-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F4ba+BCGLr+S5CJAnedscahnxoQTQBOYSPKG1Cag/JOhGO6vU6UXL0qveZe0sHew C8SJIyp9kKVhDSPKyjRjKg== 0000891804-04-000023.txt : 20040108 0000891804-04-000023.hdr.sgml : 20040108 20040108121138 ACCESSION NUMBER: 0000891804-04-000023 CONFORMED SUBMISSION TYPE: N-CSR PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 20031031 FILED AS OF DATE: 20040108 EFFECTIVENESS DATE: 20040108 FILER: COMPANY DATA: COMPANY CONFORMED NAME: NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND INC CENTRAL INDEX KEY: 0000860188 IRS NUMBER: 363689957 STATE OF INCORPORATION: MN FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: N-CSR SEC ACT: 1940 Act SEC FILE NUMBER: 811-06040 FILM NUMBER: 04514867 BUSINESS ADDRESS: STREET 1: 333 W WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3129178200 MAIL ADDRESS: STREET 1: 333 W WACKER CITY: CHICAGO STATE: IL ZIP: 60606 N-CSR 1 file001.txt NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC. 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 811-6040 --------------------- Nuveen Municipal Market Opportunity Fund, Inc. ------------------------------------------------------------------------------ (Exact name of registrant as specified in charter) Nuveen Investments 333 West Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------ (Address of principal executive offices) (Zip code) Jessica R. Droeger 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, 2003 ------------------ Date of reporting period: October 31, 2003 ------------------ 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, 2003 Nuveen Municipal Closed-End Exchange-Traded Funds NUVEEN PERFORMANCE PLUS MUNICIPAL FUND NPP NUVEEN MUNICIPAL ADVANTAGE FUND NMA NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND NMO NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND NAD NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NXZ NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3 NZF Photo of: Man holding up child in his arms. Photo of: 2 woman and 2 girls looking at seashells. DEPENDABLE, TAX-FREE INCOME BECAUSE IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) Logo: NUVEEN Investments FASTER INFORMATION RECEIVE YOUR NUVEEN FUND REPORT ELECTRONICALLY By registering for electronic delivery, you will receive an e-mail as soon as your Nuveen Fund information is available. Click on the link and you will be taken directly to the report. Your Fund report can be viewed and saved on your computer. Your report will arrive faster via e-mail than by traditional mail. Registering is easy and only takes a few minutes (see instructions at right). - -------------------------------------------------------------------------------- SOME COMMON CONCERNS: WILL MY E-MAIL ADDRESS BE DISTRIBUTED TO OTHER COMPANIES? No, your e-mail address is strictly confidential and will not be used for anything other than notification of shareholder information. WHAT IF I CHANGE MY MIND AND WANT TO RECEIVE INVESTOR MATERIALS THROUGH REGULAR MAIL DELIVERY AGAIN? If you decide you do not like receiving your reports electronically, it's a simple process to go back to regular mail delivery. - -------------------------------------------------------------------------------- IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS COME FROM YOUR FINANCIAL ADVISOR OR BROKERAGE ACCOUNT, FOLLOW THE STEPS OUTLINED BELOW: 1 Go to WWW.INVESTORDELIVERY.COM and follow the simple instructions, using the address sheet that accompanied this report as a guide. 2 You'll be taken to a page with several options. Select the NEW ENROLLMENT-CREATE screen and follow the simple instructions. 3 Click Submit. Confirm the information you just entered is correct, then click Submit again. 4 You should get a confirmation e-mail within 24 hours. If you do not, go back through these steps to make sure all the information is correct. 5 Use this same process if you need to change your registration information or cancel internet viewing. IF YOUR NUVEEN FUND DIVIDENDS AND STATEMENTS COME DIRECTLY TO YOU FROM NUVEEN, FOLLOW THE STEPS OUTLINED BELOW: 1 Go to WWW.NUVEEN.COM 2 Select ACCESS YOUR ACCOUNT. Select the E-REPORT ENROLLMENT section. Click on Enrollment Today. 3 You'll be taken to a screen that asks for your Social Security number and e-mail address. Fill in this information, then click Enroll. 4 You should get a confirmation e-mail within 24 hours. If you do not, go back through these steps to make sure all the information is correct. 5 Use this same process if you need to change your registration information or cancel internet viewing. Logo: NUVEEN Investments Photo of: Timothy R. Schwertfeger Chairman of the Board Sidebar text: WE THINK YOUR NUVEEN FUND CAN BE AN IMPORTANT BUILDING BLOCK IN A PORTFOLIO DESIGNED TO PERFORM WELL THROUGH A VARIETY OF MARKET CONDITIONS. Dear SHAREHOLDER I am very pleased to report that for the year ended October 31, 2003, your Nuveen Fund continued to provide you with attractive monthly tax-free income. Your Nuveen Fund is managed with a value investing strategy that puts an emphasis on finding securities that we think are undervalued or underrated. We believe that there are always some municipal bonds that the market is not properly valuing, and that by using a consistent, research-oriented management approach we have the opportunity to find them for your Fund. In this low-rate environment, many have begun to wonder whether interest rates will soon start to rise, and whether that possibility should cause them to adjust their holdings of fixed-income investments. We believe that by constructing a carefully balanced portfolio with the help of a trusted investment professional you may be able to reduce your overall investment risk and give yourself a better chance to meet your financial goals. We think that municipal bond investments like your Nuveen Fund can be important building blocks in a portfolio designed to perform well through a variety of market conditions. Since 1898, Nuveen Investments has offered financial products and solutions that incorporate careful research, diversification, and the application of conservative risk-management principles. We are grateful that you have chosen us as a partner as you pursue your financial goals. We look forward to continuing to earn your trust in the months and years ahead. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board December 15, 2003 1 Nuveen National Municipal Closed-End Exchange-Traded Funds (NPP, NMA, NMO, NAD, NXZ, NZF) Portfolio Manager's COMMENTS Portfolio manager Tom Spalding discusses U.S. economic and market conditions, key investment strategies, and the annual performance of these national Funds. With 27 years of investment experience at Nuveen, Tom has managed NXZ since its inception in 2001, adding NPP, NMA, NMO, NAD, and NZF in January 2003. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE 12-MONTH PERIOD ENDED OCTOBER 31, 2003? Over the 12-month reporting period the two greatest influences on the general economy continued to be historically low interest rates and the overall pace of economic improvement. In June 2003, the Federal Reserve reduced the fed funds rate to 1.0%, the lowest level since 1958. The Fed's accommodative monetary policy coupled with Washington's tax relief measures and increased spending for defense helped to fuel an 8.2% year-over-year jump in the third-quarter Gross Domestic Product (GDP), up from 3.3% in the second quarter. At the same time, inflation remained under control throughout the period. In the municipal market, the slower rate of economic recovery over the majority of this reporting period, low interest rates, and lack of inflationary pressures helped many municipal bonds perform well. During the summer of 2003, however, stronger-than-expected economic data precipitated a spike in bond yields and a corresponding drop in bond prices that impacted results across all fixed-income markets, including the municipal market, for the 12-month period ended October 31, 2003. During the first 10 months of 2003, municipal supply nationally remained robust, with $319.9 billion in new bonds, up 8% over the same period in 2002. HOW DID THESE NUVEEN FUNDS PERFORM OVER THIS REPORTING PERIOD? Individual results for these Funds, as well as for relevant benchmarks, are presented in the accompanying table. TOTAL RETURN LEHMAN LIPPER MARKET YIELD ON NAV TOTAL RETURN1 AVERAGE2 - -------------------------------------------------------------------------------- 1 YEAR 1 YEAR 1 YEAR TAXABLE- ENDED ENDED ENDED 10/31/03 EQUIVALENT3 10/31/03 10/31/03 10/31/03 - -------------------------------------------------------------------------------- NPP 6.64% 9.22% 6.97% 5.11% 8.08% - -------------------------------------------------------------------------------- NMA 6.68% 9.28% 8.71% 5.11% 8.08% - -------------------------------------------------------------------------------- NMO 6.63% 9.21% 10.24% 5.11% 8.08% - -------------------------------------------------------------------------------- NAD 6.79% 9.43% 8.41% 5.11% 8.08% - -------------------------------------------------------------------------------- NXZ 6.95% 9.65% 8.67% 5.11% 8.08% - -------------------------------------------------------------------------------- NZF 6.87% 9.54% 7.82% 5.11% 8.08% - -------------------------------------------------------------------------------- Past performance is not predictive of future results. For additional information, see the individual Performance Overview for your Fund in this report. For the 12 months ended October 31, 2003, all six of the Funds in this report outperformed the unleveraged Lehman Brothers Municipal Bond Index. NMA, NMO, NAD and NXZ also outperformed their Lipper peer group average, while NPP and NZF trailed this measure. The use of leverage was one of the factors that influenced the performances of these Funds relative to the Lehman index over the past 12 months. While this 1 The total annual returns on common share net asset value (NAV) for these Nuveen Funds are compared with the total annual return of the Lehman Brothers Municipal Bond Index, an unleveraged, unmanaged index comprising a broad range of investment-grade municipal bonds. Results for the Lehman index do not reflect any expenses. 2 The total returns of these Funds are compared with the average annualized return of the 62 funds in the Lipper General Leveraged Municipal Debt Funds category. Fund and Lipper returns assume reinvestment of dividends. 3 The taxable-equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 2 is a strategy that carries price risk and additional volatility, leveraging can provide opportunities for additional income for common shareholders, especially during periods of low short-term interest rates. In general, the Funds also benefited from their duration4 positioning during this period. As of October 31, 2003, the durations of these Funds ranged from 8.94 to 10.22, compared with 8.22 for the Lehman index. These durations were long enough to enable these Funds to benefit as interest rates declined during most of the 12-month reporting period and short enough to offer some protection as interest rates rose in recent months. In general, investments with longer durations would be expected to outperform those with shorter durations during periods of declining interest rates, all other factors being equal. In addition to leverage and duration, factors such as call exposure, portfolio trading activity, and the price movement of specific sectors and holdings also had an impact on the Funds' relative performances during this period. For example, at the beginning of this reporting period, NPP held a higher concentration of airline-backed bonds than the other five Funds. In recent months, airline bonds started to rebound, recovering much of their value. Because we had already begun to trim NPP's airline allocation to bring it more in line with the other Funds, the Fund did not benefit from the recovery of these bonds to the extent that the others did. HOW DID THE MARKET ENVIRONMENT AFFECT THE FUNDS' DIVIDENDS AND SHARE PRICES? With short-term interest rates remaining at historically low levels, the dividend-paying capabilities of all of these Funds benefited from their use of leverage. During the 12 months ended October 31, 2003, continued low short-term rates enabled us to implement three dividend increases in NPP, NAD, and NXZ, two in NMA and NZF, and one in NMO. Even at these dividend levels, each Fund's common share net investment income during the period exceeded the amount of dividends paid to common shareholders. This excess net investment income, along with any excess net investment income from prior fiscal periods, was held in reserve by the Funds as undistributed net investment income (UNII) and is part of the Funds' net asset value. The Funds, over time, will pay all their net investment income out to common shareholders. However, UNII reserves may help the Funds maintain more stable common share dividend levels over time should the short-term rates the Funds pay on their MuniPreferred shares rise or net common share earnings otherwise decline. 4 Duration is a measure of a fund's NAV volatility in reaction to interest rate movements. Fund duration, also known as leverage-adjusted duration, takes into account the leveraging process for a fund and therefore is generally longer than the duration of the actual portfolio of individual bonds that make up the fund. References to duration in this commentary are intended to indicate fund duration unless otherwise noted. 3 Despite the increased volatility in the fixed-income markets during the summer of 2003, the Funds' share prices and NAVs finished the period higher than they had been at the beginning. As of October 31, 2003, the discounts to common share NAV for all six Funds were narrower than they had been 12 months earlier. WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE FISCAL YEAR ENDED OCTOBER 31, 2003? Over this 12-month reporting period, we continued to place strong emphasis on keeping the Funds fully invested and well diversified, improving call protection, and enhancing dividend-paying capabilities. We also continued to focus on managing the Funds'durations as a way of enhancing our ability to mitigate interest rate risk and produce potentially more consistent returns over time. Interest rate risk is the risk that the value of a Fund's portfolio will decline when market interest rates rise (since bond prices move in the opposite direction of interest rates). The longer the duration of a Fund's portfolio, the greater its interest rate risk. As a result of our efforts, the durations of all six Funds shortened over the 12 month reporting period. In line with the steepness of the municipal yield curve, the majority of our purchase activity over the past year focused on value opportunities in the intermediate part of the yield curve (i.e., bonds that mature in 15 to 20 years). In many cases, bonds in this part of the curve offered yields similar to those of longer-term bonds but, in our opinion, had less inherent interest rate risk. In the recent market environment, we have also focused on bonds offering above-market coupons that can help support the Funds' dividends and on issues in the low AA/high A credit quality sectors that can add diversification. 4 HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF OCTOBER 31, 2003? We believe that, given the current geopolitical and economic climate, maintaining strong credit quality remains a vital requirement. As of October 31, 2003, these Nuveen Funds offered excellent credit quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from 65% to 83%. Looking at bond calls, these Funds offer good levels of call protection over the next two years, with potential call exposure ranging from 2% in NXZ and NZF to 11% in NPP during 2004 and 2005. The number of bond calls will depend largely on market interest rates in coming months. In general, we believe that these Nuveen Funds can continue to serve as attractive sources of tax-free income, while simultaneously offering the potential for portfolio diversification. In our opinion, the Funds represent a quality component of a well- balanced core investment portfolio that can continue to benefit shareholders over time. 5 Nuveen Performance Plus Municipal Fund, Inc. Performance OVERVIEW As of October 31, 2003 NPP Pie Chart: CREDIT QUALITY AAA/U.S. Guaranteed 69% AA 14% A 5% BBB 8% NR 3% BB or Lower 1% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $14.64 - -------------------------------------------------- Common Share Net Asset Value $15.45 - -------------------------------------------------- Market Yield 6.64% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.22% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $925,525 - -------------------------------------------------- Average Effective Maturity (Years) 17.33 - -------------------------------------------------- Leverage-Adjusted Duration 9.99 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 6/22/89) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 9.58% 6.97% - -------------------------------------------------- 5-Year 5.54% 6.24% - -------------------------------------------------- 10-Year 5.50% 6.30% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- U.S. Guaranteed 16% - -------------------------------------------------- Tax Obligation/General 15% - -------------------------------------------------- Tax Obligation/Limited 14% - -------------------------------------------------- Utilities 10% - -------------------------------------------------- Healthcare 9% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.077 Dec 0.078 Jan 0.078 Feb 0.078 Mar 0.0795 Apr 0.0795 May 0.0795 Jun 0.0795 Jul 0.0795 Aug 0.0795 Sep 0.081 Oct 0.081 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 14.4 14.29 14.12 13.77 13.95 14.01 13.86 13.86 14.15 14.3 13.98 14.02 14.16 14.34 14.27 14.16 14.15 14.43 14.48 14.45 14.28 14.46 14.42 14.5 14.59 14.68 14.89 15.05 15.48 15.63 15.78 15.12 15.32 15.25 15.36 14.55 14.16 14.37 14.02 14.11 14.16 14.34 14.47 14.44 14.55 14.54 14.45 14.65 10/31/03 14.64 1 Taxable-equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2002 of $0.0254 per share. 6 Nuveen Municipal Advantage Fund, Inc. Performance OVERVIEW As of October 31, 2003 NMA Pie Chart: CREDIT QUALITY AAA/U.S. Guaranteed 60% AA 15% A 6% BBB 17% BB or Lower 2% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $15.44 - -------------------------------------------------- Common Share Net Asset Value $15.62 - -------------------------------------------------- Market Yield 6.68% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.28% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $671,147 - -------------------------------------------------- Average Effective Maturity (Years) 18.75 - -------------------------------------------------- Leverage-Adjusted Duration 8.99 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/89) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 13.17% 8.71% - -------------------------------------------------- 5-Year 6.61% 6.51% - -------------------------------------------------- 10-Year 6.07% 6.43% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Healthcare 17% - -------------------------------------------------- Utilities 17% - -------------------------------------------------- U.S. Guaranteed 14% - -------------------------------------------------- Housing/Single Family 11% - -------------------------------------------------- Transportation 10% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.082 Dec 0.0835 Jan 0.0835 Feb 0.0835 Mar 0.086 Apr 0.086 May 0.086 Jun 0.086 Jul 0.086 Aug 0.086 Sep 0.086 Oct 0.086 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 14.65 14.78 14.44 14.32 14.35 14.58 14.39 14.33 14.7 14.75 14.48 14.56 14.75 14.75 14.8 14.79 14.83 14.91 15.02 15 14.72 15 15.04 14.97 15 15.18 15.39 15.53 15.98 16.31 16.39 15.69 15.9 15.92 16.01 15.44 14.94 15.22 14.82 14.94 15.09 15.12 15.14 15.27 15.37 15.31 15.19 15.3 10/31/03 15.44 1 Taxable-equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2002 of $0.0733 per share. 7 Nuveen Municipal Market Opportunity Fund, Inc. Performance OVERVIEW As of October 31, 2003 NMO Pie Chart: CREDIT QUALITY AAA/U.S. Guaranteed 67% AA 10% A 12% BBB 8% NR 1% BB or Lower 2% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $14.29 - -------------------------------------------------- Common Share Net Asset Value $15.11 - -------------------------------------------------- Market Yield 6.63% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.21% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $687,955 - -------------------------------------------------- Average Effective Maturity (Years) 17.92 - -------------------------------------------------- Leverage-Adjusted Duration 8.94 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/21/90) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 10.62% 10.24% - -------------------------------------------------- 5-Year 4.53% 5.42% - -------------------------------------------------- 10-Year 5.01% 5.85% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Tax Obligation/General 23% - -------------------------------------------------- Transportation 16% - -------------------------------------------------- Tax Obligation/Limited 13% - -------------------------------------------------- U.S. Guaranteed 13% - -------------------------------------------------- Healthcare 10% - -------------------------------------------------- Bar Chart: 2002-2003 Monthly Tax-Free Dividends Per Share Nov 0.078 Dec 0.078 Jan 0.078 Feb 0.078 Mar 0.079 Apr 0.079 May 0.079 Jun 0.079 Jul 0.079 Aug 0.079 Sep 0.079 Oct 0.079 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 13.83 14.07 13.8 13.57 13.68 13.8 13.6 13.63 13.87 13.99 13.54 13.72 13.75 13.92 13.89 13.89 13.82 14.05 14.08 14.05 13.94 14.1 14.15 14.1 14.19 14.19 14.61 14.62 14.94 15.16 15.33 14.76 14.98 15.09 15.12 14.47 13.88 14.24 13.88 13.98 14.11 14.1 14.09 14.2 14.21 14.17 14.05 14.12 10/31/03 14.29 1 Taxable-equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 8 Nuveen Dividend Advantage Municipal Fund Performance OVERVIEW As of October 31, 2003 NAD Pie Chart: CREDIT QUALITY AAA/U.S. Guaranteed 65% AA 10% A 2% BBB 7% NR 11% BB or Lower 5% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $15.12 - -------------------------------------------------- Common Share Net Asset Value $15.17 - -------------------------------------------------- Market Yield 6.79% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.43% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $595,266 - -------------------------------------------------- Average Effective Maturity (Years) 16.72 - -------------------------------------------------- Leverage-Adjusted Duration 9.18 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 5/26/99) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 11.41% 8.41% - -------------------------------------------------- Since Inception 6.67% 7.84% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Healthcare 16% - -------------------------------------------------- Transportation 14% - -------------------------------------------------- Tax Obligation/General 14% - -------------------------------------------------- U.S. Guaranteed 12% - -------------------------------------------------- Tax Obligation/Limited 12% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.081 Dec 0.082 Jan 0.082 Feb 0.082 Mar 0.082 Apr 0.082 May 0.082 Jun 0.083 Jul 0.083 Aug 0.083 Sep 0.0855 Oct 0.0855 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 14.51 14.5 14.46 14.34 14.29 14.4 14.38 14.4 14.61 14.95 14.29 14.5 14.57 14.79 14.92 14.87 14.98 15 15.04 14.93 14.48 14.74 14.75 14.84 14.87 14.95 15.11 15.29 15.7 15.74 16.02 15.75 15.78 15.72 15.67 14.81 14.5 14.73 14.48 14.58 14.44 14.67 14.75 14.94 14.9 14.82 14.82 14.95 10/31/03 15.12 1 Taxable-equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 9 Nuveen Dividend Advantage Municipal Fund 2 Performance OVERVIEW As of October 31, 2003 NXZ Pie Chart: CREDIT QUALITY AAA/U.S. Guaranteed 58% AA 7% A 16% BBB 8% NR 2% BB or Lower 9% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $14.85 - -------------------------------------------------- Common Share Net Asset Value $15.13 - -------------------------------------------------- Market Yield 6.95% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.65% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $443,101 - -------------------------------------------------- Average Effective Maturity (Years) 25.19 - -------------------------------------------------- Leverage-Adjusted Duration 10.22 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 14.39% 8.67% - -------------------------------------------------- Since Inception 6.09% 8.59% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Healthcare 24% - -------------------------------------------------- Tax Obligation/Limited 19% - -------------------------------------------------- Transportation 14% - -------------------------------------------------- Water and Sewer 9% - -------------------------------------------------- Tax Obligation/General 9% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.079 Dec 0.0815 Jan 0.0815 Feb 0.0815 Mar 0.0845 Apr 0.0845 May 0.0845 Jun 0.086 Jul 0.086 Aug 0.086 Sep 0.086 Oct 0.086 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 14 14.15 13.83 13.54 13.72 14.08 13.89 13.77 14.25 14.21 14.21 13.98 14.15 14.23 14.41 14.21 14.2 14.44 14.55 14.38 14.31 14.56 14.65 14.55 14.58 14.65 14.79 14.89 15.28 15.57 15.67 15.29 15.4 15.55 15.3 14.8 14.6 14.63 14.48 14.47 14.5 14.62 14.7 14.84 14.84 14.84 14.66 14.8 10/31/03 14.85 1 Taxable-equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 2 The Fund also paid shareholders a capital gains distribution in December 2002 of $0.0093 per share. 10 Nuveen Dividend Advantage Municipal Fund 3 Performance OVERVIEW As of October 31, 2003 NZF Pie Chart: CREDIT QUALITY AAA/U.S. Guaranteed 72% AA 11% A 2% BBB 9% NR 4% BB or Lower 2% PORTFOLIO STATISTICS - -------------------------------------------------- Share Price $13.80 - -------------------------------------------------- Common Share Net Asset Value $14.74 - -------------------------------------------------- Market Yield 6.87% - -------------------------------------------------- Taxable-Equivalent Yield (Federal Income Tax Rate)1 9.54% - -------------------------------------------------- Net Assets Applicable to Common Shares ($000) $594,154 - -------------------------------------------------- Average Effective Maturity (Years) 21.56 - -------------------------------------------------- Leverage-Adjusted Duration 10.00 - -------------------------------------------------- AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/01) - -------------------------------------------------- ON SHARE PRICE ON NAV - -------------------------------------------------- 1-Year 9.04% 7.82% - -------------------------------------------------- Since Inception 2.30% 7.65% - -------------------------------------------------- TOP FIVE SECTORS (as a % of total investments) - -------------------------------------------------- Transportation 17% - -------------------------------------------------- Healthcare 16% - -------------------------------------------------- Water and Sewer 12% - -------------------------------------------------- Tax Obligation/Limited 12% - -------------------------------------------------- Tax Obligation/General 9% - -------------------------------------------------- Bar Chart: 2002-2003 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.0755 Dec 0.0755 Jan 0.0755 Feb 0.0755 Mar 0.078 Apr 0.078 May 0.078 Jun 0.079 Jul 0.079 Aug 0.079 Sep 0.079 Oct 0.079 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/02 13.62 13.63 13.37 13.23 13.26 13.55 13.19 13.05 13.49 13.62 13.35 13.44 13.62 13.74 13.85 13.73 13.55 13.73 13.92 13.73 13.57 13.82 13.97 13.85 13.93 14.07 14.2 14.28 14.5 14.73 14.86 14.55 14.49 14.75 14.63 14.15 13.69 13.91 13.7 13.84 13.78 13.81 13.8 13.72 13.72 13.8 13.71 13.82 10/31/03 13.8 1 Taxable-equivalent yield represents the yield that must be earned on a taxable investment, other than an investment that generates qualified dividend income that is taxable at a maximum rate of 15%, in order to equal the yield of the Nuveen Fund on an after-tax basis. It is calculated using the current market yield and a federal income tax rate of 28%. 11 Report of INDEPENDENT AUDITORS THE BOARD OF DIRECTORS/TRUSTEES AND SHAREHOLDERS NUVEEN PERFORMANCE PLUS MUNICIPAL FUND, INC. NUVEEN MUNICIPAL ADVANTAGE FUND, INC. NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC. NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 2 NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3 We have audited the accompanying statements of assets and liabilities, including the portfolios of investments, of Nuveen Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Dividend Advantage Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2 and Nuveen Dividend Advantage Municipal Fund 3 as of October 31, 2003, and the related statements of operations and changes in net assets and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights. Our procedures included confirmation of investments owned as of October 31, 2003, by correspondence with the custodian and brokers or by other appropriate auditing procedures where replies from brokers were not received. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial positions of Nuveen Performance Plus Municipal Fund, Inc., Nuveen Municipal Advantage Fund, Inc., Nuveen Municipal Market Opportunity Fund, Inc., Nuveen Dividend Advantage Municipal Fund, Nuveen Dividend Advantage Municipal Fund 2 and Nuveen Dividend Advantage Municipal Fund 3 at October 31, 2003, and the results of their operations, changes in their net assets and financial highlights for the periods indicated therein in conformity with accounting principles generally accepted in the United States. /s/ Ernst & Young LLP Chicago, Illinois December 12, 2003 12 Nuveen Performance Plus Municipal Fund, Inc. (NPP) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 1.7% $ 3,615 Alabama Water Pollution Control Authority, Revolving Fund Loan 8/05 at 100.00 AAA $ 3,943,929 Bonds, Series 1994A, 6.750%, 8/15/17 - AMBAC Insured Jefferson County, Alabama, Sewer Revenue Warrants, Series 1997A Refunding: 3,640 5.625%, 2/01/22 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA 4,093,107 1,435 5.625%, 2/01/22 - FGIC Insured 2/07 at 101.00 AAA 1,551,321 3,820 5.375%, 2/01/27 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 100.00 AAA 4,229,695 1,505 5.375%, 2/01/27 - FGIC Insured 2/07 at 100.00 AAA 1,572,289 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.3% 1,000 Arizona State Transportation Board, Highway Revenue Bonds, 7/12 at 100.00 AAA 1,055,110 Series 2002B, 5.250%, 7/01/22 Phoenix, Arizona, Civic Improvement Corporation, Senior Lien Airport Revenue Bonds, Series 2002B: 5,365 5.750%, 7/01/15 (Alternative Minimum Tax) - FGIC Insured 7/12 at 100.00 AAA 5,867,701 5,055 5.750%, 7/01/16 (Alternative Minimum Tax) - FGIC Insured 7/12 at 100.00 AAA 5,494,532 - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.6% 5,080 Independence County, Arkansas, Hydroelectric Power Revenue 5/13 at 100.00 A 5,093,106 Bonds, Series 2003, 5.350%, 5/01/28 - ACA Insured - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 12.7% 11,000 Anaheim Public Financing Authority, California, Subordinate No Opt. Call AAA 4,685,230 Lease Revenue Bonds, Anaheim Public Improvements Project, Series 1997C, 0.000%, 9/01/20 - FSA Insured 2,000 California Health Facilities Financing Authority, Revenue Bonds, 3/13 at 100.00 A 1,834,680 Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 6,435 State of California, General Obligation Refunding Bonds, No Opt. Call AAA 7,611,768 Series 2002, 6.000%, 4/01/16 - AMBAC Insured California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A: 4,000 6.000%, 5/01/15 5/12 at 101.00 A3 4,544,160 2,500 5.375%, 5/01/22 5/12 at 101.00 A3 2,560,725 6,925 East Bay Municipal Utility District, Alameda and Contra Costa 6/06 at 100.00 AAA 6,938,919 Counties, California, Water System Subordinated Revenue Refunding Bonds, Series 1996, 4.750%, 6/01/21 - FGIC Insured 10,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 9,123,400 Tobacco Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39 1,000 Mt. Diablo Hospital District, California Insured Hospital 12/03 at 102.00 AAA 1,023,520 Revenue Bonds, Series 1993A, 5.125%, 12/01/23 - AMBAC Insured 13,450 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 17,597,846 County, California, Revenue Refunding Bonds, Redevelopment Project 1, Series 1995, 7.200%, 8/01/17 - MBIA Insured 20,420 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 23,815,438 Residential Mortgage Revenue Refunding Bonds, Series 1991A, 7.150%, 2/01/10 2,325 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 3,182,483 Restructured Single Family Mortgage Revenue Bonds, Series 1986D, 8.000%, 4/01/16 (Alternative Minimum Tax) 10,000 San Bernardino County, California, Certificates of Participation, 8/05 at 102.00 AAA 10,940,900 Medical Center Financing Project, Series 1995, 5.500%, 8/01/15 (Pre-refunded to 8/01/05) - MBIA Insured 2,000 Airports Commission of the City and County of 5/09 at 101.00 AAA 2,023,580 San Francisco, California, San Francisco International Airport, Second Series Revenue Bonds, Issue 23B, 5.125%, 5/01/30 - FGIC Insured 2,000 San Francisco City and County Airports Commission, 5/11 at 100.00 AAA 2,037,380 California, Revenue Refunding Bonds, San Francisco International Airport, Series 2, Issue 27B, 5.125%, 5/01/26 - FGIC Insured 15,745 Walnut Valley Unified School District, Los Angeles County, 8/11 at 103.00 AAA 19,510,259 California, General Obligation Refunding Bonds, Series 1997A, 7.200%, 2/01/16 - MBIA Insured 13 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 0.6% $ 5,425 City and County of Denver, Colorado, Airport System Revenue 11/07 at 101.00 AAA $ 5,641,403 Bonds, Series 1997E, 5.250%, 11/15/23 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.7% 6,985 District of Columbia Tobacco Settlement Financing Corporation, 5/11 at 101.00 BBB 6,393,720 Tobacco Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 4.5% 1,700 Miami-Dade County, Florida, Beacon Tradeport Community 5/12 at 102.00 AA 1,797,648 Development District, Special Assessment Bonds, Commercial Project, Series 2002A, 5.625%, 5/01/32 - RAAI Insured Housing Finance Authority of Broward County, Florida, Multifamily Housing Revenue Bonds, Venice Homes Apartments Project, Series 2001A: 1,545 5.700%, 1/01/32 (Alternative Minimum Tax) - FSA Insured 7/11 at 100.00 AAA 1,563,401 1,805 5.800%, 1/01/36 (Alternative Minimum Tax) - FSA Insured 7/11 at 100.00 AAA 1,834,512 4,200 Florida Housing Finance Corporation, Homeowner Mortgage 1/10 at 100.00 AAA 4,373,124 Revenue Bonds, 2000 Series 11, 5.850%, 1/01/22 (Alternative Minimum Tax) - FSA Insured 10,050 State of Florida, Full Faith and Credit, State Board of 6/10 at 101.00 AA+ 11,069,975 Education, Public Education Capital Outlay Refunding Bonds, 1999 Series D, 5.750%, 6/01/22 7,000 Hillsborough County Aviation Authority, Florida, Tampa 10/13 at 100.00 AAA 7,333,200 International Airport Revenue Bonds, Series 2003A, 5.250%, 10/01/17 (Alternative Minimum Tax) - MBIA Insured 10,750 Martin County, Florida, Industrial Development Authority, 12/04 at 102.00 BBB- 11,230,203 Industrial Development Revenue Bonds, Indiantown Cogeneration, L.P. Project, Series 1994A, 7.875%, 12/15/25 (Alternative Minimum Tax) 2,570 Miami-Dade County Housing Finance Authority, Florida, 6/11 at 100.00 AAA 2,672,157 Multifamily Mortgage Revenue Bonds, Country Club Villas II Project, Series 2001-1A, 5.850%, 1/01/37 (Alternative Minimum Tax) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 3.2% 4,920 City of Atlanta, Georgia, Airport General Revenue and 1/10 at 101.00 AAA 5,689,537 Refunding Bonds, Series 2000A, 5.600%, 1/01/30 (Pre-refunded to 1/01/10) - FGIC Insured 5,000 City of Atlanta, Georgia, Water and Wastewater Revenue No Opt. Call AAA 5,562,600 Bonds, Series 1999A, 5.500%, 11/01/22 - FGIC Insured 2,000 George L. Smith II World Congress Center Authority, 7/10 at 101.00 AAA 2,101,200 Revenue Refunding Bonds, Domed Stadium Project, Series 2000, 5.500%, 7/01/20 (Alternative Minimum Tax) - MBIA Insured 15,000 Private Colleges and Universities Authority, Georgia, Revenue 11/09 at 101.00 AA 15,867,300 Bonds, Emory University Project, Series 1999A, 5.500%, 11/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.3% 1,350 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aa2 1,412,816 Mortgage Bonds, Series 2000-G2, 5.950%, 7/01/25 (Alternative Minimum Tax) 1,170 Idaho Housing and Finance Association, Single Family 1/10 at 100.00 A1 1,236,257 Mortgage Bonds, Series 2000D, 6.200%, 7/01/14 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 20.2% 3,000 City of Chicago, Illinois, General Obligation Bonds, Library, 1/08 at 102.00 AAA 3,368,700 Series 1997, 5.750%, 1/01/17 - FGIC Insured City of Chicago, Illinois, General Obligation Bonds, City Colleges of Chicago Capital Improvement Project, Series 1999: 32,170 0.000%, 1/01/21 - FGIC Insured No Opt. Call AAA 13,328,996 32,670 0.000%, 1/01/22 - FGIC Insured No Opt. Call AAA 12,660,278 10,000 Chicago School Reform Board of Trustees of the Board of No Opt. Call AAA 4,476,700 Education of the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Tax Revenue, Series 1998-B1, 0.000%, 12/01/19 - FGIC Insured 10,000 Chicago School Reform Board of Trustees of the Board No Opt. Call AAA 4,195,200 of Education of the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%, 12/01/20 - FGIC Insured 14 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 9,145 City of Chicago, Illinois, Chicago Midway Airport Revenue 1/07 at 101.00 AAA $ 9,479,981 Bonds, Series 1996A, 5.500%, 1/01/29 - MBIA Insured DuPage County Forest Preserve District, Illinois, General Obligation Bonds, Series 2000: 8,000 0.000%, 11/01/18 No Opt. Call AAA 3,870,160 15,285 0.000%, 11/01/19 No Opt. Call AAA 6,925,022 3,500 Illinois Development Finance Authority, Pollution Control 3/05 at 102.00 AAA 3,804,780 Revenue Refunding Bonds, Commonwealth Edison Company Project, Series 1994D, 6.750%, 3/01/15 - AMBAC Insured 10,000 Illinois Educational Facilities Authority, Adjustable Demand 12/03 at 102.00 AAA 10,239,300 Revenue Bonds, University of Chicago, Series 1985 Remarketed, 5.700%, 12/01/25 (Pre-refunded to 12/01/03) 12,910 Illinois Health Facilities Authority, Revenue Bonds, 8/04 at 102.00 AA+ 13,297,042 Northwestern Memorial Hospital, Series 1994A, 6.000%, 8/15/24 3,285 Illinois Health Facilities Authority, Revenue Bonds, 8/09 at 101.00 A- 3,422,050 Silver Cross Hospital and Medical Centers, Series 1999, 5.250%, 8/15/15 4,580 Illinois Health Facilities Authority, Revenue Bonds, 8/10 at 102.00 Aaa 4,892,127 Midwest Care Center IX, Series 2000, 6.250%, 8/20/35 3,000 Illinois Health Facilities Authority, Revenue Bonds, 7/13 at 100.00 A- 3,183,810 Lake Forest Hospital, Series 2003, 6.000%, 7/01/33 4,415 Illinois Health Facilities Authority, Revenue Refunding 1/04 at 100.00 BB+ 4,367,980 Bonds, Proctor Community Hospital Project, Series 1991, 7.375%, 1/01/23 3,700 Village of Libertyville, Illinois, Affordable Housing 11/09 at 100.00 A2 3,714,319 Revenue Bonds, Liberty Towers Project, Series 1999A, 7.000%, 11/01/29 (Alternative Minimum Tax) 6,000 McHenry County, Illinois, Conservation District General 2/11 at 100.00 AAA 6,539,400 Obligation Bonds, Series 2001A, 5.625%, 2/01/21 - FGIC Insured Metropolitan Pier and Exposition Authority, Illinois, McCormick Place Expansion Project Refunding Bonds, Series 1996A: 9,400 0.000%, 12/15/18 - MBIA Insured No Opt. Call AAA 4,515,290 16,570 0.000%, 12/15/20 - MBIA Insured No Opt. Call AAA 6,988,729 23,550 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 8,683,827 13,000 0.000%, 12/15/24 - MBIA Insured No Opt. Call AAA 4,158,180 Metropolitan Pier and Exposition Authority, Illinois, McCormick Place Expansion Project Refunding Bonds, Series 1998A: 5,180 5.500%, 12/15/23 - FGIC Insured No Opt. Call AAA 5,783,677 5,100 5.500%, 12/15/23 - FGIC Insured No Opt. Call AAA 5,644,578 10,650 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call AAA 13,710,597 McCormick Place Hospitality Facilities Revenue Bonds, Series 1996A, 7.000%, 7/01/26 17,865 Regional Transportation Authority, Cook, DuPage, Kane, No Opt. Call AAA 20,260,697 Lake, McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1999, 5.750%, 6/01/23 - FSA Insured 6,090 Sherman, Illinois, GNMA Mortgage Revenue Refunding 10/09 at 102.00 AAA 6,516,970 Bonds, Villa Vianney, Series 1999A, 6.450%, 10/01/29 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 6.9% 5,000 Ft. Wayne South Side School Building Corporation, 1/04 at 102.00 AAA 5,152,700 Indiana, First Mortgage Bonds, Series 1994, 6.125%, 1/15/12 (Pre-refunded to 1/15/04) - MBIA Insured 5,250 Indiana Bond Bank, State Revolving Fund Program Bonds, 2/04 at 102.00 AAA 5,413,853 Guarantee Revenue Bonds, Series 1994A, 6.000%, 2/01/16 14,000 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 AAA 14,698,740 Revenue Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/30 - MBIA Insured Indiana Health Facility Financing Authority, Revenue Bonds, Ancilla Systems Incorporated Obligated Group, Series 1997: 15,380 5.250%, 7/01/17 - MBIA Insured 7/07 at 101.00 AAA 16,714,984 2,250 5.250%, 7/01/22 - MBIA Insured 7/07 at 101.00 AAA 2,373,908 4,320 5.250%, 7/01/22 - MBIA Insured 7/07 at 101.00 AAA 4,557,902 8,000 Indiana Transportation Finance Authority, Highway Revenue 12/10 at 100.00 AA 8,374,800 Bonds, Series 2000, 5.375%, 12/01/25 15 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) $ 5,730 Michigan City School Building Corporation, Indiana, First 12/04 at 102.00 AAA $ 6,169,319 Mortgage Bonds, Series 1994A, 6.125%, 12/15/09 (Pre-refunded to 12/15/04) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.4% 5,000 Tobacco Settlement Authority, Iowa, Tobacco Settlement 6/11 at 101.00 BBB 3,864,100 Asset-Backed Revenue Bonds, Series 2001B, 5.600%, 6/01/35 - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.9% 5,790 Sedgwick County Unified School District No. 259, Wichita, 9/10 at 100.00 AA 5,273,764 Kansas, General Obligation Bonds, Series 2000, 3.500%, 9/01/17 3,200 Unified School District No. 500, County of Wyandotte, 9/11 at 100.00 AAA 2,947,744 Kansas, General Obligation School Bonds, Series 2001, 4.000%, 9/01/21 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.4% 3,700 Louisville Metropolitan Sewer District, Kentucky, Sewer 5/07 at 101.00 AAA 4,130,162 and Drainage System Revenue Bonds, Series 1997A, 6.250%, 5/15/26 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 6.7% 2,475 East Baton Rouge Mortgage Finance Authority, Louisiana, 10/07 at 102.00 Aaa 2,569,595 GNMA/FNMA Mortgage-Backed Securities Program, Single Family Mortgage Revenue Refunding Bonds, Series 1997B-1, 5.750%, 10/01/26 35,700 Louisiana Stadium and Exposition District, Hotel Occupancy 7/06 at 102.00 AAA 40,271,385 Tax Bonds, Series 1996, 5.750%, 7/01/26 (Pre-refunded to 7/01/06) - FGIC Insured 5,630 New Orleans Housing Development Corporation, Louisiana, 12/03 at 100.00 AAA 5,639,740 FNMA Multifamily Housing Revenue Refunding Bonds, Curran Place Apartments, Series 1990A, 7.700%, 8/01/23 Tobacco Settlement Financing Corporation, Louisiana, Asset-Backed Bonds, Series 2001B: 10,000 5.500%, 5/15/30 5/11 at 101.00 BBB 8,166,000 6,250 5.875%, 5/15/39 5/11 at 101.00 BBB 5,004,125 - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 1.3% 5,935 Maine State Housing Authority, Mortgage Purchase Bonds, 2/04 at 102.00 AA+ 6,029,307 Series 1994A, 5.700%, 11/15/26 5,680 Portland, Maine, General Airport Revenue Bonds, 7/13 at 100.00 AAA 5,709,877 Series 2003A, 5.000%, 7/01/32 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 2.7% 1,145 Community Development Administration, Maryland 9/10 at 100.00 Aa2 1,191,063 Department of Housing and Community Development, Residential Revenue Bonds, Series H, 5.800%, 9/01/32 (Alternative Minimum Tax) 7,720 Maryland Transportation Authority, Baltimore-Washington 3/12 at 101.00 AAA 7,899,876 International Airport, Parking Revenue Bonds, Series 2002B, 5.125%, 3/01/20 (Alternative Minimum Tax) - AMBAC Insured 7,475 Housing Opportunities Commission of Montgomery County, 7/04 at 102.00 Aa2 7,659,035 Maryland, Multifamily Housing Revenue Bonds, Series 1994A, 6.250%, 7/01/28 7,090 Takoma Park, Maryland, Hospital Facilities Refunding and No Opt. Call AAA 8,531,113 Improvement Revenue Bonds, Washington Adventist Hospital Project, Series 1995, 6.500%, 9/01/12 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 3.3% 1,820 Massachusetts Educational Financing Authority, Education 12/09 at 101.00 AAA 2,034,214 Loan Revenue and Refunding Bonds, Issue G, Series 2000A, 5.700%, 12/01/11 (Alternative Minimum Tax) - MBIA Insured Massachusetts Municipal Wholesale Electric Company, Power Supply System Revenue Bonds, Series 1987A: 70 8.750%, 7/01/18 (Pre-refunded to 1/01/04) 1/04 at 100.00 Aaa 70,899 70 8.750%, 7/01/18 (Pre-refunded to 7/01/04) 7/04 at 100.00 Aaa 73,572 35 8.750%, 7/01/18 (Pre-refunded to 1/01/05) 1/05 at 100.00 Aaa 38,053 35 8.750%, 7/01/18 (Pre-refunded to 7/01/05) 7/05 at 100.00 Aaa 39,312 2,500 Commonwealth of Massachusetts, General Obligation 11/12 at 100.00 Aa2 2,563,975 Bonds, Consolidated Loan, Series 2002C, 5.250%, 11/01/30 5,000 Commonwealth of Massachusetts, General Obligation 1/13 at 100.00 AAA 5,261,550 Bonds, Consolidated Loan, Series 2002E, 5.250%, 1/01/22 - FGIC Insured 16 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS (continued) Massachusetts Development Finance Authority, Revenue Bonds, 100 Cambridge Street Redevelopment, M/SRBC Project, 2002 Series A: $ 4,000 5.125%, 8/01/28 - MBIA Insured 2/12 at 100.00 AAA $ 4,058,280 5,000 5.125%, 2/01/34 - MBIA Insured 2/12 at 100.00 AAA 5,057,950 1,420 Massachusetts Health and Educational Facilities Authority, 7/08 at 101.00 Aaa 1,376,718 Revenue Bonds, Southcoast Health System Obligated Group Issue, Series A, 4.750%, 7/01/27 - MBIA Insured 8,500 Route 3 North Transportation Improvements Association, 6/10 at 100.00 AAA 9,719,325 Commonwealth of Massachusetts, Lease Revenue Bonds, Series 2000, 5.375%, 6/15/33 (Pre-refunded to 6/15/10) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 5.4% 17,000 Birmingham City School District, Oakland County, Michigan, 11/07 at 100.00 AAA 16,854,990 School Building and Site Bonds, Series 1998, 4.750%, 11/01/24 - FSA Insured 3,000 City of Detroit, Michigan, Water Supply System Revenue 7/07 at 101.00 AAA 3,073,230 Senior Lien Bonds, Series 1997A, 5.000%, 7/01/21 - MBIA Insured 3,885 Grand Rapids Housing Corporation, Multifamily Revenue 1/04 at 104.00 AAA 3,991,604 Refunding Bonds, FHA-Insured Mortgage Loan-Section 8 Assisted Elderly Project, Series 1992, 7.375%, 7/15/41 4,030 Hancock Hospital Finance Authority, Michigan, FHA-Insured 8/08 at 100.00 AAA 4,223,722 Mortgage Hospital Revenue Bonds, Portage Health System, Inc., Series 1998, 5.450%, 8/01/47 - MBIA Insured 1,000 Michigan State Building Authority, Facilities Program Revenue 10/11 at 100.00 AA+ 1,012,080 Refunding Bonds, Series 2001I, 5.000%, 10/15/24 7,115 Michigan State Hospital Finance Authority, Hospital Revenue 3/13 at 100.00 A1 7,466,552 Refunding Bonds, Henry Ford Health System, Series 2003A, 5.500%, 3/01/16 3,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 3,110,370 Revenue Refunding Pollution Control Bonds, Detroit Edison Company, Series 1999A, 5.550%, 9/01/29 (Alternative Minimum Tax) - MBIA Insured 10,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 10,622,800 Metropolitan Wayne County Airport, Series 1998A, 5.375%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 6.6% 7,475 Dakota County Community Development Agency, Minnesota, 2/12 at 102.00 Aaa 7,722,273 GNMA Collateralized Mortgage Loan Multifamily Senior Housing Revenue Bonds, Wingate Project, Series 2002A, 5.625%, 8/20/43 990 Dakota County Housing and Redevelopment Authority, 4/04 at 102.00 AAA 1,015,057 Minnesota, FNMA Collateralized Single Family Mortgage Revenue Bonds, Series 1994A, 6.900%, 10/01/27 (Alternative Minimum Tax) 3,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 3,078,840 Minnesota, Subordinate Airport Revenue Bonds, Series 2001C, 5.250%, 1/01/26 - FGIC Insured 18,020 Plymouth, Minnesota, GNMA Collateralized Mortgage 3/12 at 105.00 Aaa 18,327,962 Loan Senior Housing Revenue Bonds, Regent at Plymouth Project, Series 2002A, 4.090%, 9/20/43 21,860 St. Paul Housing and Redevelopment Authority, 11/15 at 103.00 AAA 26,962,124 Minnesota, Sales Tax Revenue Refunding Bonds, Civic Center Project, Series 1996, 7.100%, 11/01/23 - FSA Insured 3,395 St. Paul Housing and Redevelopment Authority, Minnesota, 3/05 at 102.60 Aaa 3,547,435 Single Family Mortgage Revenue Refunding Bonds, FNMA Mortgage-Backed Securities Middle Income Program - Phase II, Series 1995, 6.800%, 3/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.1% 9,750 Mississippi Business Finance Corporation, Pollution Control 4/04 at 102.00 BBB- 9,722,310 Revenue Refunding Bonds, System Energy Resources Inc. Project, Series 1998, 5.875%, 4/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.4% 2,000 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 2,018,300 Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink Cross County Extension Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured 6,350 City of Kansas City, Missouri, General Improvement Airport 9/12 at 100.00 AAA 6,839,903 Revenue Bonds, Series 2003B, 5.250%, 9/01/17 - FGIC Insured 435 Missouri Housing Development Commission, GNMA 11/03 at 100.00 AAA 435,596 Mortgage-Backed Securities Program Single Family Mortgage Revenue Bonds, Series 1988A, 8.300%, 5/01/19 (Alternative Minimum Tax) 17 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI (continued) $ 3,740 Health and Educational Facilities Authority of the State 6/11 at 101.00 AAA $ 3,836,193 of Missouri, Revenue Bonds, SSM Health Care, Series 2001A, 5.250%, 6/01/28 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 1.1% 1,845 Montana Board of Housing, Single Family Mortgage Bonds, 6/07 at 101.50 AA+ 1,914,077 Series 1997A, 6.150%, 6/01/30 (Alternative Minimum Tax) 2,890 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 3,041,436 Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax) 4,795 Montana Higher Education Student Assistance 12/08 at 101.00 A2 4,884,762 Corporation, Student Loan Revenue Bonds, Subordinate Series 1998B, 5.500%, 12/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.4% 3,260 Nebraska Investment Finance Authority, Single Family 9/10 at 100.00 AAA 3,390,172 Housing Revenue Bonds, 2000 Series E, 5.850%, 9/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 2.5% 10,900 Clark County School District, Nevada, General Obligation 6/12 at 100.00 AAA 11,829,334 Bonds, Series 2002C, 5.500%, 6/15/19 - MBIA Insured 10,505 State of Nevada, General Obligation Bonds, Municipal Bond 5/06 at 101.00 AAA 11,765,285 Bank Project No. 52, Series 1996A, 6.000%, 5/15/21 (Pre-refunded to 5/15/06) - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 1.2% New Hampshire Housing Finance Authority, FHLMC Multifamily Housing Revenue Remarketing Bonds, Countryside LP Project, Series 1994: 3,725 6.000%, 7/01/18 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 3,925,815 6,945 6.100%, 7/01/24 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 7,251,900 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 7.1% 4,425 New Jersey Higher Education Student Assistance Authority, 6/10 at 101.00 AAA 4,891,484 Student Loan Revenue Bonds, Series 2000A, 6.000%, 6/01/13 (Alternative Minimum Tax) - MBIA Insured 3,000 New Jersey Economic Development Authority, Transportation 5/09 at 100.00 AAA 3,391,020 Project Sublease Revenue Bonds, New Jersey Transit Corporation - Light Rail Transit System Projects, Series 1999A, 5.250%, 5/01/17 (Pre-refunded to 5/01/09) - FSA Insured 8,750 New Jersey Transportation Trust Fund Authority, 6/07 at 102.00 AA- 9,470,300 Transportation System Bonds, Series 1996B, 5.250%, 6/15/16 9,250 New Jersey Transportation Trust Fund Authority, 6/13 at 100.00 AA- 9,946,803 Transportation System Bonds, Series 2003C, 5.500%, 6/15/23 4,500 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 5,092,920 Transportation System Bonds, Series 2001C, 5.500%, 12/15/18 - FSA Insured 10,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, 7/13 at 100.00 AAA 10,439,700 Series 2003A, 5.000%, 1/01/20 - FSA Insured 15,000 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 12,916,650 Tobacco Settlement Asset-Backed Bonds, Series 2002, 5.750%, 6/01/32 3,125 Tobacco Settlement Financing Corporation, New Jersey, 6/13 at 100.00 BBB 2,840,313 Tobacco Settlement Asset-Backed Bonds, Series 2003, 6.750%, 6/01/39 Township of West Deptford, County of Gloucester, New Jersey, General Obligation Bonds, Series 2000: 3,150 5.500%, 9/01/21 - FGIC Insured 9/10 at 100.00 Aaa 3,391,857 3,335 5.500%, 9/01/22 - FGIC Insured 9/10 at 100.00 Aaa 3,582,857 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 16.5% 5 City of New York, New York, General Obligation Bonds, 2/04 at 100.00 A 5,084 Fiscal Series 1987D, 8.500%, 8/01/08 12,500 City of New York, New York, General Obligation Bonds, No Opt. Call A 13,625,250 Fiscal Series 1997A, 7.000%, 8/01/05 6,300 City of New York, New York, General Obligation Bonds, 5/10 at 101.00 AAA 7,244,055 Fiscal Series 2000A, 6.250%, 5/15/26 - FSA Insured 18 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) City of New York, New York, General Obligation Bonds, Fiscal Series 1996F: $ 2,240 5.750%, 2/01/15 (Pre-refunded to 2/01/06) 2/06 at 101.50 A*** $ 2,482,166 14,055 5.750%, 2/01/15 2/06 at 101.50 A 15,123,180 20,650 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 22,696,209 Water and Sewer System Revenue Bonds, Fiscal Series 1996B, 5.750%, 6/15/26 - MBIA Insured 4,875 New York Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 5,194,605 Water and Sewer System Revenue Bonds, Fiscal Series 1997A, 5.500%, 6/15/24 - MBIA Insured 10,000 New York City Municipal Water Finance Authority, 6/09 at 101.00 AA 10,994,700 New York, Water and Sewer System Revenue Bonds, Fiscal Series 2000A, 5.750%, 6/15/30 7,810 New York Transitional Finance Authority, New York, 8/09 at 101.00 AA+*** 9,177,375 Future Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded to 8/15/09) 2,250 Dormitory Authority of the State of New York, Lease 7/09 at 101.00 AAA 2,403,090 Revenue Bonds, State University Dormitory Facilities Issue, Series 1999C, 5.500%, 7/01/29 - MBIA Insured 4,000 Dormitory Authority of the State of New York, State 11/03 at 100.00 AA- 4,094,200 University Educational Facilities, Revenue Bonds, Series 1990B, 6.000%, 5/15/17 1,500 Dormitory Authority of the State of New York, Revenue 8/07 at 101.00 AAA 1,593,645 Bonds, St. Barnabas Hospital, Series 1997, 5.450%, 8/01/35 - AMBAC Insured 2,070 Dormitory Authority of the State of New York, Insured 7/08 at 101.00 AAA 2,301,198 Revenue Bonds, 853 Schools Program 1998 Issue 1, Gateway-Longview Inc., Series 1998A, 5.500%, 7/01/18 - AMBAC Insured 17,000 Dormitory Authority of the State of New York, City University 7/09 at 101.00 AAA 19,713,540 System Consolidated Third General Resolution Revenue Bonds, Series 1999-1, 5.500%, 7/01/29 (Pre-refunded to 7/01/09) - FSA Insured 3,000 Dormitory Authority of the State of New York, City University 1/08 at 102.00 AAA 3,435,180 System Consolidated Third General Resolution Revenue Bonds, Series 1997-1, 5.375%, 7/01/24 (Pre-refunded to 1/01/08) - FSA Insured 2,000 Dormitory Authority of the State of New York, Mental 2/06 at 102.00 AAA 2,089,600 Health Services Facilities Improvement Revenue Bonds, Series 1996B, 5.375%, 2/15/26 - MBIA Insured Dormitory Authority of the State of New York, Revenue Bonds, Marymount Manhattan College, Series 1999: 1,580 6.375%, 7/01/13 - RAAI Insured 7/09 at 101.00 AA 1,788,402 9,235 6.125%, 7/01/21 - RAAI Insured 7/09 at 101.00 AA 10,145,109 3,000 New York State Energy Research and Development 9/08 at 102.00 AAA 3,213,420 Authority, Pollution Control Revenue Bonds, Rochester Gas and Electric Corporation Project, Series 1998A, 5.950%, 9/01/33 (Alternative Minimum Tax) - MBIA Insured 14,750 New York State Medical Care Facilities Finance Agency, 2/04 at 102.00 AAA 15,192,205 Mental Health Services Facilities Improvement Revenue Bonds, Series 1993F Refunding, 5.375%, 2/15/14 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.2% 2,000 North Carolina Municipal Power Agency Number 1, 1/08 at 102.00 AAA 2,057,980 Catawba Electric Revenue Bonds, Series 1998A, 5.000%, 1/01/20 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 0.3% 2,900 North Dakota Housing Finance Agency, Home Mortgage 7/10 at 100.00 Aa2 3,049,843 Finance Program Refunding Bonds, Series 2000A, 6.500%, 1/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 5.8% 7,500 Cleveland, Ohio, Airport System Revenue Bonds, 1/10 at 101.00 AAA 7,555,650 Series 2000A, 5.000%, 1/01/31 - FSA Insured 17,715 Ohio Housing Finance Agency, Residential Mortgage 7/09 at 100.00 Aaa 18,221,472 Revenue Bonds, Mortgage-Backed Securities Program, Series 1999C, 5.750%, 9/01/30 (Alternative Minimum Tax) 15,200 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 14,007,256 Revenue Bonds, Bay Shore Power Project, Series 1998A, 5.875%, 9/01/20 (Alternative Minimum Tax) 14,100 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 14,034,717 Revenue Bonds, Bay Shore Power Project, Convertible Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) 19 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.3% $ 3,400 Trustees of the Tulsa Municipal Airport Trust, Oklahoma, 12/08 at 100.00 B- $ 2,893,604 Revenue Refunding Bonds, Refunding Series 2000B, 6.000%, 6/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 1.0% 1,220 State of Oregon, Housing and Community Services 1/10 at 100.00 Aa2 1,276,925 Department, Mortgage Revenue Bonds, Single Family Mortgage Program, Series 2000F, 6.250%, 7/01/28 (Alternative Minimum Tax) 9,150 Port of St. Helens, Oregon, Pollution Control Revenue Bonds, No Opt. Call BBB 7,900,019 Portland General Electric Company Project, Series 1985B, 4.800%, 6/01/10 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 4.3% Bethlehem Authority, Northampton and Lehigh Counties, Pennsylvania, Guaranteed Water Revenue Bonds, Series 1998: 3,125 0.000%, 5/15/22 - FSA Insured No Opt. Call AAA 1,208,687 3,125 0.000%, 5/15/23 - FSA Insured No Opt. Call AAA 1,130,969 3,135 0.000%, 5/15/24 - FSA Insured No Opt. Call AAA 1,057,843 3,155 0.000%, 5/15/26 - FSA Insured No Opt. Call AAA 940,632 4,145 0.000%, 11/15/26 - FSA Insured No Opt. Call AAA 1,203,086 2,800 0.000%, 5/15/28 - FSA Insured No Opt. Call AAA 744,800 3,000 0.000%, 11/15/28 - FSA Insured No Opt. Call AAA 775,050 4,730 Carbon County Industrial Development Authority, No Opt. Call BBB- 5,083,993 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 2,565 Cumberland County Municipal Authority, Pennsylvania, 11/04 at 102.00 BBB-*** 2,731,007 Carlisle Hospital and Health Services First Mortgage Revenue and Refunding Bonds, Series 1994, 6.800%, 11/15/14 (Pre-refunded to 11/15/04) 11,000 Delaware County Authority, Pennsylvania, Health System 11/08 at 102.00 AAA 11,242,990 Revenue Bonds, Catholic Health East Issue, Series 1998A, 4.875%, 11/15/18 - AMBAC Insured Pennsylvania Economic Development Financing Authority, Resource Recovery Revenue Bonds, Northampton Generating Project, Senior Series 1994A: 2,100 6.400%, 1/01/09 (Alternative Minimum Tax) 1/04 at 102.00 BBB- 2,146,284 4,500 6.500%, 1/01/13 (Alternative Minimum Tax) 1/04 at 102.00 BBB- 4,562,820 900 Pennsylvania Economic Development Financing Authority, 1/04 at 102.00 N/R 900,099 Resource Recovery Revenue Subordinate Bonds, Northampton Generating Project, Series 1994C, 6.875%, 1/01/11 (Alternative Minimum Tax) 6,250 Pennsylvania Economic Development Financing Authority, No Opt. Call N/R 6,427,937 Resource Recovery Revenue Bonds, Northampton Generating Project, Senior Lien Series 1994B, 6.750%, 1/01/07 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.2% 1,250 Puerto Rico Highway and Transportation Authority, 7/10 at 101.00 AAA 1,426,437 Highway Revenue Bonds, Series 2000B, 5.875%, 7/01/21 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 0.5% 2,000 Kent County Water Authority, Rhode Island, General Revenue 7/12 at 100.00 AAA 2,037,320 Bonds, Series 2002A, 5.000%, 7/15/23 -MBIA Insured Rhode Island Health and Educational Building Corporation, Revenue Refunding Bonds, Salve Regina University, Series 2002: 1,260 5.250%, 3/15/17 - RAAI Insured 3/12 at 101.00 AA 1,334,378 1,080 5.250%, 3/15/18 - RAAI Insured 3/12 at 101.00 AA 1,136,797 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 2.8% 6,925 South Carolina, General Obligation Bonds, Series 1999A, 10/09 at 101.00 AAA 7,014,679 4.000%, 10/01/14 21,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 19,028,730 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.000%, 5/15/22 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 2.8% 2,260 The Health and Educational Facilities Board of the City of 7/23 at 100.00 AAA 2,359,530 Johnson City, Tennessee, Hospital Revenue Refunding and Improvement Bonds, Johnson City Medical Center Hospital, Series 1998C, 5.125%, 7/01/25 (Pre-refunded to 7/01/23) - MBIA Insured 1,700 Memphis-Shelby County Airport Authority, Tennessee, 3/10 at 101.00 AAA 1,836,561 Airport Revenue Bonds, Series 1999D, 6.000%, 3/01/24 (Alternative Minimum Tax) - AMBAC Insured 20 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE (continued) $ 6,675 Memphis Health, Educational and Housing Facilities Board, 1/04 at 102.00 AAA $ 6,840,473 Tennessee, Multifamily Mortgage Revenue Refunding Bonds, Riverdale Plaza Apartments Project, Series 1993, 6.350%, 7/20/28 6,000 The Health and Educational Facilities Board of the 12/17 at 100.00 AAA 6,980,700 Metropolitan Government of Nashville and Davidson County, Tennessee, Revenue Refunding and Improvement Bonds, Meharry Medical College Project Series 1996, 6.000%, 12/01/19 - AMBAC Insured 7,225 Tennessee Housing Development Agency, Homeownership 7/10 at 101.00 AA 7,516,095 Program Bonds, Issue 2000-1, 6.375%, 7/01/25 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 4.7% 3,740 Austin, Texas, Hotel Occupancy Tax Subordinate Lien Revenue 11/09 at 100.00 AAA 4,166,173 Refunding Bonds, Series 1999, 5.625%, 11/15/17 - AMBAC Insured 3,975 Bell County Health Facilities Development Corporation, 2/10 at 101.00 AAA 4,404,141 Texas, Hospital Revenue Bonds, Scott and White Memorial Hospital and Scott, Sherwood and Brindley Foundation Project, Series 2000A, 6.125%, 8/15/23 - MBIA Insured 5,690 Dallas-Ft. Worth, Texas, International Airport Facilities 11/05 at 100.00 CCC 4,908,820 Improvement Corporation, Revenue Refunding Bonds, Series 2000B, American Airlines, 6.050%, 5/01/29 (Alternative Minimum Tax) (Mandatory put 11/01/05) 680 Ft. Worth Housing Finance Corporation, Texas, Home 4/04 at 101.00 Aa2 688,670 Mortgage Revenue Refunding Bonds, Series 1991A, 8.500%, 10/01/11 1,625 Harris County, Texas, Health Facilities Development 7/09 at 101.00 AAA 1,689,773 Corporation, Revenue Bonds, Christus Health, Series 1999A, 5.375%, 7/01/24 - MBIA Insured 180 Hidalgo County Housing Finance Corporation, Texas, 4/04 at 102.00 AAA 182,378 GNMA/FNMA Collateralized Single Family Mortgage Revenue Bonds, Series 1994A, 6.750%, 10/01/15 (Alternative Minimum Tax) 3,885 Houston Independent School District Public Facility No Opt. Call AAA 1,758,740 Corporation, Harris County, Texas, Lease Revenue Bonds, Cesar E. Chavez High School, Series 1998A, 0.000%, 9/15/19 - AMBAC Insured 1,690 Webb County, Laredo, Texas, Combination Tax and Sewer 2/08 at 100.00 AAA 1,696,760 System, Revenue Certificates of Obligation, Series 1998A, 4.500%, 2/15/18 - MBIA Insured Leander Independent School District, Williamson and Travis Counties, Texas, Unlimited Tax School Building and Refunding Bonds, Series 1998: 4,930 0.000%, 8/15/20 8/06 at 46.47 AAA 1,982,008 3,705 0.000%, 8/15/22 8/06 at 41.33 AAA 1,318,572 695 Lubbock Housing Finance Corporation, Texas, Single Family 6/07 at 102.00 AAA 707,586 Mortgage Revenue Refunding Bonds, GNMA Mortgage-Backed Securities Program, Series 1997A, 6.125%, 12/01/17 3,480 Pearland, Texas, General Obligation Bonds, Series 2002, 3/12 at 100.00 AAA 3,501,680 5.000%, 3/01/27 - FGIC Insured 6,050 City of San Antonio, Texas, Electric and Gas Systems 2/09 at 100.00 AA+ 5,918,171 Revenue Refunding Bonds, Series 1998A, 4.500%, 2/01/21 6,000 Spring Branch Independent School District, Harris County, 2/11 at 100.00 AAA 6,073,440 Texas, Limited Tax Schoolhouse and Refunding Bonds, Series 2001, 5.125%, 2/01/26 4,000 Tarrant Regional Water District, Texas, Water Revenue 3/13 at 100.00 AAA 4,091,080 Bonds, Series 1999 Refunding and Improvement, 5.000%, 3/01/22 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 4.6% 10,000 Intermountain Power Agency, Utah, Power Supply Revenue 7/07 at 102.00 AAA 11,138,100 Refunding Bonds, Series 1997B, 5.750%, 7/01/19 - MBIA Insured Utah County, Utah, Hospital Revenue Bonds, IHC Health Services, Inc., Series 1997: 12,500 5.250%, 8/15/21 - MBIA Insured 8/07 at 101.00 AAA 12,980,250 3,900 5.250%, 8/15/26 - MBIA Insured 8/07 at 101.00 AAA 3,986,697 4,445 Utah Housing Corporation, Single Family Mortgage Bonds, 1/12 at 100.00 AA- 4,669,072 Series 2002-A1, 5.300%, 7/01/18 (Alternative Minimum Tax) 495 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 100.00 AA 506,979 Series 2000B, 6.250%, 7/01/22 (Alternative Minimum Tax) 2,850 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA- 3,069,991 Series 2000D-1, 6.050%, 7/01/14 (Alternative Minimum Tax) 21 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ UTAH (continued) $ 3,165 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 Aa1 $ 3,440,165 Series 2000E-1, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax) 715 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA 731,259 Series 2000E-1, Class II, 6.150%, 1/01/27 (Alternative Minimum Tax) 1,255 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/11 at 100.00 AA 1,275,005 Series 2001A2, 5.650%, 7/01/27 (Alternative Minimum Tax) 945 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/11 at 100.00 Aa2 1,008,504 Series 2001B-1, 5.750%, 7/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ VERMONT - 0.5% 4,725 Vermont Housing Finance Agency, Single Family Housing 11/04 at 102.00 A+ 4,828,336 Bonds, Series 1994-5, 7.000%, 11/01/27 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 1.8% 16,000 Metropolitan Washington Airports Authority, Virginia, 10/04 at 100.00 AAA 16,403,680 Airport System Revenue Bonds, Series 1994A, 5.500%, 10/01/24 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 3.6% 12,235 Chelan County Public Utility District 1, Washington, No Opt. Call AAA 3,305,408 Columbia River-Rock Island Hydroelectric System Revenue Refunding Bonds, Series 1997A, 0.000%, 6/01/26 - MBIA Insured 5,000 Energy Northwest, Washington, Nuclear Project No. 1 7/13 at 100.00 Aa1 5,518,050 Electric Revenue Bonds, Series 2003A Refunding, 5.500%, 7/01/16 1,815 Grant County Public Utility District 2, Washington, 1/06 at 102.00 AAA 1,926,332 Wanapum Hydroelectric Revenue Bonds, Series 1997A, Master Lease Program, 5.625%, 1/01/26 - MBIA Insured 12,000 State of Washington, Motor Vehicle Fuel Tax General 1/11 at 100.00 AA+ 12,341,640 Obligation Bonds, Series 2001D, 5.250%, 1/01/26 5,000 Washington State Housing Finance Commission, 7/09 at 101.00 AA 5,455,550 Nonprofit Housing Revenue Bonds, The Kline Galland Center Project, Series 1999, 6.000%, 7/01/29 - RAAI Insured 4,500 Washington Health Care Facilities Authority Revenue 12/09 at 101.00 AAA 4,787,370 Bonds, Providence Services, Series 1999, 5.375%, 12/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.5% 5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 4,962,000 Bonds, Appalachian Power Company Project, Series 2003L, 5.500%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 2.3% 1,660 Wisconsin Health and Educational Facilities Authority, 2/04 at 102.00 AAA 1,698,014 Revenue Bonds, Aurora Health Care Obligated Group, Series 1993, 5.250%, 8/15/23 - MBIA Insured 11,620 Wisconsin Health and Educational Facilities Authority, 2/10 at 101.00 AA 12,900,292 Revenue Bonds, Marshfield Clinic, Series 1999, 6.250%, 2/15/29 - RAAI Insured 7,490 Wisconsin Health and Educational Facilities Authority, 7/08 at 103.00 N/R 6,661,081 Revenue Bonds, The Millennium Housing Foundation Inc. Project, Series 1998, 6.100%, 1/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,439,015 Total Long-Term Investments (cost $1,285,853,235) - 147.9% 1,368,462,830 =============----------------------------------------------------------------------------------------------------------------------- 22 PRINCIPAL MARKET AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 1.1% $ 10,600 Nebraska Educational Finance Authority, Revenue Bonds, VMIG-1 $ 10,600,000 Creighton University, Variable Rate Demand Obligations, Series 2003, 1.150%, 3/01/33 - AMBAC Insured+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 10,600 Total Short-Term Investments (cost $10,600,000) 10,600,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $1,296,453,235) - 149.0% 1,379,062,830 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.8% 25,462,017 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.8)% (479,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 925,524,847 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. N/R Investment is not rated. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 23
Nuveen Municipal Advantage Fund, Inc. (NMA) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 3.3% $ 10,000 Jefferson County, Alabama, Sewer Revenue Capital 2/09 at 101.00 AAA $11,439,400 Improvement Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded to 2/01/09) - FGIC Insured 5,075 The Health Care Authority of Lauderdale County and the 7/09 at 101.00 AAA 5,197,155 City of Florence, Alabama, Revenue Bonds, Coffee Health Group, Series 1999A, 5.250%, 7/01/24 - MBIA Insured 5,155 Phenix City, Alabama, Industrial Development Board 5/12 at 100.00 BBB 5,280,937 Environmental Improvement Revenue Bonds, MeadWestvaco Project, 2002A, 6.350%, 5/15/35 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.7% 5,000 Maricopa County, Arizona, Pollution Control Corporation, 5/06 at 101.00 BBB- 4,909,400 Pollution Control Revenue Refunding Bonds, Remarketing Series 1992A, Public Service Company of New Mexico, 5.750%, 11/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 7.5% 3,000 California Health Facilities Financing Authority, Revenue 3/13 at 100.00 A 2,752,020 Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 2,500 California Department of Water Resources, Power Supply 5/12 at 101.00 A3 2,560,725 Revenue Bonds, Series 2002A, 5.375%, 5/01/22 7,535 Contra Costa County, California, GNMA Mortgage-Backed No Opt. Call AAA 10,098,934 Securities Program Home Mortgage Revenue Bonds, Series 1989, 7.750%, 5/01/22 (Alternative Minimum Tax) 6,925 East Bay Municipal Utility District, Alameda and Contra 6/06 at 100.00 AAA 6,938,919 Costa Counties, California, Water System Subordinated Revenue Refunding Bonds, Series 1996, 4.750%, 6/01/21 - FGIC Insured 2,500 Los Angeles County Metropolitan Transportation Authority, 7/05 at 100.00 AAA 2,657,750 California, Proposition C Sales Tax Revenue Bonds, Second Senior Series 1995A, 5.000%, 7/01/25 (Pre-refunded to 7/01/05) - AMBAC Insured 5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,337,350 Residential Mortgage Revenue Refunding Bonds, Series 1991B, 7.375%, 2/01/12 5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,834,400 Single Family Restructured Mortgage Revenue Bonds, Series 1986A, 8.000%, 3/01/16 (Alternative Minimum Tax) 9,315 Perris, California, GNMA Mortgage-Backed Securities No Opt. Call AAA 12,396,309 Program, Single Family Mortgage Revenue Bonds, Series 1989A, 7.600%, 1/01/23 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 2.6% 8,350 Colorado Health Facilities Authority, Remarketed Revenue 7/06 at 102.00 A 8,587,223 Bonds, Kaiser Permanente, Series 1994A, 5.350%, 11/01/16 2,650 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 1,455,884 Bonds, Series 1997B, 0.000%, 9/01/16 - MBIA Insured Platte River Power Authority, Colorado, Power Revenue Bonds, Series EE Refunding: 2,000 5.375%, 6/01/17 6/12 at 100.00 AA- 2,176,080 5,000 5.375%, 6/01/18 6/12 at 100.00 AA- 5,406,450 - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.8% 5,000 Connecticut Housing Finance Authority, Housing Mortgage 11/09 at 100.00 AAA 5,214,450 Finance Program Bonds, Series 2000B, Subseries B-2, 5.750%, 11/15/21 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.4% 4,940 District of Columbia Housing Finance Agency, GNMA 12/04 at 103.00 AAA 5,000,564 Collateralized Single Family Mortgage Revenue Bonds, Series 1988F-1, 6.375%, 6/01/26 (Alternative Minimum Tax) 4,390 District of Columbia Housing Finance Agency, Single Family 6/07 at 102.00 AAA 4,534,475 Mortgage Revenue Bonds, Series 1997B, 5.900%, 12/01/28 (Alternative Minimum Tax) 24 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 2.0% $ 2,770 Florida Housing Finance Corporation, Housing 12/10 at 100.00 AAA $ 2,879,055 Revenue Bonds, Stratford Point Apartments, 2000 Series O-1, 5.850%, 12/01/31 (Alternative Minimum Tax) - FSA Insured 9,990 City of Tampa, Florida, Allegany Health System Revenue 12/03 at 102.00 AAA 10,489,001 Bonds, St. Mary's Hospital, Inc. Issue, Series 1993, 5.125%, 12/01/23 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 0.8% 3,205 Hawaii Housing Finance and Development Corporation, 7/07 at 102.00 AAA 3,288,715 Single Family Mortgage Purchase Revenue Bonds, Series 1997A, 5.750%, 7/01/30 (Alternative Minimum Tax) 2,215 Hawaii Housing and Community Development Corporation, 7/10 at 102.00 AAA 2,312,017 GNMA Collateralized Multifamily Housing Revenue Bonds, Sunset Villas, Series 2000, 5.700%, 7/20/31 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 13.7% 5,865 City of Chicago, Illinois, General Obligation Bonds, 7/10 at 101.00 AAA 7,146,796 Neighborhoods Alive 21 Program, Series 2000A, 6.500%, 1/01/35 (Pre-refunded to 7/01/10) - FGIC Insured 4,000 Chicago School Reform Board of Trustees of the Board 12/07 at 102.00 AAA 4,427,720 of Education of the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Tax Revenues, Series 1997, 5.750%, 12/01/20 - AMBAC Insured 12,500 Chicago School Reform Board of Trustees of the Board 12/07 at 102.00 AAA 12,788,500 of Education of the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Tax Revenues, Series 1997A, 5.250%, 12/01/27 - AMBAC Insured 5,000 City of Chicago, Illinois, Chicago O'Hare International No Opt. Call Ca 1,300,000 Airport, Special Facility Revenue Bonds, United Air Lines, Inc. Project, Series 2001A, 6.375%, 11/01/35 (Alternative Minimum Tax) (Mandatory put 5/01/13)# 5,000 City of Chicago, Illinois, Chicago O'Hare International 1/11 at 101.00 AAA 5,108,950 Airport, Second Lien Passenger Facility Charge Revenue Bonds, Series 2001A, 5.375%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured 5,000 City of Chicago, Illinois, Second Lien Wastewater 1/08 at 102.00 AAA 5,108,350 Transmission Revenue Bonds, Series 1997, 5.250%, 1/01/28 - AMBAC Insured 10,115 Illinois Health Facilities Authority, Revenue Bonds, 11/06 at 102.00 AAA 11,466,667 Rush-Presbyterian-Saint Luke's Medical Center Obligation Group, Series 1996A Refunding, 6.250%, 11/15/20 - MBIA Insured 6,165 Illinois Health Facilities Authority, Revenue Bonds, 2/07 at 102.00 A 6,303,774 Sarah Bush Lincoln Health Center, Series 1996B, 5.750%, 2/15/22 3,935 Illinois Health Facilities Authority, Revenue Bonds, Victory 8/07 at 101.00 A- 3,238,348 Health Services, Series 1997A, 5.375%, 8/15/16 6,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 A3 6,164,700 Medical Center, Series 2002, 5.750%, 5/15/22 Metropolitan Pier and Exposition Authority, Illinois, McCormick Place Expansion Project Bonds, Series 1999A: 12,455 5.500%, 12/15/24 - FGIC Insured 12/09 at 101.00 AAA 13,174,276 10,000 5.250%, 12/15/28 - FGIC Insured 12/09 at 101.00 AAA 10,224,200 2,600 Regional Transportation Authority, Cook, DuPage, Kane, No Opt. Call AAA 3,412,084 Lake, McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1990A, 7.200%, 11/01/20 - AMBAC Insured 1,940 University of Illinois, Auxiliary Facilities Systems Revenue 4/13 at 100.00 AAA 1,968,305 Bonds, Series 2003A, 5.000%, 4/01/23 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 5.2% 7,425 Ft. Wayne International Airport Building Corporation, 1/04 at 101.00 Aa3 7,511,130 Indiana, General Obligation Airport Bonds, Series 1994, 5.900%, 1/01/14 (Alternative Minimum Tax) 5,205 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 AAA 5,464,782 Revenue Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/30 - MBIA Insured 9,000 Indiana Health Facility Financing Authority, Hospital 5/06 at 102.00 AAA 9,744,030 Revenue Refunding and Improvement Bonds, Community Hospitals Projects, Series 1995, 5.700%, 5/15/22 - MBIA Insured 6,075 LaGrange County Jail Building Corporation, Indiana, 10/09 at 101.00 A3 6,270,007 First Mortgage Jail Bonds, Series 1998, 5.400%, 10/01/21 25 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA (continued) $ 3,215 Mooresville Consolidated School Building Corporation, 1/04 at 102.00 N/R*** $ 3,314,794 Morgan County, Indiana, First Mortgage Bonds, Series 1994B, 6.400%, 7/15/15 (Pre-refunded to 1/15/04) 2,725 Saint Joseph County Hospital Authority, Indiana, Health 2/09 at 102.00 BBB 2,762,850 System Revenue Bonds, Madison Center Inc. Project, Series 1999, 5.450%, 2/15/12 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.8% 1,925 Iowa Finance Authority, GNMA/FNMA Mortgage-Backed 1/05 at 102.00 AAA 1,988,410 Securities Program Single Family Mortgage Bonds, Series 1995C, 6.450%, 1/01/24 3,500 Marshalltown, Iowa, Pollution Control Revenue Refunding 11/03 at 102.00 AAA 3,578,645 Bonds, Iowa Electric Light and Power Company Project, Series 1993, 5.500%, 11/01/23 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.8% 5,000 Burlington, Kansas, Environmental Improvement Revenue No Opt. Call A2 5,330,500 Bonds, Kansas City Power and Light Company Project, Series 1998A, 4.750%, 9/01/15 (Mandatory put 10/01/07) - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.6% 5,500 Louisville Metropolitan Sewer District, Kentucky, Sewer 5/07 at 101.00 AAA 5,669,345 and Drainage System Revenue Bonds, Series 1997A, 5.250%, 5/15/27 - MBIA Insured 4,950 Louisville and Jefferson County Metropolitan Sewer 11/07 at 101.00 AAA 5,063,850 District, Commonwealth of Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997B, 5.200%, 5/15/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 6.2% 13,500 De Soto Parish, Louisiana, Pollution Control Revenue 9/09 at 102.00 AAA 14,903,460 Refunding Bonds, Cleco Utility Group Inc. Project, Series 1999, 5.875%, 9/01/29 - AMBAC Insured 10,000 Louisiana Public Facilities Authority, Extended Care Facilities No Opt. Call BBB 12,489,800 Revenue Bonds, Comm-Care Corporation Project, Series 1994, 11.000%, 2/01/14 Tobacco Settlement Financing Corporation, Louisiana, Asset-Backed Bonds, Series 2001B: 6,000 5.500%, 5/15/30 5/11 at 101.00 BBB 4,899,600 11,750 5.875%, 5/15/39 5/11 at 101.00 BBB 9,407,755 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 2.8% 5,000 Commonwealth of Massachusetts, General Obligation 8/12 at 100.00 AAA 5,341,150 Bonds, Consolidated Loan of 2002 Series D, 5.375%, 8/01/21 - MBIA Insured 1,750 Massachusetts Health and Educational Facilities Authority, 1/09 at 101.00 AAA 1,751,960 Revenue Bonds, UMass Memorial Health Issue A, 5.000%, 7/01/28 - AMBAC Insured 9,120 Massachusetts Housing Finance Agency, Single Family 12/09 at 100.00 AAA 9,899,304 Housing Revenue Bonds, Series 77, 5.950%, 6/01/25 (Alternative Minimum Tax) - FSA Insured 1,495 Massachusetts Housing Finance Agency, Single Family 12/09 at 100.00 AAA 1,556,235 Housing Revenue Bonds, Series 79, 5.950%, 12/01/27 (Alternative Minimum Tax) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.1% 3,275 Michigan State Hospital Finance Authority, Revenue and 2/04 at 102.00 Ba3 2,414,985 Refunding Bonds, Detroit Medical Center Obligated Group, Series 1993A, 6.500%, 8/15/18 Michigan State Hospital Finance Authority, Hospital Revenue Bonds, Detroit Medical Center Obligated Group, Series 1998A: 4,995 5.250%, 8/15/23 8/08 at 101.00 Ba3 3,006,540 3,000 5.250%, 8/15/28 8/08 at 101.00 Ba3 1,725,960 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 2.2% 5,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 5,124,700 Minnesota, Subordinate Airport Revenue Bonds, Series 2001C, 5.250%, 1/01/32 - FGIC Insured 5,890 Minnesota Housing Finance Agency, Single Family 7/09 at 100.00 AA+ 6,041,844 Mortgage Revenue Bonds, Series 2000C, 5.550%, 7/01/24 (Alternative Minimum Tax) 3,560 Minnesota Housing Finance Agency, Single Family 1/10 at 100.00 AA+ 3,797,523 Mortgage Revenue Bonds, Series 2000J, 5.400%, 1/01/23 (Alternative Minimum Tax) 26 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.7% $ 2,140 Coahoma-Clarksdale Housing Development Corporation, 2/04 at 100.00 AAA $ 2,142,418 Mississippi, Multifamily Mortgage Revenue Refunding Bonds, Gooden Estates and McLaurin Arms Project, Series 1990A, 8.000%, 8/01/24 2,665 Coahoma-Clarksdale Housing Development Corporation, 2/04 at 100.00 AAA 2,668,011 Multifamily Mortgage Revenue Refunding Bonds, Gooden Estates and McLaurin Arms Project, Series 1990B, 8.000%, 8/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.4% 1,500 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 1,513,725 Agency, Metrolink Cross County Extension Project, Mass Transit Sales Tax Appropriation Bonds, Series 2002B, 5.000%, 10/01/32 - FSA Insured 855 Missouri Housing Development Commission, Homeownership 9/09 at 102.00 AAA 898,434 Loan Program, Single Family Mortgage Revenue Bonds, Series 2000A-1, 7.500%, 3/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 2.4% 8,420 Montana Board of Housing, Single Family Program Bonds, 12/05 at 102.00 AA+ 8,723,794 Series 1995B, 6.400%, 12/01/27 (Alternative Minimum Tax) 6,920 Montana Board of Housing, Single Family Mortgage Bonds, 6/07 at 101.50 AA+ 7,209,187 Series 1997A, 6.050%, 12/01/37 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 3.9% 7,310 Clark County, Nevada, General Obligation Limited Tax 7/10 at 100.00 AA 8,029,962 Bond Bank Bonds, Series 2000, 5.500%, 7/01/19 7,500 Clark County, Nevada, Airport System Subordinate Lien 7/10 at 101.00 AAA 8,914,050 Revenue Bonds, Series 1999A, 6.000%, 7/01/29 (Pre-refunded to 7/01/10) - MBIA Insured 7,000 Director of Nevada State Department of Business and 1/10 at 100.00 AAA 7,323,470 Industry, Revenue Bonds, Las Vegas Monorail Project, 1st Tier Series 2000, 5.375%, 1/01/40 - AMBAC Insured 2,125 Nevada Housing Division, Single Family Mortgage Bonds, 4/07 at 102.00 Aaa 2,164,398 1997 Senior Series C-2, 5.750%, 4/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.6% 2,480 New Hampshire Business Finance Authority, Water Facility 12/04 at 102.00 AAA 2,664,859 Revenue Bonds, Pennichuck Water Works Inc., Series 1994A, 6.350%, 12/01/19 - AMBAC Insured 1,320 New Hampshire Business Finance Authority, Revenue 12/04 at 102.00 AAA 1,418,908 Bonds, Pennichuck Water Works, Inc., Series 1994B, 6.450%, 12/01/16 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 3.2% 3,000 New Jersey Turnpike Authority, Turnpike Revenue Bonds, No Opt. Call A 3,550,170 Series 1991C, 6.500%, 1/01/09 Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: 16,000 5.750%, 6/01/32 6/12 at 100.00 BBB 13,777,760 5,000 6.125%, 6/01/42 6/12 at 100.00 BBB 4,117,900 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.1% 7,500 City of Farmington, New Mexico, Pollution Control Revenue 4/06 at 101.00 BBB- 7,426,800 Refunding Bonds, Public Service Company of New Mexico, San Juan Project, Series 1997B, 5.800%, 4/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 15.4% 7,000 Metropolitan Transportation Authority, New York, State 7/12 at 100.00 AA- 7,092,400 Service Contract Refunding Bonds, Series 2002A, 5.125%, 1/01/29 County of Nassau, New York, General Obligations, Serial General Improvement Bonds, Series F: 3,980 7.000%, 3/01/11 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,906,066 4,070 7.000%, 3/01/12 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 5,017,008 3,925 7.000%, 3/01/15 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,838,269 The City of New York, New York, General Obligation Bonds, Fiscal Series 1997G: 1,515 6.000%, 10/15/26 (Pre-refunded to 10/15/07) 10/07 at 101.00 Aaa 1,761,824 8,485 6.000%, 10/15/26 10/07 at 101.00 A 9,273,172 7,435 The City of New York, New York, General Obligation Bonds, 5/10 at 101.00 A 7,970,394 Fiscal Series 2000E, 5.750%, 5/15/20 9,750 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 10,736,993 Water and Sewer System Revenue Bonds, Fiscal Series 2000A, 5.750%, 6/15/31 - FGIC Insured 27 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) $ 5,000 New York City Municipal Water Finance Authority, 6/07 at 101.00 AAA $ 5,494,650 New York, Water and Sewer System Revenue Bonds, Fiscal Series 1997B, 5.750%, 6/15/29 - FGIC Insured 10,000 New York Transitional Finance Authority, New York, 5/10 at 101.00 AA+*** 11,899,300 Future Tax Secured Bonds, Fiscal Series 2000B, 6.000%, 11/15/29 (Pre-refunded to 5/15/10) 4,975 New York City Industrial Development Agency, New York, 12/08 at 102.00 Ba2 3,564,040 Special Facilities Revenue Bonds, British Airways PLC Project, Series 1998, 5.250%, 12/01/32 (Alternative Minimum Tax) 3,000 New York City Industrial Development Agency, New York, 12/12 at 101.00 Ba2 2,957,640 Special Facilities Revenue Bonds, British Airways PLC Project, Series 2002, 7.625%, 12/01/32 3,655 Dormitory Authority of the State of New York, State 5/08 at 101.00 AA-*** 4,139,141 University Educational Facilities Revenue Bonds, Series 1997, 5.125%, 5/15/27 (Pre-refunded to 5/15/08) Dormitory Authority of the State of New York, Mental Health Services Facilities Improvement Revenue Bonds, Series 1997B: 45 5.625%, 2/15/21 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** 51,289 7,315 5.625%, 2/15/21 2/07 at 102.00 AA- 7,684,042 9,495 State of New York Mortgage Agency, Homeowner Mortgage 4/10 at 100.00 Aa1 9,968,706 Revenue Bonds, Series 94, 5.800%, 10/01/20 (Alternative Minimum Tax) 5,000 New York State Urban Development Corporation, 1/09 at 101.00 AAA 5,877,750 Correctional Facilities Service Contract Revenue Bonds, Series C, 6.000%, 1/01/29 (Pre-refunded to 1/01/09) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 4.3% 9,815 North Carolina Housing Finance Agency, Home Ownership 7/09 at 100.00 AA 10,255,693 Revenue Bonds, Series 7A, 1998 Trust Agreement, 6.250%, 1/01/29 (Alternative Minimum Tax) 9,915 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 10,607,265 Revenue Bonds, Series 8A, 1998 Trust Agreement, 5.950%, 1/01/27 (Alternative Minimum Tax) 5,990 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 6,203,663 Revenue Bonds, Series 9A, 1998 Trust Agreement, 5.875%, 7/01/31 (Alternative Minimum Tax) 1,545 North Carolina Housing Finance Agency, Home Ownership 7/10 at 100.00 AAA 1,565,749 Revenue Bonds, Series 10A, 1998 Trust Agreement, 5.400%, 7/01/32 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 0.7% 4,575 North Dakota Housing Finance Agency, Home Mortgage 7/08 at 102.00 Aaa 4,656,298 Finance Program Bonds, Series 1998B, 5.500%, 7/01/29 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 6.0% 5,000 Akron, Bath, and Copley Joint Township Hospital District, 11/09 at 101.00 Baa1 4,704,900 Ohio, Hospital Facilities Revenue Bonds, Summa Health System Project, Series 1998A, 5.375%, 11/15/18 6,000 County of Cuyahoga, Ohio, Hospital Revenue Bonds, 7/09 at 101.00 AAA 6,261,600 University Hospitals Health System, Inc., Series 1999, 5.500%, 1/15/30 - AMBAC Insured Montgomery County, Ohio, Hospital Facilities Revenue Bonds, Kettering Medical Center, Series 1999: 7,840 6.750%, 4/01/18 4/10 at 101.00 BBB+ 8,513,848 5,000 6.750%, 4/01/22 4/10 at 101.00 BBB+ 5,353,700 2,680 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa 2,747,992 Securities Program, Residential Mortgage Revenue Bonds, Series 2000D, 5.450%, 9/01/31 (Alternative Minimum Tax) 2,650 Ohio State Higher Education, General Obligation Bonds, 5/13 at 100.00 AA+ 2,733,926 Series 2003A, 5.000%, 5/01/22 10,000 Ohio Air Quality Development Authority, Pollution Control 12/04 at 100.00 Baa2 10,218,500 Revenue Refunding Bonds, Ohio Edison Company Project, Series 1999C, 5.800%, 6/01/16 (Mandatory put 12/01/04) - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 2.0% 5,000 Oklahoma Industries Authority, Health System Revenue 8/09 at 101.00 AAA 5,341,300 and Refunding Bonds, INTEGRIS Obligated Group of Baptist Medical Center, Inc., South Oklahoma City Hospital Corporation, and Rural Health, Inc., Series 1999A, 5.750%, 8/15/29 - MBIA Insured 10,000 Trustees of the Tulsa Municipal Airport Trust, Oklahoma, 12/08 at 100.00 B- 8,411,300 Revenue Refunding Bonds, American Airlines Inc, Series 2001B, 5.650%, 12/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) 28 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 2.2% $ 20 Pennsylvania Housing Finance Agency, FNMA Rental 1/04 at 102.00 AAA $ 20,371 Housing Revenue Refunding Bonds, Series 1993, 5.800%, 7/01/18 2,500 Philadelphia School District, Pennsylvania, General 2/12 at 100.00 AAA 2,637,900 Obligation Bonds, Series 2002A, 5.500%, 2/01/31 - FSA Insured 4,285 Venango Housing Corporation, Pennsylvania, Multifamily 2/04 at 100.00 AAA 4,298,155 FHA-Insured Mortgage Revenue Bonds, Evergreen Arbors Project, Series 1990A, 8.000%, 2/01/24 6,750 Washington County Authority, Pennsylvania, Capital No Opt. Call AAA 7,844,513 Funding Revenue Bonds, Capital Projects and Equipment Acquisition Program, Series 1999, 6.150%, 12/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 2.7% The Housing Authority of the City of Providence, Rhode Island, Multifamily Mortgage Revenue Bonds, FHA-Insured Mortgage Loan - Cathedral Square Apartments II Project, 1992 Series: 370 7.375%, 4/01/10 (Alternative Minimum Tax) 4/07 at 100.00 AAA 385,100 1,060 7.400%, 4/01/20 (Alternative Minimum Tax) 4/07 at 100.00 AAA 1,103,301 3,050 7.500%, 10/01/32 (Alternative Minimum Tax) 4/07 at 100.00 AAA 3,175,141 12,250 Rhode Island Health and Educational Building Corporation, 5/07 at 102.00 AAA 13,324,203 Hospital Financing Revenue Bonds, Lifespan Obligated Group Issue, Series 1996, 5.500%, 5/15/16 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 3.9% 10,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 11,115,300 Purchase Revenue Bonds, Series 2002, 6.000%, 12/01/20 2,500 Lexington County Health Services District, South Carolina, 11/13 at 100.00 A 2,601,225 Hospital Revenue Bonds, Series 2003 Refunding and Improvement, 5.750%, 11/01/28 South Carolina Public Service Authority, Revenue Refunding Bonds, Series 2003A: 3,560 5.000%, 1/01/20 - AMBAC Insured 7/13 at 100.00 AAA 3,699,481 2,125 5.000%, 1/01/21 - AMBAC Insured 7/13 at 100.00 AAA 2,194,785 7,500 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 6,608,700 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 5.2% 6,000 Knox County Health, Educational, and Housing Facilities 4/12 at 101.00 Baa2 6,181,140 Board, Tennessee, Hospital Facilities Revenue Bonds, Baptist Health System of East Tennessee, Series 2002, 6.500%, 4/15/31 20,415 Knox County Health, Educational, and Housing Facility 1/13 at 75.87 AAA 9,805,529 Board, Tennessee, Hospital Revenue Refunding Bonds, Covenant Health, Series 2002A, 0.000%, 1/01/18 - FSA Insured 1,750 The Metropolitan Government of Nashville and Davidson 5/11 at 100.00 AA 1,782,043 County, Tennessee, Electric System Revenue Bonds, Series 2001A, 5.125%, 5/15/26 14,385 The Health and Educational Facilities Board of the 11/09 at 101.00 AAA 17,005,515 Metropolitan Government of Nashville and Davidson County Tennessee, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 5.875%, 11/15/28 (Pre-refunded to 11/15/09) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 16.3% 14,900 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call BBB 15,599,406 Refunding Bonds, TXU Electric Company Project, Series 2001C, 5.750%, 5/01/36 (Alternative Minimum Tax) (Mandatory put 11/01/11) 6,000 Brazos River Authority, Texas, Revenue Refunding Bonds, No Opt. Call AAA 6,306,900 Houston Lighting and Power Company Project, Series 1998, 5.050%, 11/01/18 (Alternative Minimum Tax) - AMBAC Insured 8,400 Gulf Coast Waste Disposal Authority, Texas, Waste 4/09 at 101.00 BBB 7,894,740 Disposal Revenue Bonds, Valero Energy Corporation Project, Series 1999, 5.700%, 4/01/32 (Alternative Minimum Tax) 10,000 Harris County Health Facilities Development Corporation, 5/06 at 102.00 AAA 11,066,200 Texas, Special Facilities Revenue Bonds, Texas Medical Center Project, Series 1996, 5.900%, 5/15/16 - MBIA Insured 5,000 Harris County Health Facilities Development Corporation, 11/13 at 100.00 AAA 5,037,200 Texas, Thermal Utility Revenue Bonds, TECO Project, Series 2003, 5.000%, 11/15/30 - MBIA Insured 12,500 City of Houston, Texas, Airport System Subordinate Lien 7/10 at 100.00 AAA 13,200,500 Revenue Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured 29 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) City of Houston, Texas, Water Conveyance System Contract, Certificates of Participation, Series 1993 A-J: $ 5,490 6.800%, 12/15/10 - AMBAC Insured No Opt. Call AAA $ 6,682,593 2,000 6.800%, 12/15/11 - AMBAC Insured No Opt. Call AAA 2,441,800 16,305 Matagorda County Navigation District 1, Texas, Revenue 5/09 at 101.00 BBB- 15,414,095 Refunding Bonds, Reliant Energy Project, Series 1999B, 5.950%, 5/01/30 (Alternative Minimum Tax) 3,425 Sabine River Authority, Texas, Pollution Control Revenue No Opt. Call BBB 3,587,345 Refunding Bonds, TXU Electric Company Project, Series 2001A, 5.500%, 5/01/22 (Mandatory put 11/01/11) 4,700 Sam Rayburn Municipal Power Agency, Texas, Power 10/12 at 100.00 Baa2 4,838,603 Supply System Revenue Refunding Bonds, Series 2002A, 6.000%, 10/01/21 4,000 State of Texas, General Obligation Bonds, Water Financial 8/09 at 100.00 Aa1 4,208,640 Assistance, State Participation Program, Series 199C, 5.500%, 8/01/35 6,840 Travis County Health Facilities Development Corporation, 11/09 at 101.00 AAA 8,086,043 Texas, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 5.875%, 11/15/24 (Pre-refunded to 11/15/09) - AMBAC Insured 2,500 Trinity River Authority of Texas, Pollution Control Revenue No Opt. Call Baa2 2,614,625 Refunding Bonds, TXU Electric Company Project, Series 2001A, 5.000%, 5/01/27 (Alternative Minimum Tax) (Mandatory put 11/01/06) 245 Wood Glen Housing Finance Corporation, Texas, Mortgage 1/04 at 100.00 AAA 245,916 Revenue Refunding Bonds, FHA-Insured Mortgage Loan - Section 8 Assisted Copperwood I Project, Series 1990A, 7.625%, 1/01/10 - MBIA Insured Wood Glen Housing Finance Corporation, Texas, Mortgage Revenue Refunding Bonds, FHA-Insured Mortgage Loan - Section 8 Assisted Copperwood II Project, Series 1990C: 205 7.625%, 1/01/10 - MBIA Insured 1/04 at 100.00 AAA 205,502 1,250 7.650%, 7/01/23 - MBIA Insured 1/04 at 100.00 AAA 1,280,937 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 1.0% 6,380 Capital Region Airport Authority, Richmond, Virginia, 7/05 at 102.00 AAA 6,854,098 Airport Revenue Bonds, International Airport Projects, Series 1995A, 5.625%, 7/01/20 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 14.5% 8,810 Public Utility District No. 1 of Chelan County, Washington, 7/11 at 101.00 AAA 9,161,695 Chelan Hydro-Consolidated System Revenue Bonds, Series 2001A, 5.600%, 1/01/36 (Alternative Minimum Tax) - MBIA Insured 10,730 Public Utility District No. 1 of Chelan County, Washington, 7/11 at 101.00 AAA 11,234,847 Chelan Hydro-Consolidated System Revenue Refunding Bonds, Series 2001C, 5.650%, 7/01/32 (Alternative Minimum Tax) - MBIA Insured 5,665 Public Utility District No. 1 of Chelan County, Washington, 7/12 at 100.00 AAA 5,723,123 Chelan Hydro-Consolidated System Revenue Bonds, Series 2002B, 5.250%, 7/01/37 (Alternative Minimum Tax) - AMBAC Insured 10,730 Pierce County School District 320, Sumner, Washington, 12/10 at 100.00 Aaa 12,596,054 Unlimited Tax General Obligation Bonds, Series 2000, 6.250%, 12/01/17 - FSA Insured 10,550 Port of Seattle, Washington, Limited Tax General Obligation 12/10 at 100.00 AA+ 11,071,064 Bonds, Series 2000B, 5.750%, 12/01/25 (Alternative Minimum Tax) 5,315 Port of Seattle, Washington, Revenue Bonds, No Opt. Call AAA 6,047,779 Series 2000B, 6.000%, 2/01/10 (Alternative Minimum Tax) - MBIA Insured 19,295 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 21,437,710 Terminal 18 Project, Series 1999A, 6.000%, 9/01/29 - MBIA Insured 5,000 Port of Seattle, Washington, Special Facility Revenue Bonds, 3/10 at 101.00 AAA 5,393,650 Terminal 18 Project, Series 1999B, 6.000%, 9/01/20 (Alternative Minimum Tax) - MBIA Insured 5,000 Washington Health Care Facilities Authority Revenue Bonds, 12/09 at 101.00 AAA 5,319,300 Providence Services, Series 1999, 5.375%, 12/01/19 - MBIA Insured 8,750 Washington Public Power Supply System, Nuclear Project 7/08 at 102.00 Aa1 9,084,425 No. 3, Refunding Revenue Bonds, Series 1998A, 5.125%, 7/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.7% 5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 4,962,000 Bonds, Appalachian Power Company Project, Series 2003L, 5.500%, 10/01/22 30 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 7.8% $ 8,000 Badger Tobacco Asset Securitization Corporation, 6/12 at 100.00 BBB $ 7,312,640 Wisconsin, Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27 5,000 Madison, Wisconsin, Industrial Development Revenue 4/12 at 100.00 AA- 5,137,250 Refunding Bonds, Madison Gas & Electric Company Projects, Series 2002A, 5.875%, 10/01/34 (Alternative Minimum Tax) 3,000 Southeast Wisconsin Professional Baseball Park District, No Opt. Call AAA 3,383,610 Sales Tax Revenue Refunding Bonds, Series 1998A, 5.500%, 12/15/19 - MBIA Insured 3,640 Wisconsin Housing and Economic Development Authority, 3/10 at 100.00 AA 3,870,335 Home Ownership Revenue Bonds, Series 2000B, 5.750%, 3/01/22 (Alternative Minimum Tax) Wisconsin Health and Educational Facilities Authority, Revenue Bonds, Aurora Medical Group, Inc. Project, Series 1996: 10,000 5.600%, 11/15/16 - FSA Insured 5/06 at 102.00 AAA 10,979,602 20,000 5.750%, 11/15/25 - FSA Insured 5/06 at 102.00 AAA 21,607,400 - ------------------------------------------------------------------------------------------------------------------------------------ $ 962,480 Total Long-Term Investments (cost $936,335,897) - 148.5% 996,661,335 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 1.8% 4,000 Moffat County, Colorado, Pollution Control Revenue Refunding A-1+ 4,000,000 Bonds, Pacificorp Projects, Variable Rate Demand Bonds, Series 1994, 1.200%, 5/01/13 - AMBAC Insured+ 6,095 Montgomery County, Tennessee, Public Building Authority VMIG-1 6,095,000 Pooled Financing Revenue Bonds, County Loan Pool Program, Variable Rate Demand Bonds, Series 2002, 1.150%, 4/01/32+ 2,000 Nebraska Educational Finance Authority, Variable Rate VMIG-1 2,000,000 Demand Revenue Refunding Bonds, Creighton University, Series 2001, 1.150%, 8/01/31+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 12,095 Total Short-Term Investments (cost $12,095,000) 12,095,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $948,430,897) - 150.3% 1,008,756,335 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.0% 20,390,939 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.3)% (358,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 671,147,274 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. # On December 9, 2002, UALCorporation, the holding company of United Air Lines, Inc. filed for federal bankruptcy protection. The Adviser determined that it was likely United would not remain current on their interest payment obligations with respect to these bonds and thus has stopped accruing interest. N/R Investment is not rated. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 31
Nuveen Municipal Market Opportunity Fund, Inc. (NMO) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.8% $ 3,000 Arizona State Transportation Board, Highway Revenue 7/11 at 100.00 AAA $ 3,196,590 Bonds, Series 2001, 5.250%, 7/01/20 1,725 Maricopa County Industrial Development Authority, Education 7/10 at 102.00 Baa3 1,707,146 Revenue Bonds, Arizona Charter Schools Project I, Series 2000A, 6.750%, 7/01/29 570 Pima County Industrial Development Authority, Arizona, 5/07 at 105.85 AAA 601,111 FNMA/GNMA Single Family Mortgage Revenue Bonds, Series 1997A, 7.100%, 11/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.8% 5,000 Arkansas Development Finance Authority, Hospital Revenue 2/10 at 100.00 BBB- 5,475,850 Bonds, Washington Regional Medical Center, Series 2000, 7.000%, 2/01/15 3,480 Cabot School District No. 4 of Lonoke County, Arkansas, 8/08 at 100.00 Aaa 3,505,160 General Obligation Bonds, Series 2003 Refunding, 5.000%, 2/01/27 - AMBAC Insured 2,865 Board of Trustees of The University of Arkansas at 12/12 at 100.00 Aaa 3,120,042 Fayetteville, Various Facilities Revenue Bonds, Series 2002, 5.500%, 12/01/20 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 4.9% 3,225 California Health Facilities Financing Authority, Revenue 3/13 at 100.00 A 2,958,422 Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 1,000 California Department of Water Resources, Power Supply 5/12 at 101.00 A3 1,092,480 Revenue Bonds, Series 2002A, 5.750%, 5/01/17 2,500 Los Angeles Community Redevelopment Agency, California, 1/04 at 100.00 BBB*** 2,526,200 Tax Allocation Refunding Bonds, Central Business District Redevelopment Project, Series 1987G, 6.750%, 7/01/10 Department of Water and Power of The City of Los Angeles, California, Electric Plant Revenue Bonds, Second Issue of 1993: 490 4.750%, 10/15/20 4/04 at 102.00 AA-*** 500,795 5,510 4.750%, 10/15/20 4/04 at 102.00 Aaa 5,631,496 995 Department of Water and Power of The City of Los Angeles, 2/04 at 102.00 AA-*** 1,007,268 California, Electric Plant Revenue Bonds, Issue of 1994, 5.375%, 2/15/34 Orange County, California, Recovery Certificates of Participation, Series 1996A: 13,100 5.875%, 7/01/19 - MBIA Insured 7/06 at 102.00 AAA 14,713,003 690 6.000%, 7/01/26 - MBIA Insured 7/06 at 102.00 AAA 771,213 5,000 San Joaquin Hills Transportation Corridor Agency, 1/14 at 102.00 AAA 4,521,950 California, Toll Road Refunding Revenue Bonds, Series 1997A, 0.000%, 1/15/17 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 3.9% 3,000 Broomfield, Colorado, Master Facilities Lease Purchase 12/09 at 100.00 AAA 3,265,530 Agreement, Certificates of Participation, Series 1999, 5.750%, 12/01/24 - AMBAC Insured 6,000 Broomfield, Colorado, Sales and Use Tax Revenue Bonds, 12/12 at 100.00 Aaa 6,496,560 Series 2002A Refunding and Improvement, 5.500%, 12/01/22 - AMBAC Insured 11,465 City and County of Denver, Colorado, Airport System 11/10 at 100.00 AAA 12,460,047 Revenue Refunding Bonds, Series 2000A, 6.000%, 11/15/18 (Alternative Minimum Tax) - AMBAC Insured 20,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 4,758,000 Bonds, Series 2000A, 0.000%, 9/01/28 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 6.2% 15,000 City of Atlanta, Georgia, Airport General Revenue and 1/10 at 101.00 AAA 17,346,150 Refunding Bonds Series 2000A, 5.600%, 1/01/30 (Pre-refunded to 1/01/10) - FGIC Insured 14,000 Fulton County Facilities Corporation, Georgia, Certificates 11/10 at 101.00 AAA 15,404,340 of Participation, Public Purpose Project, Series 1999, 5.500%, 11/01/18 - AMBAC Insured 32 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA (continued) $ 8,000 Georgia, General Obligation Bonds, Series 1995C, No Opt. Call AAA $ 9,683,280 7.250%, 7/01/08 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 10.1% 6,500 Chicago, Illinois, Gas Supply Revenue Refunding Bonds, 6/05 at 102.00 Aa2 6,956,820 Peoples Gas Light and Coke Company Project, Series 1995A, 6.100%, 6/01/25 5,250 City of Chicago, Illinois, Chicago Midway Airport, Revenue 1/09 at 101.00 AAA 5,257,455 Bonds, Series 1998B, 5.000%, 1/01/28 - MBIA Insured 4,000 City of Chicago, Illinois, Motor Fuel Tax Revenue Bonds, 7/13 at 100.00 AAA 4,010,360 Series 2003A, 5.000%, 1/01/33 - AMBAC Insured 5,210 Illinois Housing Development Authority, Section 8 Elderly 1/04 at 101.00 A 5,281,690 Housing Revenue Bonds, Garden House of River Oaks West Development, Series 1992A, 6.875%, 1/01/20 950 Illinois Housing Development Authority, Section 8 Elderly 3/04 at 101.00 A 971,052 Housing Revenue Bonds, Village Center Development, Series 1992C, 6.600%, 3/01/07 38,645 State of Illinois, General Obligation Bonds, Illinois FIRST, 4/10 at 100.00 AAA 40,686,229 Series 2000, 5.500%, 4/01/25 - MBIA Insured 1,975 Lake County Community High School District No. 127, No Opt. Call AAA 2,756,863 Grayslake, Illinois, General Obligation Bonds, Series 2002A, 9.000%, 2/01/13 - FGIC Insured Metropolitan Pier and Exposition Authority, Illinois, McCormick Place Expansion Project Revenue Bonds, Series 2002A: 3,250 0.000%, 6/15/25 - MBIA Insured 6/22 at 101.00 AAA 1,566,273 2,270 5.000%, 12/15/28 - MBIA Insured 6/12 at 101.00 AAA 2,282,803 - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 2.0% 4,695 Indiana Educational Facilities Authority, Educational Facilities 2/11 at 100.00 AAA 4,939,328 Revenue Bonds, Butler University Project, Series 2001, 5.500%, 2/01/26 - MBIA Insured 20,695 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 Ca 7,191,513 Revenue Bonds, United Air Lines, Inc., Indianapolis Maintenance Center Project, Series 1995A, 6.500%, 11/15/31 (Alternative Minimum Tax)# 2,000 City of Petersburg, Indiana, Pollution Control Revenue 8/11 at 102.00 Baa2 1,928,100 Refunding Bonds, Indianapolis Power and Light Company, Series 1991, 5.750%, 8/01/21 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.6% 4,215 Iowa Finance Authority, Solid Waste Disposal Revenue No Opt. Call N/R 3,915,693 Bonds, IPSCO Project, Series 1997, 6.000%, 6/01/27 (Alternative Minimum Tax) (Mandatory put 6/01/07) - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.6% Jefferson County, Kentucky, School District Finance Corporation, School Building Revenue Bonds, Series 2000A: 3,045 5.250%, 7/01/17 - FSA Insured 1/10 at 101.00 AAA 3,295,695 7,490 5.250%, 7/01/20 - FSA Insured 1/10 at 101.00 AAA 7,970,484 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 1.1% 7,415 Louisiana Local Government Environmental Facilities and 12/12 at 100.00 AAA 7,439,395 Community Development Authority, Revenue Bonds, Baton Rouge Community College Facilities Corporation Project, Series 2002, 5.000%, 12/01/32 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.6% Frederick County, Maryland, General Obligation Public Facilities Bonds, Series 2002: 3,710 5.000%, 11/01/18 11/12 at 101.00 AA 3,957,494 3,890 5.000%, 11/01/19 11/12 at 101.00 AA 4,116,476 2,500 Department of Transportation, State of Maryland, County No Opt. Call AA 2,861,525 Transportation Revenue Bonds, Series 2002, 5.500%, 2/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 3.3% 5,250 Massachusetts Bay Transportation Authority, Assessment 7/10 at 100.00 AAA 5,439,998 Bonds, Series 2000A, 5.250%, 7/01/30 10,000 Massachusetts Water Resources Authority, General Revenue 8/10 at 101.00 AAA 10,959,100 Bonds, Series 2000A, 5.750%, 8/01/39 - FGIC Insured 33 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS (continued) $ 6,195 University of Massachusetts Building Authority, Facilities 11/10 at 100.00 AAA $ 6,312,767 Revenue Bonds, Senior Series 2000A, Commonwealth Guaranteed, 5.125%, 11/01/25 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.5% 6,635 Detroit, Michigan, Water Supply System Revenue Bonds, 7/11 at 101.00 AAA 7,784,447 Senior Lien, Series 2001A, 5.750%, 7/01/28 (Pre-refunded to 7/01/11) - FGIC Insured 2,090 City of Grand Rapids Building Authority, County of Kent, 8/10 at 100.00 AAA 2,289,700 Michigan, General Obligation Limited Tax Bonds, Series 2000, 5.375%, 8/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 8.1% 13,675 State of Minnesota, General Obligation Bonds, 11/10 at 100.00 AAA 14,807,564 Series 2000, 5.125%, 11/01/16 4,375 Minnesota Housing Finance Agency, Single Family Mortgage 1/11 at 101.00 AA+ 4,632,075 Bonds, Series 1998H-2, Remarketed, 6.050%, 7/01/31 (Alternative Minimum Tax) 30,000 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A 32,126,700 Health Care System Revenue Bonds, Fairview Health Services, Series 2000A, 6.375%, 11/15/29 3,390 The Housing and Redevelopment Authority of the City of 11/15 at 103.00 AAA 4,181,226 St. Paul, Minnesota, Sales Tax Revenue Refunding Bonds, Civic Center Project, Series 1996, 7.100%, 11/01/23 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.2% 5,900 Mississippi Business Finance Corporation, Pollution Control 4/04 at 102.00 BBB- 5,883,244 Revenue Refunding Bonds, System Energy Resources Inc. Project, Series 1998, 5.875%, 4/01/22 2,070 Mississippi Home Corporation, GNMA Mortgage-Backed 7/07 at 105.00 Aaa 2,157,975 Securities Single Family Mortgage Revenue Bonds, Series 1997D-5, 6.750%, 7/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 3.8% Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, 1st Tier Series 2000: 8,500 0.000%, 1/01/26 - AMBAC Insured No Opt. Call AAA 2,504,185 5,315 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AAA 1,482,832 21,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 21,970,410 - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 4.0% 650 Camden County Pollution Control Financing Authority, 12/03 at 100.00 B2 623,720 New Jersey, Solid Waste Disposal and Resource Recovery System Revenue Bonds, Series 1991D, 7.250%, 12/01/10 21,000 New Jersey Transportation Trust Fund Authority, 6/10 at 100.00 AA-*** 24,468,990 Transportation System Bonds, Series 2000B, 5.750%, 6/15/17 (Pre-refunded to 6/15/10) 3,165 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 2,606,631 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/42 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.9% 5,925 New Mexico Hospital Equipment Loan Council, Hospital 8/11 at 101.00 A+ 6,100,617 Revenue Bonds, Presbyterian Healthcare Services, Series 2001A, 5.500%, 8/01/21 5,675 Regents of the University of New Mexico, System Revenue No Opt. Call AA 6,759,663 Refunding Bonds, Series 1992A, 6.250%, 6/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 24.8% 5,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 5,172,900 General Revenue Bonds, Series 1998A, 5.250%, 12/01/26 - MBIA Insured 11,000 Nassau County Tobacco Settlement Corporation, New York, 7/09 at 101.00 Baa2 10,947,970 Tobacco Settlement Asset-Backed Bonds, Series 1999A, 6.400%, 7/15/33 21,715 City of New York, New York, General Obligation Bonds, 3/06 at 101.50 A 23,559,689 Fiscal Series 1996I, 5.875%, 3/15/18 City of New York, New York, General Obligation Bonds, Fiscal Series 2002G: 1,000 5.000%, 8/01/17 8/12 at 100.00 A 1,023,050 10,500 5.750%, 8/01/18 8/12 at 100.00 A 11,467,680 5,000 City of New York, New York, General Obligation Bonds, 8/12 at 100.00 A 5,460,800 Fiscal Series 2003A, 5.750%, 8/01/16 34 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) City of New York, New York, General Obligation Bonds, Fiscal Series 1997H: $ 80 6.125%, 8/01/25 (Pre-refunded to 8/01/07) 8/07 at 101.00 A*** $ 92,968 9,920 6.125%, 8/01/25 8/07 at 101.00 A 11,014,771 17,870 New York Transitional Finance Authority, New York, Future 8/09 at 101.00 AA+*** 20,998,680 Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded to 8/15/09) Dormitory Authority of the State of New York, Mental Health Services Facilities Improvement Revenue Bonds, Series 1997A: 19,290 5.750%, 2/15/27 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** 22,062,359 710 5.750%, 2/15/27 2/07 at 102.00 AA- 748,794 4,500 New York State Energy Research and Development 1/04 at 102.00 AAA 4,592,610 Authority, Gas Facilities Revenue Bonds, The Brooklyn Union Gas Company Project, Series 1989C, 5.600%, 6/01/25 (Alternative Minimum Tax) - MBIA Insured 3,000 New York State Medical Care Facilities Finance Agency, 2/05 at 102.00 AAA 3,277,620 Brookdale Hospital Medical Center Secured Hospital Revenue Bonds, 1995 Series A, 6.850%, 2/15/17 (Pre-refunded to 2/15/05) 4,785 New York State Medical Care Facilities Finance Agency, 11/05 at 102.00 Aa1 5,079,469 Health Center Projects Revenue Bonds, Secured Mortgage Program, Series 1995A, 6.375%, 11/15/19 10,000 Port Authority of New York and New Jersey, Special 12/07 at 102.00 AAA 11,040,600 Project Bonds, JFK International Air Terminal LLC Project, Series 6, 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 5,400 Tobacco Settlement Financing Corporation of New York State, 6/10 at 100.00 AA- 5,728,212 Asset-Backed Bonds, Series 2003-A1, 5.500%, 6/01/16 7,000 Triborough Bridge and Tunnel Authority, New York, General 1/22 at 100.00 AAA 7,878,780 Purpose Revenue Bonds, Series 1999B, 5.500%, 1/01/30 (Pre-refunded to 1/01/22) 20,500 TSASC, Inc., New York, Tobacco Flexible Amortization Bonds, 7/09 at 101.00 A3 20,850,755 Series 1999-1, 6.250%, 7/15/34 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.2% 7,500 North Carolina Municipal Power Agency Number 1, 1/13 at 100.00 AAA 7,990,725 Catawba Electric Revenue Bonds, Series 2003A, 5.250%, 1/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 4.3% 22,905 Fargo, North Dakota, Health System Revenue Bonds, 6/10 at 101.00 AAA 24,005,814 MeritCare Obligated Group, Series 2000A, 5.625%, 6/01/31 - FSA Insured North Dakota Water Commission, Water Development and Management Program Bonds, Series 2000A: 2,230 5.700%, 8/01/18 - MBIA Insured 8/10 at 100.00 AAA 2,508,572 2,450 5.750%, 8/01/19 - MBIA Insured 8/10 at 100.00 AAA 2,757,377 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 2.6% 16,140 Montgomery County, Ohio, Hospital Facilities Revenue Bonds, No Opt. Call BBB+ 17,870,047 Kettering Medical Center, Series 1999, 6.300%, 4/01/12 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.0% 300 Trustees of the Tulsa Municipal Airport Trust, Oklahoma, 12/08 at 100.00 B- 255,318 Revenue Refunding Bonds, Series 2000B, 6.000%, 6/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 2.4% 5,000 Oregon Health Sciences University, Revenue Bonds, 1/13 at 100.00 AAA 5,265,400 Series 2002A, 5.250%, 7/01/22 - MBIA Insured Portland, Oregon, Water System Revenue Bonds, Series 2000A: 6,780 5.375%, 8/01/18 8/10 at 100.00 Aa1 7,384,030 3,655 5.500%, 8/01/20 8/10 at 100.00 Aa1 3,991,187 - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 6.4% 5,000 Delaware County Industrial Development Authority, 1/08 at 102.00 BBB 5,184,450 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Series 1997A, 6.200%, 7/01/19 15,000 Delaware River Port Authority, Pennsylvania, Revenue No Opt. Call AAA 16,732,350 Refunding Bonds, Series 1998B, 5.250%, 1/01/08 - AMBAC Insured 15,050 Pennsylvania General Obligation Bonds, Second 9/11 at 101.00 AA 16,299,903 Series 2001, 5.000%, 9/15/14 35 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA (continued) $ 5,000 Pennsylvania Higher Education Assistance Agency, 12/10 at 100.00 AAA $ 5,911,250 Capital Acquisition Revenue Bonds, Series 2000, 5.875%, 12/15/30 (Pre-refunded to 12/15/10) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 1.1% 8,150 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 7,360,673 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 5.4% 24,730 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 26,067,893 Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/22 1,865 Three Rivers Solid Waste Authority, South Carolina, 1/07 at 102.00 AAA 1,932,979 Solid Waste Disposal Facilities Revenue Bonds, Series 1997, 5.300%, 1/01/27 - MBIA Insured 10,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 8,811,600 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 0.9% 5,000 The Health, Educational, and Housing Facilities Board of 7/13 at 100.00 AA 4,965,650 Knox County, Tennessee, Hospital Facilities Revenue Bonds, East Tennessee Children's Hospital, Series 2003A, 5.000%, 7/01/23 - RAAI Insured 1,200 The Health and Educational Facilities Board of the 1/04 at 102.00 N/R 1,150,164 Metropolitan Government of Nashville and Davidson County, Tennessee, Revenue Refunding Bonds, The Blakeford at Green Hills, Series 1998, 5.650%, 7/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 26.5% 5,000 Alliance Airport Authority, Inc., Texas, Special Facilities 12/03 at 100.00 CCC 3,491,050 Revenue Bonds, American Airlines, Inc. Project, Series 1990, 7.500%, 12/01/29 (Alternative Minimum Tax) Arlington Independent School District, Tarrant County, Texas, General Obligation Bonds, Series 1995: 3,710 0.000%, 2/15/12 2/05 at 67.33 Aaa 2,428,863 3,710 0.000%, 2/15/13 2/05 at 62.94 Aaa 2,270,668 12,250 Austin, Texas, Hotel Occupancy Tax Subordinate Lien Revenue 11/09 at 100.00 AAA 13,323,713 Refunding Bonds, Series 1999, 5.800%, 11/15/29 - AMBAC Insured 14,200 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call BBB 14,866,548 Refunding Bonds, TXU Electric Company Project, Series 2001C, 5.750%, 5/01/36 (Alternative Minimum Tax) (Mandatory put 11/01/11) Brownsville Independent School District, Cameron County, Texas, General Obligation Bonds, Series 1999: 5,015 5.625%, 8/15/25 8/09 at 100.00 AAA 5,363,894 8,825 5.625%, 8/15/29 8/09 at 100.00 AAA 9,428,277 Clear Creek Independent School District, Galveston and Harris Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds, Series 2000: 17,325 5.400%, 2/15/18 2/10 at 100.00 AAA 18,787,057 10,000 5.650%, 2/15/19 2/10 at 100.00 AAA 11,059,800 6,880 5.700%, 2/15/20 2/10 at 100.00 AAA 7,601,437 8,020 5.700%, 2/15/21 2/10 at 100.00 AAA 8,804,597 6,000 Dallas-Fort Worth International Airport Facility Improvement 11/09 at 101.00 CCC 3,960,240 Corporation, Texas, Revenue Bonds, American Airlines, Inc., Series 1999, 6.375%, 5/01/35 (Alternative Minimum Tax) 11,750 Dallas-Fort Worth International Airport Facilities 11/07 at 100.00 CCC 8,722,025 Improvement Corporation, Texas, Revenue Refunding Bonds, American Airlines, Inc., Series 2000C, 6.150%, 5/01/29 (Alternative Minimum Tax) (Mandatory put 11/01/07) 21,500 City of Houston, Texas, Airport System Subordinate Lien 7/10 at 100.00 AAA 22,704,860 Revenue Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured 22,500 Houston, Texas, Water and Sewer System Junior Lien 12/10 at 100.00 AAA 23,052,150 Revenue Refunding Bonds, Series 2000B, 5.250%, 12/01/30 - FGIC Insured 1,250 Houston, Texas, Water and Sewer System Junior Lien Revenue 12/11 at 100.00 AAA 1,291,912 Refunding Bonds, Series 2001A, 5.000%, 12/01/20 - FSA Insured 36 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 15,000 San Antonio Independent School District, Bexar County, 8/09 at 100.00 AAA $17,493,450 Texas, General Obligation Bonds, Series 1999, 5.800%, 8/15/29 (Pre-refunded to 8/15/09) 4,259 Texas General Services Commission, Participation Interests, 9/05 at 100.00 A 4,329,441 Series 1992, 7.500%, 9/01/22 3,970 City of Wichita Falls, Wichita County, Texas, Water and 8/11 at 100.00 AAA 4,068,377 Sewer System Priority Lien Revenue Bonds, Series 2001, 5.000%, 8/01/21 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 16.1% 5,500 Public Utility District No. 1 of Clark County, Washington, 1/11 at 100.00 AAA 5,742,880 Generating System Revenue Refunding Bonds, Series 2000, 5.125%, 1/01/20 - FSA Insured 2,755 Cowlitz County, Washington, Special Sewer Revenue No Opt. Call AAA 3,121,332 Refunding Bonds, CSOB Wastewater Treatment Facilities, Series 2002, 5.500%, 11/01/16 - FGIC Insured 10,000 Energy Northwest, Washington, Nuclear Project No. 3 7/11 at 101.00 AAA 10,927,000 Electric Revenue Refunding Bonds, Series 2001A, 5.500%, 7/01/17 - FSA Insured 2,500 King County, Washington, Sewer Revenue Bonds, 1/12 at 100.00 AAA 2,539,200 Series 2001, 5.000%, 1/01/23 - FGIC Insured 33,490 Port of Seattle, Washington, Revenue Bonds, Series 2000A, 8/10 at 100.00 AAA 35,752,250 5.625%, 2/01/30 - MBIA Insured 6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 8/10 at 100.00 AAA 7,225,151 5.625%, 2/01/24 (Alternative Minimum Tax) - MBIA Insured Seattle, Washington, General Obligation Bonds, Series 2002 Refunding and Improvement: 6,165 4.400%, 12/01/19 12/12 at 100.00 AAA 6,107,974 6,445 4.500%, 12/01/20 12/12 at 100.00 AAA 6,402,979 City of Tacoma, Washington, Electric System Revenue Bonds, Series 2001A Refunding: 6,630 5.750%, 1/01/17 - FSA Insured 1/11 at 101.00 AAA 7,440,783 3,500 5.750%, 1/01/18 - FSA Insured 1/11 at 101.00 AAA 3,916,115 9,000 State of Washington, Motor Vehicle Fuel Tax General 1/12 at 100.00 AAA 9,239,130 Obligation Bonds, Series 2002C, 5.000%, 1/01/21 - FSA Insured 7,890 Washington State Higher Education Facilities Authority, 11/09 at 101.00 AA 8,624,875 Revenue Bonds, Pacific Lutheran University Project, Series 1999, 5.950%, 11/01/29 - RAAI Insured 3,520 Washington State Health Care Facilities Authority, Revenue 10/11 at 100.00 Aaa 3,580,860 Bonds, Children's Hospital and Regional Medical Center, Series 2001, 5.000%, 10/01/21 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 0.2% 1,250 Wisconsin Health and Educational Facilities Authority, 3/08 at 101.00 N/R 1,040,980 Revenue Bonds, United Lutheran Program for the Aging Inc., Series 1998, 5.700%, 3/01/28 - ------------------------------------------------------------------------------------------------------------------------------------ WYOMING - 0.4% 2,800 Jackson National Rural Utilities Cooperative Financing 5/07 at 101.00 A 2,897,048 Corporation, Wyoming, Guaranteed Gas Supply Revenue Bonds, Lower Valley Power and Light Inc. Project, Series 1997B, 5.875%, 5/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ $ 1,019,914 Total Long-Term Investments (cost $977,453,141) - 150.7% 1,036,269,730 =============----------------------------------------------------------------------------------------------------------------------- 37 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL MARKET AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 1.7% $ 11,900 Chester County Industrial Development Authority, VMIG-1 $ 11,900,000 Pennsylvania, Archdiocese of Philadelphia, Variable Rate Demand Revenue Bonds, Series 2001, 1.150%, 7/01/31+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 11,900 Total Short-Term Investments (cost $11,900,000) 11,900,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $989,353,141) - 152.4% 1,048,169,730 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.8% 19,785,422 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (55.2)% (380,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 687,955,152 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. # On December 9, 2002, UALCorporation, the holding company of United Air Lines, Inc. filed for federal bankruptcy protection. The Adviser determined that it was likely United would not remain current on their interest payment obligations with respect to these bonds and thus has stopped accruing interest. N/R Investment is not rated. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 38
Nuveen Dividend Advantage Municipal Fund (NAD) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.2% $ 1,500 Alabama 21st Century Authority, Tobacco Settlement 6/10 at 102.00 A1 $ 1,407,630 Revenue Bonds, Series 2000, 5.750%, 12/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 2.6% 15,000 Maricopa County, Arizona, Pollution Control Corporation, No Opt. Call BB+ 15,605,550 Pollution Control Revenue Remarketing Bonds, El Paso Electric Company, Series 1994A, 6.375%, 7/01/14 (Mandatory put 8/01/05) - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 2.1% 2,475 Department of Water and Power of the City of Los Angeles, 7/06 at 100.00 AA- 2,597,389 California, Power System Revenue Bonds, Series 2001A, Subseries A-3, 5.375%, 7/01/20 9,375 Sacramento County Sanitation District Financing Authority, 12/05 at 101.00 AA 10,189,313 California, Revenue Bonds, Series 2000A, 5.875%, 12/01/27 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 2.6% 10,000 City and County of Denver, Colorado, Airport System Revenue 11/06 at 101.00 AAA 10,436,600 Bonds, Series 1996D, 5.500%, 11/15/25 - MBIA Insured 1,475 City and County of Denver, Colorado, Multifamily Housing 10/07 at 102.00 AAA 1,512,023 Revenue Bonds, FHA-Insured Mortgage Loan - The Boston Lofts Project, Series 1997A, 5.750%, 10/01/27 (Alternative Minimum Tax) 3,205 City and County of Denver, Colorado, Airport Special Facilities 1/09 at 101.00 AAA 3,579,921 Revenue Bonds, Rental Car Projects, Series 1999A, 6.000%, 1/01/12 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.5% Connecticut Development Authority, Health Facility Refunding Revenue Bonds, Alzheimer's Resource Center of Connecticut, Inc. Project, Series 1994A: 290 6.875%, 8/15/04 No Opt. Call N/R 289,684 2,700 7.125%, 8/15/14 8/04 at 102.00 N/R 2,592,891 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 2.7% 1,630 Florida Housing Finance Agency, Housing Revenue Bonds, 12/07 at 102.00 AAA 1,707,686 Mar Lago Village Apartments Project, Series 1997F, 5.800%, 12/01/17 (Alternative Minimum Tax) - AMBAC Insured 13,625 Martin County, Florida, Industrial Development Authority, 12/04 at 102.00 BBB- 14,233,629 Industrial Development Revenue Bonds, Indiantown Cogeneration, L.P. Project, Series 1994A, 7.875%, 12/15/25 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.4% 4,000 Forsyth County Water and Sewerage Authority, Georgia, 4/10 at 102.00 AA*** 4,736,360 Revenue Bonds, Series 2000, 6.000%, 4/01/25 (Pre-refunded to 4/01/10) 3,500 The Hospital Authority of Hall County and the City of Gainesville, 5/09 at 101.00 AAA 3,620,610 Georgia, Revenue Anticipation Certificates, Northeast Georgia Health System, Inc. Project, Series 1999, 5.500%, 5/15/29 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.8% 1,045 Idaho Housing and Finance Association, Single Family 7/09 at 101.00 Aa2 1,088,984 Mortgage Bonds, Series 1999E, 5.750%, 1/01/21 (Alternative Minimum Tax) 1,690 Idaho Housing and Finance Association, Single Family 1/10 at 100.00 Aa2 1,781,970 Mortgage Bonds, Series 2000D, 6.350%, 7/01/22 (Alternative Minimum Tax) 1,595 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aaa 1,683,028 Mortgage Bonds, Series 2000E, 5.950%, 7/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 33.2% 3,635 Channahon, Illinois, Revenue Refunding Bonds, Morris 12/09 at 102.00 BBB+ 3,796,358 Hospital, Series 1999, 5.750%, 12/01/12 22,750 City of Chicago, Illinois, General Obligation Bonds, Emergency No Opt. Call AAA 25,107,355 Telephone System, Refunding Series 1999, 5.500%, 1/01/23 - FGIC Insured 39 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 7,250 Chicago School Reform Board of Trustees of the Board of No Opt. Call AAA $ 7,980,075 Education of the City of Chicago, Illinois, Unlimited Tax General Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 5.500%, 12/01/26 - FGIC Insured Chicago, Illinois, FHA/GNMA Multifamily Housing Revenue Bonds, Archer Court Apartments, Series 1999A: 935 5.500%, 12/20/19 (Alternative Minimum Tax) 10/10 at 101.00 AAA 976,645 1,210 5.600%, 12/20/29 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,232,688 1,925 5.650%, 12/20/40 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,955,550 4,940 City of Chicago, Illinois, Wastewater Transmission Revenue 1/06 at 102.00 AAA 4,990,190 Bonds, Series 1995, 5.125%, 1/01/25 - FGIC Insured 5,000 City of Chicago, Illinois, Water Revenue Bonds, Series 1997, 11/07 at 102.00 AAA 5,115,300 5.250%, 11/01/27 - FGIC Insured 24,835 Illinois Development Finance Authority, Revenue Bonds, 9/07 at 102.00 AAA 26,395,135 The Presbyterian Home of Lake Forest Project, Series 1999, 5.625%, 9/01/31 - FSA Insured 3,935 Illinois Development Finance Authority, Local Government No Opt. Call Aaa 2,375,796 Program Revenue Bonds, Round Lake Community Unit School District 116 Project, Series 1999, 0.000%, 1/01/15 - MBIA Insured 2,750 Illinois Educational Facilities Authority, Revenue Bonds, 9/09 at 100.00 AAA 2,988,095 MJH Education Assistance Illinois LLC, Series 1999D, 5.450%, 9/01/14 - AMBAC Insured Illinois Health Facilities Authority, Revenue Bonds, Loyola University Health System, Series 1997A: 1,600 5.000%, 7/01/24 (Pre-refunded to 7/01/07) - MBIA Insured 7/07 at 101.00 AAA 1,787,648 5,400 5.000%, 7/01/24 - MBIA Insured 7/07 at 101.00 AAA 5,440,662 5,490 Illinois Health Facilities Authority, Revenue Bonds, Sarah 2/07 at 102.00 A 5,655,578 Bush Lincoln Health Center, Series 1996B, 5.500%, 2/15/16 17,280 Illinois Health Facilities Authority Converted Adjustable 10/07 at 102.00 AAA 20,172,845 Rate Revenue Bonds, Highland Park Hospital, Series 1991A, 6.000%, 10/01/15 (Pre-refunded to 10/01/07) - FGIC Insured 9,940 Illinois Health Facilities Authority, Revenue Bonds, University 8/11 at 103.00 Aa1 10,777,644 of Chicago Project, Series 1985A Remarketed, 5.500%, 8/01/20 7,245 Illinois Health Facilities Authority, Revenue Refunding Bonds, 1/04 at 100.00 BB+ 7,167,841 Proctor Community Hospital Project, Series 1991, 7.375%, 1/01/23 Metropolitan Pier and Exposition Authority, Illinois, McCormick Place Expansion Project Refunding Bonds, Series 1996A: 9,750 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 3,595,215 13,000 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 4,472,130 20,500 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 101.00 AAA 21,683,875 McCormick Place Expansion Project Bonds, Series 1999A, 5.500%, 12/15/24 - FGIC Insured Regional Transportation Authority, Cook, DuPage, Kane, Lake, McHenry and Will Counties, Illinois, General Obligation Bonds, Series 1999: 22,650 5.750%, 6/01/19 - FSA Insured No Opt. Call AAA 26,029,833 3,500 5.750%, 6/01/23 - FSA Insured No Opt. Call AAA 3,969,350 5,000 Robbins, Illinois, Resources Recovery Revenue Bonds, No Opt. Call N/R 1,853,950 Restructuring Project, Series 1999C, Guaranteed by Foster Wheeler, 7.250%, 10/15/24 (Alternative Minimum Tax) 4,500 Will County School District No. 122, New Lenox, Illinois, No Opt. Call Aaa 2,176,965 General Obligation Bonds, Series 2000B, 0.000%, 11/01/18 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.9% 8,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA 8,379,200 Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/26 - MBIA Insured 8,755 Indiana Health Facility Financing Authority, Hospital Revenue 11/09 at 101.00 AAA 10,168,320 Bonds, Charity Obligated Group, Series 1999D, 5.500%, 11/15/24 (Pre-refunded to 11/15/09) - MBIA Insured 4,190 Indianapolis, Indiana, Economic Development Revenue 6/09 at 101.00 Aa3 4,419,612 Bonds, Park Tudor Foundation Inc., Project, Series 1999, 5.700%, 6/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 2.0% 11,135 Iowa Higher Education Loan Authority, Private College 10/10 at 102.00 N/R 11,758,671 Facility Revenue Bonds, Waldorf College Project, Series 1999, 7.375%, 10/01/19 40 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.6% $ 3,825 Wichita, Kansas, Water and Sewer Utility Revenue Bonds, 10/06 at 101.00 AAA $ 3,672,995 Series 1999, 4.000%, 10/01/18 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 5.6% 3,030 Hardin County School District Finance Corporation, Kentucky, 2/10 at 101.00 Aa3 3,370,057 School Building Revenue Bonds, Series 2000, 5.750%, 2/01/20 Kentucky Economic Development Financing Authority, Hospital System Revenue and Refunding Improvement Bonds, Applachian Regional Healthcare, Inc. Project, Series 1997: 1,850 5.850%, 10/01/17 4/08 at 102.00 BB- 1,701,445 5,000 5.875%, 10/01/22 4/08 at 102.00 BB- 4,414,250 Newport Public Properties Corporation, Kentucky, First Mortgage Revenue Bonds, Public Parking and Plaza Project, Series 2000A: 16,730 8.375%, 1/01/18 7/10 at 104.00 N/R 16,084,222 3,000 8.500%, 1/01/27 7/10 at 104.00 N/R 2,895,570 4,985 8.375%, 1/01/27 7/10 at 104.00 N/R 4,754,793 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 1.7% 2,245 City of Lafayette, Louisiana, Public Improvement Sales Tax 5/10 at 101.50 AAA 2,415,800 Bonds, Series 2000B, 5.625%, 5/01/25 - FGIC Insured 9,545 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 7,794,447 Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/30 - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 0.9% 5,000 Community Development Administration, Maryland Department 9/09 at 100.00 Aa2 5,215,300 of Housing and Community Development, Residential Revenue Bonds, Series 2000G, 5.950%, 9/01/29 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.8% 1,500 Boston, Massachusetts, Industrial Development Financing 9/12 at 102.00 N/R 1,455,780 Authority, Subordinate Revenue Bonds, Crosstown Center Project, Series 2002, 8.000%, 9/01/35 (Alternative Minimum Tax) 785 Massachusetts Port Authority, Special Facilities Revenue 9/06 at 102.00 AAA 807,828 Bonds, US Air Project, Series 1996-A, 5.875%, 9/01/23 (Alternative Minimum Tax) - MBIA Insured 7,000 Massachusetts Port Authority, Special Facilities Revenue 7/07 at 102.00 AAA 7,417,410 Bonds, BOSFUEL Corporation Project, Series 1997, 5.500%, 7/01/18 (Alternative Minimum Tax) - MBIA Insured 955 Massachusetts Housing Finance Agency, Single Family 12/04 at 102.00 AA 984,853 Housing Revenue Bonds, Series 32, 6.600%, 12/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.6% Detroit, Michigan, Water Supply System Revenue Bonds, Senior Lien, Series 2001A: 2,565 5.250%, 7/01/33 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 2,903,093 2,435 5.250%, 7/01/33 - FGIC Insured 7/11 at 100.00 AAA 2,505,225 4,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 4,249,120 Metropolitan Wayne County Airport, Series 1998A, 5.375%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.8% 2,250 Minneapolis-St. Paul Metropolitan Airports Commission, 4/11 at 101.00 N/R 2,052,990 Minnesota, Special Facilities Revenue Bonds, Northwest Airlines, Inc. Project, Series 2001A, 7.000%, 4/01/25 (Alternative Minimum Tax) 2,510 Minnesota Housing Finance Agency, Single Family 1/10 at 101.00 AA+ 2,564,316 Mortgage Bonds, Series 1998H-1, 5.650%, 7/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.4% Health and Educational Facilities Authority of the State of Missouri, Revenue Bonds, SSM Health Care Series 2001A: 4,370 5.250%, 6/01/21 - AMBAC Insured 6/11 at 101.00 AAA 4,577,269 3,670 5.250%, 6/01/28 - AMBAC Insured 6/11 at 101.00 AAA 3,764,392 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.9% 3,900 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 4,104,360 Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax) 41 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA (continued) $ 1,000 Montana Higher Education Student Assistance Corporation, 12/09 at 100.00 A2 $ 1,048,100 Student Loan Revenue Bonds, Subordinate Series 1999B, 6.400%, 12/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.4% 2,000 Nebraska Higher Education Loan Program Incorporated, No Opt. Call AAA 2,170,240 Senior Subordinate Bonds, Series 1993A-5A, 6.200%, 6/01/13 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.7% 4,250 New Hampshire Housing Finance Authority Single Family 7/05 at 102.00 Aa2 4,355,060 Mortgage Acquisition Revenue Bonds, Series 1995D, 6.550%, 7/01/26 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 8.2% 3,835 New Jersey Higher Education Student Assistance Authority, 6/10 at 101.00 AAA 4,239,286 Student Loan Revenue Bonds, Series 2000A, 6.000%, 6/01/13 (Alternative Minimum Tax) - MBIA Insured 2,000 New Jersey Health Care Facilities Financing Authority, 8/11 at 100.00 AAA 2,064,660 FHA-Insured Mortgage Revenue Bonds, Jersey City Medical Center Issue, Series 2001, 4.800%, 8/01/21 - AMBAC Insured 15,600 New Jersey Economic Development Authority, Solid Waste No Opt. Call N/R 10,725,000 Facilities Revenue Bonds, Bridgewater Resources Inc. Project, Series 1999B, 8.250%, 6/01/19 (Alternative Minimum Tax)## 475 New Jersey Economic Development Authority, Solid Waste No Opt. Call N/R 327,156 Revenue Bonds, Bridgewater Resources Inc. Project, Series 2003C, 0.000%, 6/30/05## 4,130 New Jersey Transit Corporation, Federal Transit No Opt. Call AAA 4,690,524 Administration Grants, Certificates of Participation, Series 2002A, 5.500%, 9/15/13 - AMBAC Insured 4,000 New Jersey Transportation Trust Fund Authority, No Opt. Call AA- 4,608,040 Transportation System Bonds, Series 1999A, 5.750%, 6/15/18 10,000 Port Authority of New York and New Jersey, Special 12/07 at 102.00 AAA 11,211,900 Project Bonds, JFK International Air Terminal LLC Project, Series 6, 5.900%, 12/01/17 (Alternative Minimum Tax) - MBIA Insured Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: 10,000 5.750%, 6/01/32 6/12 at 100.00 BBB 8,611,100 3,165 6.125%, 6/01/42 6/12 at 100.00 BBB 2,606,631 - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 19.1% 1,940 Cattaraugus County Industrial Development Agency, No Opt. Call N/R 1,240,727 New York, Revenue Bonds, Laidlaw Energy and Environmental Inc. Project, Series 1999A, 8.500%, 7/01/21 (Alternative Minimum Tax)# 5,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 5,172,900 General Revenue Bonds, Series 1998A, 5.250%, 12/01/26 - FSA Insured County of Nassau, New York, General Obligation Serial Improvement Bonds, Series B: 4,005 5.250%, 6/01/19 - AMBAC Insured 6/09 at 102.00 AAA 4,332,449 7,005 5.250%, 6/01/20 - AMBAC Insured 6/09 at 102.00 AAA 7,517,346 7,005 5.250%, 6/01/21 - AMBAC Insured 6/09 at 102.00 AAA 7,469,291 2,000 City of New York, New York, General Obligation Bonds, 2/08 at 101.00 AAA 2,178,500 Fiscal Series 1998E, 5.250%, 8/01/14 - AMBAC Insured 14,000 City of New York, New York, General Obligation Bonds, 2/08 at 101.00 AAA 14,719,880 Series 1998F, 5.375%, 8/01/19 - MBIA Insured 2,525 New York City Transitional Finance Authority, New York, 8/07 at 101.00 AA+*** 2,833,378 Future Tax Secured Bonds, Fiscal Series 1998A, 5.000%, 8/15/27 (Pre-refunded to 8/15/07) 12,350 New York City Transitional Finance Authority, Future Tax 5/10 at 101.00 AA+*** 14,322,295 Secured Bonds, Fiscal Series 2000C, 5.500%, 11/01/29 (Pre-refunded to 5/01/10) 10,000 New York City Transitional Finance Authority, New York, 8/09 at 101.00 AA+*** 11,750,800 Future Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded to 8/15/09) 4,400 Dormitory Authority of the State of New York, Mental 2/07 at 102.00 AAA 4,766,300 Health Services Facilities Improvement Revenue Bonds, Series 1996E, 5.250%, 2/15/18 - AMBAC Insured 2,170 Dormitory Authority of the State of New York, Frances 7/07 at 102.00 AA 2,383,810 Schervier Home & Hospital Insured Revenue Bonds, Franciscan Health Partnership Obligated Group, Series 1997, 5.500%, 7/01/17 - RAAI Insured 42 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) Dormitory Authority of the State of New York, Mental Health Services Facilities Improvement Revenue Bonds, Series 1996B: $ 4,305 5.125%, 8/15/21 (Pre-refunded to 2/15/06) - MBIA Insured 2/06 at 100.00 AAA $ 4,736,921 165 5.125%, 8/15/21 - MBIA Insured 2/06 at 102.00 AAA 171,250 7,500 Dormitory Authority of the State of New York, Secured 2/08 at 101.50 AAA 7,949,325 Hospital Revenue Refunding Bonds, Wyckoff Heights Medical Center, Series 1998H, 5.300%, 8/15/21 - MBIA Insured 10,000 Dormitory Authority of the State of New York, City University 7/09 at 101.00 AAA 11,596,200 System Consolidated Third General Resolution Revenue Bonds, 1999 Series 1, 5.500%, 7/01/29 (Pre-refunded to 7/01/09) - FSA Insured 2,000 Dormitory Authority of the State of New York, City University 1/08 at 102.00 AAA 2,290,120 System Consolidated Third General Resolution Revenue Bonds, 1997 Series 1, 5.375%, 7/01/24 (Pre-refunded to 1/01/08) - FSA Insured 7,500 New York State Urban Development Corporation, Correctional 1/06 at 102.00 AAA 8,270,025 Facilities Revenue Bonds, Series 6, 5.375%, 1/01/25 (Pre-refunded to 1/01/06) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.6% 3,000 County of Wake, North Carolina, General Obligation School 2/11 at 102.00 AAA 3,275,850 Bonds, Series 2001B, 5.250%, 2/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 4.4% 2,300 Amherst Exempted Village School District, Ohio, General 12/11 at 100.00 Aaa 2,388,205 Obligation Unlimited Tax School Improvement Bonds, Series 2001, 5.125%, 12/01/21 - FGIC Insured 3,635 Franklin County, Ohio, FHA-Insured Multifamily Housing 1/05 at 103.00 Aa 3,677,202 Mortgage Revenue Bonds, Hamilton Creek Apartments Project, Series 1994A, 5.550%, 7/01/24 (Alternative Minimum Tax) 5,650 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 5,206,645 Revenue Bonds, Bay Shore Power Project, Series 1998A, 5.875%, 9/01/20 (Alternative Minimum Tax) 13,500 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 13,437,495 Revenue Bonds, Bay Shore Power Project, Convertible Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) 1,115 Warren County, Ohio, Special Assessment Bonds, 12/07 at 101.00 Aa2 1,236,167 Waterstone Boulevard, Series 1997 General Obligation, 5.500%, 12/01/17 - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 0.4% 2,255 Portland, Oregon, Downtown Waterfront Urban Renewal 6/10 at 101.00 Aaa 2,461,400 and Redevelopment Bonds, Series 2000A, 5.500%, 6/15/20 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 5.0% 3,480 Allegheny County, Pennsylvania, Hospital Development 11/10 at 102.00 B 3,575,770 Authority, Health System Revenue Bonds, Series 2000B, West Penn Allegheny Health System, 9.250%, 11/15/22 2,365 Carbon County Industrial Development Authority, No Opt. Call BBB- 2,541,997 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 18,900 City of Philadelphia Airport Revenue Refunding Bonds, 6/08 at 102.00 AAA 20,034,000 Pennsylvania, Philadelphia Airport System, Series 1998A, 5.500%, 6/15/18 (Alternative Minimum Tax) - FGIC Insured 3,205 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 AAA 3,567,325 Obligation Bonds, Series 2002B, 5.625%, 8/01/16 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 2.7% 2,015 Central Falls, Rhode Island, General Obligation School Bonds, 5/09 at 102.00 AA 2,261,797 Series 1999, 6.250%, 5/15/20 - RAAI Insured 3,500 Providence Redevelopment Agency, Rhode Island, Revenue 4/10 at 101.00 Aaa 3,831,310 Bonds, Public Safety and Municipal Building Projects, Series 1999A, 5.750%, 4/01/29 - AMBAC Insured 12,000 Tobacco Settlement Financing Corporation of Rhode Island, 6/12 at 100.00 BBB 10,184,400 Asset-Backed Bonds, Series 2002A, 6.125%, 6/01/32 - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 2.3% 5,260 Memphis-Shelby County Airport Authority, Tennessee, 3/10 at 101.00 AAA 5,682,536 Airport Revenue Bonds, Series 1999D, 6.000%, 3/01/24 (Alternative Minimum Tax) - AMBAC Insured 2,425 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 2,457,956 Airport Revenue Bonds, Series 2001B, 5.125%, 3/01/26 - FSA Insured 43 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE (continued) $ 3,625 Tennessee Housing Development Agency, Homeownership 7/10 at 101.00 AA $ 3,771,051 Program Bonds, Issue 2000-1, 6.375%, 7/01/25 (Alternative Minimum Tax) 1,790 Tennessee Housing Development Agency, Homeownership 7/10 at 100.00 AA 1,855,138 Program Bonds, Issue 2000-2B, 6.250%, 1/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 14.2% 1,000 Alliance Airport Authority, Inc., Texas, Special Facilities 12/03 at 100.00 CCC 698,210 Revenue Bonds, American Airlines, Inc. Project, Series 1990, 7.500%, 12/01/29 (Alternative Minimum Tax) 10,000 Austin, Texas, Airport System Prior Lien Revenue Bonds, 11/05 at 102.00 AAA 11,009,900 Series 1995A, 6.125%, 11/15/25 (Alternative Minimum Tax) - MBIA Insured 2,560 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 BBB 2,848,896 Refunding Bonds, TXU Electric Company Project, Series 1999C, 7.700%, 4/01/32 (Alternative Minimum Tax) 4,675 Carrollton-Farmers Branch Independent School District, 2/09 at 100.00 AAA 5,452,967 Dallas County, Texas, School Building Unlimited Tax Bonds, Series 1999, 6.000%, 2/15/20 (Pre-refunded to 2/15/09) Coppell Independent School District, Dallas County, Texas, Unlimited Tax School Building and Refunding Bonds, Series 1999: 5,130 0.000%, 8/15/20 8/09 at 52.47 AAA 2,058,669 7,000 0.000%, 8/15/21 8/09 at 49.48 AAA 2,623,600 7,345 0.000%, 8/15/23 8/09 at 44.01 AAA 2,381,102 7,000 0.000%, 8/15/24 8/09 at 41.50 AAA 2,126,320 7,350 0.000%, 8/15/25 8/09 at 39.14 AAA 2,099,234 7,000 0.000%, 8/15/26 8/09 at 36.91 AAA 1,879,080 2,000 Dallas-Ft. Worth, Texas, International Airport Facilities 11/05 at 100.00 CCC 1,725,420 Improvement Corporation, Revenue Refunding Bonds, American Airlines, Series 2000B, 6.050%, 5/01/29 (Alternative Minimum Tax) (Mandatory put 11/01/05) 6,000 Dallas-Fort Worth, Texas, International Airport Facilities 11/07 at 100.00 CCC 4,453,800 Improvement Corporation, Revenue Refunding Bonds, American Airlines, Series 2000C, 6.150%, 5/01/29 (Alternative Minimum Tax) (Mandatory put 11/01/07) Harris County, Texas, Health Facilities Development Corporation, Revenue Bonds, Christus Health, Series 1999A: 12,000 5.375%, 7/01/24 - MBIA Insured 7/09 at 101.00 AAA 12,478,320 11,000 5.375%, 7/01/29 - MBIA Insured 7/09 at 101.00 AAA 11,409,750 2,500 Jefferson County, Texas, Certificates of Obligation, 8/10 at 100.00 AAA 2,956,750 Series 2000, 6.000%, 8/01/25 (Pre-refunded to 8/01/10) - FSA Insured 4,245 Laredo Independent School District, Webb County, Texas, 8/09 at 100.00 AAA 4,373,836 Unlimited Tax School Building Bonds, Series 1999, 5.250%, 8/01/24 2,000 Laredo, Texas, Sports Venue Sales Tax Revenue Bonds, 3/09 at 100.00 AAA 2,064,520 Series 2001, 5.300%, 3/15/26 - FGIC Insured 1,500 Port Arthur, Texas, Jefferson County, General Obligation 2/07 at 100.00 AAA 1,526,955 Bonds, Series 1997, 5.000%, 2/15/21 - MBIA Insured 10,000 Tarrant County Health Facilities Development Corporation 2/08 at 102.00 AAA 10,597,200 Texas Health Resources System Revenue Bonds, Series 1997A, 5.250%, 2/15/17 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 1.2% 195 Utah Housing Finance Agency, Single Family Mortgage 7/04 at 102.00 AAA 198,853 Senior Bonds, Federally Insured or Guaranteed Mortgage Loans, Series 1994F, 7.000%, 7/01/27 (Alternative Minimum Tax) Utah Housing Finance Agency, Single Family Mortgage Bonds, 1999 Series C-2 Class I: 1,795 5.700%, 7/01/19 (Alternative Minimum Tax) 1/10 at 101.50 AAA 1,888,843 910 5.750%, 7/01/21 (Alternative Minimum Tax) 1/10 at 101.50 AA 950,886 1,685 Utah Housing Finance Agency, Single Family Mortgage 7/09 at 101.00 AA 1,764,347 Bonds, Series 1999D, 5.850%, 7/01/21 (Alternative Minimum Tax) 350 Utah Housing Finance Agency, Single Family Mortgage 7/09 at 101.50 Aa2 373,009 Bonds, Series 1999F, 6.300%, 7/01/21 (Alternative Minimum Tax) 1,800 Utah Housing Finance Agency, Single Family Mortgage 7/10 at 100.00 AA- 1,860,660 Bonds, Series 2000F-2, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax) 44 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 1.4% $ 4,815 Metropolitan Washington Airports Authority, Virginia, Airport 10/04 at 100.00 AAA $ 4,936,482 System Revenue Bonds, Series 1994A, 5.500%, 10/01/24 (Alternative Minimum Tax) - MBIA Insured 3,395 Virginia Small Business Financing Authority, Industrial 11/09 at 102.00 N/R 3,345,399 Development Water Revenue Bonds, S.I.L. Clean Water, LLC Project, Series 1999, 7.250%, 11/01/24 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 10.7% 4,000 Energy Northwest, Washington, Nuclear Project No. 3 7/13 at 100.00 Aa1 4,387,760 Electric Revenue Bonds, Series 2003A Refunding, 5.500%, 7/01/17 Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18 Project, Series 1999B: 1,755 6.000%, 9/01/15 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 1,920,409 2,590 6.000%, 9/01/16 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 2,823,618 Port of Seattle, Washington, Special Facilities Revenue Bonds, Terminal 18 Project, Series 1999C: 875 6.000%, 9/01/15 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 957,469 1,260 6.000%, 9/01/16 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 1,373,652 9,760 City of Tacoma, Washington, Electric System Revenue Bonds, 1/11 at 101.00 AAA 10,622,296 Series 2001A Refunding, 5.625%, 1/01/21 - FSA Insured 7,725 Tobacco Settlement Authority, Washington State, Tobacco 6/13 at 100.00 BBB 7,121,369 Settlement Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26 11,605 State of Washington, Certificates of Participation, 7/09 at 100.00 AAA 12,531,775 Washington State Convention and Trade Center, Series 1999, 5.250%, 7/01/16 - MBIA Insured 3,350 State of Washington, General Obligation Compound Interest No Opt. Call AAA 1,678,049 Bonds, Series 1999S-2, 0.000%, 1/01/18 - FSA Insured State of Washington, General Obligation Compound Interest Bonds, Series 1999S-3: 17,650 0.000%, 1/01/20 No Opt. Call AA+ 7,708,991 18,470 0.000%, 1/01/21 No Opt. Call AA+ 7,549,613 4,800 Washington Public Power Supply System, Nuclear Project 7/07 at 102.00 AAA 5,171,856 No. 3 Refunding Revenue Bonds, Series 1997A, 5.250%, 7/01/16 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 6.3% 3,810 City of La Crosse, Wisconsin, Industrial Development 12/08 at 102.00 AAA 4,143,832 Refunding Revenue Bonds, Dairyland Power Cooperative Project, Series 1997C, 5.550%, 2/01/15 - AMBAC Insured 4,180 Wisconsin Health and Educational Facilities Authority, 5/09 at 101.00 A 4,193,460 Revenue Bonds, Kenosha Hospital and Medical Center Inc. Project, Series 1999, 5.625%, 5/15/29 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, FH Healthcare Development Inc. Project, Series 1999: 8,375 6.250%, 11/15/20 11/09 at 101.00 N/R 8,813,599 5,000 6.250%, 11/15/28 11/09 at 101.00 N/R 5,185,950 12,700 Wisconsin Health and Educational Facilities Authority, 8/09 at 101.00 Aaa 13,358,491 Revenue Bonds, Mercy Health System Corporation, Series 1999, 5.500%, 8/15/25 - AMBAC Insured 2,200 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A 2,065,840 Revenue Bonds, Wheaton Franciscan Services, Series 2003A, 5.125%, 8/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ $ 901,055 Total Long-Term Investments (cost $810,194,357) - 144.9% 862,687,804 =============----------------------------------------------------------------------------------------------------------------------- 45 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL MARKET AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 1.8% $ 5,250 California Statewide Communities Development Authority, A-1 $ 5,250,000 Variable Rate Demand Revenue Bonds, Fremont-Rideout Health Group, Series 2001A, 1.100%, 1/01/31 - AMBAC Insured+ 2,300 Fulton County Residential Care Facilities Authority, A-1+ 2,300,000 Georgia, Variable Rate Demand Revenue Refunding Bonds, Lenbrook Square Foundation Inc., Series 1996, 1.200%, 1/01/18+ 3,300 Massachusetts Health and Educational Facilities A-1+ 3,300,000 Authority, Revenue Bonds, Wellesley College Variable Rate Demand Obligations, Series 1999G, 1.080%, 7/01/39+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 10,850 Total Short-Term Investments (cost $10,850,000) 10,850,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $821,044,357) - 146.7% 873,537,804 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.9% 16,728,426 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (49.6)% (295,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 595,266,230 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. # Non-income producing security. In August 2002, Cattaraugus Acquisition Corp. (an entity formed by several Nuveen Funds owning various interests in the Laidlaw Energy and Environmental Inc. project) took possession of 80% of the Laidlaw Energy assets on behalf of the various Nuveen Funds. Cattaraugus Acquisition Corp. has determined that a sale of the facility is in the best interests of shareholders and is proceeding accordingly. ## Non-income producing security. In June 2003, Waste Solutions Group, Inc. (an entity formed for the benefit of Nuveen Dividend Advantage Municipal Fund (NAD) which owns various interests in the Bridgewater Resources Inc. project) took possession of 45% of the Bridgewater Resources Inc. assets on behalf of the Fund. Bridgewater Resources Inc. emerged from bankruptcy in June 2003. NAD, via Waste Solutions Group Inc., has agreed to allow debt service reserve monies to be used for capital expenses, and has also agreed to a debt service moratorium until December 2005. Nuveen Advisory Corp. will continue to actively monitor the Bridgewater Resources, Inc. project, and to cause NAD and Waste Solutions Group Inc. to act in what it believes is in the best interests of fund shareholders. N/R Investment is not rated. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 46
Nuveen Dividend Advantage Municipal Fund 2 (NXZ) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 4.2% $ 18,500 Huntsville Health Care Authority, Alabama, Revenue Bonds, 6/11 at 101.00 A2 $18,805,805 Series 2001A, 5.750%, 6/01/31 - ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.6% 2,500 Phoenix, Arizona, Civic Improvement Corporation, 7/12 at 100.00 AAA 2,543,350 Senior Lien Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 (Alternative Minimum Tax) - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.6% 2,500 Arkansas Development Finance Authority, Single Family 1/12 at 100.00 AAA 2,546,400 Mortgage Revenue Bonds, GNMA Mortgage-Backed Securities Program, Series 2002C, 5.400%, 1/01/34 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 10.0% 6,000 California Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AAA 6,203,640 Stanford University, Series 2001Q, 5.250%, 12/01/32 13,825 Department of Veterans Affairs of the State of California, 6/06 at 101.00 AAA 14,718,648 Home Purchase Revenue Bonds, Series 2001A, 5.550%, 12/01/25 - AMBAC Insured 11,200 State of California, General Obligation Bonds, 8/13 at 100.00 A3 11,121,600 Series 2003, 5.250%, 2/01/28 1,500 California Statewide Communities Development Authority, 10/15 at 103.00 N/R 1,427,535 Revenue Bonds, East Valley Tourist Authority, Senior Lien, Series 2003B, 9.250%, 10/01/20 5,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 4,561,700 Tobacco Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39 6,000 Regional Airports Improvement Corporation, California, 12/12 at 102.00 B- 5,835,120 American Airlines Inc. Terminal 4 Project, Los Angeles International Airport Facilities Sublease Revenue Bonds, Series 2002C, 7.500%, 12/01/24 (Alternative Minimum Tax) 240 Yuba County Water Agency, California, Yuba River 3/04 at 100.00 Ba3 231,569 Development Revenue Bonds, Pacific Gas and Electric Company Project, Series 1966A, 4.000%, 3/01/16 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 5.2% 3,000 Colorado Educational and Cultural Facilities Authority, 8/11 at 100.00 Ba2 3,118,500 Boulder County, Colorado, Charter School Revenue Bonds, Peak to Peak Charter School Project, Created by Boulder Valley School District No. RE-2, 7.500%, 8/15/21 10,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 2,379,000 Bonds, Series 2000A, 0.000%, 9/01/28 - MBIA Insured 1,885 Eagle County Air Terminal Corporation, Colorado, Airport 5/11 at 101.00 N/R 1,736,801 Terminal Revenue Bonds, Series 2001, 7.125%, 5/01/31 (Alternative Minimum Tax) 5,000 Northwest Parkway Public Highway Authority, Colorado, 6/11 at 102.00 AAA 5,138,500 Revenue Bonds, Senior Series 2001A, 5.250%, 6/15/41 - FSA Insured Northwest Parkway Public Highway Authority, Colorado, Revenue Bonds, Senior Series 2001B: 22,000 0.000%, 6/15/28 - FSA Insured 6/11 at 35.65 AAA 5,442,800 17,650 0.000%, 6/15/29 - AMBAC Insured 6/11 at 33.45 AAA 4,094,977 1,000 Plaza Metropolitan District No. 1, Lakewood, Colorado, 6/14 at 101.00 N/R 1,003,260 Tax Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25 - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.1% 15,000 City of Jacksonville, Florida, Transportation Revenue Bonds, 10/11 at 100.00 AAA 15,504,450 Series 2001, 5.250%, 10/01/29 - MBIA Insured 3,000 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 AAA 3,083,910 Miami International Airport, Series 2002, 5.375%, 10/01/32 (Alternative Minimum Tax) - FGIC Insured 4,000 Miami-Dade County Health Facilities Authority, Florida, 8/11 at 101.00 AAA 4,073,360 Hospital Revenue Refunding Bonds, Miami Children's Hospital, Series 2001A, 5.125%, 8/15/26 - AMBAC Insured 47 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 2.3% Honolulu City and County, Hawaii, Board of Water Supply, Water System Revenue Bonds, Series 2001: $ 3,000 5.250%, 7/01/26 - FSA Insured 7/11 at 100.00 AAA $ 3,096,210 6,725 5.250%, 7/01/31 - FSA Insured 7/11 at 100.00 AAA 6,923,253 - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 12.0% 15,270 City of Chicago, Illinois, General Obligation Bonds, Project 1/11 at 101.00 AAA 15,692,368 and Refunding Series 2001A, 5.250%, 1/01/33 - MBIA Insured 3,710 Chicago, Illinois, FHA/GNMA Collateralized Multifamily 12/11 at 100.00 A+ 3,820,150 Housing Revenue Bonds, Stone Terrace Apartments Project, Series 2001A, 5.750%, 12/20/42 (Alternative Minimum Tax) 1,755 City of Chicago, Illinois, Chicago O'Hare International Airport, No Opt. Call Ca 456,300 Special Facility Revenue Bonds, United Air Lines, Inc. Project, Series 2001A, 6.375%, 11/01/35 (Alternative Minimum Tax) (Mandatory put 5/01/13)# 3,790 Chicago, Illinois, Collateralized Single Family Mortgage 4/11 at 105.00 AAA 4,118,328 Revenue Bonds, Series 2001A, 6.250%, 10/01/32 (Alternative Minimum Tax) 3,180 Illinois Development Finance Authority, Revenue Bonds, 12/21 at 100.00 BBB 3,098,783 Chicago Charter School Foundation Project, Series 2002A, 6.250%, 12/01/32 5,000 Illinois Development Finance Authority, Revenue Bonds, 9/11 at 100.00 AAA 5,261,950 Illinois Wesleyan University, Series 2001, 5.500%, 9/01/32 - AMBAC Insured 3,100 Illinois Development Finance Authority, Revenue Bonds, 5/11 at 101.00 BBB+ 3,209,957 Midwestern University, Series 2001B, 6.000%, 5/15/31 5,000 Illinois Health Facilities Authority, Revenue Bonds, 2/11 at 101.00 AAA 5,122,800 Edward Hospital Obligated Group, Series 2001B, 5.250%, 2/15/34 - FSA Insured 3,000 Illinois Educational Facilities Authority, Student Housing 5/12 at 101.00 Baa2 3,008,850 Revenue Bonds, Educational Advancement Foundation Fund, University Center Project, Series 2002, 6.250%, 5/01/34 2,275 State of Illinois, Build Illinois Bonds, Sales Tax Revenue 6/11 at 100.00 AAA 2,520,814 Bonds, Series 2001, 5.500%, 6/15/16 4,980 Metropolitan Pier and Exposition Authority, Illinois, 6/06 at 102.00 AAA 5,092,548 McCormick Place Expansion Project Refunding Bonds, Series 1996A, 5.250%, 6/15/27 - AMBAC Insured 5,000 Robbins, Illinois, Resources Recovery Revenue Bonds, No Opt. Call N/R 1,853,950 Restructuring Project, Series 1999C, Guaranteed by Foster Wheeler, 7.250%, 10/15/24 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 5.6% 2,000 Indiana Health Facility Financing Authority, Hospital Revenue 9/11 at 100.00 A+ 1,981,560 Bonds, The Methodist Hospital Inc, Series 2001, 5.500%, 9/15/31 2,500 Indiana Health Facility Financing Authority, Hospital Revenue No Opt. Call AAA 3,124,450 Refunding Bonds, Columbus Regional Hospital, Series 1993, 7.000%, 8/15/15 - FSA Insured Indiana Transportation Finance Authority, Highway Revenue Bonds, Series 2003A: 4,000 5.000%, 6/01/23 - FSA Insured 6/13 at 100.00 AAA 4,068,400 6,000 5.000%, 6/01/24 - FSA Insured 6/13 at 100.00 AAA 6,065,760 2,000 Indianapolis Airport Authority, Indiana, Special Facilities 7/04 at 102.00 BBB 2,103,000 Revenue Bonds, Federal Express Corporation Project, Series 1994, 7.100%, 1/15/17 (Alternative Minimum Tax) 5,000 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 Ca 1,737,500 Revenue Bonds, United Air Lines, Inc., Indianapolis Maintenance Center Project, Series 1995A, 6.500%, 11/15/31 (Alternative Minimum Tax)# 6,000 Saint Joseph County Hospital Authority, Indiana, Health 2/09 at 102.00 BBB 5,742,420 System Revenue Bonds, Madison Center Inc. Project, Series 1999, 5.800%, 2/15/24 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.2% 1,000 Iowa Higher Education Loan Authority, Private College 10/12 at 100.00 A 1,034,630 Facility Revenue Bonds, Wartburg College Project, Series 2002, 5.500%, 10/01/28 - ACA Insured - ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 3.9% 17,000 City of Wichita, Kansas, Hospital Facilities Improvement 11/11 at 101.00 A+ 17,312,800 and Refunding Revenue Bonds, Via Christi Health System Inc, Series III 2001, 5.625%, 11/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.1% 17,060 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 13,659,260 Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 48 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 4.2% $ 3,300 Massachusetts Port Authority, Special Facilities Revenue 7/07 at 102.00 AAA $ 3,489,354 Bonds, BOSFUEL Corporation Project, Series 1997, 5.750%, 7/01/39 (Alternative Minimum Tax) - MBIA Insured 15,000 Massachusetts Turnpike Authority, Metropolitan Highway 1/07 at 102.00 AAA 15,029,400 System Revenue Bonds, Series 1997A Senior, 5.000%, 1/01/37 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 14.3% Detroit, Michigan, Water Supply System Revenue Bonds, Senior Lien, Series 2001A: 15,390 5.250%, 7/01/33 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 17,418,556 20,000 5.500%, 7/01/33 - FGIC Insured 7/11 at 101.00 AAA 21,191,800 14,610 5.250%, 7/01/33 - FGIC Insured 7/11 at 100.00 AAA 15,031,352 4,000 Michigan Municipal Bond Authority, Public School Academy 10/09 at 102.00 Ba1 3,949,040 Revenue Bonds, Detroit Academy, Series 2001A, 8.000%, 10/01/31 Michigan State Hospital Finance Authority, Revenue and Refunding Bonds, Detroit Medical Center Obligated Group, Series 1993A: 2,000 6.250%, 8/15/13 2/04 at 102.00 Ba3 1,536,100 4,000 6.500%, 8/15/18 2/04 at 102.00 Ba3 2,949,600 2,000 Michigan State Hospital Finance Authority, Hospital Revenue 8/08 at 101.00 Ba3 1,263,880 Bonds, Detroit Medical Center Obligated Group, Series 1998A, 5.125%, 8/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 3.2% 14,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 14,349,160 Minnesota, Airport Revenue Bonds, Series 2001A, 5.250%, 1/01/32 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 4.9% 21,000 Health and Educational Facilities Authority of the State 6/11 at 101.00 AAA 21,540,120 of Missouri, Revenue Bonds, SSM Health Care, Series 2001A, 5.250%, 6/01/28 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 1.2% 5,320 Montana Board of Housing, Single Family Program Bonds, 12/10 at 100.00 AA+ 5,454,756 Series 2001A-2, 5.700%, 6/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 4.6% 12,275 Director of Nevada State Department of Business and 1/10 at 100.00 AAA 12,842,228 Industry, Revenue Bonds, Las Vegas Monorail Project, 1st Tier Series 2000, 5.375%, 1/01/40 - AMBAC Insured 3,500 State of Nevada, Director of Business and Industry, 1/10 at 102.00 N/R 3,460,240 Las Vegas Monorail Company Project, Second Tier Series 2000, 7.375%, 1/01/40 4,000 Henderson, Nevada, Health Care Facility Revenue Bonds, 7/08 at 101.00 Baa1 3,890,120 Catholic Healthcare West, Series 1998A, 5.250%, 7/01/18 - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 2.7% 8,000 New Hampshire Business Finance Authority, Pollution 10/08 at 102.00 A3 8,309,040 Control Revenue Bonds, Connecticut Light and Power Company, Series 1992A Refunding, Remarketed, 5.850%, 12/01/22 3,660 New Hampshire Housing Finance Authority, Single Family 5/11 at 100.00 Aa2 3,757,685 Mortgage Acquisition Bonds, Series 2001A, 5.700%, 1/01/31 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 1.4% 3,995 New Jersey Economic Development Authority, Special 11/10 at 101.00 B 3,657,662 Facilities Revenue Bonds, Continental Airlines Inc. Project, Series 2000, 7.000%, 11/15/30 (Alternative Minimum Tax) Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2003: 425 6.750%, 6/01/39 6/13 at 100.00 BBB 386,283 2,700 6.250%, 6/01/43 6/13 at 100.00 BBB 2,263,977 - ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 5.2% New Mexico Hospital Equipment Loan Council, Hospital Revenue Bonds, Presbyterian Healthcare Services, Series 2001A: 12,000 5.500%, 8/01/25 8/11 at 101.00 A+ 12,161,040 10,800 5.500%, 8/01/30 8/11 at 101.00 A+ 10,877,328 49 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 6.7% $ 6,000 Long Island Power Authority, New York, Electric System 5/11 at 100.00 A- $ 6,107,400 General Revenue Bonds, Series 2000L, 5.375%, 5/01/33 14,500 New York City Municipal Water Finance Authority, Water 6/11 at 101.00 AA 14,660,225 and Sewer System Revenue Bonds, Fiscal Series 2001C, 5.125%, 6/15/33 5,000 New York City Industrial Development Agency, New York, 8/12 at 101.00 CCC 3,825,050 Special Facilities Revenue Bonds, American Airlines, Inc. JFK Airport Project, Series 2002B, 8.500%, 8/01/28 (Alternative Minimum Tax) 4,900 Dormitory Authority of the State of New York, Revenue 7/10 at 101.00 Ba1 5,016,032 Bonds, Mount Sinai NYU Obligated Group, Series 2000A, 6.625%, 7/01/19 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.7% 2,950 North Carolina Capital Facilities Financing Agency, 4/13 at 100.00 AAA 2,968,585 Educational Facilities Revenue Bonds, Johnson and Wales University Project, Series 2003A, 5.000%, 4/01/33 - XLCA Insured 4,500 North Carolina Eastern Municipal Power Agency, Power 1/09 at 102.00 BBB 4,721,355 System Revenue Refunding Bonds, Series 1999B, 5.600%, 1/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 0.9% 4,130 North Dakota Housing Finance Agency, Home Mortgage 7/10 at 100.00 Aa2 4,174,563 Finance Program Refunding Bonds, Series 2001A, 5.550%, 1/01/32 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 0.4% 1,845 Board of Education, City School District of Columbus, 6/13 at 100.00 AAA 1,865,369 Franklin County, Ohio, General Obligation Bonds, Series 2003, 5.000%, 12/01/28 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.7% Oklahoma Development Finance Authority, Hillcrest Healthcare System Revenue and Refunding Bonds, Series 1999A: 2,655 5.125%, 8/15/10 8/09 at 101.00 B1 2,168,524 1,000 5.200%, 8/15/11 8/09 at 101.00 B1 801,890 - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.9% 8,000 Hospital Facility Authority of Clackamas County, Oregon, 5/11 at 101.00 AA 8,274,240 Revenue Refunding Bonds, Legacy Health System, Series 2001, 5.250%, 5/01/21 9,000 State of Oregon Department of Administrative Services, 5/11 at 101.00 AAA 9,121,320 Certificates of Participation, Series 2001D, 5.000%, 5/01/26 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.0% 5,000 Allegheny County, Pennsylvania, Hospital Development 11/10 at 102.00 B 5,137,600 Authority, Health System Revenue Bonds, Series 2000B, West Penn Allegheny Health System, 9.250%, 11/15/30 8,000 Pennsylvania Higher Educational Facilities Authority, 1/11 at 101.00 A 8,327,520 Revenue Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31 - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 0.2% 630 South Carolina Public Service Authority, Revenue Refunding 1/06 at 102.00 AAA 687,084 Bonds, Series 1996A, 5.750%, 1/01/22 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH DAKOTA - 1.1% 4,820 South Dakota Housing Development Authority, Remarketed 5/09 at 102.00 AAA 5,029,574 Homeownership Mortgage Bonds, Series 1997E-4, 5.450%, 5/01/18 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 22.7% 7,500 City of Austin, Texas, Electric Utility System Revenue 11/10 at 100.00 AAA 7,532,925 Refunding Bonds, Series 2001, 5.000%, 11/15/30 - FSA Insured Dallas-Fort Worth International Airport Public Facility Improvement Corporation, Texas, Airport Hotel Revenue Bonds, Series 2001: 15,000 5.250%, 1/15/26 - FSA Insured 1/09 at 100.00 AAA 15,269,250 1,750 5.200%, 1/15/31 - FSA Insured 1/09 at 100.00 AAA 1,779,278 50 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 10,000 Gulf Coast Industrial Development Authority, Texas, 4/12 at 100.00 Ba2 $10,176,100 Solid Waste Disposal Revenue Bonds, Citgo Petroleum Project, Series 1998, 8.000%, 4/01/28 (Alternative Minimum Tax) 3,000 Harris County, Texas, Health Facilities Development 7/09 at 101.00 AAA 3,119,580 Corporation, Revenue Bonds, Christus Health, Series 1999A, 5.375%, 7/01/24 - MBIA Insured 40,000 Houston Sports Authority, Harris County, Texas, Senior 11/30 at 54.04 AAA 4,697,200 Lien Revenue Refunding Bonds, Series 2001A, 0.000%, 11/15/40 - MBIA Insured 30,980 Houston Sports Authority, Harris County, Texas, Junior Lien 11/11 at 100.00 AAA 31,684,485 Revenue Refunding Bonds, Series 2001B, 5.250%, 11/15/40 - MBIA Insured Hays Consolidated Independent School District, Hays County, Texas, General Obligation School Building Bonds, Series 2001: 10,715 0.000%, 8/15/25 8/11 at 43.18 AAA 3,120,529 12,940 0.000%, 8/15/26 8/11 at 40.60 AAA 3,552,806 Houston, Texas, Hotel Occupancy Tax and Special Revenue Bonds, Convention and Entertainment Project, Series 2001B: 5,000 0.000%, 9/01/30 - AMBAC Insured No Opt. Call AAA 1,115,350 5,000 0.000%, 9/01/31 - AMBAC Insured No Opt. Call AAA 1,052,700 5,000 Metro Health Facilities Development Corporation, Texas, 1/11 at 100.00 B1 4,631,150 Hospital Revenue Bonds, Wilson N. Jones Memorial Hospital Project, Series 2001, 7.250%, 1/01/31 10,500 Texas State, General Obligation Bonds, Water Financial 8/11 at 100.00 Aa1 10,778,040 Assistance Program, Series 2001, 5.250%, 8/01/35 2,000 Tom Green County Health Facilities Development 5/11 at 101.00 Baa3 2,097,060 Corporation, Texas, Hospital Revenue Bonds, Shannon Health System Project, Series 2001, 6.750%, 5/15/21 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.5% 2,200 Intermountain Power Agency, Utah, Power Supply Revenue 1/04 at 102.00 A+*** 2,251,920 Refunding Bonds, Series 1993A, 5.500%, 7/01/20 - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 4.8% 7,250 City of Seattle, Washington, Municipal Light and Power 3/11 at 100.00 AAA 7,335,188 Improvements and Revenue Refunding Bonds, Series 2001, 5.125%, 3/01/26 - FSA Insured 3,500 City of Tacoma, Washington, Electric System Revenue 1/11 at 101.00 AAA 3,916,115 Refunding Bonds, Series 2001A, 5.750%, 1/01/18 - FSA Insured 2,000 State of Washington, Certificates of Participation, 7/09 at 100.00 AAA 2,163,400 Washington State Convention and Trade Center, Series 1999, 5.125%, 7/01/13 - MBIA Insured 7,500 Washington State Health Care Facilities Authority, 10/11 at 100.00 AAA 7,724,775 Revenue Bonds, Providence Health System, Series 2001A, 5.250%, 10/01/21 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.1% 5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 4,962,000 Bonds, Appalachian Power Company Project, Series 2003L, 5.500%, 10/01/22 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 0.7% 1,000 Wisconsin Health and Educational Facilities Authority, 5/12 at 100.00 N/R 996,740 Revenue Bonds, Divine Savior Healthcare, Series 2002A, 7.375%, 5/01/26 2,100 Wisconsin Health and Educational Facilities Authority, 8/13 at 100.00 A 1,971,940 Revenue Bonds, Wheaton Franciscan Services, Series 2003A, 5.125%, 8/15/33 - ------------------------------------------------------------------------------------------------------------------------------------ $ 732,985 Total Long-Term Investments (cost $613,391,578) - 142.9% 633,300,549 =============----------------------------------------------------------------------------------------------------------------------- 51 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL MARKET AMOUNT (000) DESCRIPTION(1) RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ SHORT-TERM INVESTMENTS - 4.6% $ 10,000 Clark County School District, Nevada, General Obligation A-1+ $ 10,000,000 Variable Rate Demand Bonds, Series A, 1.120%, 6/15/21 - FSA Insured+ 10,200 Clarksville Public Building Authority, Tennessee, VMIG-1 10,200,000 Municipal Bond Fund Pooled Financing, Variable Rate Demand Bonds, Series 2003, 1.150%, 1/01/33+ - ------------------------------------------------------------------------------------------------------------------------------------ $ 20,200 Total Short-Term Investments (cost $20,200,000) 20,200,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $633,591,578) - 147.5% 653,500,549 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.6% 11,600,709 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.1)% (222,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 443,101,258 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. *** Securities are backed by an escrow or trust containing sufficient U.S. Government or U.S. Government agency securities which ensures the timely payment of principal and interest. Such securities are normally considered to be equivalent to AAA rated securities. # On December 9, 2002, UALCorporation, the holding company of United Air Lines, Inc. filed for federal bankruptcy protection. The Adviser determined that it was likely United would not remain current on their interest payment obligations with respect to these bonds and thus has stopped accruing interest. N/R Investment is not rated. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 52
Nuveen Dividend Advantage Municipal Fund 3 (NZF) Portfolio of INVESTMENTS October 31, 2003
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 1.0% $ 5,655 Alabama State Port Authority, Docks Facilities Revenue 10/11 at 100.00 AAA $ 5,740,730 Bonds, Series 2001, 5.250%, 10/01/26 (Alternative Minimum Tax) - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.7% 4,000 Alaska Student Loan Corporation, Student Loan Revenue 7/08 at 100.00 AAA 4,157,160 Bonds, Series 1998A, 5.250%, 7/01/14 (Alternative Minimum Tax) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.9% Sebastian County, Arkansas, Sparks Regional Medical Center, Public Health Facilities Board Hospital Revenue Improvement Bonds, Series 2001A: 1,805 5.500%, 11/01/13 11/11 at 101.00 Baa1 1,902,542 1,900 5.500%, 11/01/14 11/11 at 101.00 Baa1 1,984,284 1,305 5.250%, 11/01/21 11/11 at 101.00 Baa1 1,277,504 - ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 9.6% 5,000 California Infrastructure and Economic Development Bank, 8/11 at 102.00 A 5,094,150 Revenue Bonds, Kaiser Hospital Assistance I - LLC, Series 2001A, 5.550%, 8/01/31 18,850 California State, General Obligation Veterans Welfare 6/07 at 101.00 AAA 19,158,763 Bonds, Series 2001BZ, 5.350%, 12/01/21 (Alternative Minimum Tax) - MBIA Insured 1,500 California Statewide Communities Development Authority, 10/15 at 103.00 N/R 1,427,535 Revenue Bonds, East Valley Tourist Authority, Senior Lien, Series 2003B, 9.250%, 10/01/20 Los Angeles, California, Regional Airports Improvement Corporation Lease Revenue Refunding Bonds, LAXFUEL Corporation at Los Angeles International Airport, Series 2001: 13,955 5.750%, 1/01/16 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 14,913,848 5,000 5.375%, 1/01/21 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 5,078,200 1,500 5.250%, 1/01/23 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 1,500,375 10,000 5.500%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 10,140,300 - ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 8.5% 2,250 Canterberry Crossing Metropolitan District II, Parker, 12/12 at 100.00 N/R 2,247,120 Colorado, General Obligation Limited Tax Bonds, Series 2002, 7.375%, 12/01/32 1,775 Colorado Educational and Cultural Facilities Authority, 6/11 at 100.00 Ba1 1,830,842 Charter School Revenue Bonds, Series 2001, Frontier Academy Project in Weld County School District No. 6, 7.375%, 6/01/31 3,250 Colorado Educational and Cultural Facilities Authority, 5/12 at 102.00 N/R 3,212,268 Charter School Revenue Bonds, Montessori Peaks Building Foundation, Series 2002A, 8.000%, 5/01/32 1,700 Colorado Educational and Cultural Facilities Authority, 3/12 at 100.00 N/R 1,702,023 Charter School Revenue Bonds, Belle Creek Education Center, Series 2002A, 7.625%, 3/15/32 5,060 Colorado Housing and Finance Authority, Multifamily 10/11 at 100.00 AAA 5,173,698 Project Bonds, Class I, Series 2001A-1, 5.500%, 4/01/31 (Alternative Minimum Tax) 10,100 City of Colorado Springs, Colorado, Utilities System 11/07 at 100.00 AA 10,579,649 Improvement and Refunding Revenue Bonds, Series 1997A, 5.375%, 11/15/26 2,000 City and County of Denver, Colorado, Airport System Revenue 11/11 at 100.00 AAA 2,128,760 Refunding Bonds, Series 2001A, 5.500%, 11/15/16 (Alternative Minimum Tax) - FGIC Insured City and County of Denver, Colorado, Airport System Revenue Bonds, Series 1996A: 19,150 5.750%, 11/15/16 - MBIA Insured 11/06 at 101.00 AAA 21,173,389 1,105 5.500%, 11/15/25 - MBIA Insured 11/06 at 101.00 AAA 1,162,217 1,000 Plaza Metropolitan District No. 1, Lakewood, Colorado, 6/14 at 101.00 N/R 1,003,260 Tax Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25 53 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 1.4% $ 5,250 Connecticut Housing Finance Authority, Housing Mortgage 11/09 at 100.00 AAA $ 5,444,617 Finance Program Bonds, Series 2000B, Subseries B-2, 5.850%, 5/15/31 (Alternative Minimum Tax) 2,895 Connecticut Housing Finance Authority, Housing Mortgage 5/10 at 100.00 AAA 2,971,631 Finance Program Bonds, Series 2001A, Subseries A-2, 5.350%, 11/15/22 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ DELAWARE - 0.7% 4,000 Delaware State Housing Authority, Multifamily Mortgage 7/12 at 100.00 Aa3 4,116,520 Revenue Bonds, Series 2001A, 5.400%, 7/01/24 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.1% 6,000 District of Columbia, Revenue Bonds, Catholic University 10/09 at 101.00 AAA 6,384,720 of America Issue, Series 1999, 5.625%, 10/01/29 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 1.7% 2,000 Dade County, Florida, Water and Sewer System Revenue 10/07 at 102.00 AAA 2,202,480 Bonds, Series 1997, 5.375%, 10/01/16 - FGIC Insured Orange County, Florida, Housing Finance Authority, Multifamily Housing Revenue Bonds, Oak Glen Apartments, Series 2001G: 1,105 5.400%, 12/01/32 (Alternative Minimum Tax) - FSA Insured 12/11 at 100.00 AAA 1,124,636 2,195 5.450%, 12/01/41 (Alternative Minimum Tax) - FSA Insured 12/11 at 100.00 AAA 2,229,286 4,175 Pace Property Finance Authority, Inc., Florida, Utility System 9/07 at 102.00 AAA 4,515,722 Improvement and Revenue Refunding Bonds, Series 1997, 5.250%, 9/01/17 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 2.3% 5,000 City of Atlanta, Georgia, Airport General Revenue Bonds, 1/10 at 101.00 AAA 5,206,800 Series 2000B, 5.625%, 1/01/30 (Alternative Minimum Tax) - FGIC Insured 2,700 City of Atlanta, Georgia, Tax Allocation Bonds, Atlantic 12/11 at 101.00 N/R 2,781,594 Station Project, Series 2001, 7.900%, 12/01/24 3,600 Gainesville and Hall County Hospital Authority, Georgia, 5/11 at 100.00 A- 3,616,416 Revenue Anticipation Certificates, Northeast Georgia Health System Inc. Project, Series 2001, 5.500%, 5/15/31 2,000 Henry County Water and Sewerage Authority, Georgia, 2/10 at 101.00 AAA 2,156,100 Water and Sewerage Revenue Bonds, Series 2000, 5.625%, 2/01/30 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 0.9% 5,125 State of Hawaii, Highway Revenue Bonds, Series 2001, 7/11 at 100.00 AAA 5,479,906 5.375%, 7/01/21 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 16.6% 3,000 City of Chicago, Illinois, General Obligation Bonds, 1/11 at 100.00 AAA 3,143,460 Neighborhoods Alive 21 Program, Series 2001A, 5.500%, 1/01/31 - FGIC Insured 8,375 City of Chicago, Illinois, Midway Airport Revenue Bonds, 1/11 at 101.00 AAA 8,775,325 Series 2001A, 5.500%, 1/01/19 (Alternative Minimum Tax) - FSA Insured 4,950 City of Chicago, Illinois, Chicago O'Hare International 1/11 at 101.00 AAA 5,057,861 Airport, Second Lien Passenger Facility Charge Revenue Bonds, Series 2001A, 5.375%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured 1,750 Chicago, Illinois, Sales Tax Revenue Bonds, Series 1998, 7/08 at 102.00 AAA 1,788,150 5.250%, 1/01/28 - FGIC Insured 10,800 City of Chicago, Illinois, Sales Tax Revenue Bonds, 1/09 at 101.00 AAA 12,337,164 Series 1999, 5.375%, 1/01/30 (Pre-refunded to 1/01/09) - FGIC Insured City of Chicago, Illinois, Second Lien Wastewater Transmission Revenue Bonds, Series 2001A: 2,220 5.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 2,493,726 8,610 5.500%, 1/01/26 - AMBAC Insured 1/11 at 100.00 AAA 9,027,068 10,000 City of Chicago, Illinois, Senior Lien Water Revenue Bonds, 11/11 at 100.00 AAA 10,055,700 Series 2001, 5.000%, 11/01/26 - AMBAC Insured 1,100 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/10 at 101.00 A3 1,168,849 Medical Center, Series 2000, 6.500%, 5/15/30 15,000 Illinois Health Facilities Authority, Revenue Bonds, Loyola 7/11 at 100.00 Baa1 15,348,000 University Health System, Series 2001A, 6.125%, 7/01/31 54 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 9,000 Illinois Health Facilities Authority, Revenue Bonds, 12/11 at 101.00 BBB+ $ 8,572,410 Covenant Retirement Communities Inc., Series 2001, 5.875%, 12/01/31 2,000 Metropolitan Pier and Exposition Authority, Illinois, No Opt. Call AAA 2,206,600 McCormick Place Expansion Project Refunding Bonds, Series 1998A, 5.500%, 6/15/29 - FGIC Insured 16,900 Metropolitan Pier and Exposition Authority, Illinois, 12/09 at 101.00 AAA 17,278,898 McCormick Place Expansion Project Bonds, Series 1999A, 5.250%, 12/15/28 - FGIC Insured 4,000 Robbins, Illinois, Resources Recovery Revenue Bonds, No Opt. Call N/R 1,483,160 Restructuring Project, Series 1999C, Guaranteed by Foster Wheeler, 7.250%, 10/15/24 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 4.9% Clark-Pleasant Community School Building Corporation, Indiana, First Mortgage Bonds, Series 2001: 1,255 5.000%, 7/15/21 - AMBAC Insured 1/12 at 100.00 AAA 1,285,020 1,000 5.000%, 1/15/26 - AMBAC Insured 1/12 at 100.00 AAA 1,004,270 Evansville Vanderburgh Public Library Leasing Corporation, Indiana, First Mortgage Bonds, Series 2001: 2,000 5.750%, 7/15/18 - MBIA Insured 7/12 at 100.00 AAA 2,206,580 2,750 5.125%, 1/15/24 - MBIA Insured 1/12 at 100.00 AAA 2,793,973 3,480 Gary, Indiana, GNMA/FHA Mortgage Revenue Bonds, 11/11 at 102.00 AAA 3,505,822 Windsor Square Project, Series 2001A, 5.375%, 10/20/41 (Alternative Minimum Tax) 1,250 Hamilton Southeastern Cumberland Campus School 1/12 at 100.00 AAA 1,277,962 Building Corporation, Indiana, First Mortgage Bonds, Series 2001, 5.125%, 1/15/23 - AMBAC Insured 9,500 Indiana Educational Facilities Authority, Educational Facilities 2/11 at 100.00 AAA 9,994,380 Revenue Bonds, Butler University Project, Series 2001, 5.500%, 2/01/26 - MBIA Insured 3,000 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 Ca 1,042,500 Revenue Bonds, United Air Lines, Inc., Indianapolis Maintenance Center Project, Series 1995A, 6.500%, 11/15/31 (Alternative Minimum Tax)# 3,500 University of Southern Indiana, Student Fee Bonds, 10/11 at 100.00 Aaa 3,593,065 Series 2001H, 5.000%, 10/01/21 - AMBAC Insured Wayne County Jail Holding Corporation, Indiana, First Mortgage Bonds, Series 2001: 1,150 5.625%, 7/15/18 - AMBAC Insured 1/13 at 101.00 AAA 1,280,410 1,090 5.500%, 7/15/22 - AMBAC Insured 1/13 at 101.00 AAA 1,178,802 - ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 4.6% 2,000 Iowa Finance Authority, Healthcare Facilities Revenue Bonds, 5/11 at 100.00 AAA 2,018,540 Great River Medical Center, Series 2001, 5.250%, 5/15/31 - FSA Insured Tobacco Settlement Authority, Iowa, Tobacco Settlement Asset-Backed Revenue Bonds, Series 2001B: 28,000 5.300%, 6/01/25 6/11 at 101.00 BBB 22,201,760 3,950 5.600%, 6/01/35 6/11 at 101.00 BBB 3,052,639 - ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 3.2% 18,500 Louisville and Jefferson County Metropolitan Sewer 11/11 at 101.00 AAA 18,922,355 District, Kentucky, Sewer and Drainage System Revenue Bonds, Series 2001A, 5.125%, 5/15/27 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.7% 19,890 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 15,925,127 Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 6,000 Parish of West Feliciana, Louisiana, Remarketed Pollution 11/03 at 102.00 BB+ 6,196,980 Control Revenue Bonds, Gulf States Utilities Company Project, Series 1985A, 7.500%, 5/01/15 - ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 1.3% Maine State Housing Authority, Mortgage Purchase Bonds, Series 2001B: 4,610 5.400%, 11/15/21 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 4,740,186 3,065 5.500%, 11/15/32 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 3,127,587 - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 2.3% Community Development Administration, Department of Housing and Community Development, Maryland, Multifamily Housing Revenue Bonds, Insured Mortgage Loan, Series 2001B: 1,175 5.250%, 5/15/21 (Alternative Minimum Tax) 5/11 at 100.00 Aa2 1,205,104 1,585 5.250%, 7/01/21 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 1,629,174 55 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND (continued) $ 10,600 Maryland Energy Financing Administration Limited 9/05 at 102.00 N/R $10,753,806 Obligation Cogeneration Revenue Bonds, AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.0% 5,000 Massachusetts Port Authority, Special Facilities Revenue 1/11 at 101.00 AAA 5,225,250 Bonds, Delta Air Lines Inc. Project, Series 2001A, 5.500%, 1/01/18 (Alternative Minimum Tax) - AMBAC Insured 765 Massachusetts Housing Finance Agency, Single Family 6/09 at 100.00 AAA 782,870 Housing Revenue Bonds, Series 71, 5.650%, 6/01/31 (Alternative Minimum Tax) - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 8.1% 15,000 Detroit School District, Wayne County, Michigan, No Opt. Call AAA 17,717,700 Unlimited Tax School Building and Site Improvement General Obligation Bonds, Series 2001A, 6.000%, 5/01/29 - FSA Insured 11,000 Kent Hospital Finance Authority, Michigan, Revenue Bonds, 7/11 at 101.00 AA 11,208,450 Spectrum Health, Series 2001A, 5.500%, 1/15/31 Michigan State Hospital Finance Authority, Hospital Revenue Refunding Bonds, Sparrow Obligated Group, Series 2001: 1,400 5.500%, 11/15/21 11/11 at 101.00 A1 1,432,480 2,500 5.625%, 11/15/31 11/11 at 101.00 A1 2,524,625 12,640 Royal Oak, Michigan, Hospital Finance Authority, Hospital 11/11 at 100.00 AAA 12,861,832 Revenue Bonds, William Beaumont Hospital, Series 2001M, 5.250%, 11/15/31 - MBIA Insured 2,395 Ypsilanti Community Utilities Authority, Washtenaw 5/11 at 100.00 AAA 2,428,506 County, Michigan, Sanitary Sewer System No. 3 Bonds, Charter Township of Ypsilanti, 5.100%, 5/01/31 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.4% 2,390 Dakota County Community Development Agency, 10/11 at 105.00 Aaa 2,461,987 Minnesota, GNMA Collateralized Multifamily Housing Revenue Bonds, Rose Apartments Project, Series 2001, 6.350%, 10/20/37 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.4% 2,155 Mississippi Business Finance Corporation, GNMA 5/09 at 103.00 AAA 2,211,935 Collateralized Retirement Facility Mortgage Revenue Refunding Bonds, Aldersgate Retirement Community Inc. Project, Series 1999A, 5.450%, 5/20/34 - ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 2.6% 2,000 Fenton, Missouri, Tax Increment Bonds, Gravois Bluffs 10/12 at 100.00 N/R 2,034,200 Project, Series 2002 Refunding and Improvement, 6.125%, 10/01/21 Missouri Development Finance Board, Cultural Facilities Revenue Bonds, The Nelson Gallery Foundation, Series 2001A: 3,335 5.250%, 12/01/19 - MBIA Insured 12/11 at 100.00 AAA 3,572,319 3,510 5.250%, 12/01/20 - MBIA Insured 12/11 at 100.00 AAA 3,739,730 3,695 5.250%, 12/01/21 - MBIA Insured 12/11 at 100.00 AAA 3,908,608 2,040 5.250%, 12/01/22 - MBIA Insured 12/11 at 100.00 AAA 2,138,410 - ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.8% 5,000 Montana Board of Investments, Exempt Facility Revenue 7/10 at 101.00 Ba3 4,792,550 Bonds, Stillwater Mining Company Project, Series 2000, 8.000%, 7/01/20 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 1.4% Nebraska Investment Finance Authority, Single Family Housing Revenue Bonds, Series 2001D: 3,570 5.250%, 9/01/21 (Alternative Minimum Tax) 9/11 at 100.00 AAA 3,640,900 4,825 5.375%, 9/01/32 (Alternative Minimum Tax) 9/11 at 100.00 AAA 4,883,045 - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.9% 35,000 Clark County, Nevada, General Obligation Limited Tax Bond 7/10 at 100.00 AAA 37,280,250 Bank Bonds, Series 2000, 5.500%, 7/01/30 - MBIA Insured 4,000 State of Nevada, Director of Business and Industry, 1/10 at 102.00 N/R 3,954,560 Las Vegas Monorail Company Project, Second Tier Series 2000, 7.375%, 1/01/40 1,165 Nevada Housing Division, Single Family Mortgage Senior 4/08 at 101.50 Aaa 1,200,940 Bonds, Series 1998A-1, 5.300%, 4/01/18 (Alternative Minimum Tax) 56 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ NEVADA (continued) $ 4,290 University of Nevada, Universities Revenue Bonds, 1/12 at 100.00 AAA $ 4,420,330 Community College System Project, Series 2001A, 5.250%, 7/01/26 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.4% 2,000 New Hampshire Health and Education Authority, Hospital 10/11 at 101.00 Aaa 2,139,740 Revenue Bonds, Concord Hospital Issue, Series 2001, 5.500%, 10/01/21 - FSA Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 2.5% 10,000 New Jersey Economic Development Authority, Water 11/12 at 101.00 Aaa 10,224,100 Facilities Revenue Bonds, New Jersey-American Water Company Project, Series 2002A, 5.250%, 11/01/32 (Alternative Minimum Tax) - AMBAC Insured 4,125 New Jersey Transit Corporation, Federal Transit No Opt. Call AAA 4,684,845 Administration Grants, Certificates of Participation, Series 2002A, 5.500%, 9/15/13 - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 5.0% 1,780 East Rochester Housing Authority, New York, GNMA 10/11 at 101.00 AAA 1,829,804 Secured Revenue Bonds, Gates Senior Housing, Inc. Project, Series 2001, 5.300%, 4/20/31 5,350 Metropolitan Transportation Authority, New York, 11/11 at 100.00 AAA 5,393,924 Dedicated Tax Fund Bonds, Series 2001A, 5.000%, 11/15/31 - FGIC Insured 4,155 Monroe County Airport Authority, New York, Greater No Opt. Call AAA 4,645,581 Rochester International Airport Revenue Refunding Bonds, Series 1999, 5.750%, 1/01/13 (Alternative Minimum Tax) - MBIA Insured 2,500 The City of New York, New York, General Obligation Bonds, 8/12 at 100.00 AAA 2,761,325 Fiscal 2002 Series G, 5.625%, 8/01/20 - MBIA Insured New York City Municipal Water Finance Authority, New York, Water and Sewer System Revenue Bonds, Fiscal Series 2001A: 8,610 5.500%, 6/15/33 - MBIA Insured 6/10 at 101.00 AAA 9,197,719 5,710 5.500%, 6/15/33 - FGIC Insured 6/10 at 101.00 AAA 6,099,765 - ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 3.2% 7,150 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/08 at 101.50 AAA 7,343,550 Securities Program Residential Mortgage Revenue Bonds, Series 1998A-1, 5.300%, 9/01/19 (Alternative Minimum Tax) - FSA Insured 7,900 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 7,863,423 Revenue Bonds, Bay Shore Power Project, Convertible Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) Portage County, Ohio, General Obligation Bonds, Series 2001: 1,870 5.000%, 12/01/21 - FGIC Insured 12/11 at 100.00 AAA 1,923,127 1,775 5.000%, 12/01/23 - FGIC Insured 12/11 at 100.00 AAA 1,809,808 - ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.4% Oklahoma Development Finance Authority, Hillcrest Healthcare System Revenue and Refunding Bonds, Series 1999A: 1,000 5.125%, 8/15/10 8/09 at 101.00 B1 816,770 2,500 5.625%, 8/15/29 8/09 at 101.00 B1 1,678,900 - ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 2.5% 4,700 Oregon Health, Housing, Educational, and Cultural 11/11 at 101.00 AAA 4,907,834 Facilities Authority, Revenue Bonds, Peacehealth Issue, Series 2001, 5.250%, 11/15/21 - AMBAC Insured 10,000 Oregon Housing and Community Services Department, 7/10 at 100.00 Aa2 10,135,600 Multifamily Housing Revenue Bonds, Series 2000A, 6.050%, 7/01/42 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 1.9% Allegheny County, Pennsylvania, Hospital Development Authority, Health System Revenue Bonds, West Penn Allegheny Health System, Series 2000B: 2,000 9.250%, 11/15/22 11/10 at 102.00 B 2,055,040 2,000 9.250%, 11/15/30 11/10 at 102.00 B 2,055,040 3,500 Pennsylvania Economic Development Financing Authority, 1/04 at 102.00 BBB- 3,538,150 Resource Recovery Revenue Bonds, Northampton Generating Project, Senior Series 1994A, 6.600%, 1/01/19 (Alternative Minimum Tax) 57 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA (continued) $ 3,205 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA $ 3,567,325 Bonds, Series 2002B, 5.625%, 8/01/16 - FGIC Insured - ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 1.7% 2,185 Greenville County, South Carolina, Special Source Revenue 4/11 at 101.00 AAA 2,369,611 Bonds, Road Improvement Project, Series 2001, 5.500%, 4/01/21 - AMBAC Insured 6,850 South Carolina Transportation Infrastructure Bank, Revenue 10/11 at 100.00 Aaa 7,893,255 Bonds, Series 2001A, 5.500%, 10/01/22 (Pre-refunded to 10/01/11) - AMBAC Insured - ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.7% 5,210 Memphis-Shelby County Airport Authority, Tennessee, 3/11 at 100.00 AAA 5,624,820 Airport Revenue Bonds, Series 2001A, 5.500%, 3/01/14 (Alternative Minimum Tax) - FSA Insured 2,395 Tennessee Housing Development Agency, Homeownership 1/09 at 101.00 AA 2,437,320 Program Bonds, Issue 1998-2, 5.350%, 7/01/23 (Alternative Minimum Tax) 2,130 Tennessee Housing Development Agency, Homeownership 7/11 at 100.00 AA 2,162,674 Program Bonds, Issue 2001-3A, 5.200%, 7/01/22 (Alternative Minimum Tax) - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 18.1% 1,125 Brushy Creek Municipal Utility District, Williamson County, 6/09 at 100.00 Aaa 1,136,036 Texas, Combination Unlimited Tax Revenue and Refunding Bonds, Series 2001, 5.125%, 6/01/26 - FSA Insured 3,850 Cities of Dallas and Fort Worth, Texas, Dallas-Ft. Worth 11/11 at 100.00 AAA 3,963,113 International Airport, Joint Revenue Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 (Alternative Minimum Tax) - FGIC Insured City of Frisco, Texas, Counties of Collins and Denton, General Obligation Bonds, Series 2001: 1,910 5.000%, 2/15/20 - FGIC Insured 2/11 at 100.00 AAA 1,970,337 2,005 5.000%, 2/15/21 - FGIC Insured 2/11 at 100.00 AAA 2,052,178 4,040 Harris County, Texas, Tax and Revenue Certificates of 8/11 at 100.00 AA+ 4,067,957 Obligation, Series 2001, 5.000%, 8/15/27 7,000 City of Houston, Texas, Airport System Subordinate Lien 7/08 at 101.00 AAA 7,422,310 Revenue Bonds, Series 1998B, 5.250%, 7/01/14 (Alternative Minimum Tax) - FGIC Insured City of Houston, Texas, Airport System Subordinate Lien Revenue Refunding Bonds, Series 2001A: 2,525 5.500%, 7/01/13 (Alternative Minimum Tax) - FGIC Insured 1/12 at 100.00 AAA 2,743,438 2,905 5.500%, 7/01/14 (Alternative Minimum Tax) - FGIC Insured 1/12 at 100.00 AAA 3,127,203 6,000 City of Houston, Texas, Water and Sewer System Junior No Opt. Call AAA 6,578,160 Lien Revenue Refunding Bonds, Series 2001B, 5.500%, 12/01/29 - MBIA Insured Jefferson County, Texas, Health Facilities Development Corporation, FHA-Insured Mortgage Revenue Bonds, Baptist Hospital of Southeast Texas, Series 2001: 8,500 5.400%, 8/15/31 - AMBAC Insured 8/11 at 100.00 AAA 8,661,500 8,500 5.500%, 8/15/41 -AMBAC Insured 8/11 at 100.00 AAA 8,716,155 10,700 Laredo Independent School District, Webb County, Texas, 8/11 at 100.00 AAA 10,757,245 General Obligation Refunding Bonds, Series 2001, 5.000%, 8/01/25 2,500 Matagorda County Navigation District 1, Texas, Collateralized No Opt. Call AAA 2,525,025 Revenue Refunding Bonds, Houston Light and Power Company Project, Series 1997, 5.125%, 11/01/28 (Alternative Minimum Tax) - AMBAC Insured 1,540 Medina Valley Independent School District, Medina County, 2/11 at 100.00 Aaa 1,580,656 Texas, General Obligation Bonds, Series 2001, 5.250%, 2/15/26 5,430 Mineral Wells Independent School District, Pale Pinto 2/08 at 100.00 Aaa 5,419,737 and Parker Counties, Texas, Unlimited School Tax Building and Refunding Bonds, Series 1998, 4.750%, 2/15/22 3,000 North Central Texas Health Facilities Development 2/08 at 102.00 AAA 3,075,750 Corporation, Revenue Bonds, Texas Health Resources System, Series 1997B, 5.375%, 2/15/26 - MBIA Insured 3,045 Port of Houston Authority of Harris County, Texas, General 10/11 at 100.00 AAA 3,228,096 Obligation Port Improvement Bonds, Series 2001B, 5.500%, 10/01/17 (Alternative Minimum Tax) - FGIC Insured 12,960 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA 13,095,302 Residential Mortgage Revenue Bonds, Series 2001A, 5.350%, 7/01/33 (Alternative Minimum Tax) 58 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 15,600 Texas Water Development Board, State Revolving Fund, 1/07 at 100.00 AAA $16,545,360 Senior Lien Revenue Bonds, Series 1996B, 5.125%, 7/15/18 - ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 1.2% Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001E: 2,385 5.200%, 1/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 2,489,272 730 5.500%, 1/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 739,505 Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001F-1: 2,905 4.950%, 7/01/18 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 2,989,739 715 5.300%, 7/01/23 (Alternative Minimum Tax) 7/11 at 100.00 AA- 748,912 - ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 1.2% 7,145 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 7,389,502 Mortgage Bonds, Series 2001J, Subseries J-1, 5.200%, 7/01/19 - MBIA Insured - ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 16.5% Bellingham Housing Authority, Washington, Housing Revenue Bonds, Varsity Village Project, Series 2001A: 1,000 5.500%, 12/01/27 - MBIA Insured 12/11 at 100.00 Aaa 1,048,240 2,000 5.600%, 12/01/36 - MBIA Insured 12/11 at 100.00 Aaa 2,098,820 2,090 Public Utility District No. 1 of Benton County, Washington, 11/11 at 100.00 AAA 2,348,408 Electric Revenue Refunding Bonds, Series 2001A, 5.625%, 11/01/15 - FSA Insured 1,500 Public Utility District No. 1 of Grays Harbor County, 1/11 at 100.00 AAA 1,540,980 Washington, Electric Revenue Bonds, Series 2001, 5.125%, 1/01/22 - AMBAC Insured 2,475 Public Utility District No. 1 of Klickitat County, Washington, 12/11 at 100.00 AAA 2,483,885 Electric Revenue Bonds, Series 2001B, 5.000%, 12/01/26 - AMBAC Insured 12,955 Port of Seattle, Washington, Passenger Facility Charge 12/08 at 101.00 AAA 13,667,914 Revenue Bonds, Series 1998B, 5.300%, 12/01/16 (Alternative Minimum Tax) - AMBAC Insured Port of Seattle, Washington, Revenue Bonds, Series 2001B: 2,535 5.625%, 4/01/18 (Alternative Minimum Tax) - FGIC Insured 10/11 at 100.00 AAA 2,713,134 16,000 5.100%, 4/01/24 (Alternative Minimum Tax) - FGIC Insured 10/08 at 100.00 AAA 16,002,720 5,680 City of Seattle, Washington, Municipal Light and Power 3/11 at 100.00 AAA 6,213,182 Improvements and Revenue Refunding Bonds, Series 2001, 5.500%, 3/01/18 - FSA Insured 4,530 City of Tacoma, Washington, Solid Waste Utility Revenue 12/11 at 100.00 AAA 4,752,604 Refunding Bonds, Series 2001, 5.250%, 12/01/21 - AMBAC Insured 2,250 State of Washington, Certificates of Participation, 7/09 at 100.00 AAA 2,451,667 Washington State Convention and Trade Center, Series 1999, 5.250%, 7/01/14 - MBIA Insured Washington State Healthcare Facilities Authority, Revenue Bonds, Group Health Cooperative of Puget Sound, Series 2001: 3,005 5.375%, 12/01/17 - AMBAC Insured 12/11 at 101.00 AAA 3,239,450 2,915 5.375%, 12/01/18 - AMBAC Insured 12/11 at 101.00 AAA 3,124,676 3,720 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 Aaa 3,959,084 Bonds, Children's Hospital and Regional Medical Center, Series 2001, 5.375%, 10/01/18 - AMBAC Insured Washington State Health Care Facilities Authority, Revenue Bonds, Good Samaritan Hospital, Series 2001: 5,480 5.500%, 10/01/21 - RAAI Insured 10/11 at 101.00 AA 5,737,176 25,435 5.625%, 10/01/31 - RAAI Insured 10/11 at 101.00 AA 26,631,462 - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 5.2% City of Appleton, Wisconsin, Waterworks Revenue Refunding Bonds, Series 2001: 3,705 5.375%, 1/01/20 - FGIC Insured 1/12 at 100.00 Aaa 3,954,272 1,850 5.000%, 1/01/21 - FGIC Insured 1/12 at 100.00 Aaa 1,901,689 1,735 Evansville Community School District, Dane, Green, and 4/11 at 100.00 AAA 1,892,746 Rock Counties, Wisconsin, General Obligation Refunding Bonds, Series 2001, 5.500%, 4/01/20 - FGIC Insured 12,250 City of La Crosse, Wisconsin, Pollution Control Revenue 12/08 at 102.00 AAA 13,323,345 Refunding Bonds, Dairyland Power Cooperative Project, Series 1997B, 5.550%, 2/01/15 - AMBAC Insured 59 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2003 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE - ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN (continued) $ 3,180 State of Wisconsin, Clean Water Revenue Bonds, 6/09 at 100.00 AA+ $ 3,524,394 1999 Series 1, 5.500%, 6/01/17 4,000 Wisconsin Health and Educational Facilities Authority, 10/11 at 101.00 A+ 3,960,480 Revenue Bonds, Froedert and Community Health Obligated Group, Series 2001, 5.375%, 10/01/30 2,500 Wisconsin Health and Educational Facilities Authority, 2/12 at 100.00 BBB+ 2,523,274 Revenue Bonds, Marshfield Clinic, Series 2001B, 6.000%, 2/15/25 - ------------------------------------------------------------------------------------------------------------------------------------ $ 869,040 Total Long-Term Investments (cost $871,058,204) - 149.5% 888,188,075 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 3.0% 17,966,002 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (52.5)% (312,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 594,154,077 ==================================================================================================================== (1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares. * Optional Call Provisions (not covered by the report of independent auditors): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent auditors): Using the higher of Standard & Poor's or Moody's rating. # On December 9, 2002, UALCorporation, the holding company of United Air Lines, Inc. filed for federal bankruptcy protection. The Adviser determined that it was likely United would not remain current on their interest payment obligations with respect to these bonds and thus has stopped accruing interest. N/R Investment is not rated. See accompanying notes to financial statements. 60
Statement of ASSETS AND LIABILITIES October 31, 2003
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ------------------------------------------------------------------------------------------------------------------------------------ ASSETS Investments, at market value (cost $1,296,453,235, $948,430,897, $989,353,141, $821,044,357, $633,591,578 and $871,058,204, respectively) $1,379,062,830 $1,008,756,335 $1,048,169,730 $873,537,804 $653,500,549 $888,188,075 Cash -- 1,024,201 -- -- 3,005,929 -- Receivables: Interest 22,300,811 18,849,236 18,162,689 15,069,666 11,440,319 15,693,012 Investments sold 8,514,439 1,273,831 9,669,706 3,143,978 -- 3,160,038 Other assets 49,277 41,688 47,219 46,678 31,356 10,844 - ------------------------------------------------------------------------------------------------------------------------------------ Total assets 1,409,927,357 1,029,945,291 1,076,049,344 891,798,126 667,978,153 907,051,969 - ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft 4,335,428 -- 7,242,723 933,950 -- 446,360 Payable for investments purchased -- -- -- -- 2,551,563 -- Accrued expenses: Management fees 732,858 541,657 561,198 244,628 193,521 252,427 Other 306,507 230,456 259,908 337,533 115,577 184,301 Preferred share dividends payable 27,717 25,904 30,363 15,785 16,234 14,804 - ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 5,402,510 798,017 8,094,192 1,531,896 2,876,895 897,892 - ------------------------------------------------------------------------------------------------------------------------------------ Preferred shares, at liquidation value 479,000,000 358,000,000 380,000,000 295,000,000 222,000,000 312,000,000 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $ 925,524,847 $ 671,147,274 $ 687,955,152 $595,266,230 $443,101,258 $594,154,077 ==================================================================================================================================== Common shares outstanding 59,914,073 42,980,333 45,540,872 39,237,705 29,282,000 40,310,119 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.45 $ 15.62 $ 15.11 $ 15.17 $ 15.13 $ 14.74 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: - ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 599,141 $ 429,803 $ 455,409 $ 392,377 $ 292,820 $ 403,101 Paid-in surplus 836,307,520 600,296,194 635,397,085 557,556,239 416,101,191 572,811,979 Undistributed net investment income 11,883,367 9,507,298 6,566,696 6,991,496 5,895,336 5,124,505 Accumulated net realized gain (loss) from investment transactions (5,874,776) 588,541 (13,280,627) (22,167,329) 902,940 (1,315,379) Net unrealized appreciation of investments 82,609,595 60,325,438 58,816,589 52,493,447 19,908,971 17,129,871 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $ 925,524,847 $ 671,147,274 $ 687,955,152 $595,266,230 $443,101,258 $594,154,077 ==================================================================================================================================== Authorized shares: Common 200,000,000 200,000,000 200,000,000 Unlimited Unlimited Unlimited Preferred 1,000,000 1,000,000 1,000,000 Unlimited Unlimited Unlimited ====================================================================================================================================
See accompanying notes to financial statements. 61 Statement of OPERATIONS Year Ended October 31, 2003
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $74,947,407 $56,742,924 $ 55,594,814 $48,296,150 $36,964,229 $47,382,671 - ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 8,676,542 6,397,562 6,586,891 5,553,186 4,174,354 5,658,480 Preferred shares - auction fees 1,218,276 901,466 955,263 752,720 540,021 770,667 Preferred shares - dividend disbursing agent fees 50,000 50,000 40,000 30,000 30,000 30,000 Shareholders' servicing agent fees and expenses 258,874 153,740 173,785 28,367 12,564 11,307 Custodian's fees and expenses 304,155 225,793 242,125 209,041 156,821 201,996 Directors'/Trustees' fees and expenses 24,305 14,057 19,095 15,980 12,275 16,781 Professional fees 36,381 36,576 131,553 1,134,658 44,860 37,316 Shareholders' reports - printing and mailing expenses 152,991 88,126 135,189 111,008 68,541 95,385 Stock exchange listing fees 23,105 16,784 17,739 15,923 1,232 4,056 Investor relations expense 149,319 132,004 139,930 111,707 71,806 104,830 Other expenses 63,655 60,322 64,701 42,677 34,931 38,114 - ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit and expense reimbursement 10,957,603 8,076,430 8,506,271 8,005,267 5,147,405 6,968,932 Custodian fee credit (27,822) (23,445) (35,349) (31,113) (25,168) (19,376) Expense reimbursement -- -- -- (2,666,357) (1,982,210) (2,714,220) - ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 10,929,781 8,052,985 8,470,922 5,307,797 3,140,027 4,235,336 - ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 64,017,626 48,689,939 47,123,892 42,988,353 33,824,202 43,147,335 - ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS Net realized gain (loss) from investments (5,880,620) 634,285 (11,663,137) (4,617,432) 890,827 202,373 Change in net unrealized appreciation (depreciation) of investments 8,871,335 9,982,884 34,046,066 12,311,762 4,294,735 3,920,609 - ------------------------------------------------------------------------------------------------------------------------------------ Net gain from investments 2,990,715 10,617,169 22,382,929 7,694,330 5,185,562 4,122,982 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (4,280,974) (3,175,596) (3,474,652) (2,660,192) (2,029,376) (2,863,822) From accumulated net realized gains from investments (139,879) (242,543) -- -- (28,710) -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (4,420,853) (3,418,139) (3,474,652) (2,660,192) (2,058,086) (2,863,822) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $62,587,488 $55,888,969 $ 66,032,169 $48,022,491 $36,951,678 $44,406,495 ====================================================================================================================================
See accompanying notes to financial statements. 62 Statement of CHANGES IN NET ASSETS
PERFORMANCE PLUS (NPP) MUNICIPAL ADVANTAGE (NMA) MARKET OPPORTUNITY (NMO) ----------------------------- ------------------------------ ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 10/31/02 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 64,017,626 $ 65,273,913 $ 48,689,939 $ 49,642,569 $ 47,123,892 $ 50,666,010 Net realized gain (loss) from investments (5,880,620) 1,658,527 634,285 3,175,745 (11,663,137) (1,622,794) Change in net unrealized appreciation (depreciation) of investments 8,871,335 (15,059,549) 9,982,884 (13,241,244) 34,046,066 (30,326,455) Distributions to Preferred shareholders: From net investment income (4,280,974) (5,916,338) (3,175,596) (4,136,412) (3,474,652) (4,944,432) From accumulated net realized gains from investments (139,879) (720,966) (242,543) (1,143,082) -- (289,119) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 62,587,488 45,235,587 55,888,969 34,297,576 66,032,169 13,483,210 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (56,921,521) (53,683,146) (44,027,554) (40,570,160) (42,990,586) (41,601,362) From accumulated net realized gains from investments (1,515,794) (2,612,288) (2,984,339) (4,129,879) -- (992,816) - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (58,437,315) (56,295,434) (47,011,893) (44,700,039) (42,990,586) (42,594,178) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- -- -- -- -- Preferred shares offering costs (1,000) (501,535) -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions (1,000) (501,535) -- -- -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 4,149,173 (11,561,382) 8,877,076 (10,402,463) 23,041,583 (29,110,968) Net assets applicable to Common shares at the beginning of year 921,375,674 932,937,056 662,270,198 672,672,661 664,913,569 694,024,537 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $925,524,847 $921,375,674 $671,147,274 $662,270,198 $687,955,152 $664,913,569 ==================================================================================================================================== Undistributed net investment income at the end of year $ 11,883,367 $ 9,074,385 $ 9,507,298 $ 8,026,346 $ 6,566,696 $ 5,943,407 ====================================================================================================================================
See accompanying notes to financial statements. 63 Statement of CHANGES IN NET ASSETS (continued)
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF) ----------------------------- ------------------------------ ---------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 10/31/02 - ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 42,988,353 $ 44,433,341 $ 33,824,202 $ 33,702,642 $ 43,147,335 $ 41,656,411 Net realized gain (loss) from investments (4,617,432) 140,122 890,827 301,752 202,373 (1,471,054) Change in net unrealized appreciation (depreciation) of investments 12,311,762 (107,226) 4,294,735 (9,579,398) 3,920,609 7,512,570 Distributions to Preferred shareholders: From net investment income (2,660,192) (3,979,694) (2,029,376) (3,000,574) (2,863,822) (4,027,379) From accumulated net realized gains from investments -- -- (28,710) (64,965) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 48,022,491 40,486,543 36,951,678 21,359,457 44,406,495 43,670,548 - ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (38,956,575) (36,722,714) (29,486,976) (26,749,093) (37,528,721) (36,520,445) From accumulated net realized gains from investments -- -- (272,342) (298,687) -- -- - ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (38,956,575) (36,722,714) (29,759,318) (27,047,780) (37,528,721) (36,520,445) - ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions 155,266 1,192,197 -- -- 476,145 43,936 Preferred shares offering costs -- -- 2,137 286,674 1,199 (3,494,972) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions 155,266 1,192,197 2,137 286,674 477,344 (3,451,036) - ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares 9,221,182 4,956,026 7,194,497 (5,401,649) 7,355,118 3,699,067 Net assets applicable to Common shares at the beginning of year 586,045,048 581,089,022 435,906,761 441,308,410 586,798,959 583,099,892 - ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $595,266,230 $586,045,048 $443,101,258 $435,906,761 $594,154,077 $586,798,959 ==================================================================================================================================== Undistributed net investment income at the end of year $ 6,991,496 $ 5,680,795 $ 5,895,336 $ 3,600,024 $ 5,124,505 $ 2,370,251 ====================================================================================================================================
See accompanying notes to financial statements. 64 Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The National Funds (the "Funds") covered in this report and their corresponding Common share stock exchange symbols are Nuveen Performance Plus Municipal Fund, Inc. (NPP), Nuveen Municipal Advantage Fund, Inc. (NMA), Nuveen Municipal Market Opportunity Fund, Inc. (NMO), Nuveen Dividend Advantage Municipal Fund (NAD), Nuveen Dividend Advantage Municipal Fund 2 (NXZ) and Nuveen Dividend Advantage Municipal Fund 3 (NZF). Performance Plus (NPP), Municipal Advantage (NMA), Market Opportunity (NMO) and Dividend Advantage (NAD) are traded on the New York Stock Exchange while Dividend Advantage 2 (NXZ) and Dividend Advantage 3 (NZF) 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. The following is a summary of significant accounting policies followed by the Funds in the preparation of their financial statements in accordance with accounting principles generally accepted in the United States. Securities Valuation The prices of municipal bonds in each Fund's investment portfolio are provided by a pricing service approved by the Fund's Board of Directors/Trustees. When price quotes are not readily available (which is usually the case for municipal securities), the pricing service establishes fair market value based on yields or prices of municipal bonds of comparable quality, type of issue, coupon, maturity and rating, indications of value from securities dealers, evaluations of anticipated cash flows or collateral and general market conditions. If it is determined that market prices for a security are unavailable or inappropriate, the Board of Directors/Trustees of the Funds, or its designee, may establish a fair value for the security. Temporary investments in securities that have variable rate and demand features qualifying them as short-term securities are valued at amortized cost, which approximates market value. Securities Transactions Securities transactions are recorded on a trade date basis. Realized gains and losses from such transactions are determined on the specific identification method. Securities purchased or sold on a when-issued or delayed delivery basis may have extended settlement periods. The securities so purchased are subject to market fluctuation during this period. The Funds have instructed the custodian to segregate assets with a current value at least equal to the amount of the when-issued and delayed delivery purchase commitments. At October 31, 2003, there were no such outstanding purchase commitments in any of the 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. 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 the Fund's shareholders. Federal Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to comply with the requirements of the Internal Revenue Code applicable to regulated investment companies and to distribute all of its net investment income to its shareholders. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal income tax, to retain such tax-exempt status when distributed to shareholders of the Funds. All monthly tax-exempt income dividends paid during the fiscal year ended October 31, 2003, have been designated Exempt Interest Dividends. 65 Notes to FINANCIAL STATEMENTS (continued) Dividends and Distributions to Common Shareholders Dividends from tax-exempt net investment income are declared monthly. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from accounting principles generally accepted in the United States. Preferred Shares The Funds have issued and outstanding $25,000 stated value Preferred shares. Each Fund's Preferred shares are issued in more than one Series. The dividend rate on each Series may change every seven days, as set pursuant to a dutch auction process by the auction agent, and is payable at or near the end of each rate period. The number of Preferred shares outstanding, by Series and in total, for each Fund is as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - --------------------------------------------------------------------------------------------------------- Number of shares: Series M 4,000 3,000 4,000 4,000 3,000 -- Series T 4,000 3,000 4,000 4,000 3,000 -- Series W 4,000 3,000 3,200 -- -- 4,160 Series TH 3,160 2,320 -- 3,800 -- 4,160 Series F 4,000 3,000 4,000 -- 2,880 4,160 - --------------------------------------------------------------------------------------------------------- Total 19,160 14,320 15,200 11,800 8,880 12,480 =========================================================================================================
66 Derivative Financial Instruments The Funds may invest in certain derivative financial instruments including futures, forward, swap and option contracts, and other financial instruments with similar characteristics. Although the Funds are authorized to invest in such financial instruments, and may do so in the future, they did not make any such investments during the fiscal year ended October 31, 2003. Custodian Fee Credit Each Fund has an arrangement with the custodian bank whereby certain custodian fees and expenses are reduced by credits earned on each Fund's cash on deposit with the bank. Such deposit arrangements are an alternative to overnight investments. Offering Costs Costs incurred by Performance Plus (NPP) and Dividend Advantage 3 (NZF) in connection with their offerings of Preferred shares ($502,535 and $3,493,773, respectively) were recorded as a reduction to paid-in surplus. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES Transactions in Common and Preferred shares were as follows:
MUNICIPAL MARKET PERFORMANCE PLUS (NPP) ADVANTAGE (NMA) OPPORTUNITY (NMO) ---------------------- ------------------ ------------------- YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 10/31/02 ========================================================================================================= Common shares issued to shareholders due to reinvestment of distributions -- -- -- -- -- -- ========================================================================================================= Preferred shares sold -- 1,400 -- -- -- -- ========================================================================================================= DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF) ------------------------ -------------------------- -------------------------- YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/03 10/31/02 10/31/03 10/31/02 10/31/03 10/31/02 ========================================================================================================= Common shares issued to shareholders due to reinvestment of distributions 9,858 80,089 -- -- -- 3,119 ========================================================================================================= Preferred shares sold -- -- -- -- -- 12,480 =========================================================================================================
67 Notes to FINANCIAL STATEMENTS (continued) 3. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in long-term municipal securities during the fiscal year ended October 31, 2003, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - --------------------------------------------------------------------------------------------------------- Purchases $142,495,719 $74,556,548 $ 95,269,111 $30,224,317 $72,469,463 $30,112,563 Sales and maturities 136,068,025 91,537,583 108,089,800 47,917,593 92,271,573 26,282,970 =========================================================================================================
4. INCOME TAX INFORMATION The following information is presented on an income tax basis. Differences between amounts for financial statement and federal income tax purposes are primarily due to timing differences in recognizing income on taxable market discount securities and timing differences in recognizing certain gains and losses on security transactions. At October 31, 2003, the cost of investments were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - ------------------------------------------------------------------------------------------------------------- Cost of investments $1,295,588,954 $947,768,522 $988,885,955 $820,431,397 $633,345,726 $871,007,676 =============================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments at October 31, 2003, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - --------------------------------------------------------------------------------------------------------- Gross unrealized: Appreciation $96,389,691 $77,539,144 $81,144,469 $67,183,324 $30,778,706 $28,953,058 Depreciation (12,915,815) (16,551,331) (21,860,694) (14,076,917) (10,623,883) (11,772,659) - --------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments $83,473,876 $60,987,813 $59,283,775 $53,106,407 $20,154,823 $17,180,399 =========================================================================================================
68 The tax components of undistributed net investment income and net realized gains at October 31, 2003, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - --------------------------------------------------------------------------------------------------------- Undistributed net tax-exempt income $15,733,229 $12,505,878 $9,582,171 $9,592,110 $8,183,960 $8,273,202 Undistributed net ordinary income * 166,616 11,261 145,432 27,034 11 79 Undistributed net long-term capital gains -- 638,541 -- -- 902,940 -- =========================================================================================================
* Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. The tax character of distributions paid during the fiscal years ended October 31, 2003 and October 31, 2002, was designated for purposes of the dividends paid deduction as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 2003 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - --------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $60,990,090 $46,876,673 $46,423,461 $41,473,029 $31,323,275 $40,277,088 Distributions from net ordinary income * 3,729 179,625 -- -- 185,573 -- Distributions from net long-term capital gains 1,655,369 3,226,882 -- -- 115,479 -- =========================================================================================================
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 2002 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - --------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $59,286,613 $44,278,184 $46,362,835 $40,491,284 $29,610,711 $37,463,976 Distributions from net ordinary income * 256,881 1,271,708 -- -- 363,652 -- Distributions from net long-term capital gains 3,076,373 4,070,716 1,281,935 -- -- -- =========================================================================================================
* Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. At October 31, 2003, the following Funds had unused capital loss carryforwards available for federal income tax purposes to be applied against future capital gains, if any. If not applied, the carryforwards will expire as follows:
PERFORMANCE MARKET DIVIDEND DIVIDEND PLUS OPPORTUNITY ADVANTAGE ADVANTAGE 3 (NPP) (NMO) (NAD) (NZF) - --------------------------------------------------------------------------------------------------------- Expiration year: 2007 $ -- $ -- $ 2,980,482 $ -- 2008 -- -- 14,462,547 -- 2009 -- -- -- -- 2010 -- 1,622,794 -- 1,315,379 2011 5,874,776 11,657,833 4,594,300 -- - --------------------------------------------------------------------------------------------------------- Total $5,874,776 $13,280,627 $22,037,329 $1,315,379 =========================================================================================================
69 Notes to FINANCIAL STATEMENTS (continued) 5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES Under Performance Plus' (NPP), Municipal Advantage's (NMA) and Market Opportunity's (NMO) investment management agreements with Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc. (formerly, The John Nuveen Company), each Fund pays an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE - -------------------------------------------------------------------------------- For the first $125 million .6500% For the next $125 million .6375 For the next $250 million .6250 For the next $500 million .6125 For the next $1 billion .6000 For the next $3 billion .5875 For net assets over $5 billion .5750 ================================================================================ Under Dividend Advantage's (NAD), Dividend Advantage 2's (NXZ) and Dividend Advantage 3's (NZF) investment management agreements with the Adviser, each Fund pays an annual management fee, payable monthly, at the rates set forth below, which are based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: AVERAGE DAILY NET ASSETS (INCLUDING NET ASSETS ATTRIBUTABLE TO PREFERRED SHARES) MANAGEMENT FEE - -------------------------------------------------------------------------------- For the first $125 million .6500% For the next $125 million .6375 For the next $250 million .6250 For the next $500 million .6125 For the next $1 billion .6000 For net assets over $2 billion .5750 ================================================================================ The management fee compensates the Adviser for overall investment advisory and administrative services and general office facilities. The Funds pay no compensation directly to those of its Directors/Trustees who are affiliated with the Adviser or to their officers, all of whom receive remuneration for their services to the Funds from the Adviser or its affiliates. For the first ten years of Dividend Advantage's (NAD) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts, and for the time periods set forth below: YEAR ENDING YEAR ENDING JULY 31, JULY 31, - -------------------------------------------------------------------------------- 1999* .30% 2005 .25% 2000 .30 2006 .20 2001 .30 2007 .15 2002 .30 2008 .10 2003 .30 2009 .05 2004 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Dividend Advantage (NAD) for any portion of its fees and expenses beyond July 31, 2009. 70 For the first ten years of Dividend Advantage 2's (NXZ) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts, and for the time periods set forth below: YEAR ENDING YEAR ENDING MARCH 31, MARCH 31, - -------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Dividend Advantage 2 (NXZ) for any portion of its fees and expenses beyond March 31, 2011. For the first ten years of Dividend Advantage 3's (NZF) operations, the Adviser has agreed to reimburse the Fund, as a percentage of average daily net assets (including net assets attributable to Preferred shares), for fees and expenses in the amounts, and for the time periods set forth below: YEAR ENDING YEAR ENDING SEPTEMBER 30, SEPTEMBER 30, - -------------------------------------------------------------------------------- 2001* .30% 2007 .25% 2002 .30 2008 .20 2003 .30 2009 .15 2004 .30 2010 .10 2005 .30 2011 .05 2006 .30 ================================================================================ * From the commencement of operations. The Adviser has not agreed to reimburse Dividend Advantage 3 (NZF) for any portion of its fees and expenses beyond September 30, 2011. 6. INVESTMENT COMPOSITION At October 31, 2003, the revenue sources by municipal purpose, expressed as a percent of total investments, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - --------------------------------------------------------------------------------------------------------- Consumer Staples 5% 5% 5% 4% 3% 5% Education and Civic Organizations 4 -- 4 5 3 5 Healthcare 9 17 10 16 24 16 Housing/Multifamily 6 2 1 1 1 4 Housing/Single Family 6 11 1 4 6 7 Long-Term Care 1 2 -- 4 1 1 Tax Obligation/General 15 7 23 14 9 9 Tax Obligation/Limited 14 9 13 12 19 12 Transportation 8 10 16 14 14 17 U.S. Guaranteed 16 14 13 12 3 2 Utilities 10 17 8 10 7 8 Water and Sewer 6 5 5 3 9 12 Other -- 1 1 1 1 2 - --------------------------------------------------------------------------------------------------------- 100% 100% 100% 100% 100% 100% =========================================================================================================
Certain investments owned by the Funds are either covered by insurance issued by several private insurers or are backed by an escrow or trust containing U.S. Government or U.S. Government agency securities, both of which ensure the timely payment of principal and interest in the event of default (62% for Performance Plus (NPP), 55% for Municipal Advantage (NMA), 56% for Market Opportunity (NMO), 62% for Dividend Advantage (NAD), 53% for Dividend Advantage 2 (NXZ) and 66% for Dividend Advantage 3 (NZF)). Such insurance or escrow, however, does not guarantee the market value of the municipal securities or the value of the Funds' shares. For additional information regarding each investment security, refer to the Portfolio of Investments of each Fund. 71 Notes to FINANCIAL STATEMENTS (continued) 7. SUBSEQUENT EVENT - DISTRIBUTIONS TO COMMON SHAREHOLDERS The Funds declared Common share dividend distributions from their tax-exempt net investment income which were paid on December 1, 2003, to shareholders of record on November 15, 2003, as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) - --------------------------------------------------------------------------------------------------------- Dividend per share $.0810 $.0860 $.0790 $.0855 $.0860 $.0790 =========================================================================================================
72 Financial HIGHLIGHTS 73 Financial HIGHLIGHTS Selected data for a Common share outstanding throughout each period:
Investment Operations Less Distributions ---------------------------------------------------------------- ------------------------------- Distributions Distributions from Net from Net Beginning Net Investment Capital Investment Capital Common Realized/ Income to Gains to Income to Gains to Share Net Unrealized Preferred Preferred Common Common Net Asset Investment Investment Share- Share- Share- Share- Value Income Gain (Loss) holders+ holders+ Total holders holders Total ==================================================================================================================================== PERFORMANCE PLUS (NPP) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 $15.38 $1.07 $ .05 $(.07) $ -- $ 1.05 $ (.95) $(.03) $ (.98) 2002 15.57 1.09 (.22) (.10) (.01) .76 (.90) (.04) (.94) 2001 14.36 1.10 1.17 (.23) -- 2.04 (.83) -- (.83) 2000 13.69 1.12 .69 (.29) -- 1.52 (.84) -- (.84) 1999 15.43 1.12 (1.73) (.21) -- (.82) (.91) (.01) (.92) MUNICIPAL ADVANTAGE (NMA) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 15.41 1.13 .25 (.07) (.01) 1.30 (1.02) (.07) (1.09) 2002 15.65 1.15 (.22) (.10) (.03) .80 (.94) (.10) (1.04) 2001 14.61 1.16 1.10 (.24) (.03) 1.99 (.87) (.08) (.95) 2000 13.98 1.24 .63 (.33) -- 1.54 (.91) -- (.91) 1999 15.85 1.24 (1.85) (.24) -- (.85) (1.00) -- (1.00) MARKET OPPORTUNITY (NMO) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 14.60 1.03 .50 (.08) -- 1.45 (.94) -- (.94) 2002 15.24 1.11 (.70) (.11) (.01) .29 (.91) (.02) (.93) 2001 14.45 1.16 .80 (.26) (.01) 1.69 (.87) (.03) (.90) 2000 14.11 1.24 .38 (.34) -- 1.28 (.94) -- (.94) 1999 15.96 1.26 (1.83) (.24) -- (.81) (1.01) (.01) (1.02) DIVIDEND ADVANTAGE (NAD) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 14.94 1.10 .19 (.07) -- 1.22 (.99) -- (.99) 2002 14.84 1.13 .01 (.10) -- 1.04 (.94) -- (.94) 2001 13.59 1.16 1.21 (.24) -- 2.13 (.88) -- (.88) 2000 12.78 1.15 .84 (.31) -- 1.68 (.86) -- (.86) 1999(a) 14.33 .39 (1.47) (.07) -- (1.15) (.30) -- (.30) DIVIDEND ADVANTAGE 2 (NXZ) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 14.89 1.16 .17 (.07) -- 1.26 (1.01) (.01) (1.02) 2002 15.07 1.15 (.32) (.10) -- .73 (.91) (.01) (.92) 2001(b) 14.33 .52 .88 (.09) -- 1.31 (.45) -- (.45) DIVIDEND ADVANTAGE 3 (NZF) - ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2003 14.56 1.07 .10 (.07) -- 1.10 (.93) -- (.93) 2002 14.47 1.03 .16 (.10) -- 1.09 (.91) -- (.91) 2001(c) 14.33 .03 .14 -- -- .17 -- -- -- ==================================================================================================================================== 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** ============================================================================================ PERFORMANCE PLUS (NPP) - -------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 $ -- $15.45 $14.6400 9.58% 6.97% 2002 (.01) 15.38 14.2800 4.51 5.03 2001 -- 15.57 14.5800 26.96 14.51 2000 (.01) 14.36 12.1875 .90 11.47 1999 -- 13.69 12.9375 (10.76) (5.63) MUNICIPAL ADVANTAGE (NMA) - -------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 -- 15.62 15.4400 13.17 8.71 2002 -- 15.41 14.6600 5.89 5.39 2001 -- 15.65 14.8500 23.35 13.97 2000 -- 14.61 12.8750 1.46 11.48 1999 (.02) 13.98 13.6250 (8.16) (5.83) MARKET OPPORTUNITY (NMO) - -------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 -- 15.11 14.2900 10.62 10.24 2002 -- 14.60 13.8000 .49 2.03 2001 -- 15.24 14.6500 20.03 11.93 2000 -- 14.45 13.0000 2.97 9.41 1999 (.02) 14.11 13.5625 (9.18) (5.49) DIVIDEND ADVANTAGE (NAD) - -------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 -- 15.17 15.1200 11.41 8.41 2002 -- 14.94 14.5000 2.01 7.26 2001 -- 14.84 15.1400 27.35 16.03 2000 (.01) 13.59 12.6250 (.79) 13.61 1999(a) (.10) 12.78 13.6250 (7.29) (8.83) DIVIDEND ADVANTAGE 2 (NXZ) - -------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 -- 15.13 14.8500 14.39 8.67 2002 .01 14.89 13.9100 (.81) 5.16 2001(b) (.12) 15.07 14.9600 2.75 8.39 DIVIDEND ADVANTAGE 3 (NZF) - -------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 .01 14.74 13.8000 9.04 7.82 2002 (.09) 14.56 13.5300 (4.26) 7.20 2001(c) (.03) 14.47 15.0700 .47 .98 ============================================================================================ Ratios/Supplemental Data ---------------------------------------------------------------------------------------------- Before Credit/Reimbursement After Credit/Reimbursement*** ----------------------------- ------------------------------- Ratio of Net Ratio of Net Ratio of Investment Ratio of Investment Ending Expenses Income to Expenses Income to Net to Average Average to Average Average Assets Net Assets Net Assets Net Assets Net Assets Applicable Applicable Applicable Applicable Applicable Portfolio to Common to Common to Common to Common to Common Turnover Shares (000) Shares++ Shares++ Shares++ Shares++ Rate ================================================================================================================================ PERFORMANCE PLUS (NPP) - -------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 $925,525 1.18% 6.89% 1.18% 6.90% 10% 2002 921,376 1.18 7.11 1.17 7.12 11 2001 932,937 1.15 7.29 1.14 7.30 14 2000 860,556 1.17 8.09 1.16 8.10 25 1999 820,432 1.15 7.48 1.12 7.51 30 MUNICIPAL ADVANTAGE (NMA) - -------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 671,147 1.21 7.27 1.20 7.27 7 2002 662,270 1.22 7.55 1.22 7.55 17 2001 672,673 1.23 7.60 1.22 7.61 18 2000 628,099 1.23 8.77 1.23 8.77 39 1999 600,923 1.16 8.12 1.16 8.12 29 MARKET OPPORTUNITY (NMO) - -------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 687,955 1.25 6.94 1.25 6.94 9 2002 664,914 1.24 7.50 1.24 7.51 13 2001 694,025 1.23 7.73 1.23 7.74 11 2000 658,070 1.25 8.76 1.23 8.77 52 1999 642,643 1.15 8.18 1.14 8.19 31 DIVIDEND ADVANTAGE (NAD) - -------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 595,266 1.35 6.78 .89 7.24 3 2002 586,045 1.25 7.24 .80 7.70 7 2001 581,089 1.26 7.56 .78 8.04 12 2000 531,571 1.22 8.34 .73 8.83 37 1999(a) 499,783 1.06* 6.10* .58* 6.58* 16 DIVIDEND ADVANTAGE 2 (NXZ) - -------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 443,101 1.17 7.20 .71 7.66 11 2002 435,907 1.17 7.32 .70 7.79 9 2001(b) 441,308 1.13* 5.56* .63* 6.06* 5 DIVIDEND ADVANTAGE 3 (NZF) - -------------------------------------------------------------------------------------------------------------------------------- Year Ended 10/31: 2003 594,154 1.17 6.80 .71 7.26 3 2002 586,799 1.17 6.78 .70 7.25 7 2001(c) 583,100 .72* 2.05* .42* 2.36* 1 ================================================================================================================================ Preferred Shares at End of Period --------------------------------------- Aggregate Liquidation Amount and Market Asset Outstanding Value Coverage (000) Per Share Per Share ========================================================================== PERFORMANCE PLUS (NPP) - -------------------------------------------------------------------------- Year Ended 10/31: 2003 $479,000 $25,000 $73,305 2002 479,000 25,000 73,089 2001 444,000 25,000 77,530 2000 444,000 25,000 73,455 1999 400,000 25,000 76,277 MUNICIPAL ADVANTAGE (NMA) - -------------------------------------------------------------------------- Year Ended 10/31: 2003 358,000 25,000 71,868 2002 358,000 25,000 71,248 2001 358,000 25,000 71,974 2000 358,000 25,000 68,862 1999 358,000 25,000 66,964 MARKET OPPORTUNITY (NMO) - -------------------------------------------------------------------------- Year Ended 10/31: 2003 380,000 25,000 70,260 2002 380,000 25,000 68,744 2001 380,000 25,000 70,660 2000 380,000 25,000 68,294 1999 380,000 25,000 67,279 DIVIDEND ADVANTAGE (NAD) - -------------------------------------------------------------------------- Year Ended 10/31: 2003 295,000 25,000 75,446 2002 295,000 25,000 74,665 2001 295,000 25,000 74,245 2000 295,000 25,000 70,048 1999(a) 295,000 25,000 67,354 DIVIDEND ADVANTAGE 2 (NXZ) - -------------------------------------------------------------------------- Year Ended 10/31: 2003 222,000 25,000 74,899 2002 222,000 25,000 74,089 2001(b) 222,000 25,000 74,697 DIVIDEND ADVANTAGE 3 (NZF) - -------------------------------------------------------------------------- Year Ended 10/31: 2003 312,000 25,000 72,608 2002 312,000 25,000 72,019 2001(c) -- -- -- ========================================================================== * Annualized. ** Total Investment Return on Market Value is the combination of reinvested dividend income, reinvested capital gains distributions, if any, and changes in stock price per share. Total Return on Common Share Net Asset Value is the combination of reinvested dividend income at net asset value, reinvested capital gains distributions at net asset value, if any, and changes in Common share net asset value per share. Total returns are not annualized. *** After custodian fee credit and expense reimbursement, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares, where applicable. (a) For the period May 26, 1999 (commencement of operations) through October 31, 1999. (b) For the period March 27, 2001 (commencement of operations) through October 31, 2001. (c) For the period September 25, 2001 (commencement of operations) through October 31, 2001. See accompanying notes to financial statements. 74-75 spread
Directors/Trustees AND OFFICERS The management of the Funds, including general supervision of the duties performed for the Funds by the Adviser, is the responsibility of the Board of Directors/ Trustees of the Funds. The number of directors/trustees of the Funds is currently set at twelve. None of the directors/trustees who are not "interested" persons of the Funds has ever been a director/trustee or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the directors/trustees and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below.
NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS DIRECTOR/TRUSTEE - ------------------------------------------------------------------------------------------------------------------------------------ DIRECTOR/TRUSTEE WHO IS AN INTERESTED PERSON OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ Timothy R. Schwertfeger (1) Chairman of the 1994 Chairman and Director (since 1996) of Nuveen 142 3/28/49 Board and Investments, Inc. and Nuveen Investments, LLC; 333 W. Wacker Drive Director/Trustee Director (since 1992) and Chairman (since 1996) of Chicago, IL 60606 Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.; Chairman and Director (since 1997) of Nuveen Asset Management, Inc.; Director (since 1996) of Institutional Capital Corporation; Chairman and Director (since 1999) of Rittenhouse Asset Management, Inc.; Chairman of Nuveen Investments Advisers Inc. (since 2002). DIRECTORS/TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ William E. Bennett Director/Trustee 2001 Private Investor; previously, President and Chief Executive 142 10/16/46 Officer, Draper & Kramer, Inc., a private company that 333 W. Wacker Drive handles mortgage banking, real estate development, pension Chicago, IL 60606 advisory and real estate management (1995-1998). Prior thereto, Executive Vice President and Chief Credit Officer of First Chicago Corporation and its principal subsidiary, The First National Bank of Chicago. - ------------------------------------------------------------------------------------------------------------------------------------ Robert P. Bremner Director/Trustee 1997 Private Investor and Management Consultant. 141 8/22/40 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Lawrence H. Brown Director/Trustee 1993 Retired (since 1989) as Senior Vice President of The 141 7/29/34 Northern Trust Company; Director of the United Way of 333 W. Wacker Drive Highland Park-Highwood (since 2002). Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Jack B. Evans Director/Trustee 1999 President, The Hall-Perrine Foundation, a private philanthropic 131 10/22/48 corporation (since 1996); Director, Alliant Energy; Director and 333 W. Wacker Drive Vice Chairman, United Fire & Casualty Company; Director, Chicago, IL 60606 Federal Reserve Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. - ------------------------------------------------------------------------------------------------------------------------------------ Anne E. Impellizzeri Director/Trustee 1994 Retired, formerly, Executive Director (since 1998) of Manitoga/ 141 1/26/33 The Russel Wright Design Center; prior thereto, President and 333 W. Wacker Drive Chief Executive Officer of Blanton-Peale Institute (since 1990); Chicago, IL 60606 prior thereto, Vice President, Metropolitan Life Insurance Co. - ------------------------------------------------------------------------------------------------------------------------------------ William L. Kissick Director/Trustee 1992 Professor Emeritus, School of Medicine and the Wharton 131 7/29/32 School of Management and former Chairman, Leonard Davis 333 W. Wacker Drive Institute of Health Economics, University of Pennsylvania; Chicago, IL 60606 Adjunct Professor, Health Policy and Management, Yale University. - ------------------------------------------------------------------------------------------------------------------------------------ Thomas E. Leafstrand Director/Trustee 1992 Retired; previously, Vice President in charge of Municipal 131 11/11/31 Underwriting and Dealer Sales at The Northern Trust 333 W. Wacker Drive Company. Chicago, IL 60606 76 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST PRINCIPAL OCCUPATION(S) FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR INCLUDING OTHER DIRECTORSHIPS OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(2) DURING PAST 5 YEARS DIRECTOR/TRUSTEES - ------------------------------------------------------------------------------------------------------------------------------------ DIRECTORS/TRUSTEES WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Peter R. Sawers Director/Trustee 1991 Adjunct Professor of Business and Economics, University of 141 4/3/33 Dubuque, Iowa; formerly (1991-2000) Adjunct Professor, Lake 333 W. Wacker Drive Forest Graduate School of Management, Lake Forest, Illinois; Chicago, IL 60606 prior thereto, Executive Director, Towers Perrin Australia, a management consulting firm; Chartered Financial Analyst; Certified Management Consultant; Director, Executive Service Corps of Chicago, a not-for-profit organization. - ------------------------------------------------------------------------------------------------------------------------------------ William J. Schneider Director/Trustee 1997 Senior Partner and Chief Operating Officer, Miller-Valentine 141 9/24/44 Group, Vice President, Miller-Valentine Realty, a construction 333 W. Wacker Drive company; Chair, MiamiValley Hospital; Chair, Dayton Chicago, IL 60606 Development Coalition; formerly, Member, Community Advisory Board, National City Bank, Dayton, Ohio and Business Advisory Council, Cleveland Federal Reserve Bank. - ------------------------------------------------------------------------------------------------------------------------------------ Judith M. Stockdale Director/Trustee 1997 Executive Director, Gaylord and Dorothy Donnelley Foundation 141 12/29/47 (since 1994); prior thereto, Executive Director, Great Lakes 333 W. Wacker Drive Protection Fund (from 1990 to 1994). Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Sheila W. Wellington Director/Trustee 1994 President (since 1993) of Catalyst (a not-for-profit organization 131 2/24/32 focusing on women's leadership development in business 333 W. Wacker Drive and the professions). Chicago, IL 60606 POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS: - ------------------------------------------------------------------------------------------------------------------------------------ Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary 142 9/9/56 Administrative and Associate General Counsel, formerly, Vice President 333 W. Wacker Drive Officer and Assistant General Counsel of Nuveen Investments, LLC; Chicago, IL 60606 Managing Director (since 2002), General Counsel and Assistant Secretary, formerly, Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp.; Managing Director (since 2002), Assistant Secretary and Associate General Counsel, formerly, Vice President (since 2000), of Nuveen Asset Management, Inc.; Assistant Secretary of Nuveen Investments, Inc. (since 1994); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002); Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Managing Director, Associate General Counsel and Assistant Secretary of Rittenhouse Asset Management, Inc. (since May 2003); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant 142 2/3/66 and Assistant Vice President (since 2000), previously, Associate of 333 W. Wacker Drive Secretary Nuveen Investments, LLC. Chicago, IL 60606 77 Directors/Trustees AND OFFICERS (CONTINUED) POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ Paul L. Brennan Vice President 1999 Vice President (since 2002), formerly, Assistant 128 11/10/66 Vice President (since 1997), of Nuveen Advisory Corp.; 333 W. Wacker Drive prior thereto, portfolio manager of Flagship Financial Inc.; Chicago, IL 60606 Chartered Financial Analyst and Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999), 142 11/28/67 and Treasurer prior thereto, Assistant Vice President (since 1997); Vice 333 W. Wacker Drive President and Treasurer of Nuveen Investments, Inc. (since Chicago, IL 60606 1999); Vice President and Treasurer of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. (since 1999); Vice President and Treasurer of Nuveen Asset Management, Inc. (since 2002) and of Nuveen Investments Advisers Inc. (since 2002); Assistant Treasurer of NWQ Investment Management Company, LLC (since 2002); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Susan M. DeSanto Vice President 2001 Vice President of Nuveen Advisory Corp. (since 2001); 142 9/8/54 previously, Vice President of Van Kampen Investment 333 W. Wacker Drive Advisory Corp. (since 1998); Vice President of Nuveen Chicago, IL 60606 Institutional Advisory Corp. (since 2002); prior thereto, Assistant Vice President of Van Kampen Investment Advisory Corp. (since 1994). - ------------------------------------------------------------------------------------------------------------------------------------ Jessica R. Droeger Vice President 2000 Vice President (since 2002) and Assistant General Counsel 142 9/24/64 and Secretary (since 1998); formerly, Assistant Vice President (since 1998) 333 W. Wacker Drive of Nuveen Investments, LLC; Vice President (since 2002) Chicago, IL 60606 and Assistant Secretary (since 1998), formerly Assistant Vice President of Nuveen Advisory Corp. and Nuveen Institutional Advisory Corp. - ------------------------------------------------------------------------------------------------------------------------------------ Lorna C. Ferguson Vice President 1998 Vice President of Nuveen Investments, LLC; Vice 142 10/24/45 President (since 1998) of Nuveen Advisory Corp. and 333 W. Wacker Drive Nuveen Institutional Advisory Corp. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 142 3/2/64 LLC; Managing Director (since 2001), formerly Vice 333 W. Wacker Drive President of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp. (since 1995); Managing Director of Nuveen Asset Management, Inc. (since 2001); Vice President of Nuveen Investment Advisers Inc. (since 2002); Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Stephen D. Foy Vice President 1998 Vice President (since 1993) and Funds Controller (since 142 5/31/54 and Controller 1998) of Nuveen Investments, LLC and Vice President and 333 W. Wacker Drive Funds Controller (since 1998) of Nuveen Investments, Inc.; Chicago, IL 60606 Certified Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ J. Thomas Futrell Vice President 1988 Vice President of Nuveen Advisory Corp.; 128 7/5/55 Chartered Financial Analyst. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Steven J. Krupa Vice President 1990 Vice President of Nuveen Advisory Corp. 128 8/21/57 333 W. Wacker Drive Chicago, IL 60606 78 POSITION(S) YEAR FIRST NUMBER OF PORTFOLIOS NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) IN FUND COMPLEX AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OVERSEEN BY OFFICER - ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): - ------------------------------------------------------------------------------------------------------------------------------------ David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, LLC, 142 3/22/63 previously Assistant Vice President (since 1999); prior 333 W. Wacker Drive thereto, Associate of Nuveen Investments, LLC; Certified Chicago, IL 60606 Public Accountant. - ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant Vice 142 8/27/61 President (since 1993) of Nuveen Investments, LLC. 333 W. Wacker Drive Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Larry W. Martin Vice President 1988 Vice President, Assistant Secretary and Assistant General 142 7/27/51 and Assistant Counsel of Nuveen Investments, LLC; Vice President and 333 W. Wacker Drive Secretary Assistant Secretary of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 Institutional Advisory Corp.; Assistant Secretary of Nuveen Investments, Inc. and (since 1997) Nuveen Asset Management, Inc.; Vice President (since 2000), Assistant Secretary and Assistant General Counsel (since 1998) of Rittenhouse Asset Management, Inc.; Vice President and Assistant Secretary of Nuveen Investments Advisers Inc. (since 2002); Assistant Secretary of NWQ Investment Management Company, LLC (since 2002). - ------------------------------------------------------------------------------------------------------------------------------------ John V. Miller Vice President 2003 Vice President (since 2003), previously, Assistant 128 4/10/67 Vice President (since 1999), prior thereto, credit 333 W. Wacker Drive analyst (since 1996) of Nuveen Advisory Corp.; Chicago, IL 60606 Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, 142 7/7/65 LLC; Managing Director (since 1997), formerly Vice 333 W. Wacker Drive President (since 1996) of Nuveen Advisory Corp. and Chicago, IL 60606 Nuveen Institutional Advisory Corp.; Managing Director of Nuveen Asset Management, Inc. (since 1999). Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Thomas J. O'Shaughnessy Vice President 1999 Vice President (since 2002), formerly, Assistant 128 9/4/60 Vice President (since 1998), of Nuveen Advisory Corp.; 333 W. Wacker Drive prior thereto, portfolio manager. Chicago, IL 60606 - ------------------------------------------------------------------------------------------------------------------------------------ Daniel S. Solender Vice President 2003 Vice President of Nuveen Advisory Corp. (since 2003); 128 10/27/65 previously, Principal and portfolio manager with The Vanguard 333 W. Wacker Drive Group (1999-2003); prior thereto, Assistant Vice President Chicago, IL 60606 of the Nuveen Advisory Corp.; Chartered Financial Analyst. - ------------------------------------------------------------------------------------------------------------------------------------ Thomas C. Spalding Vice President 1982 Vice President of Nuveen Advisory Corp. and Nuveen 128 7/31/51 Institutional Advisory Corp.; Chartered Financial Analyst. 333 W. Wacker Drive Chicago, IL 60606
(1) Mr. Schwertfeger is an "interested person" of the Funds, as defined in the Investment Company Act of 1940, because he is an officer and trustee of the Adviser. (2) Directors/Trustees serve a one-year term until his/her successor is elected. The year first elected or appointed represents the year in which the Director/Trustee was first elected or appointed to any fund in the Nuveen Complex. (3) Officers serve a one-year term through July of each year. The year first elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen Complex. 79 Build Your Wealth AUTOMATICALLY Sidebar text: NUVEEN MAKES REINVESTING EASY. A PHONE CALL IS ALL IT TAKES TO SET UP YOUR REINVESTMENT ACCOUNT. NUVEEN CLOSED-END EXCHANGE-TRADED FUNDS DIVIDEND REINVESTMENT PLAN Your Nuveen Closed-End Exchange-Traded Fund allows you to conveniently reinvest dividends and/or capital gains distributions in additional fund shares. By choosing to reinvest, you'll be able to invest money regularly and automatically, and watch your investment grow through the power of tax-free compounding. Just like dividends or distributions in cash, there may be times when income or capital gains taxes may be payable on dividends or distributions that are reinvested. It is important to note that an automatic reinvestment plan does not ensure a profit, nor does it protect you against loss in a declining market. EASY AND CONVENIENT To make recordkeeping easy and convenient, each month you'll receive a statement showing your total dividends and distributions, the date of investment, the shares acquired and the price per share, and the total number of shares you own. HOW SHARES ARE PURCHASED The shares you acquire by reinvesting will either be purchased on the open market or newly issued by the Fund. If the shares are trading at or above net asset value at the time of valuation, the Fund will issue new shares at the then-current market price. If the shares are trading at less than net asset value, shares for your account will be purchased on the open market. Dividends and distributions received to purchase shares in the open market will normally be invested shortly after the dividend payment date. No interest will be paid on dividends and distributions awaiting reinvestment. Because the market price of shares may increase before purchases are completed, the average purchase price per share may exceed the market price at the time of valuation, resulting in the acquisition of fewer shares than if the dividend or distribution had been paid in shares issued by the Fund. A pro rata portion of any applicable brokerage commissions on open market purchases will be paid by Plan participants. These commissions usually will be lower than those charged on individual transactions. FLEXIBILITY You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change. Should you withdraw, you can receive a certificate for all whole shares credited to your reinvestment account and cash payment for fractional shares, or cash payment for all reinvestment account shares, less brokerage commissions and a $2.50 service fee. You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan. The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time. For more information on the Nuveen Automatic Reinvestment Plan or to enroll in or withdraw from the Plan, speak with your financial advisor or call us at (800) 257-8787. 80 Fund INFORMATION BOARD OF DIRECTORS/TRUSTEES William E. Bennett Robert P. Bremner Lawrence H. Brown Jack B. Evans Anne E. Impellizzeri William L. Kissick Thomas E. Leafstrand Peter R. Sawers William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale Sheila W. Wellington FUND MANAGER Nuveen Advisory Corp. 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN State Street Bank & Trust Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Chapman and Cutler LLP Chicago, IL INDEPENDENT AUDITORS Ernst & Young LLP Chicago, IL PROXY VOTING POLICIES AND PROCEDURES A description of the policies and procedures that the Funds use to determine how to vote proxies relating to portfolio securities is available (i) without charge, upon request, by calling Nuveen Investments at (800) 257-8787; and (ii) on the Commission's website at http://www.sec.gov. POLICY CHANGE On November 14, 2002, the Board adopted a policy that allows each Fund, in addition to investments in municipal bonds, to invest up to 5% of its net assets (including assets attributable to preferred shares, if any) in tax-exempt or taxable fixed-income securities or equity securities for the purpose of acquiring control of an issuer whose municipal bonds (a) the Fund already owns and (b) have deteriorated or are expected shortly to deteriorate significantly in credit quality, provided Nuveen Advisory determines that such investment should enable the Fund to better maximize the value of its existing investment in such issuer. This policy is a non-fundamental policy of each Fund which means that it can be changed at any time by the Board of Trustees without vote of the shareholders. GLOSSARY OF TERMS USED IN THIS REPORT Average Annual Total Return: This is a commonly used method to express an investment's performance over a particular, usually multi-year time period. It expresses the return (including change in NAV and reinvested dividends) that would have been necessary on an annual basis to equal the investment's actual performance over the time period being considered. Average Duration: Duration is a measure of a bond or bond fund's sensitivity to changes in interest rates. Generally, the longer a bond or fund's duration, the more the price of the bond or fund will change as interest rates change. Average Effective Maturity: The average of all the maturities of the bonds in a fund's portfolio, computed by weighting each maturity date (the date the security comes due) by the market value of the security. This figure does not account for the likelihood of prepayments or the exercise of call provisions. Leverage-Adjusted Duration: Duration is a measure of a bond or bond fund's sensitivity to changes in interest rates. Generally, the longer a bond or fund's duration, the more the price of the bond or fund will change as interest rates change. Leverage-adjusted duration takes into account the leveraging process for a Fund and therefore is generally longer than the duration of the actual portfolio of individual bonds that make up the Fund. Market Yield (also known as Dividend Yield or Current Yield): An investment's current annualized dividend divided by its current market price. Net Asset Value (NAV): A fund's NAV is calculated by subtracting the liabilities of the fund from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day. Taxable-Equivalent Yield: The yield necessary from a fully taxable investment to equal, on an after-tax basis, the yield of a municipal bond investment. - --------- Each Fund intends to repurchase shares of its own common or preferred stock, where applicable, in the future at such times and in such amounts as is deemed advisable. No shares were repurchased during the fiscal year ended October 31, 2003. Any future repurchases will be reported to shareholders in the next annual or semiannual report. 81 Serving Investors FOR GENERATIONS Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions. For the past century, Nuveen Investments has adhered to the belief that the best approach to investing is to apply conservative risk-management principles to help minimize volatility. Building on this tradition, we today offer a range of high quality equity and fixed-income solutions that are integral to a well-diversified core portfolio. Our clients have come to appreciate this diversity, as well as our continued adherence to proven, long-term investing principles. Managing $90 billion in assets, Nuveen Investments offers access to a number of different asset classes and investing solutions through a variety of products. Nuveen Investments markets its capabilities under four distinct brands: Nuveen, a leader in tax-free investments; NWQ, a leader in value-style equities; Rittenhouse, a leader in growth-style equities; and Symphony, a leading institutional manager of market-neutral alternative investment portfolios. To learn more about the products and services Nuveen Investments offers and for a prospectus, where applicable, talk to your financial advisor, or call us at (800) 257-8787. Please read the information carefully before you invest. Distributed by NUVEEN INVESTMENTS, LLC | 333 West Wacker Drive | Chicago, Illinois 60606 | www.nuveen.com EAN-B-1003D ITEM 2. CODE OF ETHICS. As of the end of the period covered by this report, the registrant has adopted a code of ethics that applies to the registrant's principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions. The registrant has posted such code of ethics on its website at www.nuveen.com/etf. ITEM 3. AUDIT COMMITTEE FINANCIAL EXPERT. The registrant's board of directors has determined that the registrant has at least one "audit committee financial expert" (as defined in Item 3 of Form N-CSR) serving on its audit committee. The registrant's audit committee financial expert is William E. Bennett, who is "independent" for purposes of Item 3 of Form N-CSR. Mr. Bennett was formerly Executive Vice President and Chief Credit Officer of First Chicago Corporation and its principal subsidary, The First National Bank of Chicago. As part of his role as Chief Credit Officer, Mr. Bennett set policy as to accrual of assets/loans; designated performing/non-performing assets; set the level of reserves against the credit portfolio; and determined the carrying value of credit related assets and exposure. Among other things, Mr. Bennett was also responsible for the oversight of the internal analysis function including setting ground rules for the review and preparation of financial analysis and financial statements for use in making credit and risk decisions for clients. Mr. Bennett has significant experience reviewing, analyzing and evaluating financial statements of domestic and international companies in a variety of industries with complex accounting issues. ITEM 4. PRINCIPAL ACCOUNTANT FEES AND SERVICES. Not applicable at this time. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. Not applicable at this time. ITEM 6. [RESERVED] ITEM 7. DISCLOSURE OF PROXY VOTING POLICIES AND PROCEDURES FOR CLOSED-END MANAGEMENT INVESTMENT COMPANIES In the rare event that a municipal issuer held by the Fund were to issue a proxy or that the Fund were to receive a proxy issued by a cash management security, Nuveen Advisory Corp. (the "Adviser") would either engage an independent third party to determine how the proxy should be voted or vote the proxy with the consent, or based on the instructions, of the Fund's Board of Directors or Trustees or its representative. In the case of a conflict of interest, the proxy would be submitted to the applicable Fund's Board to determine how the proxy should be voted. A member of the Adviser's legal department would oversee the administration of the voting, and ensure that records were maintained in accordance with Rule 204-2(c)(2) under the Investment Advisers Act of 1940 (17 CFR 275.204-2(c)(2)), reports were filed with the SEC on Form N-PX, and the results were provided to the Board of Directors or Trustees and made available to shareholders as required by applicable rules. ITEM 8. [RESERVED] ITEM 9. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Securities Exchange Act of 1934, as amended (the "Exchange Act")(17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the registrant's last fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 10. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable because posted on registrant's website at www.nuveen.com/etf. (a)(2) A separate certification for each principal executive officer and principal financial officer of the registrant as required by Rule 30a-2(a) under the Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT Attached hereto. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the Act (17 CFR 270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Ex-99.906 CERT attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Nuveen Municipal Market Opportunity Fund, Inc. ----------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ---------------------------------------------- Jessica R. Droeger Vice President and Secretary Date: January 8, 2004 ------------------------------------------------------------------- Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated. By (Signature and Title)* /s/ Gifford R. Zimmerman ---------------------------------------------- Gifford R. Zimmerman Chief Administrative Officer (Principal Executive Officer) Date: January 8, 2004 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (Principal Financial Officer) Date: January 8, 2004 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature. EX-99.CERT 3 file002.txt CERTIFICATIONS CERTIFICATION I, Gifford R. Zimmerman, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen Municipal Market Opportunity Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 8, 2004 /s/ Gifford R. Zimmerman ------------------------- -------------------------------- Chief Administrative Officer (Principal Executive Officer) CERTIFICATION I, Stephen D. Foy, certify that: 1. I have reviewed this report on Form N-CSR of Nuveen Municipal Market Opportunity Fund, Inc.; 2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; 3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations, changes in net assets, and cash flows (if the financial statements are required to include a statement of cash flows) of the registrant as of, and for, the periods presented in this report; 4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940) for the registrant and have: (a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; (b) evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of a date within 90 days prior to the filing date of this report based on such evaluation; and (c) disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal half-year (the registrant's second fiscal half-year in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and 5. The registrant's other certifying officer and I have disclosed to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions): (a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize, and report financial information; and (b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting. Date: January 8, 2004 /s/ Stephen D. Foy ------------------------- -------------------------------- Vice President and Controller (Principal Financial Officer) EX-99.906CERT 4 file003.txt CERTIFICATIONS Certification Pursuant to 18 U.S.C. 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002; provided by the Chief Executive Officer and Chief Financial Officer, based on each such officer's knowledge and belief. The undersigned officers of Nuveen Municipal Market Opportunity Fund, Inc. (the "Fund"), certify that, to the best of each such officer's knowledge and belief: 1. The Form N-CSR of the Fund for the period ended October 31, 2003 (the "Report") fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and 2. The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Fund. Date: January 8, 2004 ----------------------- /s/ Gifford R. Zimmerman --------------------- Chief Administrative Officer (Chief Executive Officer) /s/ Stephen D. Foy --------------------- Vice President, Controller (Chief Financial Officer) -----END PRIVACY-ENHANCED MESSAGE-----