accumulated net
realized gains -- -- -- -- (19,807) --
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease) in net assets
applicable to Common shares
from operations 10,603,170 56,932,590 1,165,304 23,750,808 7,909,671 38,825,148
------------------------------------------------------------------------------------------------------------------------------------
DISTRIBUTIONS TO COMMON SHAREHOLDERS
From net investment income (40,496,209) (44,257,967) (13,479,410) (14,033,577) (22,823,070) (24,231,711)
From accumulated
net realized gains -- -- -- -- (105,253) --
------------------------------------------------------------------------------------------------------------------------------------
Decrease in net assets applicable to
Common shares from distributions
to Common shareholders (40,496,209) (44,257,967) (13,479,410) (14,033,577) (22,928,323) (24,231,711)
------------------------------------------------------------------------------------------------------------------------------------
CAPITAL SHARE TRANSACTIONS
Common shares:
Net proceeds from shelf offering -- -- -- -- 3,071,410 --
Net proceeds from shares issued
to shareholders due to
reinvestment of distributions 227,748 -- -- -- 731,262 860,335
Cost of repurchases -- -- (2,448,254) -- -- 220,368
------------------------------------------------------------------------------------------------------------------------------------
Net increase in net assets applicable
to Common shares from
capital share transactions 227,748 -- (2,448,254) -- 3,802,672 1,080,703
------------------------------------------------------------------------------------------------------------------------------------
Net increase (decrease)
in net assets applicable
to Common shares (29,665,291) 12,674,623 (14,762,360) 9,717,231 (11,215,980) 15,674,140
Net assets applicable
to Common shares
at the beginning of year 839,751,299 827,076,676 309,140,186 299,422,955 372,699,563 357,025,423
------------------------------------------------------------------------------------------------------------------------------------
Net assets applicable
to Common shares
at the end of year $810,086,008 $839,751,299 $294,377,826 $309,140,186 $361,483,583 $372,699,563
====================================================================================================================================
Undistributed (Over-distribution of)
net investment income
at the end of year $ (333,918) $ 1,631,998 $ (632,067) $ (342,548) $ 505,752 $ 166,221
====================================================================================================================================
See accompanying notes to financial statements.
78
Statement of
CASH FLOWS
Year Ended October 31, 2007
PREMIER
INCOME
(NPF)
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCREASE (DECREASE) IN NET ASSETS APPLICABLE TO COMMON SHARES FROM OPERATIONS $ 1,165,304
Adjustments to reconcile the net increase (decrease) in net assets applicable to Common shares from operations
to net cash provided by (used in) operating activities:
Purchases of investments (56,675,346)
Proceeds from sales and maturities of investments 53,856,525
Proceeds from sales of forward swaps 178,000
Amortization/(Accretion) of premiums and discounts, net (956,411)
(Increase) Decrease in receivable for interest 76,856
(Increase) Decrease in receivable for investments sold 13,098,669
(Increase) Decrease in other assets (7,947)
Increase (Decrease) in payable for investments purchased (26,064,647)
Increase (Decrease) in accrued management fees (6,251)
Increase (Decrease) in accrued other liabilities 46,553
Increase (Decrease) in Preferred shares dividends payable (33,798)
Net realized (gain) loss from investments (53,881)
Net realized (gain) loss from forward swaps (178,000)
Change in net unrealized (appreciation) depreciation of investments 12,901,205
Change in net unrealized (appreciation) depreciation of forward swaps (636,942)
Taxes paid on undistributed capital gains (443)
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) operating activities (3,290,554)
------------------------------------------------------------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in floating rate obligations 15,968,000
Cash distributions paid to Common shareholders (12,508,969)
Cost of Common shares repurchases (2,448,254)
------------------------------------------------------------------------------------------------------------------------------------
Net cash provided by (used in) financing activities 1,010,777
------------------------------------------------------------------------------------------------------------------------------------
NET INCREASE (DECREASE) IN CASH (2,279,777)
Cash at the beginning of year 2,338,827
------------------------------------------------------------------------------------------------------------------------------------
CASH AT THE END OF YEAR $ 59,050
====================================================================================================================================
See accompanying notes to financial statements.
79
Notes to
FINANCIAL STATEMENTS
1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES
The funds (the "Funds") covered in this report and their corresponding Common
share stock exchange symbols are Nuveen Investment Quality Municipal Fund, Inc.
(NQM), Nuveen Select Quality Municipal Fund, Inc. (NQS), Nuveen Quality Income
Municipal Fund, Inc. (NQU), Nuveen Premier Municipal Income Fund, Inc. (NPF) and
Nuveen Municipal High Income Opportunity Fund (NMZ). Common shares of Investment
Quality (NQM), Select Quality (NQS), Quality Income (NQU) and Premier Income
(NPF) are traded on the New York Stock Exchange while Common shares of High
Income Opportunity (NMZ) are traded on the American Stock Exchange. The Funds
are registered under the Investment Company Act of 1940, as amended, as
closed-end, diversified management investment companies.
Each Fund seeks to provide current income exempt from regular federal income tax
by investing primarily in a diversified portfolio of municipal obligations
issued by state and local government authorities or certain U.S. territories.
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.
Investment Valuation
The prices of municipal bonds in each Fund's investment portfolio are provided
by a pricing service approved by the Fund's Board of Directors/Trustees. When
market price quotes are not readily available (which is usually the case for
municipal securities), the pricing service may establish fair value based on
yields or prices of municipal bonds of comparable quality, type of issue,
coupon, maturity and rating, indications of value from securities dealers,
evaluations of anticipated cash flows or collateral and general market
conditions. Prices of forward swap contracts are also provided by an independent
pricing service approved by each Fund's Board of Directors/Trustees. If the
pricing service is unable to supply a price for a municipal bond or forward swap
contract, each Fund may use a market price or fair market value quote provided
by a major broker/dealer in such investments. If it is determined that the
market price or fair market value for an investment or derivative transaction is
unavailable or inappropriate, the Board of Directors/Trustees of the Funds, or
its designee, may establish a fair value for the investment. 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.
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 October 31, 2007, High
Income Opportunity (NMZ) had outstanding when-issued/delayed delivery purchase
commitments of $4,000,000. 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.
Professional Fees
Professional fees presented in the Statement of Operations consist of legal fees
incurred in the normal course of operations, audit fees, tax consulting fees
and, in some cases, workout expenditures. Workout expenditures are incurred in
an attempt to protect or enhance an investment, or to pursue other claims or
legal actions on behalf of Fund shareholders. Legal fee refunds presented on the
Statement of Operations for Premier Income (NPF) reflect a refund of workout
expenditures paid in a prior reporting period.
80
Federal Income Taxes
Each Fund is a separate taxpayer for federal income tax purposes. Each Fund
intends to distribute substantially all 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 which will enable interest from
municipal securities, which is exempt from regular federal income tax, 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.
Dividends and Distributions to Common Shareholders
Dividends from tax-exempt net investment income are declared monthly. Net
realized capital gains and/or market discount from investment transactions, if
any, are distributed to shareholders not less frequently than annually.
Furthermore, capital gains are distributed only to the extent they exceed
available capital loss carryforwards.
Distributions to Common shareholders of tax-exempt net investment income, net
realized capital gains and/or market discount, if any, are recorded on the
ex-dividend date. The amount and timing of distributions are determined in
accordance with federal income tax regulations, which may differ from U.S.
generally accepted accounting principles.
Preferred Shares
The Funds have issued and outstanding Preferred shares, $25,000 stated value per
share, as a means of effecting financial leverage. Each Fund's Preferred shares
are issued in more than one 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.
Prior to January 31, 2007, the dividend rate for High Income Opportunity's (NMZ)
Series W was payable monthly at a rate which was negotiated at the time of the
Preferred share offering. The number of Preferred shares outstanding, by Series
and in total, for each Fund is as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
(NQM) (NQS) (NQU) (NPF) (NMZ)
------------------------------------------------------------------------------------------------------------------
Number of shares:
Series M 2,500 2,000 3,000 1,000 3,000
Series T 2,500 2,000 3,000 2,800 1,600
Series W 2,500 2,800 3,000 -- 1,600
Series W2 -- -- 2,080 -- --
Series TH 2,040 1,560 4,000 2,800 --
Series F 2,500 2,800 3,000 -- --
------------------------------------------------------------------------------------------------------------------
Total 12,040 11,160 18,080 6,600 6,200
==================================================================================================================
Common Shares Shelf Offering
On September 24, 2007, a registration statement filed by High Income Opportunity
(NMZ) became effective. This registration statement permits the Fund to issue up
to 2,400,000 of additional shares of common stock through a shelf offering.
Under this equity shelf program, the Fund, subject to market conditions, may
raise additional equity capital from time to time in varying amounts and
offering methods at a net price at or above the Fund's net asset value per
common share.
Shelf Offering Costs
Costs incurred by High Income Opportunity (NMZ) in connection with the offering
of its additional common shares are recorded as a deferred charge which are
amortized over the period such additional Common shares are sold.
Inverse Floating Rate Securities
Each Fund may 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.
81
Notes to
FINANCIAL STATEMENTS (continued)
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"). A Fund may also enter into shortfall and
forbearance agreements (sometimes referred to as a "recourse trust" or "credit
recovery swap") 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, as well as any shortfalls in interest
cash flows. 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 an "Inverse floating rate investment". An investment in a
self-deposited inverse floater, recourse trust or credit recovery swap is
accounted for as a financing transaction in accordance with Statement of
Financial Accounting Standards (SFAS) No. 140 "Accounting for Transfers and
Servicing of Financial Assets and Extinguishment of Liabilities". In such
instances, a fixed-rate bond deposited into a special purpose trust is
identified in the Portfolio of Investments as an "Underlying bond of an inverse
floating rate trust", 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 accounts for the related interest
paid to the holders of the short-term floating rate certificates as "Interest
expense on floating rate obligations" in the Statement of Operations.
During the fiscal year ended October 31, 2007, each Fund invested in externally
deposited inverse floaters and/or self-deposited inverse floaters.
The average floating rate obligations outstanding and average annual interest
rate and fees related to self-deposited inverse floaters during the fiscal year
ended October 31, 2007, were as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
(NQM) (NQS) (NQU) (NPF) (NMZ)
------------------------------------------------------------------------------------------------------------------
Average floating rate obligations $21,661,986 $3,451,192 $44,104,151 $49,557,774 $20,854,247
Average annual interest rate and fees 3.88% 3.88% 3.87% 3.88% 3.87%
==================================================================================================================
Forward Swap Transactions
The Funds are authorized to invest in forward interest rate swap transactions.
Each Fund's use of forward interest rate swap transactions is intended to help
the Fund manage its overall interest rate sensitivity, either shorter or longer,
generally to more closely align the Fund's interest rate sensitivity with that
of the broader municipal market. Forward interest rate swap transactions involve
each Fund's agreement with a counterparty to pay, in the future, a fixed or
variable rate payment in exchange for the counterparty paying the Fund a
variable or fixed rate payment, the accruals for which would begin at a
specified date in the future (the "effective date"). The amount of the payment
obligation is based on the notional amount of the forward swap contract and the
termination date of the swap (which is akin to a bond's maturity). The value of
the Fund's swap commitment would increase or decrease based primarily on the
extent to which long-term interest rates for bonds having a maturity of the
swap's termination date increases or decreases. The Funds may terminate a swap
contract prior to the effective date, at which point a realized gain or loss is
recognized. When a forward swap is terminated, it ordinarily does not involve
the delivery of securities or other underlying assets or principal, but rather
is settled in cash on a net basis. Each Fund intends, but is not obligated, to
terminate its forward swaps before the effective date. Accordingly, the risk of
loss with respect to the swap counterparty on such transactions is limited to
the credit risk associated with a counterparty failing to honor its commitment
to pay any realized gain to the Fund upon termination. To reduce such credit
risk, all counterparties are required to pledge collateral daily (based on the
daily valuation of each swap) on behalf of each Fund with a value approximately
equal to the amount of any unrealized gain above a pre-determined threshold.
Reciprocally, when any of the Funds have an unrealized loss on a swap contract,
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 swap valuations fluctuate, either up or
down, by at least the predetermined threshold amount. Premier Income (NPF) was
the only Fund to invest in forward interest rate swap transactions during the
fiscal year ended October 31, 2007.
82
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 the 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. generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at the
date of the financial statements and the reported amounts of increases and
decreases in net assets applicable to Common shares from operations during the
reporting period. Actual results may differ from those estimates.
2. FUND SHARES
On July 10, 2007, the Board of Directors of Premium Income (NPF), approved an
open-market share repurchase program, as part of a broad, ongoing effort
designed to support the market prices of the Fund's Common shares. Under the
terms of the program, the Fund may repurchase up to 10% of its outstanding
Common shares.
Transactions in Common shares were as follows:
INVESTMENT QUALITY (NQM) SELECT QUALITY (NQS) QUALITY INCOME (NQU)
------------------------ ----------------------- -----------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/07 10/31/06 10/31/07 10/31/06 10/31/07 10/31/06
------------------------------------------------------------------------------------------------------------------
Common shares:
Shares issued to shareholders due
to reinvestment of distributions 71,808 -- 73,380 43,382 14,886 --
Shares repurchased -- -- -- -- -- --
------------------------------------------------------------------------------------------------------------------
Weighted average price per
Common share repurchased -- -- -- -- -- --
Weighted average discount per
Common share repurchased -- -- -- -- -- --
==================================================================================================================
HIGH
PREMIER INCOME (NPF) INCOME OPPORTUNITY (NMZ)
----------------------- ------------------------
YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED
10/31/07 10/31/06 10/31/07 10/31/06
------------------------------------------------------------------------------------------------------------------
Common shares:
Shares sold through shelf offering -- -- 197,111 --
Shares issued to shareholders due
to reinvestment of distributions -- -- 44,002 51,796
Shares repurchased (182,300) -- -- --
------------------------------------------------------------------------------------------------------------------
Weighted average price per Common share repurchased 13.41 -- -- --
Weighted average discount per Common share repurchased 8.71% -- -- --
Weighted average premium per Common share sold -- -- 4.32% --
==================================================================================================================
3. INVESTMENT TRANSACTIONS
Purchases and sales (including maturities but excluding short-term investments
and derivative transactions) during the fiscal year ended October 31, 2007, were
as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
(NQM) (NQS) (NQU) (NPF) (NMZ)
------------------------------------------------------------------------------------------------------------------
Purchases $112,902,262 $65,461,850 $76,284,562 $56,675,346 $112,573,190
Sales and maturities 90,225,327 61,173,985 67,090,964 53,856,525 64,618,492
==================================================================================================================
83
Notes to
FINANCIAL STATEMENTS (continued)
4. INCOME TAX INFORMATION
The following information is presented on an income tax basis. Differences
between amounts for financial statement and federal income tax purposes are
primarily due to the treatment of paydown gains and losses, 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 transactions subject to SFAS No.140. To the
extent that differences arise that are permanent in nature, such amounts are
reclassified within the capital accounts on the Statement of Assets and
Liabilities presented in the annual report, based on their federal tax basis
treatment; temporary differences do not require reclassification. Temporary and
permanent differences do not impact the net asset values of the Funds.
At October 31, 2007, the cost of investments was as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
(NQM) (NQS) (NQU) (NPF) (NMZ)
------------------------------------------------------------------------------------------------------------------------
Cost of investments $789,017,765 $744,479,581 $1,176,625,155 $434,205,729 $495,195,725
========================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments
at October 31, 2007, were as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
(NQM) (NQS) (NQU) (NPF) (NMZ)
------------------------------------------------------------------------------------------------------------------------
Gross unrealized:
Appreciation $43,712,539 $40,445,063 $71,489,496 $20,970,478 $29,711,040
Depreciation (4,445,421) (1,261,069) (4,617,771) (2,721,766) (3,738,521)
------------------------------------------------------------------------------------------------------------------------
Net unrealized appreciation (depreciation)
of investments $39,267,118 $39,183,994 $66,871,725 $18,248,712 $25,972,519
========================================================================================================================
The tax components of undistributed net tax-exempt income, net ordinary income
and net long-term capital gains at October 31, 2007, the Funds' tax year end,
were as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
(NQM) (NQS) (NQU) (NPF) (NMZ)
-----------------------------------------------------------------------------------------------------------------------
Undistributed net tax-exempt income * $1,813,319 $1,897,389 $2,245,512 $458,294 $ 794,702
Undistributed net ordinary income ** 203,237 797 -- 10,401 82,621
Undistributed net long-term capital gains -- -- -- -- 2,667,895
=======================================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced
for the dividend declared on October 1, 2007, paid on November 1, 2007.
** 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
October 31, 2007 and October 31, 2006, was designated for purposes of the
dividends paid deduction as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
2007 (NQM) (NQS) (NQU) (NPF) (NMZ)
------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income*** $39,550,444 $38,224,899 $56,796,248 $19,389,148 $28,368,237
Distributions from net ordinary income ** -- -- -- -- 4,938
Distributions from net long-term capital gains**** -- -- -- -- 125,060
==================================================================================================================
84
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
2006 (NQM) (NQS) (NQU) (NPF) (NMZ)
------------------------------------------------------------------------------------------------------------------
Distributions from net tax-exempt income $38,825,191 $38,884,337 $58,786,651 $19,384,184 $28,940,473
Distributions from net ordinary income ** 83,195 -- -- -- --
Distributions from net long-term capital gains 6,081,436 -- -- -- --
==================================================================================================================
** 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
October 31, 2007, as Exempt Interest Dividends.
**** The Funds hereby designate these amounts paid during the fiscal year ended
October 31, 2007, as long-term capital gain dividends pursuant to Internal
Revenue Code Section 852(b)(3)
At October 31, 2007, 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:
INVESTMENT SELECT QUALITY PREMIER
QUALITY QUALITY INCOME INCOME
(NQM) (NQS) (NQU) (NPF)
------------------------------------------------------------------------------------------------------------------
Expiration year:
2011 $ -- $ -- $11,423,918 $ --
2012 -- -- -- --
2013 -- -- -- 156,324
2014 379,755 1,047,056 -- --
------------------------------------------------------------------------------------------------------------------
Total $379,755 $1,047,056 $11,423,918 $156,324
==================================================================================================================
5. MANAGEMENT FEES AND OTHER TRANSACTIONS WITH AFFILIATES
Each Fund's management fee is separated into two components - a complex-level
component, based on the aggregate amount of all fund assets managed by Nuveen
Asset Management (the "Adviser"), a wholly owned subsidiary of Nuveen
Investments, Inc. ("Nuveen"), and a specific fund-level component, based only on
the amount of assets within each individual Fund. This pricing structure enables
Nuveen fund shareholders to benefit from growth in the assets within each
individual fund as well as from growth in the amount of complex-wide assets
managed by the Adviser.
The annual fund-level fee, payable monthly, for each Fund is based upon the
average daily net assets (including net assets attributable to Preferred shares)
of each Fund as follows:
INVESTMENT QUALITY (NQM)
SELECT QUALITY (NQS)
AVERAGE DAILY NET ASSETS QUALITY INCOME (NQU)
(INCLUDING NET ASSETS PREMIER INCOME (NPF)
ATTRIBUTABLE TO PREFERRED SHARES) 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
================================================================================
AVERAGE DAILY NET ASSETS
(INCLUDING NET ASSETS HIGH INCOME OPPORTUNITY (NMZ)
ATTRIBUTABLE TO PREFERRED SHARES) FUND-LEVEL FEE RATE
--------------------------------------------------------------------------------
For the first $125 million .5500%
For the next $125 million .5375
For the next $250 million .5250
For the next $500 million .5125
For the next $1 billion .5000
For net assets over $2 billion .4750
================================================================================
The annual complex-level fee, payable monthly, which is additive to the
fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the
aggregate amount of total fund assets managed as stated in the tables below. As
of October 31, 2007, the complex-level fee rate was .1828%.
85
Notes to
FINANCIAL STATEMENTS (continued)
Effective August 20, 2007, the complex-level fee schedule is as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) 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
================================================================================
Prior to August 20, 2007, the complex-level fee schedule was as follows:
COMPLEX-LEVEL ASSET BREAKPOINT LEVEL (1) 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 .1698
$125 billion .1617
$200 billion .1536
$250 billion .1509
$300 billion .1490
================================================================================
(1) The complex-level fee component of the management fee for the funds is
calculated based upon the aggregate Managed Assets ("Managed Assets" means
the average daily net assets of each fund including assets attributable to
preferred stock issued by or borrowings by the Nuveen funds) of
Nuveen-sponsored funds in the U.S.
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.
86
For the first eight years of High Income Opportunity's (NMZ) operations, the
Adviser has agreed to reimburse the Fund, as a percentage of average daily net
assets (including net assets attributable to Preferred shares), for fees and
expenses in the amounts, and for the time periods set forth below:
YEAR ENDING YEAR ENDING
NOVEMBER 30, NOVEMBER 30,
--------------------------------------------------------------------------------
2003* .32% 2009 .24%
2004 .32 2010 .16
2005 .32 2011 .08
2006 .32
2007 .32
2008 .32
================================================================================
* From the commencement of operations.
The Adviser has not agreed to reimburse High Income Opportunity (NMZ) for any
portion of its fees and expenses beyond November 30, 2011.
As of October 31, 2007, Nuveen Investments, LLC received commissions of $17,981
related to the sale of common shares as a result of the High Income Opportunity
(NMZ) shelf offering.
Agreement and Plan of Merger On June 20, 2007, Nuveen Investments announced that
it had entered into a definitive Agreement and Plan of Merger ("Merger
Agreement") with Windy City Investments, Inc. ("Windy City"), a corporation
formed by investors led by Madison Dearborn Partners, LLC ("Madison Dearborn"),
pursuant to which Windy City would acquire Nuveen Investments. Madison Dearborn
is a private equity investment firm based in Chicago, Illinois. The merger was
consummated on November 13, 2007.
The consummation of the merger was deemed to be an "assignment" (as that term is
defined in the Investment Company Act of 1940) of the investment management
agreement between each Fund and the Adviser, and resulted in the automatic
termination of each Fund's agreement. The Board of Directors/Trustees of each
Fund considered and approved a new investment management agreement with the
Adviser at the same fee rate. The new ongoing agreement was approved by the
shareholders of each Fund and took effect on November 13, 2007.
The investors led by Madison Dearborn include an affiliate of Merrill Lynch. As
a result, Merrill Lynch is an indirect "affiliated person" (as that term is
defined in the Investment Company Act of 1940) of each Fund. Certain conflicts
of interest may arise as a result of such indirect affiliation. For example, the
Funds are generally prohibited from entering into principal transactions with
Merrill Lynch and its affiliates. The Adviser does not believe that any such
prohibitions or limitations as a result of Merrill Lynch's affiliation will
significantly impact the ability of the Funds to pursue their investment
objectives and policies.
6. NEW ACCOUNTING PRONOUNCEMENTS
Financial Accounting Standards Board Interpretation No. 48
On July 13, 2006, the Financial Accounting Standards Board (FASB) released FASB
Interpretation No. 48, "Accounting for Uncertainty in Income Taxes" (FIN 48).
FIN 48 provides guidance for how uncertain tax positions should be recognized,
measured, presented and disclosed in the financial statements. FIN 48 requires
the evaluation of tax positions taken or expected to be taken in the course of
preparing the Funds' tax returns to determine whether the tax positions are
"more-likely-than-not" of being sustained by the applicable tax authority. Tax
positions not deemed to meet the more-likely-than-not threshold would be
recorded as a tax benefit or expense in the current year. Adoption of FIN 48 is
required for fiscal years beginning after December 15, 2006, and is to be
applied to all open tax years as of the effective date. SEC guidance allows
funds to delay implementing FIN 48 into NAV calculations until the fund's last
NAV calculation in the first required financial statement reporting period. As a
result, the Funds must begin to incorporate FIN 48 into their NAV calculations
by April 30, 2008. At this time, management is continuing to evaluate the
implications of FIN 48 and does not expect the adoption of FIN 48 will have a
significant impact on the net assets or results of operations of the Funds.
Financial Accounting Standards Board Statement of Financial Accounting Standards
No. 157
In September 2006, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 157, "Fair Value
Measurements." This standard establishes a single authoritative definition of
fair value, sets out a framework for measuring fair value and requires
additional disclosures about fair value measurements. SFAS No. 157 applies to
fair value measurements already required or permitted by existing standards.
SFAS No. 157 is effective for financial statements issued for fiscal years
beginning after November 15, 2007, and interim periods within those fiscal
years. The changes to current generally accepted accounting principles from the
application of this standard relate to the definition of fair value, the methods
used to measure fair value, and the expanded disclosures about fair value
measurements. As of October 31, 2007, management does not believe the adoption
of SFAS No. 157 will impact the financial statement amounts; however, additional
disclosures may be required about the inputs used to develop the measurements
and the effect of certain of the measurements included within the Statement of
Operations for the period.
87
Notes to
FINANCIAL STATEMENTS (continued)
7. SUBSEQUENT EVENTS
Distributions to Common Shareholders
The Funds declared Common share dividend distributions from their tax-exempt net
investment income which were paid on December 3, 2007, to shareholders of record
on November 15, 2007, as follows:
INVESTMENT SELECT QUALITY PREMIER HIGH INCOME
QUALITY QUALITY INCOME INCOME OPPORTUNITY
(NQM) (NQS) (NQU) (NPF) (NMZ)
------------------------------------------------------------------------------------------------
Dividend per share $.0645 $.0670 $.0605 $.0560 $.0815
================================================================================================
88
Financial
HIGHLIGHTS
89
Financial
HIGHLIGHTS
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------------- ------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
===============================================================================================================================
INVESTMENT QUALITY (NQM)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2007 $15.71 $1.02 $(.60) $(.30) $ -- $ .12 $ (.80) $ -- $ (.80)
2006 15.49 1.05 .42 (.24) (.03) 1.20 (.84) (.14) (.98)
2005 16.06 1.05 (.39) (.16) (.01) .49 (.96) (.10) (1.06)
2004 15.65 1.07 .43 (.08) -- 1.42 (1.01) -- (1.01)
2003 15.63 1.11 .02 (.08) -- 1.05 (1.01) (.02) (1.03)
SELECT QUALITY (NQS)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2007 15.62 1.07 (.52) (.29) -- .26 (.83) -- (.83)
2006 15.46 1.07 .23 (.26) -- 1.04 (.88) -- (.88)
2005 15.69 1.06 (.16) (.16) -- .74 (.97) -- (.97)
2004 15.33 1.09 .42 (.07) (.01) 1.43 (1.00) (.07) (1.07)
2003 15.00 1.08 .30 (.07) -- 1.31 (.98) -- (.98)
===============================================================================================================================
Total Returns
---------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
=====================================================================================
INVESTMENT QUALITY (NQM)
-------------------------------------------------------------------------------------
Year Ended 10/31:
2007 $ -- $15.03 $13.88 (6.17)% .82%
2006 -- 15.71 15.60 15.33 8.09
2005 -- 15.49 14.45 1.17 3.10
2004 -- 16.06 15.33 8.54 9.37
2003 -- 15.65 15.10 7.78 6.88
SELECT QUALITY (NQS)
-------------------------------------------------------------------------------------
Year Ended 10/31:
2007 -- 15.05 15.00 2.31 1.70
2006 -- 15.62 15.47 10.47 6.94
2005 -- 15.46 14.83 4.14 4.77
2004 -- 15.69 15.19 10.19 9.64
2003 -- 15.33 14.81 9.91 8.96
=====================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund**
--------------------------------------------- ---------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++(a) Interest++(a) Interest++(a) Income++(a) Rate
====================================================================================================================================
INVESTMENT QUALITY (NQM)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2007 $538,266 1.35% 1.19% 6.67% 1.33% 1.17% 6.69% 11%
2006 561,471 1.20 1.20 6.79 1.17 1.17 6.82 10
2005 553,857 1.20 1.20 6.59 1.18 1.18 6.61 22
2004 574,164 1.20 1.20 6.78 1.20 1.20 6.79 16
2003 559,644 1.22 1.22 7.05 1.22 1.22 7.05 5
SELECT QUALITY (NQS)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2007 511,670 1.21 1.18 6.95 1.20 1.17 6.96 8
2006 529,996 1.18 1.18 6.91 1.17 1.17 6.93 5
2005 523,994 1.18 1.18 6.76 1.16 1.16 6.78 4
2004 531,694 1.21 1.21 6.96 1.15 1.15 7.02 4
2003 519,361 1.26 1.26 7.06 1.25 1.25 7.06 9
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- -------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
===============================================================================
INVESTMENT QUALITY (NQM)
-------------------------------------------------------------------------------
Year Ended 10/31:
2007 $301,000 $25,000 $69,706 $21,105 $ 40,766
2006 301,000 25,000 71,634 -- --
2005 301,000 25,000 71,001 -- --
2004 301,000 25,000 72,688 -- --
2003 301,000 25,000 71,482 -- --
SELECT QUALITY (NQS)
-------------------------------------------------------------------------------
Year Ended 10/31:
2007 279,000 25,000 70,849 6,665 119,630
2006 279,000 25,000 72,491 -- --
2005 279,000 25,000 71,953 -- --
2004 279,000 25,000 72,643 -- --
2003 279,000 25,000 71,538 -- --
===============================================================================
* Total Return 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 takes 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 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.
** After custodian fee credit, expense reimbursement and legal fee refund,
where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
90-91 spread
Financial
HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
----------------------------------------------------------------- ------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
===============================================================================================================================
QUALITY INCOME (NQU)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2007 $15.49 $1.01 $(.51) $(.30) $ -- $ .20 $(.75) $ -- $ (.75)
2006 15.26 1.01 .30 (.26) -- 1.05 (.82) -- (.82)
2005 15.54 1.02 (.22) (.16) -- .64 (.92) -- (.92)
2004 15.04 1.04 .51 (.08) -- 1.47 (.97) -- (.97)
2003 14.70 1.06 .34 (.07) -- 1.33 (.96) (.03) (.99)
PREMIER INCOME (NPF)
-------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2007 15.39 .95 (.59) (.29) -- .07 (.67) -- (.67)
2006 14.90 .94 .51 (.26) -- 1.19 (.70) -- (.70)
2005 15.53 .94 (.39) (.16) (.01) .38 (.88) (.13) (1.01)
2004 15.13 1.00 .47 (.08) -- 1.39 (.99) -- (.99)
2003 15.23 1.06 (.01) (.07) (.01) .97 (.98) (.09) (1.07)
===============================================================================================================================
Total Returns
---------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
=================================================================================
QUALITY INCOME (NQU)
---------------------------------------------------------------------------------
Year Ended 10/31:
2007 $ -- $14.94 $13.64 (2.54)% 1.31%
2006 -- 15.49 14.73 8.55 7.07
2005 -- 15.26 14.34 4.78 4.15
2004 -- 15.54 14.58 8.76 10.07
2003 -- 15.04 14.33 9.31 9.37
PREMIER INCOME (NPF)
---------------------------------------------------------------------------------
Year Ended 10/31:
2007 -- 14.79 13.30 2.28 .48
2006 -- 15.39 13.65 5.93 8.20
2005 -- 14.90 13.57 1.05 2.49
2004 -- 15.53 14.43 4.75 9.48
2003 -- 15.13 14.74 9.13 6.57
=================================================================================
Ratios/Supplemental Data
--------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund**
--------------------------------------------- ---------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++(a) Interest++(a) Interest++(a) Income++(a) Rate
====================================================================================================================================
QUALITY INCOME (NQU)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2007 $810,086 1.38% 1.17% 6.65% 1.37% 1.16% 6.66% 5%
2006 839,751 1.18 1.18 6.62 1.17 1.17 6.63 11
2005 827,077 1.18 1.18 6.57 1.17 1.17 6.57 6
2004 842,093 1.20 1.20 6.83 1.20 1.20 6.83 6
2003 815,270 1.21 1.21 7.12 1.21 1.21 7.13 9
PREMIER INCOME (NPF)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2007 294,378 1.84 1.20 6.30 1.82 1.18 6.32 10
2006 309,140 1.24 1.24 6.27 1.23 1.23 6.28 35
2005 299,423 1.23 1.23 6.16 1.22 1.22 6.17 20
2004 311,991 1.28 1.28 6.57 1.27 1.27 6.58 22
2003 304,048 1.24 1.24 6.91 1.23 1.23 6.91 19
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- -------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
===============================================================================
QUALITY INCOME (NQU)
-------------------------------------------------------------------------------
Year Ended 10/31:
2007 $ 452,000 $25,000 $69,806 $48,875 $26,823
2006 452,000 25,000 71,446 -- --
2005 452,000 25,000 70,745 -- --
2004 452,000 25,000 71,576 -- --
2003 452,000 25,000 70,092 -- --
PREMIER INCOME (NPF)
-------------------------------------------------------------------------------
Year Ended 10/31:
2007 165,000 25,000 69,603 47,355 10,701
2006 165,000 25,000 71,839 -- --
2005 165,000 25,000 70,367 -- --
2004 165,000 25,000 72,271 -- --
2003 165,000 25,000 71,068 -- --
===============================================================================
* Total Return 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 takes 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 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.
** After custodian fee credit, expense reimbursement and legal fee refund,
where applicable.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
See accompanying notes to financial statements.
92-93 spread
Financial
HIGHLIGHTS (continued)
Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions
------------------------------------------------------------------ --------------------------------
Distributions Distributions
from Net from Net
Beginning Investment Capital Investment Capital
Common Net Income to Gains to Income to Gains to
Share Net Realized/ Preferred Preferred Common Common
Net Asset Investment Unrealized Share- Share- Share- Share-
Value Income Gain (Loss) holders+ holders+ Total holders holders Total
==================================================================================================================================
HIGH INCOME OPPORTUNITY (NMZ)
----------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2007 $16.00 $1.23 $(.65) $(.24) $ --**** $ .34 $ (.98) $ --**** $ (.98)
2006 15.36 1.21 .65 (.19) -- 1.67 (1.04) -- (1.04)
2005 14.87 1.22 .54 (.13) (.01) 1.62 (1.07) (.06) (1.13)
2004(b) 14.33 .98 .71 (.08) -- 1.61 (.89) -- (.89)
==================================================================================================================================
Total Returns
---------------------
Offering Based
Costs and Ending on
Preferred Common Based Common
Share Share Ending on Share Net
Underwriting Net Asset Market Market Asset
Discounts Value Value Value* Value*
=================================================================================
HIGH INCOME OPPORTUNITY (NMZ)
---------------------------------------------------------------------------------
Year Ended 10/31:
2007 $ -- $15.36 $15.82 (2.68)% 2.14%
2006 .01 16.00 17.25 14.79 11.34
2005 -- 15.36 15.99 14.35 11.20
2004(b) (.18) 14.87 15.04 6.49 10.38
=================================================================================
Ratios/Supplemental Data
-------------------------------------------------------------------------------------------------------------------
Ratios to Average Net Assets Ratios to Average Net Assets
Applicable to Common Shares Applicable to Common Shares
Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund**
--------------------------------------------- ---------------------------------------------
Ending
Net
Assets
Applicable Expenses Expenses Net Expenses Expenses Net Portfolio
to Common Including Excluding Investment Including Excluding Investment Turnover
Shares (000) Interest++(a) Interest++(a) Income++(a) Interest++(a) Interest++(a) Income++(a) Rate
====================================================================================================================================
HIGH INCOME OPPORTUNITY (NMZ)
------------------------------------------------------------------------------------------------------------------------------------
Year Ended 10/31:
2007 $361,484 1.50% 1.28% 7.31% 1.04% .82% 7.77% 12%
2006 372,700 1.21 1.21 7.31 .75 .75 7.77 9
2005 357,025 1.20 1.20 7.54 .74 .74 8.00 6
2004(b) 345,023 1.15* 1.15* 6.75* .70* .70* 7.20* 52
====================================================================================================================================
Floating Rate Obligations
Preferred Shares at End of Period at End of Period
-------------------------------------- -------------------------
Aggregate Liquidation Aggregate
Amount and Market Asset Amount Asset
Outstanding Value Coverage Outstanding Coverage
(000) Per Share Per Share (000) Per $1,000
===============================================================================
HIGH INCOME OPPORTUNITY (NMZ)
-------------------------------------------------------------------------------
Year Ended 10/31:
2007 $ 155,000 $25,000 $83,304 $32,995 $16,653
2006 155,000 25,000 85,113 -- --
2005 155,000 25,000 82,585 -- --
2004(b) 155,000 25,000 80,649 -- --
===============================================================================
* Total Return 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 takes 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 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.
** After custodian fee credit, expense reimbursement and legal fee refund,
where applicable.
*** Annualized.
**** Per share Distributions from Capital Gains to Preferred Shareholders and
Capital Gains to Common Shareholders round to less than $.01 per share.
+ The amounts shown are based on Common share equivalents.
++ Ratios do not reflect the effect of dividend payments to Preferred
shareholders; income ratios reflect income earned on assets attributable to
Preferred shares.
(a) Interest expense arises from the application of SFAS No. 140 to certain
inverse floating rate transactions entered into by the Fund as more fully
described in Footnote 1 - Inverse Floating Rate Securities.
(b) For the period November 19, 2003 (commencement of operations) through
October 31, 2004.
See accompanying notes to financial statements.
94-95 spread
Board Members & Officers
The management of the Funds, including general supervision of the duties
performed for the Funds by the Adviser, is the responsibility of the Board
Members of the Funds. The number of board members of the Fund is currently set
at eight. None of the board members who are not "interested" persons of the
Funds has ever been a director or employee of, or consultant to, Nuveen or its
affiliates. The names and business addresses of the board members and officers
of the Funds, their principal occupations and other affiliations during the past
five years, the number of portfolios each oversees and other directorships they
hold are set forth below.
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
& ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER
AND TERM(2) OVERSEEN BY DIRECTORSHIPS
BOARD MEMBER DURING PAST 5 YEARS
BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS:
[] TIMOTHY R. SCHWERTFEGER(1) Former director (1994-November 12,
3/28/49 Chairman of 1994 2007), Chairman (1996-June 30, 2007),
333 W. Wacker Drive the Board ANNUAL 182 Non-Executive Chairman (July 1,
Chicago, IL 60606 and Board Member 2007-November 12, 2007) and Chief
Executive Officer (1996-June 30, 2007)
of Nuveen Investments, Inc. and Nuveen
Asset Management and certain other
subsidiaries of Nuveen Investments,
Inc.; formerly, Director (1992-2006) of
Institutional Capital Corporation.
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
[] ROBERT P. BREMNER Private Investor and Management
8/22/40 Lead 1997 Consultant.
333 W. Wacker Drive Independent ANNUAL OR CLASS III 182
Chicago, IL 60606 Board member
[] JACK B. EVANS President, The Hall-Perrine Foundation,
10/22/48 1999 a private philanthropic corporation
333 W. Wacker Drive Board member ANNUAL OR CLASS III 182 (since 1996); Director and Vice
Chicago, IL 60606 Chairman, United Fire Group, a publicly
held company; Member of the Board of
Regents for the State of Iowa University
System; Director, Gazette Companies;
Life Trustee of Coe College and Iowa
College Foundation; Member of the
Advisory Council of the Department of
Finance in the Tippie College of
Business, University of Iowa; 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,
3/6/48 2004 University of Iowa (since July 2006);
333 W. Wacker Drive Board member ANNUAL OR CLASS II 182 formerly, Dean and Distinguished
Chicago, IL 60606 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 (since 1997),
Credit Research Center at Georgetown
University; Director (since 2004) of
Xerox Corporation; Director, SS&C
Technologies, Inc. (May 2005-October
2005).
96
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
& ADDRESS APPOINTED IN FUND COMPLEX INCLUDING OTHER
AND TERM(2) OVERSEEN BY DIRECTORSHIPS
BOARD MEMBER DURING PAST 5 YEARS
BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS:
[] DAVID J. KUNDERT Director, Northwestern Mutual Wealth
10/28/42 2005 Management Company; Retired (since 2004)
333 W. Wacker Drive Board member ANNUAL OR CLASS II 180 as Chairman, JPMorgan Fleming Asset
Chicago, IL 60606 Management, President and CEO, Banc One
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,
Milwaukee Repertory Theater.
[] WILLIAM J. SCHNEIDER Chairman of Miller-Valentine Partners
9/24/44 1997 Ltd., a real estate investment company,
333 W. Wacker Drive Board member ANNUAL 182 formerly, Senior Partner and Chief
Chicago, IL 60606 Operating Officer (retired, 2004);
Director, Dayton Development Coalition;
formerly, Member, Business Advisory
Council, Cleveland Federal Reserve Bank.
[] JUDITH M. STOCKDALE Executive Director, Gaylord and Dorothy
12/29/47 1997 Donnelley Foundation (since 1994); prior
333 W. Wacker Drive Board member ANNUAL OR CLASS I 182 thereto, Executive Director, Great Lakes
Chicago, IL 60606 Protection Fund (from 1990 to 1994).
[] CAROLE E. STONE Director, Chicago Board Options Exchange
6/28/47 2007 (since 2006); Chair New York Racing
333 West Wacker Drive Board member ANNUAL OR CLASS I 182 Association Oversight Board (since
Chicago, IL 60606 2005); Commissioner, New York State
Commission on Public Authority Reform
(since 2005); formerly Director, New
York State Division of the Budget
(2000-2004), Chair, Public Authorities
Control Board (2000-2004) and Director,
Local Government Assistance Corporation
(2000-2004).
97
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUND:
[] GIFFORD R. ZIMMERMAN Managing Director (since 2002),
9/9/56 Chief Assistant Secretary and Associate
333 W. Wacker Drive Administrative 1988 182 General Counsel, formerly, Vice
Chicago, IL 60606 Officer President and Assistant General Counsel,
of Nuveen Investments, LLC; Managing
Director (since 2002), Associate General
Counsel and Assistant Secretary, of
Nuveen Asset Management; Vice President
and Assistant Secretary of NWQ
Investment Management Company, LLC.
(since 2002), Nuveen Investments
Advisers Inc. (since 2002), Symphony
Asset Management LLC, and NWQ Investment
Management Company, LLC (since 2003),
Tradewinds Global Investors, LLC, and
Santa Barbara Asset Management, LLC
(since 2006); Nuveen HydePark Group LLC
and Richards & Tierney, Inc. (since
2007); Managing Director, Associate
General Counsel and Assistant Secretary
of Rittenhouse Asset Management, Inc.
(since 2003); Managing Director (since
2004) and Assistant Secretary (since
1994) of Nuveen Investments, Inc.,
Assistant Secretary (since 2003) of
Symphony Asset Management LLC.
[] WILLIAMS ADAMS IV Executive Vice President, U.S.
6/9/55 Structured Products of Nuveen
333 West Wacker Drive Vice President 2007 120 Investments, LLC, (since 1999), prior
Chicago, IL 60606 thereto, Managing Director of Structured
Investments.
[] JULIA L. ANTONATOS Managing Director (since 2005), formerly
9/22/63 Vice President (since 2002) of Nuveen
333 W. Wacker Drive Vice President 2004 182 Investments, LLC; Chartered Financial
Chicago, IL 60606 Analyst.
[] CEDRIC H. ANTOSIEWICZ Managing Director, (since 2004)
1/11/62 previously, Vice President (1993-2004)
333 W. Wacker Drive Vice President 2007 120 of Nuveen Investments, LLC.
Chicago, IL 60606
[] MICHAEL T. ATKINSON Vice President (since 2002) of Nuveen
2/3/66 Vice President Investments, LLC.
333 W. Wacker Drive and Assistant 2000 182
Chicago, IL 60606 Secretary
[] PETER H. D'ARRIGO Vice President and Treasurer of Nuveen
11/28/67 Investments, LLC and Nuveen Investments,
333 W. Wacker Drive Vice President 1999 182 Inc.; Vice President and Treasurer of
Chicago, IL 60606 Nuveen Asset Management (since 2002),
Nuveen Investments Advisers Inc. (since
2002); NWQ Investment Management
Company, LLC. (since 2002); Rittenhouse
Asset Management, Inc. (since 2003),
Tradewinds NWQ Global Investors, LLC
(since 2006), Santa Barbara Asset
Management, LLC (since 2006) and Nuveen
HydePark Group, LLC and Richards
&Tierney, Inc. (since 2007); Treasurer
of Symphony Asset Management LLC (since
2003); formerly, Vice President and
Treasurer (1999-2004) of Nuveen Advisory
Corp. and Nuveen Institutional Advisory
Corp.(3), Chartered Financial Analyst.
[] LORNA C. FERGUSON Managing Director (since 2004),
10/24/45 formerly, Vice President of Nuveen
333 W. Wacker Drive Vice President 1998 182 Investments, LLC, Managing Director
Chicago, IL 60606 (2004) formerly, Vice President
(1998-2004) of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3);
Managing Director (since 2005) of Nuveen
Asset Management.
[] WILLIAM M. FITZGERALD Managing Director (since 2002),
3/2/64 formerly, Vice President of Nuveen
333 W. Wacker Drive Vice President 1995 182 Investments, LLC; Managing Director
Chicago, IL 60606 (1997-2004) of Nuveen Advisory Corp. and
Nuveen Institutional Advisory Corp.(3);
Managing Director (since 2001) of Nuveen
Asset Management; Vice President (since
2002) of Nuveen Investments Advisers
Inc.; Chartered Financial Analyst.
98
NAME, POSITION(S) HELD YEAR FIRST NUMBER PRINCIPAL
BIRTHDATE WITH THE FUNDS ELECTED OR OF PORTFOLIOS OCCUPATION(S)
AND ADDRESS APPOINTED(4) IN FUND COMPLEX DURING PAST 5 YEARS
OVERSEEN
BY OFFICER
OFFICERS OF THE FUND:
[] STEPHEN D. FOY Vice President (since 1993) and Funds
5/31/54 Vice President Controller (since 1998) of Nuveen
333 W. Wacker Drive and Controller 1998 182 Investments, LLC; formerly, Vice
Chicago, IL 60606 President and Funds Controller
(1998-2004) of Nuveen Investments, Inc.;
Certified Public Accountant.
[] WALTER M. KELLY Vice President (since 2006) formerly,
2/24/70 Chief Compliance Assistant Vice President and Assistant
333 West Wacker Drive Officer and 2003 182 General Counsel (2003-2006) of Nuveen
Chicago, IL 60606 Vice President Investments, LLC; Assistant Vice
President and Assistant Secretary of the
Nuveen Funds (2003-2006); previously,
Associate (2001-2003) at the law firm of
Vedder, Price, Kaufman & Kammholz.
[] DAVID J. LAMB Vice President (since 2000) of Nuveen
3/22/63 Investments, LLC; Certified Public
333 W. Wacker Drive Vice President 2000 182 Accountant.
Chicago, IL 60606
[] TINA M. LAZAR Vice President of Nuveen Investments, LLC
8/27/61 (since 1999).
333 W. Wacker Drive Vice President 2002 182
Chicago, IL 60606
[] LARRY W. MARTIN Vice President, Assistant Secretary and
7/27/51 Vice President Assistant General Counsel of Nuveen
333 W. Wacker Drive and Assistant 1988 182 Investments, LLC; formerly, Vice
Chicago, IL 60606 Secretary President and Assistant Secretary of
Nuveen Advisory Corp. and Nuveen
Institutional Advisory Corp.(3); Vice
President (since 2005) and Assistant
Secretary of Nuveen Investments, Inc.;
Vice President (since 2005) and
Assistant Secretary (since 1997) of
Nuveen Asset Management; Vice President
(since 2000), Assistant Secretary and
Assistant General Counsel (since 1998)
of Rittenhouse Asset Management, Inc.;
Vice President and Assistant Secretary
of Nuveen Investments Advisers Inc.
(since 2002); 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 Richards &Tierney, Inc. (since
2007).
[] KEVIN J. MCCARTHY Vice President, Nuveen Investments, LLC
3/26/66 Vice President (since 2007); Vice President, and
333 W. Wacker Drive and Secretary 2007 182 Assistant Secretary, Nuveen Asset
Chicago, IL 60606 Management, Rittenhouse Asset
Management, Inc., Nuveen Investment
Advisers Inc., Nuveen Investment
Institutional Services Group LLC, NWQ
Investment Management Company, LLC,
Tradewinds Global Investors LLC,
NWQHoldings, LLC, Symphony Asset
Management LLC, Santa Barbara Asset
Management LLC, Nuveen HydePark Group,
LLC and Richards &Tierney, Inc. (since
2007); Vice President and Assistant
General Counsel, Nuveen Investments,
Inc. (since 2007). prior thereto,
Partner, Bell, Boyd & Lloyd LLP
(1997-2007).
[] JOHN V. MILLER Managing Director (since 2007),
4/10/67 formerly, Vice President (2002-2007) of
333 W. Wacker Drive Vice President 2007 182 Nuveen Investments, LLC; Chartered
Chicago, IL 60606 Financial Analyst.
[] JAMES F. RUANE Vice President, Nuveen Investments since
7/3/62 Vice President 2007; prior thereto, Partner, Deloitte &
333 W. Wacker Drive and Assistant 2007 182 Touche USA LLP (since 2005), formerly,
Chicago, IL 60606 Secretary senior tax manager (since 2002);
Certified Public Accountant.
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the
Investment Company Act of 1940, by reason of being the former Chairman and
Chief Executive Officer of Nuveen Investments, Inc. and having previously
served in various other capacities with Nuveen Investments, Inc. and its
subsidiaries. It is expected that Mr. Schwertfeger will resign from the
Board of Trustees by the end of the second quarter of 2008.
(2) For High Income Opportunity (NMZ), Board Members serve three year terms,
except for two board members who are elected by the holders of Preferred
Shares. The Board of Trustees for NMZ 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. For Investment Quality (NQM), Select Quality
(NQS), Quality Income (NQU) and Premier Income (NPF), the Board Members
serve a one year term to serve until the next annual meeting or until their
successors shall have been duly elected and qualified. 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.
(3) Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. were
reorganized into Nuveen Asset Management, effective January 1, 2005.
(4) Officers serve one year terms through July of each year. The year first
elected or appointed represents the year in which the Officer was first
elected or appointed to any fund in the Nuveen Complex.
99
Annual Investment
Management Agreement
APPROVAL PROCESS
The Board Members are responsible for overseeing the performance of the
investment adviser to the Funds and determining whether to continue the advisory
arrangements. At the annual review meeting held on May 21, 2007 (the "May
Meeting"), the Board Members of the Funds, including the Independent Board
Members, unanimously approved the continuance of the Investment Management
Agreement between each Fund (each, a "Fund") and Nuveen Asset Management
("NAM"). The foregoing Investment Management Agreements with NAM are hereafter
referred to as the "Original Investment Management Agreements."
Subsequent to the May Meeting, Nuveen Investments, Inc. ("Nuveen"), the parent
company of NAM, entered into a merger agreement providing for the acquisition of
Nuveen by Windy City Investments, Inc., a corporation formed by investors led by
Madison Dearborn Partners, LLC ("MDP"), a private equity investment firm (the
"Transaction"). Each Original Investment Management Agreement, as required by
Section 15 of the Investment Company Act of 1940 (the "1940 Act"), provides for
its automatic termination in the event of its "assignment" (as defined in the
1940 Act). Any change in control of the adviser is deemed to be an assignment.
The consummation of the Transaction will result in a change of control of NAM as
well as its affiliated sub-advisers and therefore cause the automatic
termination of each Original Investment Management Agreement, as required by the
1940 Act. Accordingly, in anticipation of the Transaction, at a meeting held on
July 31, 2007 (the "July Meeting"), the Board Members, including the Independent
Board Members, unanimously approved new Investment Management Agreements (the
"New Investment Management Agreements") with NAM on behalf of each Fund to take
effect immediately after the Transaction or shareholder approval of the new
advisory contracts, whichever is later. The 1940 Act also requires that each New
Investment Management Agreement be approved by the respective Fund's
shareholders in order for it to become effective. Accordingly, to ensure
continuity of advisory services, the Board Members, including the Independent
Board Members, unanimously approved Interim Investment Management Agreements to
take effect upon the closing of the Transaction if shareholders have not yet
approved the New Investment Management Agreements.
Because the information provided and considerations made at the annual review
continue to be relevant with respect to the evaluation of the New Investment
Management Agreements, the Board considered the foregoing as part of its
deliberations of the New Investment Management Agreements. Accordingly, as
indicated, the discussions immediately below outline the materials and
information presented to the Board in connection with the Board's prior annual
review and the analysis undertaken and the conclusions reached by Board Members
when determining to continue the Original Investment Management Agreements.
I. APPROVAL OF THE ORIGINAL INVESTMENT MANAGEMENT AGREEMENTS
During the course of the year, the Board received a wide variety of materials
relating to the services provided by NAM and the performance of the Funds. At
each of its quarterly meetings, the Board reviewed investment performance and
various matters relating to the operations of the Funds and other Nuveen funds,
including the compliance program, shareholder services, valuation, custody,
distribution and other information relating to the nature, extent and quality of
services provided by NAM. Between the regularly scheduled quarterly meetings,
the Board Members received information on particular matters as the need arose.
In preparation for their considerations at the May Meeting, the Independent
Board Members received extensive materials, well in advance of the meeting,
which outlined or are related to, among other things:
[] the nature, extent and quality of services provided by NAM;
[] the organization and business operations of NAM, including the
responsibilities of various departments and key personnel;
100
[] each Fund's past performance as well as the Fund's performance compared to
funds with similar investment objectives based on data and information
provided by an independent third party and to customized benchmarks;
[] the profitability of Nuveen and certain industry profitability analyses for
unaffiliated advisers;
[] the expenses of Nuveen in providing the various services;
[] the advisory fees and total expense ratios of each Fund, including
comparisons of such fees and expenses with those of comparable,
unaffiliated funds based on information and data provided by an independent
third party (the "Peer Universe") as well as compared to a subset of funds
within the Peer Universe (the "Peer Group") of the respective Fund (as
applicable);
[] the advisory fees NAM assesses to other types of investment products or
clients;
[] the soft dollar practices of NAM, if any; and
[] from independent legal counsel, a legal memorandum describing among other
things, applicable laws, regulations and duties in reviewing and approving
advisory contracts.
At the May Meeting, NAM made a presentation to, and responded to questions from,
the Board. Prior to and after the presentations and reviewing the written
materials, the Independent Board Members met privately with their legal counsel
to review the Boardduties in reviewing advisory contracts and considering the
renewal of the advisory contracts. The Independent Board Members, in
consultation with independent counsel, reviewed the factors set out in judicial
decisions and Securities and Exchange Commission ("SEC") directives relating to
the renewal of advisory contracts. As outlined in more detail below, the Board
Members considered all factors they believed relevant with respect to each Fund,
including, but not limited to, the following: (a) the nature, extent and quality
of the services to be provided by NAM; (b) the investment performance of the
Fund and NAM; (c) the costs of the services to be provided and profits to be
realized by Nuveen and its affiliates; (d) the extent to which economies of
scale would be realized; and (e) whether fee levels reflect those economies of
scale for the benefit of the Fund's investors. In addition, as noted, the Board
Members met regularly throughout the year to oversee the Funds. In evaluating
the Original Investment Management Agreements, the Board Members also relied
upon their knowledge of NAM, its services and the Funds resulting from their
meetings and other interactions throughout the year. It is with this background
that the Board Members considered each Original Investment Management Agreement.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In considering the renewal of the Original Investment Management Agreements, the
Board Members considered the nature, extent and quality of NAM's services. The
Board Members reviewed materials outlining, among other things, Nuveen'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 municipal fund product line. As noted, at the annual
review, the Board Members were already familiar with the organization,
operations and personnel of NAM due to the Board Members' experience in
governing the respective Funds and working with NAM on matters relating to the
Funds. With respect to personnel, the Board Members recognized NAM's investment
in additional qualified personnel throughout the various groups in the
organization and recommended to NAM that it continue to review staffing needs as
necessary. In addition, the Board Members reviewed materials describing the
current status and, in particular, the developments in 2006 with respect to
NAM's investment process, investment strategies (including additional tools used
in executing such strategies), personnel (including portfolio management and
research teams), trading process, hedging activities, risk management operations
(e.g., reviewing credit quality, duration limits, and derivatives use, as
applicable), and investment operations (such as enhancements to trading
procedures, pricing procedures, and client services). The Board Members
recognized NAM's investment of resources and efforts to continue to enhance and
refine its investment process.
101
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
In addition to advisory services, the Independent Board Members considered the
quality of administrative and non-advisory services provided by NAM and noted
that NAM and its affiliates provide the Funds with a wide variety of services
and officers and other personnel as are necessary for the operations of the
Funds, including:
[] product management;
[] fund administration;
[] oversight by shareholder services and other fund service providers;
[] administration of Board relations;
[] regulatory and portfolio compliance; and
[] legal support.
As the Funds operate in a highly regulated industry and given the importance of
compliance, the Board Members considered, in particular, Nuveen's compliance
activities for the Funds and enhancements thereto. In this regard, the Board
Members recognized the quality of Nuveen's compliance team. The Board Members
further noted Nuveen's negotiations with other service providers and the
corresponding reduction in certain service providers' fees at the May Meeting.
In addition to the foregoing services, the Board Members also noted the
additional services that NAM or its affiliates provide to Nuveen's closed-end
funds, including, in particular, its secondary market support activities. The
Board Members recognized 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 shareholder communications;
[] providing advertising for the Nuveen closed-end funds;
[] maintaining its closed-end fund website;
[] maintaining continual contact with financial advisers;
[] providing educational symposia;
[] conducting research with investors and financial analysis regarding
closed-end funds; and
[] evaluating secondary market performance.
With respect to the Nuveen closed-end funds that utilize leverage through the
issuance of preferred shares ("Preferred Shares"), the Board Members noted
Nuveen's continued support for the holders of Preferred Shares by, among other
things:
[] maintaining an in-house trading desk;
[] maintaining a product manager for the Preferred Shares;
[] developing distribution for Preferred Shares with new market participants;
[] maintaining an orderly auction process;
[] managing leverage and risk management of leverage; and
[] maintaining systems necessary to test compliance with rating agency
criteria.
Based on their review, the Board Members found that, overall, the nature, extent
and quality of services provided (and expected to be provided) to the respective
Funds under the Original Investment Management Agreements were satisfactory.
102
B. THE INVESTMENT PERFORMANCE OF THE FUNDS AND NAM
At the May Meeting, the Board considered the investment performance for each
Fund, including the Fund's historic performance as well as its performance
compared to funds with similar investment objectives (the "Performance Peer
Group") based on data provided by an independent third party (as described
below). The Board Members also reviewed the respective Fund's portfolio level
performance (which does not reflect fund level fees and expenses, and leverage)
against customized benchmarks, described in further detail below.
In evaluating the performance information during the annual review at the May
Meeting, in certain instances, the Board Members noted that the closest
Performance Peer Group for a fund may not adequately reflect such fund's
investment objectives and strategies, thereby limiting the usefulness of the
comparisons of such fund's performance with that of the Performance Peer Group.
With respect to state-specific municipal funds, the Board Members also
recognized that certain funds do not have a corresponding state-specific
Performance Peer Group in which case their performance is measured against a
more general municipal category for various states. With respect to municipal
closed-end funds, funds that do not have corresponding state-specific
Performance Peer Groups are from states other than New York, California,
Florida, New Jersey, Michigan and Pennsylvania. However, with respect to funds
based in Florida, New Jersey, Michigan and Pennsylvania, the peer group may be
so small or the Nuveen funds may dominate the category to such an extent that
performance information for such funds was also compared to the more general
category for all states (other than New York and California).
The Board Members reviewed performance information including, among other
things, total return information compared with the Fund's Performance Peer Group
for the one-, three- and five-year periods (as applicable) ending December 31,
2006. The Board Members also reviewed the Fund's portfolio level performance
(which does not reflect fund level fees and expenses, and leverage) compared to
customized portfolio level benchmarks for the one- and three-year periods ending
December 31, 2006 (as applicable). The analysis was used to assess the efficacy
of investment decisions against appropriate measures of risk and total return,
within specific market segments. This information supplemented the Fund
performance information provided to the Board at each of its quarterly meetings.
Based on their review, the Board Members determined that each Fund's investment
performance over time had been satisfactory, subject to the following. With
respect to various municipal closed-end funds, the Board Members noted relative
total return underperformance in recent years compared to peers. The Board
Members reviewed materials and discussed with NAM the factors contributing to
the shift in performance including, among other things, the degree of risk
undertaken by peers compared to the municipal closed-end funds (such as through
the increased use of leverage or taking concentrated positions in high risk
credits). In addition, the Board Members also considered a fund's dividend
performance and the extent of any secondary market discounts. The Board Members
noted NAM's efforts to evaluate the factors affecting performance and determine
whether modification to a fund's investment strategy is necessary or
appropriate, and concluded that they were satisfied with the steps being taken.
C. FEES, EXPENSES AND PROFITABILITY
1. FEES AND EXPENSES
During the annual review, in evaluating the management fees and expenses of
a Fund, the Board reviewed, among other things, the Fund's advisory fees
(net and gross management fees) and total expense ratios (before and after
expense reimbursements and/or waivers) in absolute terms as well as
comparisons to the gross management fees (before waivers), net management
fees (after waivers) and total expense ratios (before and after waivers) of
comparable funds in the Peer Universe and the Peer Group. In reviewing the
fee schedule for a Fund, the Board Members 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 funds launched since 1999). The Board Members
further reviewed data regarding the construction of Peer Groups as well as
the methods of measurement for the fee and expense analysis and the
performance analysis. In certain cases, due to the small number of peers in
the Peer Universe, the Peer Universe and Peer Group had significant overlap
or even consisted entirely of the same unaffiliated funds. In reviewing the
comparisons of fee and expense information, the Board Members recognized
that in certain cases, the fund size relative to peers, the small size and
odd composition of the Peer Group (including differences
103
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
in objectives and strategies), expense anomalies, timing of information
used or other factors impacting the comparisons thereby limited some of the
usefulness of the comparative data. The Board Members also considered the
differences in the use of leverage. Based on their review of the fee and
expense information provided, the Board Members determined that each Fund's
net total expense ratio was within an acceptable range compared to peers.
2. COMPARISONS WITH THE FEES OF OTHER CLIENTS
At the annual review, the Board Members further reviewed data comparing the
advisory fees of NAM with fees NAM charges to other clients. With respect
to municipal funds, such clients include NAM's municipal separately managed
accounts. In general, the advisory fees charged for separate accounts are
somewhat lower than the advisory fees assessed to the Funds. The 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 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. As described in further detail above, such additional
services include, but are not limited to: product management, fund
administration, oversight of third party service providers, administration
of Board relations, and legal support. The Board Members noted that the
Funds operate in a highly regulated industry requiring extensive compliance
functions compared to other investment products. Given the inherent
differences in the products, particularly the extensive services provided
to the Funds, the Board Members believe such facts justify the different
levels of fees.
3. PROFITABILITY OF NUVEEN
In conjunction with its review of fees, the 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.
At the annual review, the Board Members reviewed the revenues and expenses
of Nuveen's advisory activities for the last three years, the allocation
methodology used in preparing the profitability data as well as the 2006
Annual Report for Nuveen. The 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 Board Members noted the enhanced dialogue and information
regarding profitability with NAM during the year, including more frequent
meetings and updates from Nuveen's corporate finance group. The Board
Members also reviewed data comparing Nuveen's profitability with other fund
sponsors prepared by three independent third party service providers as
well as comparisons of the revenues, expenses and profit margins of various
unaffiliated management firms with similar amounts of assets under
management prepared by Nuveen.
In reviewing profitability, the Board Members recognized the subjective
nature of determining profitability which may be affected by numerous
factors, including the allocation of expenses. Further, the 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 Board Members reviewed Nuveen's methodology
and assumptions for allocating expenses across product lines to determine
profitability. Last year, the Board Members also designated an Independent Board
Member as a point person for the Board to review the methodology determinations
during the year and any refinements thereto, which relevant information produced
from such process was reported to the full Board. In reviewing profitability,
the Board Members recognized Nuveen's increased investment in its fund business.
Based on its review, the 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 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
104
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 Board Members
determined that the advisory fees and expenses of the Funds were reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
With respect to economies of scale, the Board Members recognized the potential
benefits resulting from the costs of a Fund being spread over a larger asset
base. To help ensure the shareholders share in these benefits, the Board Members
reviewed and considered the breakpoints in the advisory fee schedules that
reduce advisory fees. In addition to advisory fee breakpoints, the Board also
approved a complex-wide fee arrangement in 2004. Pursuant to the complex-wide
fee arrangement, the fees of the funds in the Nuveen complex, including the
Funds, are reduced as the assets in the fund complex reach certain levels. In
evaluating the complex-wide fee arrangement, the Board Members noted that the
last complex-wide asset level breakpoint for the complex-wide fee schedule was
at $91 billion and that the Board Members anticipated further review and/or
negotiations prior to the assets of the Nuveen complex reaching such threshold.
Based on their review, the Board Members concluded that the breakpoint schedule
and complex-wide fee arrangement were acceptable and desirable in providing
benefits from economies of scale to shareholders, subject to further evaluation
of the complex-wide fee schedule as assets in the complex increase. See Section
II, Paragraph D - "Approval of the New Investment Management Agreements -
Economies of Scale and Whether Fee Levels Reflect These Economies of Scale" for
information regarding subsequent modifications to the complex-wide fee.
E. INDIRECT BENEFITS
In evaluating fees, the Board Members also considered any indirect benefits or
profits NAM or its affiliates may receive as a result of its relationship with
each Fund. With respect to closed-end funds, the Board Members considered the
revenues received by affiliates of NAM for serving as agent at Nuveen's
preferred trading desk and for serving as a co-manager in the initial public
offering of new closed-end exchange traded funds.
In addition to the above, the 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. With respect to NAM,
the 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 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 Board Members did not identify any single factor discussed previously as
all-important or controlling in their considerations to continue an advisory
contract. The Board Members, including the Independent Board Members,
unanimously concluded that the terms of the Original Investment Management
Agreements are fair and reasonable, that NAM's fees are reasonable in light of
the services provided to each Fund and that the renewal of the Original
Investment Management Agreements be approved.
II. APPROVAL OF THE NEW INVESTMENT MANAGEMENT AGREEMENTS
Following the May Meeting, the Board Members were advised of the potential
Transaction. As noted above, the completion of the Transaction would terminate
each of the Original Investment Management Agreements. Accordingly, at the July
Meeting, the Board of each Fund, including the Independent Board Members,
unanimously approved the New Investment Management Agreements on behalf of the
respective Funds. Leading up to the July Meeting, the Board Members had several
meetings and deliberations with and without Nuveen management present, and with
the advice of legal counsel, regarding the proposed Transaction as outlined
below.
On June 8, 2007, the Board Members held a special telephonic meeting to discuss
the proposed Transaction. At that meeting, the Board Members established a
special ad hoc committee comprised solely of Independent Board Members to focus
on the Transaction and to keep the Independent Board Members
105
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
updated with developments regarding the Transaction. On June 15, 2007, the ad
hoc committee discussed with representatives of NAM the Transaction and
modifications to the complex-wide fee schedule that would generate additional
fee savings at specified levels of complex-wide asset growth. Following the
foregoing meetings and several subsequent telephonic conferences among
Independent Board Members and independent counsel, and between Independent Board
Members and representatives of Nuveen, the Board met on June 18, 2007 to further
discuss the proposed Transaction. Immediately prior to and then again during the
June 18, 2007 meeting, the Independent Board Members met privately with their
independent legal counsel. At that meeting, the Board met with representatives
of MDP, of Goldman Sachs, Nuveen's financial adviser in the Transaction, and of
the Nuveen Board to discuss, among other things, the history and structure of
MDP, the terms of the proposed Transaction (including the financing terms), and
MDP's general plans and intentions with respect to Nuveen (including with
respect to management, employees, and future growth prospects). On July 9, 2007,
the Board also met to be updated on the Transaction as part of a special
telephonic Board meeting. The Board Members were further updated at a special
in-person Board meeting held on July 19, 2007 (one Independent Board Member
participated telephonically). Subsequently, on July 27, 2007, the ad hoc
committee held a telephonic conference with representatives of Nuveen and MDP to
further discuss, among other things, the Transaction, the financing of the
Transaction, retention and incentive plans for key employees, the effect of
regulatory restrictions on transactions with affiliates after the Transaction,
and current volatile market conditions and their impact on the Transaction.
In connection with their review of the New Investment Management Agreements, the
Independent Board Members, through their independent legal counsel, also
requested in writing and received additional information regarding the proposed
Transaction and its impact on the provision of services by NAM and its
affiliates.
The Independent Board Members received, well in advance of the July Meeting,
materials which outlined, among other things:
[] the structure and terms of the Transaction, including MDP's co-investor
entities and their expected ownership interests, and the financing
arrangements that will exist for Nuveen following the closing of the
Transaction;
[] the strategic plan for Nuveen following the Transaction;
[] the governance structure for Nuveen following the Transaction;
[] any anticipated changes in the operations of the Nuveen funds following the
Transaction, including changes to NAM's and Nuveen's day-to-day management,
infrastructure and ability to provide advisory, distribution or other
applicable services to the Funds;
[] any changes to senior management or key personnel who work on Fund related
matters (including portfolio management, investment oversight, and
legal/compliance) and any retention or incentive arrangements for such
persons;
[] any anticipated effect on each Fund's expense ratio (including advisory
fees) following the Transaction;
[] any benefits or undue burdens imposed on the Funds as a result of the
Transaction;
[] any legal issues for the Funds as a result of the Transaction;
[] the nature, quality and extent of services expected to be provided to the
Funds following the Transaction, changes to any existing services and
policies affecting the Funds, and cost-cutting efforts, if any, that may
impact such services or policies;
[] any conflicts of interest that may arise for Nuveen or MDP with respect to
the Funds;
[] the costs associated with obtaining necessary shareholder approvals and who
would bear those costs; and
[] from legal counsel, a memorandum describing the applicable laws,
regulations and duties in approving advisory contracts, including, in
particular, with respect to a change of control.
106
Immediately preceding the July Meeting, representatives of MDP met with the
Board to further respond to questions regarding the Transaction. After the
meeting with MDP, the Independent Board Members met with independent legal
counsel in executive session. At the July Meeting, Nuveen also made a
presentation and responded to questions. Following the presentations and
discussions of the materials presented to the Board, the Independent Board
Members met again in executive session with their counsel. As outlined in more
detail below, the Independent Board Members considered all factors they believed
relevant with respect to each Fund, including the impact that the Transaction
could be expected to have on the following: (a) the nature, extent and quality
of services to be provided; (b) the investment performance of the Funds; (c) the
costs of the services and profits to be realized by Nuveen and its affiliates;
(d) the extent to which economies of scale would be realized; and (e) whether
fee levels reflect those economies of scale for the benefit of investors. As
noted above, the Board Members had completed their annual review of the
respective Original Investment Management Agreements at the May Meeting and many
of the factors considered at the annual review were applicable to their
evaluation of the New Investment Management Agreements. Accordingly, in
evaluating the New Investment Management Agreements, the Board Members relied
upon their knowledge and experience with NAM and considered the information
received and their evaluations and conclusions drawn at the annual review. While
the Board reviewed many Nuveen funds at the July Meeting, the Independent Board
Members evaluated all information available to them on a fund-by-fund basis, and
their determinations were made separately in respect of each Fund.
A. NATURE, EXTENT AND QUALITY OF SERVICES
In evaluating the nature, quality and extent of the services expected to be
provided by NAM under the New Investment Management Agreements, the Independent
Board Members considered, among other things, the expected impact, if any, of
the Transaction on the operations, facilities, organization and personnel of
NAM; the potential implications of regulatory restrictions on the Funds
following the Transaction; the ability of NAM and its affiliates to perform
their duties after the Transaction; and any anticipated changes to the current
investment and other practices of the Funds.
The Board noted that the terms of each New Investment Management Agreement,
including the fees payable thereunder, are substantially identical to those of
the Original Investment Management Agreement relating to the same Fund (with
both reflecting reductions to fee levels in the complex-wide fee schedule for
complex-wide assets in excess of $80 billion that have an effective date of
August 20, 2007). The Board considered that the services to be provided and the
standard of care under the New Investment Management Agreements are the same as
the Original Investment Management Agreements. The Board Members further noted
that key personnel who have responsibility for the Funds in each area, including
portfolio management, investment oversight, fund management, fund operations,
product management, legal/compliance and board support functions, are expected
to be the same following the Transaction. The Board Members considered and are
familiar with the qualifications, skills and experience of such personnel. The
Board also considered certain information regarding anticipated retention or
incentive plans designed to retain key personnel. Further, the Board Members
noted that no changes to Nuveen's infrastructure or operations as a result of
the Transaction were anticipated other than potential enhancements as a result
of an expected increase in the level of investment in such infrastructure and
personnel. The Board noted MDP's representations that it does not plan to have a
direct role in the management of Nuveen, appointing new management personnel, or
directly impacting individual staffing decisions. The Board Members also noted
that there were not any planned "cost cutting" measures that could be expected
to reduce the nature, extent or quality of services. After consideration of the
foregoing, the Board Members concluded that no diminution in the nature, quality
and extent of services provided to the Funds and their shareholders is expected.
In addition to the above, the Board Members considered potential changes in the
operations of each Fund. In this regard, the Board Members considered the
potential effect of regulatory restrictions on the Funds' transactions with
future affiliated persons. During their deliberations, it was noted that, after
the Transaction, a subsidiary of Merrill Lynch is expected to have an ownership
interest in Nuveen at a level that will make Merrill Lynch an affiliated person
of Nuveen. The Board Members recognized that applicable law would generally
prohibit the Funds from engaging in securities transactions with Merrill Lynch
as principal, and would also impose restrictions on using Merrill Lynch for
agency transactions. They recognized that having MDP and Merrill Lynch as
affiliates may restrict the Nuveen funds' ability to invest in securities of
issuers controlled by MDP or issued by Merrill Lynch and its affiliates even if
not bought directly from MDP or Merrill
107
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
Lynch as principal. They also recognized that various regulations may require
the Nuveen funds to apply investment limitations on a combined basis with
affiliates of Merrill Lynch. The Board Members considered information provided
by NAM regarding the potential impact on the Nuveen funds' operations as a
result of these regulatory restrictions. The Board Members considered, in
particular, the Nuveen funds that may be impacted most by the restricted access
to Merrill Lynch, including: municipal funds (particularly certain
state-specific funds), senior loan funds, taxable fixed income funds, preferred
security funds and funds that heavily use derivatives. The Board Members
considered such funds' historic use of Merrill Lynch as principal in their
transactions and information provided by NAM regarding the expected impact
resulting from Merrill Lynch's affiliation with Nuveen and available measures
that could be taken to minimize such impact. NAM informed the Board Members
that, although difficult to determine with certainty, its management did not
believe that MDP's or Merrill Lynch's status as an affiliate of Nuveen would
have a material adverse effect on any Nuveen fund's ability to pursue its
investment objectives and policies.
In addition to the regulatory restrictions considered by the Board, the Board
Members also considered potential conflicts of interest that could arise between
the Nuveen funds and various parties to the Transaction and discussed possible
ways of addressing such conflicts.
Based on its review along with its considerations regarding services at the
annual review, the Board concluded that the Transaction was not expected to
adversely affect the nature, quality or extent of services provided by NAM and
that the expected nature, quality and extent of such services supported approval
of the New Investment Management Agreements.
B. PERFORMANCE OF THE FUNDS
With respect to the performance of the Funds, the Board considered that the
portfolio management personnel responsible for the management of the Funds'
portfolios were expected to continue to manage the portfolios following the
completion of the Transaction.
In addition, the Board Members recently reviewed Fund performance at the May
Meeting, as described above, and determined that Fund performance was
satisfactory or better, subject to the following. With respect to certain
municipal closed-end funds with relative short-term underperformance, the Board
Members concluded NAM was taking steps to evaluate the factors affecting
performance and those steps would continue following the Transaction. Further,
the investment policies and strategies were not expected to change as a result
of the Transaction.
In light of the foregoing factors, along with the prior findings regarding
performance at the annual review, the Board concluded that its findings with
respect to performance supported approval of the New Investment Management
Agreements.
C. FEES, EXPENSES AND PROFITABILITY
As described in more detail above, during the annual review, the Board Members
considered, among other things, the management fees and expenses of the Funds,
the breakpoint schedules, and comparisons of such fees and expenses with peers.
At the annual review, the Board Members determined that the respective Fund's
advisory fees and expenses were reasonable. In evaluating the costs of services
to be provided by NAM under the New Investment Management Agreements and the
profitability of Nuveen for its advisory activities, the Board Members
considered their prior conclusions at the annual review and whether the
management fees or other expenses would change as a result of the Transaction.
As described above, the investment management fee is composed of two
components--a fund-level component and complex-wide level component. The fee
schedule under the New Investment Management Agreements to be paid to NAM is
identical to that under the Original Investment Management Agreements, including
the modified complex-wide fee schedule. As noted above, the Board recently
approved a modified complex-wide fee schedule that would generate additional fee
savings on complex-wide assets above $80 billion. The modifications have an
effective date of August 20, 2007 and are part of the Original Investment
Management Agreements. Accordingly, the terms of the complex-wide component
under the New Investment Management Agreements are the same as under the
Original Investment Management Agreements. The Board Members also noted that
Nuveen has committed for a period of two years from the
108
date of closing of the Transaction that it will not increase gross management
fees for any Nuveen fund and will not reduce voluntary expense reimbursement
levels for any Nuveen fund from their currently scheduled prospective levels.
Based on the information provided, the Board Members did not expect that overall
Fund expenses would increase as a result of the Transaction.
In addition, the Board Members considered that additional fund launches were
anticipated after the Transaction which would result in an increase in total
assets under management in the complex and a corresponding decrease in overall
management fees under the complex-wide fee schedule. Taking into consideration
the Board's prior evaluation of fees and expenses at the annual renewal, and the
modification to the complex-wide fee schedule, the Board determined that the
management fees and expenses were reasonable.
While it is difficult to predict with any degree of certainty the impact of the
Transaction on Nuveen's profitability, at the recent annual review, the Board
Members were satisfied that Nuveen's level of profitability for its advisory
activities was reasonable. During the year, the Board Members had noted the
enhanced dialogue regarding profitability and the appointment of an Independent
Board Member as a point person to review methodology determinations and
refinements in calculating profitability. Given their considerations at the
annual review and the modifications to the complex-wide fee schedule, the Board
Members were satisfied that Nuveen's level of profitability for its advisory
activities continues to be reasonable.
D. ECONOMIES OF SCALE AND WHETHER FEE LEVELS REFLECT THESE ECONOMIES OF SCALE
The Board Members have been cognizant of economies of scale and the potential
benefits resulting from the costs of a Fund being spread over a larger asset
base. To help ensure that shareholders share in the benefits derived from
economies of scale, the Board adopted the complex-wide fee arrangement in 2004.
At the May Meeting, the Board Members reviewed the complex-wide fee arrangements
and noted that additional negotiations may be necessary or appropriate as the
assets in the complex approached the $91 billion threshold. In light of this
assessment coupled with the upcoming Transaction, at the June 15, 2007 meeting,
the ad hoc committee met with representatives of Nuveen to further discuss
modifications to the complex-wide fee schedule that would generate additional
savings for shareholders as the assets of the complex grow. The proposed terms
for the complex-wide fee schedule are expressed in terms of targeted cumulative
savings at specified levels of complex-wide assets, rather than in terms of
targeted marginal complex-wide fee rates. Under the modified schedule, the
schedule would generate additional fee savings beginning at complex-wide assets
of $80 billion in order to achieve targeted cumulative annual savings at $91
billion of $28 million on a complex-wide level (approximately $0.6 million
higher than those generated under the then current schedule) and generate
additional fee savings for asset growth above complex-wide assets of $91 billion
in order to achieve targeted annual savings at $125 billion of assets of
approximately $50 million on a complex-wide level (approximately $2.2 million
higher annually than that generated under the then current schedule). At the
July Meeting, the Board approved the modified complex-wide fee schedule for the
Original Investment Management Agreements and these same terms will apply to the
New Investment Management Agreements. Accordingly, the Board Members believe
that the breakpoint schedules and revised complex-wide fee schedule are
appropriate and desirable in ensuring that shareholders participate in the
benefits derived from economies of scale.
E. INDIRECT BENEFITS
During their recent annual review, the Board Members considered any indirect
benefits that NAM may receive as a result of its relationship with the Funds, as
described above. As the policies and operations of Nuveen are not anticipated to
change significantly after the Transaction, such indirect benefits should remain
after the Transaction. The Board Members further considered any additional
indirect benefits to be received by NAM or its affiliates after the Transaction.
The Board Members noted that other than benefits from its ownership interest in
Nuveen and indirect benefits from fee revenues paid by the Funds under the
management agreements and other Board-approved relationships, it was currently
not expected that MDP or its affiliates would derive any benefit from the Funds
as a result of the Transaction or transact any business with or on behalf of the
Funds (other than perhaps potential Fund acquisitions, in secondary market
transactions, of securities issued by MDP portfolio companies); or that Merrill
Lynch or its affiliates would derive any benefits from the Funds as a result of
the Transaction (noting that, indeed, Merrill Lynch would stand to experience
the discontinuation of principal transaction activity with the Nuveen funds and
likely would experience a noticeable reduction in the volume of agency
transactions with the Nuveen funds).
109
ANNUAL INVESTMENT MANAGEMENT AGREEMENT
APPROVAL PROCESS (continued)
F. OTHER CONSIDERATIONS
In addition to the factors above, the Board Members also considered the
following with respect to the Funds:
[] Nuveen would rely on the provisions of Section 15(f) of the 1940 Act.
Section 15(f) provides, in substance, that when a sale of a controlling
interest in an investment adviser occurs, the investment adviser or any of
its affiliated persons may receive any amount or benefit in connection with
the sale so long as (i) during the three-year period following the
consummation of a transaction, at least 75% of the investment company's
board of directors must not be "interested persons" (as defined in the 1940
Act) of the investment adviser or predecessor adviser and (ii) an "unfair
burden" (as defined in the 1940 Act, including any interpretations or
no-action letters of the SEC) must not be imposed on the investment company
as a result of the transaction relating to the sale of such interest, or
any express or implied terms, conditions or understanding applicable
thereto. In this regard, to help ensure that an unfair burden is not
imposed on the Nuveen funds, Nuveen has committed for a period of two years
from the date of the closing of the Transaction (i) not to increase gross
management fees for any Nuveen fund; (ii) not to reduce voluntary expense
reimbursement levels for any Nuveen fund from their currently scheduled
prospective levels during that period; (iii) that no Nuveen fund whose
portfolio is managed by a Nuveen affiliate shall use Merrill Lynch as a
broker with respect to portfolio transactions done on an agency basis,
except as may be approved in the future by the Compliance Committee of the
Board; and (iv) that NAM shall not cause the Funds and other municipal
funds that NAM manages, as a whole, to enter into portfolio transactions
with or through the other minority owners of Nuveen, on either a principal
or an agency basis, to a significantly greater extent than both what one
would expect an investment team to use such firm in the normal course of
business, and what NAM has historically done, without prior Board or
Compliance Committee approval (excluding the impact of proportionally
increasing the use of such other "minority owners" to fill the void
necessitated by not being able to use Merrill Lynch).
[] The Funds would not incur any costs in seeking the necessary shareholder
approvals for the New Investment Management Agreements (except for any
costs attributed to seeking shareholder approvals of Fund specific matters
unrelated to the Transaction, such as approval of Board Members, in which
case a portion of such costs will be borne by the applicable Funds).
[] The reputation, financial strength and resources of MDP.
[] The long-term investment philosophy of MDP and anticipated plans to grow
Nuveen's business to the benefit of the Nuveen funds.
[] The benefits to the Nuveen funds as a result of the Transaction including:
(i) as a private company, Nuveen may have more flexibility in making
additional investments in its business; (ii) as a private company, Nuveen
may be better able to structure compensation packages to attract and retain
talented personnel; (iii) as certain of Nuveen's distribution partners are
expected to be equity or debt investors in Nuveen, Nuveen may be able to
take advantage of new or enhanced distribution arrangements with such
partners; and (iv) MDP's experience, capabilities and resources that may
help Nuveen identify and acquire investment teams or firms and finance such
acquisitions.
[] The historic premium and discount levels at which the shares of the Nuveen
funds have traded at specified dates with particular focus on the premiums
and discounts after the announcement of the Transaction, taking into
consideration recent volatile market conditions and steps or initiatives
considered or undertaken by NAM to address discount levels.
110
G. CONCLUSION
The 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 New Investment Management
Agreements are fair and reasonable, that the fees therein are reasonable in
light of the services to be provided to each Fund and that the New Investment
Management Agreements should be approved and recommended to shareholders.
III. APPROVAL OF INTERIM CONTRACTS
As noted above, at the July Meeting, the Board Members, including the
Independent Board Members, unanimously approved the Interim Investment
Management Agreements. If necessary to assure continuity of advisory services,
the Interim Investment Management Agreements will take effect upon the closing
of the Transaction if shareholders have not yet approved the New Investment
Management Agreements. The terms of each Interim Investment Management Agreement
are substantially identical to those of the corresponding Original Investment
Management Agreement and New Investment Management Agreement, respectively,
except for certain term and escrow provisions. In light of the foregoing, the
Board Members, including the Independent Board Members, unanimously determined
that the scope and quality of services to be provided to the Funds under the
respective Interim Investment Management Agreement are at least equivalent to
the scope and quality of services provided under the applicable Original
Investment Management Agreement.
111
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 DIVIDEND 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 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.
112
FLEXIBLE
You may change your distribution option or withdraw from the Plan at any
time, should your needs or situation change. Should you withdraw, you can
receive a certificate for all whole shares credited to your reinvestment
account and cash payment for fractional shares, or cash payment for all
reinvestment account shares, less brokerage commissions and a $2.50 service
fee.
You can reinvest whether your shares are registered in your name, or in the
name of a brokerage firm, bank, or other nominee. Ask your investment
advisor if his or her firm will participate on your behalf. Participants
whose shares are registered in the name of one firm may not be able to
transfer the shares to another firm and continue to participate in the
Plan.
The Fund reserves the right to amend or terminate the Plan at any time.
Although the Fund reserves the right to amend the Plan to include a service
charge payable by the participants, there is no direct service charge to
participants in the Plan at this time.
CALL TODAY TO START REINVESTING DIVIDENDS AND/OR DISTRIBUTIONS
For more information on the Nuveen Automatic Reinvestment Plan or to enroll
in or withdraw from the Plan, speak with your financial advisor or call us
at (800) 257-8787.
113
NOTES
114
NOTES
115
NOTES
116
NOTES
117
Glossary of
TERMS USED in this REPORT
[] AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an
investment's performance over a particular, usually multi-year time period.
It expresses the return that would have been necessary each year to equal
the investment'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 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 typically 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.
[] 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 common share NAV per share is calculated by
subtracting the liabilities of the Fund (including any MuniPreferred shares
issued in order to leverage the Fund) from its total assets and then
dividing the remainder by the number of shares outstanding. Fund NAVs are
calculated at the end of each business day.
[] TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable
investment to equal, on an after-tax basis, the yield of a municipal bond
investment.
[] 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.
118
Other Useful INFORMATION
QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION
Each Fund's (i) quarterly portfolio of investments, (ii) information regarding
how the Funds voted proxies relating to portfolio securities held during the
twelve-month period ended June 30, 2007, and (iii) a description of the policies
and procedures that the Funds used to determine how to vote proxies relating to
portfolio securities are available 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 1-202-942-8090
for room hours and operation. You may also request Fund information by sending
an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public
References Section at 450 Fifth Street NW, Washington, D.C. 20549.
CEO CERTIFICATION DISCLOSURE
Each Fund's Chief Executive Officer has submitted to the Exchange the annual CEO
certification as required by Section 303A.12(a) of the NYSE Listed Company
Manual.
Each Fund has filed with the Securities and Exchange Commission the
certification of its Chief Executive Officer and Chief Financial Officer
required by Section 302 of the Sarbanes-Oxley Act.
INVESTMENT POLICY CHANGES
In May 2007, the Funds' Board of Directors/Trustees voted to permit the Funds'
to make loans from Fund assets to certain bond issuers. The amounts of these
loans are subject to strict limits. This policy is designed to enhance the
Funds' ability to meet their Funds' investment objectives by providing for
increased portfolio management flexibility, greater diversification potential,
and opportunities for increased capital appreciation over time.
BOARD OF DIRECTORS/TRUSTEES
Robert P. Bremner
Jack B. Evans
William C. Hunter
David J. Kundert
William J. Schneider
Timothy R. Schwertfeger
Judith M. Stockdale
Carole E. Stone
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
Each Fund intends to repurchase shares of its own common stock in the future at
such times and in such amounts as is deemed advisable. During the period covered
by this report, NPF repurchased 182,300 Common shares. Any future repurchases
will be reported to shareholders in the next annual or semi-annual report.
119
Nuveen Investments:
-------------------
SERVING INVESTORS FOR GENERATIONS
Since 1898, financial advisors and their clients have relied on Nuveen
Investments to provide dependable investment solutions. For the past century,
Nuveen Investments has adhered to the belief that the best approach to investing
is to apply conservative risk-management principles to help minimize volatility.
Building on this tradition, we today offer a range of high quality equity and
fixed-income solutions that are integral to a well-diversified core portfolio.
Our clients have come to appreciate this diversity, as well as our continued
adherence to proven, long-term investing principles.
We offer many different investing solutions for our clients' different needs.
Managing $170 billion in assets, as of September 30, 2007, Nuveen Investments
offers access to a number of different asset classes and investing solutions
through a variety of products. Nuveen Investments markets its capabilities under
six distinct brands: Nuveen, a leader in fixed-income investments; NWQ, a leader
in value-style equities; Rittenhouse, a leader in growth-style equities;
Symphony, a leading institutional manager of market-neutral alternative
investment portfolios; Santa Barbara, a leader in growth equities; and
Tradewinds, a leader in global equities.
Find out how we can help you reach your financial goals.
To learn more about the products and services Nuveen Investments offers, talk to
your financial advisor, or call us at (800) 257-8787. Please read the
information provided carefully before you invest. Be sure to obtain a
prospectus, where applicable. Investors should consider the investment objective
and policies, risk considerations, charges and expenses of the Fund carefully
before investing. The prospectus contains this and other information relevant to
an investment in the Fund. For a prospectus, please contact your securities
representative or Nuveen Investments, 333 W. Wacker Dr., Chicago, IL 60606.
Please read the prospectus carefully before you invest or send money.
Learn more about Nuveen Funds at: www.nuveen.com/etf
Share prices
Fund details
Daily financial news
Investor education
Interactive planning tools
EAN-C-1007D
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/etf. (To view the
code, click on the Investor Resources drop down menu box, 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 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, Chairman of the Audit Committee, 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 Municipal High Income Opportunity Fund
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)
----------------------------------------------------------------------------------------------------------------------------
October 31, 2007 $ 20,241 $ 0 $ 500 $ 750
----------------------------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0% 0%
pursuant to
pre-approval
exception
----------------------------------------------------------------------------------------------------------------------------
October 31, 2006 $ 18,929 $ 0 $ 400 $ 700
----------------------------------------------------------------------------------------------------------------------------
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 ("Control Affiliate") that
provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for
engagements directly related to the Fund's operations and financial reporting,
during the Fund's last two full fiscal years.
The 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
---------------------------------------------------------------------------------------------------------
October 31, 2007 $ 0 $ 0 $ 0
---------------------------------------------------------------------------------------------------------
Percentage approved 0% 0% 0%
pursuant to
pre-approval
exception
---------------------------------------------------------------------------------------------------------
October 31, 2006 $ 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 de minimis exception described above). The
Audit Committee requested and received information from Ernst & Young LLP about
any non-audit services that Ernst & Young LLP rendered during the Fund's last
fiscal year to the Adviser and any Affiliated Fund Service Provider. The
Committee considered this information in evaluating Ernst & Young LLP's
independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES TOTAL NON-AUDIT
BILLED TO ADVISER AND FEES BILLED TO
AFFILIATED FUND SERVICE ADVISER AND
PROVIDERS (ENGAGEMENTS AFFILIATED FUND
TOTAL RELATED DIRECTLY TO THE SERVICE PROVIDERS
NON-AUDIT FEES OPERATIONS AND FINANCIAL (ALL OTHER
BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL
-------------------------------------------------------------------------------------------------------------------------
October 31, 2007 $ 1,250 $ 0 $ 0 $ 1,250
October 31, 2006 $ 1,100 $ 0 $ 0 $ 1,100
"Non-Audit Fees billed to Adviser" for both fiscal year ends represent "Tax
Fees" billed to Adviser 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 of Directors or Trustees 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, William J.
Schneider and David J. Kundert. Mr. Eugene S. Sunshine, who also served as a
member of the Committee during this reporting period, resigned from the Board of
Directors or Trustees effective July 31, 2007.
ITEM 6. SCHEDULE OF INVESTMENTS.
See Portfolio of Investments in Item 1.
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 of Trustees 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 of Trustees 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 of
Trustees 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
JOHN V. MILLER Nuveen Municipal High Income Opportunity Fund
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:
TYPE OF ACCOUNT NUMBER OF
PORTFOLIO MANAGER MANAGED ACCOUNTS ASSETS
--------------------------------------------------------------------------------
John V. Miller Registered Investment Company 3 $5.244 billion
Other Pooled Investment Vehicles 1 $39 million
Other Accounts 8 $1.3 million
* Assets are as of October 31, 2007. 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, including
these three elements, 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 November 30, 2007, the S&P/Investortools Municipal Bond Index was
comprised of 52,116 securities with an aggregate current market value of $1,034
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. Each portfolio manager is eligible to receive
bonus compensation in the form of equity-based awards issued in securities
issued by Nuveen Investments, Inc. The amount of such compensation is dependent
upon the same factors articulated for cash bonus awards but also factors in his
long-term potential with the firm.
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, although the
allocation procedures may provide allocation preferences to funds with special
characteristics (such as favoring state funds versus national funds for
allocations of in-state bonds). In addition, NAM has adopted a Code of Conduct
that sets forth policies regarding conflicts of interest.
Beneficial Ownership of Securities. As of October 31, 2007, 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.
DOLLAR RANGE OF
EQUITY SECURITIES
DOLLAR RANGE OF BENEFICIALLY OWNED
EQUITY IN THE REMAINDER OF
SECURITIES NUVEEN FUNDS MANAGED
BENEFICIALLY BY NAM'S MUNICIPAL
NAME OF PORTFOLIO MANAGER FUND OWNED IN FUND INVESTMENT TEAM
------------------------------------------------------------------------------------------------------------------
John V. Miller Nuveen Municipal High Income Opportunity Fund $0 $10,001-$50,000
PORTFOLIO MANAGER BIO:
John V. Miller, CFA, joined Nuveen's investment management team as a credit
analyst in 1996, with three prior years of experience in the municipal market
with C.W. Henderson & Assoc., a municipal bond manager for private accounts. He
has a BA in Economics and Political Science from Duke University, and an MA in
Economics from Northwestern University and an MBA with honors in Finance from
the University of Chicago. He has been responsible for analysis of high yield
credits in the utility, solid waste and energy related sectors. He is currently
a Vice President of Nuveen (since 2002). He manages investments for four
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 registrants 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/etf and
there were no amendments during the period covered by this report. (To view the
code, click on the Investor Resources drop down menu box, 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 Municipal High Income Opportunity Fund
-----------------------------------------------------------
By (Signature and Title)* /s/ Kevin J. McCarthy
----------------------------------------------
Kevin J. McCarthy
Vice President and Secretary
Date: January 7, 2008
-------------------------------------------------------------------
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: January 7, 2008
-------------------------------------------------------------------
By (Signature and Title)* /s/ Stephen D. Foy
----------------------------------------------
Stephen D. Foy
Vice President and Controller
(principal financial officer)
Date: January 7, 2008
-------------------------------------------------------------------
* Print the name and title of each signing officer under his or her signature.