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 811-06040 --------------------- 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 ------------------ Date of reporting period: October 31, 2004 ------------------ 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, 2004 Nuveen Investments Municipal Closed-End Exchange-Traded Funds 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 NUVEEN DIVIDEND ADVANTAGE MUNICIPAL FUND 3 NZF Photo of: Man and woman sitting on porch. Photo of: 2 children sitting in the grass. DEPENDABLE, TAX-FREE INCOME BECAUSE IT'S NOT WHAT YOU EARN, IT'S WHAT YOU KEEP.(R) Logo: NUVEEN Investments Photo of: Woman Photo of: Man and child Photo of: Woman NOW YOU CAN RECEIVE YOUR NUVEEN FUND REPORTS FASTER. NO MORE WAITING. SIGN UP TODAY TO RECEIVE NUVEEN FUND INFORMATION BY E-MAIL. It only takes a minute to sign up for E-Reports. Once enrolled, you'll receive an e-mail as soon as your Nuveen Investments Fund information is ready -- no more waiting for delivery by regular mail. Just click on the link within the e-mail to see the report, and save it on your computer if you wish. ------------------ DELIVERY DIRECT TO YOUR E-MAIL INBOX ------------------ IT'S FAST, EASY & FREE: WWW.INVESTORDELIVERY.COM if you get your Nuveen Fund dividends and statements from your financial advisor or brokerage account. OR WWW.NUVEEN.COM/ACCOUNTACCESS if you get your Nuveen Fund dividends and statements directly from Nuveen. (Be sure to have the address sheet that accompanied this report handy. You'll need it to complete the enrollment process.) Logo: NUVEEN Investments Photo of:Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board Chairman's LETTER TO SHAREHOLDERS Once again, I am pleased to report that over the most recent fiscal year your Fund continued to provide you with monthly tax-free income and an attractive total return. For more specific information about the performance of your Fund, please see the Portfolio Manager's Perspective and Performance Overview sections of this report. With longer-term interest rates still relatively low, many investors have begun to wonder whether these rates will soon begin to rise, and whether that makes this the time to adjust their holdings of fixed-income investments. No one knows what the future will bring, which is why we think a well-balanced portfolio that is structured and carefully monitored with the help of an investment professional "OUR MISSION CONTINUES TO BE TO ASSIST YOU AND YOUR FINANCIAL ADVISOR BY OFFERING THE INVESTMENT SERVICES AND PRODUCTS THAT CAN HELP YOU TO SECURE YOUR FINANCIAL OBJECTIVES." can be an important component in achieving your long-term financial goals. A well-diversified portfolio may actually help to reduce your overall investment risk, and we believe that a municipal bond investment like your Nuveen Fund can be an important building block in a portfolio designed to perform well through a variety of market conditions. As in past reports, I'd also like to direct your attention to the inside front cover, which explains the quick and easy process to begin receiving these Fund reports via e-mail and the internet. Thousands of Nuveen Fund shareholders already have signed-up, and they are getting their Fund information faster and more conveniently than ever. I urge you to consider joining them. At Nuveen Investments, our mission continues to be to assist you and your financial advisor by offering the investment services and products that can help you to secure your financial objectives. We are grateful that you have chosen us as a partner as you pursue your financial goals, and we look forward to continuing to earn your trust in the months and years ahead. Sincerely, /s/ Timothy R. Schwertfeger Timothy R. Schwertfeger Chairman of the Board December 15, 2004 Nuveen Municipal Closed-End Exchange-Traded Funds NPP, NMA, NMO, NAD, NXZ, NZF Portfolio Manager's PERSPECTIVE Portfolio manager Tom Spalding discusses the economic and market environment, key investment strategies, and the fiscal year performance of these six Funds. With 27 years of investment experience at Nuveen, Tom has managed NXZ since its inception in 2001, and NPP, NMA, NMO, NAD, and NZF since 2003. WHAT FACTORS AFFECTED THE U.S. ECONOMY AND MUNICIPAL MARKET DURING THE ANNUAL REPORTING PERIOD ENDED OCTOBER 31, 2004? During this fiscal year, the U.S. economy demonstrated improvement in a number of key areas, although the pace of the recovery slowed over the last six months of the period. The gross domestic product (GDP) expanded at annualized rates of 4.2% in the fourth quarter of 2003 and 4.5% in the first quarter of 2004. However, sharply higher energy prices restrained consumer spending during the second and third quarters of 2004, which in turn impacted economic momentum. Over this period, GDP growth moderated to 3.3% annualized in the second quarter and 3.9% annualized in the third quarter. Higher energy costs also continued to fuel lingering concerns about inflation. Although monthly gains in consumer prices were generally tame, by the end of October 2004 inflation was running well ahead of the 2003 pace. The Consumer Price Index (CPI) rose at a 3.9% annualized rate for the first 10 months of 2004, more than double the 1.9% rate for all of 2003. Excluding energy and food, the CPI increased at an annual rate of 2.4% for the first 10 months of 2004. During the second quarter of 2004 in particular, inflation worries, the slowing pace of economic recovery and continued geopolitical uncertainty acted as catalysts for heightened volatility in the fixed-income markets. As one example, the yield on the Bond Buyer 25 Revenue Bond Index (BB25), a widely followed municipal bond index, began this reporting period at 5.24%. The BB25 yield then dropped steadily over the next five months to 4.73% by mid-March 2004. As a series of improved employment reports sparked increased anticipation of action by the Federal Reserve, the index yield began to climb again, rising more than 70 basis points over the next 8 weeks to 5.45%, where it hovered through the end of June. However, more bond-friendly news--including indications of relatively slow growth of wages and employment--prompted a retreat to 4.97% by the end of October 2004. While intermediate and long-term bond yields generally fell over most of the second half of the Funds' fiscal years, short-term rates slowly rose. The Federal Reserve instituted three different one-quarter-point increases in the fed funds rate between June and 4 September 2004. (On both November 10 and December 14, following the end of this reporting period, the Fed added additional quarter-point increases, bringing the fed funds rate to 2.25%.) Over the 12 month period, municipal new issue supply nationwide remained relatively strong, with $363.4 billion in new bonds coming to market. This represented a decrease of about 5% from the preceding 12-month period, as the improving economy and higher tax revenues lessened the need for some issuers to borrow. IN THIS ENVIRONMENT, WHAT KEY STRATEGIES WERE USED TO MANAGE THESE FUNDS DURING THE 12 MONTHS ENDED OCTOBER 31, 2004? As the market continued to anticipate increased interest rates, our focus during this fiscal year remained on purchasing bonds that we believed had the potential to add value and perform well under a variety of market scenarios. In general, our purchase activity for all six of these Funds centered on trying to find attractive securities in the long-intermediate part of the yield curve, that is, bonds that mature in 20 to 25 years. One of our longer-term goals was to work to position all of these Funds so that they produce less volatile, roughly equivalent returns over time. As one strategy to reach this goal for some of the newer Funds, we have attempted to reduce some of NXZ's interest rate risk by hedging in the derivatives markets. (Interest rate risk is the risk that the value of a Fund's portfolio will decline if market interest rates rise, since bond prices move in the opposite direction of interest rates.) Our only objective with these hedges is to reduce the Fund's interest rate risk, and not to potentially enhance its return by making a prediction about future interest rates. This hedge does not affect NXZ's income stream or dividend-paying capabilities over the short-term. Instead, the costs of the hedge are reflected as an addition or subtraction to the Fund's net asset value as the market value of the hedge fluctuates. Although the hedge had a negative market value as of October 31, 2004, it succeeded in reducing some of the volatility of NXZ's net asset value over the course of the reporting period. In NZF, we sought to shorten the Fund's duration1 to mitigate some of its interest rate risk. To accomplish this goal, we sold some of NZF's holdings with the longest maturities and reinvested the proceeds in bonds from the intermediate part of the yield curve. Demand for municipal securities remained firm through most of this reporting period, which limited our ability to find bonds with attractive prices, yields and structures. Since insured bonds accounted for about 50% of new municipal bond issuance during this period, we often looked to this area for buying opportunities. 1 Duration is a measure of a Fund's net asset value (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. 5 We also sought to purchase higher-coupon bonds that we believed could help support the Funds' dividends, and we worked to enhance the Funds' call protection by selling several bonds with short call dates and reinvesting the proceeds in longer-term securities with better call protection. HOW DID THE FUNDS PERFORM? Individual results for these Funds, as well as for relevant comparative indexes, are presented in the accompanying table. TOTAL RETURNS ON NET ASSET VALUE For periods ended 10/31/04 (Annualized) 1-YEAR 5-YEAR 10-YEAR -------------------------------------------------------------------------------- NPP 9.30% 9.40% 7.57% -------------------------------------------------------------------------------- NMA 9.57% 9.78% 7.87% -------------------------------------------------------------------------------- NMO 9.00% 8.47% 7.27% -------------------------------------------------------------------------------- NAD 10.06% 11.02% NA -------------------------------------------------------------------------------- NXZ 10.67% NA NA -------------------------------------------------------------------------------- NZF 11.10% NA NA -------------------------------------------------------------------------------- Lehman Brothers Municipal Bond Index2 6.03% 7.19% 7.05% -------------------------------------------------------------------------------- Lipper General Leveraged Municipal Debt Funds Average3 8.93% 8.78% 7.86% -------------------------------------------------------------------------------- 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, 2004, the total returns on net asset value (NAV) for all six Funds in this report outperformed the return on the Lehman Brothers Index. All of the Funds also outperformed the average return for their Lipper peer group for this period. One of the primary factors benefiting the 12-month performances of these six Funds relative to that of the unleveraged Lehman Brothers index was the Funds' use of financial leverage. While leverage can add volatility to the Funds' NAVs and share prices, especially when substantial shifts in interest rates occur, this strategy also can provide opportunities for additional income and total returns for common shareholders when short-term interest rates remain low, as they did during this period. All six Funds also benefited from their holdings of lower quality bonds, which generally outperformed higher credit quality sectors as the economy improved and demand for 2 The Lehman Brothers Municipal Bond Index is an unleveraged, unmanaged national index comprising a broad range of investment-grade municipal bonds. Results for the Lehman index do not reflect any expenses. 3 The Lipper General Leveraged Municipal Debt Funds category average is calculated using the returns of all national closed-end exchange-traded funds in this category for each period as follows: 1 year, 65 funds; 5 years, 51 funds; and 10 years, 46 funds. Fund and Lipper returns assume reinvestment of dividends. 6 lower-rated bonds increased. Among the lower-rated bonds making positive contributions to the Funds' total returns during this period were those issued by the healthcare sector, especially hospital bonds. The performance of the healthcare sector as a whole ranked second among the Lehman Brothers Index's revenue sectors for the 12-month period. As of October 31, 2004, NXZ had 25% of its portfolio in healthcare bonds, while NMA and NZF each had 17%, NAD had 16%, and NPP and NMO had 10%. In particular, NMA and NXZ benefited from their holdings of bonds issued by the Michigan State Hospital Finance Authority for Detroit Medical Center, which appreciated in price as the center's financial situation continued to improve. The Funds' returns were also helped by the strong performance of their holdings of uninsured bonds backed by the 1998 master tobacco settlement agreement. Over this period, NPP, NMA, NMO, NAD and NZF maintained exposures of approximately 5% in tobacco bonds, while NXZ continued to allocate about 3% to this sector. One sector that did not perform well during this period was housing, both multifamily and single family. The housing sector as a whole ranked at the bottom of the Lehman Brothers Index revenue sectors for the 12-month period. The sector's below-market performance stemmed largely from the increase in mortgage prepayments as interest rates remained low, which resulted in a number of bond calls. In general, the Funds' housing exposure had a negative impact on their performance, with NMA and NZF having the heaviest weightings in housing bonds. In addition, the annual performance of NMO was negatively affected by the continued deterioration of its holding of bonds issued by the Indianapolis Airport Authority and backed by United Airlines. These bonds declined in value to $0.11 on the dollar as of October 31, 2004. HOW ABOUT THE FUNDS' DIVIDENDS AND SHARE PRICES? With short-term interest rates remaining relatively low throughout this reporting period, the leveraged structures of these six Funds continued to support their dividend-paying capabilities. The extent of this benefit is tied in part to the short-term rates these Funds pay their MuniPreferred(R) shareholders. During periods of low short-term rates, leveraged Funds generally pay relatively lower dividends to their MuniPreferred shareholders, which can leave more earnings to support common share dividends. This strategy enabled us to increase the dividend of NZF in December 2003 and helped us to maintain the dividends of NPP, NMA, NMO, NAD and NXZ throughout the reporting period. 7 All of these Funds seek to pay stable dividends at rates that reflect each Fund's past results and projected future performance. During certain periods, each Fund may pay dividends at a rate that may be more or less than the amount of net investment income actually earned by the Fund during the period. If a Fund has cumulatively earned more than it has paid in dividends, it holds the excess in reserve as undistributed net investment income (UNII) as part of the Fund's NAV. Conversely, if a Fund has cumulatively paid dividends in excess of its earnings, the excess constitutes negative UNII that is likewise reflected in the Fund's NAV. Each Fund will, over time, pay all of its net investment income as dividends to shareholders. As of October 31, 2004, all six of these Funds had positive UNII balances for both financial statement and tax purposes. As of October 31, 2004, all six of these Funds were trading at discounts to their NAVs. These discounts were generally in line with the Funds' average discounts over the entire 12-month reporting period. HOW WERE THE FUNDS POSITIONED IN TERMS OF CREDIT QUALITY AND BOND CALLS AS OF OCTOBER 31, 2004? Given the current geopolitical and economic climate, we continued to believe that maintaining strong credit quality was an important requirement for the Funds. As of October 31, 2004, these six Funds continued to offer excellent credit quality, with allocations of bonds rated AAA/U.S. guaranteed and AA ranging from 68% in NXZ to 74% in NMA, 80% in NMO and NAD, and 82% in NPP and NZF. As of October 31, 2004, potential call exposure for these Funds during 2004-2006 ranged from 4% in NXZ, to 5% in NZF, 9% in NMO, 10% in NAD, 14% in NPP and 16% in NMA. The number of actual bond calls in all of these Funds depends largely on market interest rates in the future. 8 Nuveen Performance Plus Municipal Fund, Inc. NPP Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 71% AA 11% A 5% BBB 9% NR 3% BB or Lower 1% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.081 Dec 0.081 Jan 0.081 Feb 0.081 Mar 0.081 Apr 0.081 May 0.081 Jun 0.081 Jul 0.081 Aug 0.081 Sep 0.081 Oct 0.081 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/03 14.72 14.63 14.58 14.77 14.89 14.77 14.93 14.92 15.02 15.25 15.38 15.43 15.15 15.35 15.37 15.36 15.55 15.67 15.64 15.82 15.57 15.16 14.2 13.97 13.55 13.23 13.24 13.34 13.47 13.57 13.58 13.59 13.9 14.15 14.06 13.96 14.11 14.32 14.34 14.53 14.65 14.65 14.79 14.89 14.89 14.64 14.82 14.74 14.85 10/31/04 14.95 FUND SNAPSHOT ------------------------------------ Share Price $14.95 ------------------------------------ Common Share Net Asset Value $15.87 ------------------------------------ Premium/(Discount) to NAV -5.80% ------------------------------------ Market Yield 6.50% ------------------------------------ Taxable-Equivalent Yield1 9.03% ------------------------------------ Net Assets Applicable to Common Shares ($000) $950,993 ------------------------------------ Average Effective Maturity on Securities (Years) 16.34 ------------------------------------ Leverage-Adjusted Duration 9.02 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 6/22/89) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 9.10% 9.30% ------------------------------------ 5-Year 9.86% 9.40% ------------------------------------ 10-Year 7.98% 7.57% ------------------------------------ STATES (as a % of total investments) ------------------------------------ Illinois 13.2% ------------------------------------ New York 11.2% ------------------------------------ California 9.0% ------------------------------------ New Jersey 4.7% ------------------------------------ Michigan 4.4% ------------------------------------ Louisiana 4.2% ------------------------------------ Indiana 4.0% ------------------------------------ Texas 3.7% ------------------------------------ Ohio 3.2% ------------------------------------ Florida 3.0% ------------------------------------ Colorado 3.0% ------------------------------------ Utah 3.0% ------------------------------------ Washington 2.9% ------------------------------------ Minnesota 2.8% ------------------------------------ Pennsylvania 2.8% ------------------------------------ Massachusetts 2.5% ------------------------------------ South Carolina 2.4% ------------------------------------ Georgia 2.3% ------------------------------------ Nevada 2.1% ------------------------------------ Other 15.6% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ U.S. Guaranteed 18.2% ------------------------------------ Tax Obligation/Limited 15.9% ------------------------------------ Tax Obligation/General 15.6% ------------------------------------ Utilities 10.6% ------------------------------------ Healthcare 9.7% ------------------------------------ Transportation 8.3% ------------------------------------ Consumer Staples 5.1% ------------------------------------ Water and Sewer 4.9% ------------------------------------ Other 11.7% ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable-equivalent yield is lower. 9 Nuveen Municipal Advantage Fund, Inc. NMA Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 61% AA 13% A 7% BBB 17% BB or Lower 2% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.086 Dec 0.086 Jan 0.086 Feb 0.086 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. 11/1/03 15.55 15.45 15.53 15.7 15.83 15.51 15.57 15.52 15.68 15.93 16.05 16.1 16.09 16.26 16.25 16.08 16.27 16.23 16.3 16.27 16.21 16.07 14.81 14.45 14.25 13.81 13.76 13.82 14.13 14.24 13.87 14.02 14.58 14.85 14.9 14.71 14.88 15.11 15.05 15.22 15.27 15.24 15.41 15.42 15.39 15.46 15.61 15.6 15.64 10/31/04 15.7 FUND SNAPSHOT ------------------------------------ Share Price $15.70 ------------------------------------ Common Share Net Asset Value $16.02 ------------------------------------ Premium/(Discount) to NAV -2.00% ------------------------------------ Market Yield 6.57% ------------------------------------ Taxable-Equivalent Yield1 9.13% ------------------------------------ Net Assets Applicable to Common Shares ($000) $689,190 ------------------------------------ Average Effective Maturity on Securities (Years) 17.82 ------------------------------------ Leverage-Adjusted Duration 7.48 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 12/19/89) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 8.82% 9.57% ------------------------------------ 5-Year 10.28% 9.78% ------------------------------------ 10-Year 8.67% 7.87% ------------------------------------ STATES (as a % of total investments) ------------------------------------ Texas 11.0% ------------------------------------ New York 10.1% ------------------------------------ Washington 9.6% ------------------------------------ Illinois 9.5% ------------------------------------ California 6.4% ------------------------------------ Wisconsin 5.2% ------------------------------------ Louisiana 4.2% ------------------------------------ Ohio 4.0% ------------------------------------ Tennessee 3.8% ------------------------------------ Indiana 3.1% ------------------------------------ South Carolina 2.9% ------------------------------------ Nevada 2.6% ------------------------------------ North Carolina 2.4% ------------------------------------ Colorado 2.3% ------------------------------------ New Jersey 2.2% ------------------------------------ Alabama 2.1% ------------------------------------ Other 18.6% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ Healthcare 16.8% ------------------------------------ Utilities 16.7% ------------------------------------ U.S. Guaranteed 15.7% ------------------------------------ Transportation 11.0% ------------------------------------ Tax Obligation/Limited 10.5% ------------------------------------ Housing/Single Family 8.1% ------------------------------------ Tax Obligation/General 7.2% ------------------------------------ Consumer Staples 4.8% ------------------------------------ Water and Sewer 4.7% ------------------------------------ Other 4.5% ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable-equivalent yield is lower. 2 The Fund also paid shareholders capital gains and net ordinary income distributions in December 2003 of $0.0142 per share. 10 Nuveen Municipal Market Opportunity Fund, Inc. NMO Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 68% AA 12% A 9% BBB 8% NR 1% BB or Lower 2% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.086 Dec 0.086 Jan 0.086 Feb 0.086 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. 11/1/03 14.44 14.27 14.27 14.44 14.46 14.36 14.46 14.48 14.45 14.7 14.98 15.04 14.89 15.05 15.03 15.03 15.07 15.2 15.35 15.26 15.2 14.86 13.84 13.55 13.23 12.93 13 13.04 13.16 13.26 13.22 13.46 13.76 13.79 13.88 13.64 13.82 14.02 14.04 14.14 14.31 14.23 14.28 14.47 14.38 14.26 14.44 14.37 14.36 10/31/04 14.44 FUND SNAPSHOT ------------------------------------ Share Price $14.44 ------------------------------------ Common Share Net Asset Value $15.48 ------------------------------------ Premium/(Discount) to NAV -6.72% ------------------------------------ Market Yield 6.57% ------------------------------------ Taxable-Equivalent Yield1 9.13% ------------------------------------ Net Assets Applicable to Common Shares ($000) $704,760 ------------------------------------ Average Effective Maturity on Securities (Years) 16.27 ------------------------------------ Leverage-Adjusted Duration 7.85 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/21/90) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 7.97% 9.00% ------------------------------------ 5-Year 8.21% 8.47% ------------------------------------ 10-Year 7.83% 7.27% ------------------------------------ STATES (as a % of total investments) ------------------------------------ New York 15.5% ------------------------------------ Texas 15.5% ------------------------------------ Washington 11.8% ------------------------------------ Illinois 7.0% ------------------------------------ Minnesota 5.2% ------------------------------------ Pennsylvania 4.1% ------------------------------------ South Carolina 4.1% ------------------------------------ Georgia 4.0% ------------------------------------ California 3.7% ------------------------------------ Nevada 3.5% ------------------------------------ North Dakota 2.8% ------------------------------------ Colorado 2.6% ------------------------------------ New Jersey 2.6% ------------------------------------ Massachusetts 2.2% ------------------------------------ Other 15.4% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ U.S. Guaranteed 20.9% ------------------------------------ Tax Obligation/General 16.0% ------------------------------------ Transportation 15.7% ------------------------------------ Tax Obligation/Limited 15.2% ------------------------------------ Healthcare 10.3% ------------------------------------ Utilities 8.8% ------------------------------------ Consumer Staples 4.8% ------------------------------------ Other 8.3% ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable-equivalent yield is lower. 11 Nuveen Dividend Advantage Municipal Fund NAD Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 71% AA 9% A 2% BBB 9% NR 6% BB or Lower 3% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.0855 Dec 0.0855 Jan 0.0855 Feb 0.0855 Mar 0.0855 Apr 0.0855 May 0.0855 Jun 0.0855 Jul 0.0855 Aug 0.0855 Sep 0.0855 Oct 0.0855 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/03 15.05 15.07 14.99 15.15 15.17 15.3 15.44 15.44 15.54 15.97 16.01 16.1 15.85 15.87 16.01 15.88 16.03 16.17 16.19 16.14 16.02 15.73 14.59 14.21 13.94 13.52 13.82 14 14.27 14.25 14.13 14.13 14.47 14.55 14.67 14.47 14.43 14.78 14.77 15.02 15.18 15.1 15.18 15.13 15.2 15.16 15.24 15.2 15.25 10/31/04 15.31 FUND SNAPSHOT ------------------------------------ Share Price $15.31 ------------------------------------ Common Share Net Asset Value $15.62 ------------------------------------ Premium/(Discount) to NAV -1.98% ------------------------------------ Market Yield 6.70% ------------------------------------ Taxable-Equivalent Yield1 9.31% ------------------------------------ Net Assets Applicable to Common Shares ($000) $613,328 ------------------------------------ Average Effective Maturity on Securities (Years) 15.61 ------------------------------------ Leverage-Adjusted Duration 7.75 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 5/26/99) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 8.37% 10.06% ------------------------------------ 5-Year 9.24% 11.02% ------------------------------------ Since Inception 6.98% 8.24% ------------------------------------ STATES (as a % of total investments) ------------------------------------ Illinois 23.6% ------------------------------------ New York 13.6% ------------------------------------ Texas 9.8% ------------------------------------ Washington 7.3% ------------------------------------ New Jersey 5.3% ------------------------------------ Wisconsin 4.5% ------------------------------------ Pennsylvania 3.3% ------------------------------------ Ohio 2.7% ------------------------------------ Indiana 2.5% ------------------------------------ Colorado 2.1% ------------------------------------ Florida 2.0% ------------------------------------ Other 23.3% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ Healthcare 16.0% ------------------------------------ U.S. Guaranteed 15.6% ------------------------------------ Tax Obligation/General 14.7% ------------------------------------ Tax Obligation/Limited 13.8% ------------------------------------ Transportation 10.6% ------------------------------------ Utilities 9.3% ------------------------------------ Education and Civic Organizations 4.7% ------------------------------------ Consumer Staples 4.5% ------------------------------------ Other 10.8% ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable-equivalent yield is lower. 12 Nuveen Dividend Advantage Municipal Fund 2 NXZ Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 58% AA 10% A 13% BBB 8% NR 3% BB or Lower 8% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE2 Nov 0.086 Dec 0.086 Jan 0.086 Feb 0.086 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. 11/1/03 14.86 14.98 15 14.97 15.09 15.01 15.02 15.09 15.12 15.62 15.5 15.56 15.27 15.51 15.61 15.56 15.66 15.78 15.75 15.73 15.76 15.44 14.45 14.28 14.13 13.51 13.78 13.63 14.06 14 13.9 13.86 14.39 14.6 14.48 14.31 14.46 14.97 14.92 15.01 15.08 15.01 15.12 15.25 15.3 15.08 15.4 15.35 15.32 10/31/04 15.38 FUND SNAPSHOT ------------------------------------ Share Price $15.38 ------------------------------------ Common Share Net Asset Value $15.63 ------------------------------------ Premium/(Discount) to NAV -1.60% ------------------------------------ Market Yield 6.71% ------------------------------------ Taxable-Equivalent Yield1 9.32% ------------------------------------ Net Assets Applicable to Common Shares ($000) $457,552 ------------------------------------ Average Effective Maturity on Securities (Years) 24.22 ------------------------------------ Leverage-Adjusted Duration 6.85 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 3/27/01) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 11.16% 10.67% ------------------------------------ Since Inception 7.47% 9.16% ------------------------------------ STATES (as a % of total investments) ------------------------------------ Texas 16.5% ------------------------------------ Michigan 9.8% ------------------------------------ Illinois 7.6% ------------------------------------ California 7.6% ------------------------------------ New York 4.1% ------------------------------------ Washington 4.0% ------------------------------------ Colorado 4.0% ------------------------------------ New Mexico 3.6% ------------------------------------ Florida 3.5% ------------------------------------ Indiana 3.3% ------------------------------------ Missouri 3.3% ------------------------------------ Nevada 3.1% ------------------------------------ Alabama 2.9% ------------------------------------ Massachusetts 2.7% ------------------------------------ Kansas 2.7% ------------------------------------ Oregon 2.7% ------------------------------------ Pennsylvania 2.5% ------------------------------------ Louisiana 2.2% ------------------------------------ Minnesota 2.2% ------------------------------------ Other 11.7% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ Healthcare 25.1% ------------------------------------ Tax Obligation/Limited 17.2% ------------------------------------ Transportation 13.2% ------------------------------------ Water and Sewer 8.9% ------------------------------------ Tax Obligation/General 8.0% ------------------------------------ Utilities 7.8% ------------------------------------ Housing/Single Family 5.2% ------------------------------------ Other 14.6% ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable-equivalent yield is lower. 2 The Fund also paid shareholders a capital gains distribution in December 2003 of $0.0291 per share. 13 Nuveen Dividend Advantage Municipal Fund 3 NZF Performance OVERVIEW As of October 31, 2004 Pie Chart: CREDIT QUALITY (as a % of total investments) AAA/U.S. Guaranteed 71% AA 11% A 2% BBB 9% NR 5% BB or Lower 2% Bar Chart: 2003-2004 MONTHLY TAX-FREE DIVIDENDS PER SHARE Nov 0.079 Dec 0.0805 Jan 0.0805 Feb 0.0805 Mar 0.0805 Apr 0.0805 May 0.0805 Jun 0.0805 Jul 0.0805 Aug 0.0805 Sep 0.0805 Oct 0.0805 Line Chart: SHARE PRICE PERFORMANCE Weekly Closing Price Past performance is not predictive of future results. 11/1/03 13.95 13.96 13.93 14.02 14.22 14.14 14.22 14.31 14.29 14.67 14.79 14.76 14.65 14.65 14.91 14.75 14.9 15.09 15.02 14.98 14.94 14.66 13.9 13.66 13.34 12.82 13.02 13.15 13.42 13.31 13.09 13.17 13.67 13.88 13.83 13.84 13.83 14.01 14.01 14.16 14.3 14.3 14.57 14.48 14.39 14.41 14.49 14.44 14.43 10/31/04 14.5 FUND SNAPSHOT ------------------------------------ Share Price $14.50 ------------------------------------ Common Share Net Asset Value $15.36 ------------------------------------ Premium/(Discount) to NAV -5.60% ------------------------------------ Market Yield 6.66% ------------------------------------ Taxable-Equivalent Yield1 9.25% ------------------------------------ Net Assets Applicable to Common Shares ($000) $619,118 ------------------------------------ Average Effective Maturity on Securities (Years) 19.81 ------------------------------------ Leverage-Adjusted Duration 8.27 ------------------------------------ AVERAGE ANNUAL TOTAL RETURN (Inception 9/25/01) ------------------------------------ ON SHARE PRICE ON NAV ------------------------------------ 1-Year 12.45% 11.10% ------------------------------------ Since Inception 5.46% 8.74% ------------------------------------ STATES (as a % of total investments) ------------------------------------ Texas 12.3% ------------------------------------ Illinois 11.0% ------------------------------------ Washington 10.9% ------------------------------------ California 7.0% ------------------------------------ Michigan 5.8% ------------------------------------ Colorado 5.3% ------------------------------------ Nevada 5.2% ------------------------------------ New York 3.6% ------------------------------------ Wisconsin 3.4% ------------------------------------ Indiana 3.2% ------------------------------------ Iowa 3.2% ------------------------------------ Louisiana 2.6% ------------------------------------ Kentucky 2.1% ------------------------------------ Other 24.4% ------------------------------------ SECTORS (as a % of total investments) ------------------------------------ Healthcare 17.3% ------------------------------------ Transportation 17.1% ------------------------------------ Tax Obligation/Limited 12.8% ------------------------------------ Water and Sewer 9.8% ------------------------------------ Tax Obligation/General 9.6% ------------------------------------ Utilities 8.2% ------------------------------------ Housing/Single Family 5.3% ------------------------------------ Consumer Staples 4.8% ------------------------------------ U.S. Guaranteed 4.8% ------------------------------------ Education and Civic Organizations 4.7% ------------------------------------ Other 5.6% ------------------------------------ 1 Taxable-equivalent yield represents the yield that must be earned on a fully taxable investment in order to equal the yield of the Fund on an after-tax basis. It is based on a federal income tax rate of 28%. For investments that generate qualified dividend income, the taxable-equivalent yield is lower. 14 Shareholder MEETING REPORT The annual shareholder meeting was held on August 3, 2004, at the Northern Trust Bank, Chicago, Illinois.
NPP NMA NMO ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting shares voting together together together together together together as a class as a class as a class as a class as a class as a class ==================================================================================================================================== Robert P. Bremner For 52,749,399 -- 37,176,579 -- 40,022,344 -- Withhold 669,550 -- 434,374 -- 398,907 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 53,418,949 -- 37,610,953 -- 40,421,251 -- ==================================================================================================================================== Lawrence H. Brown For 52,728,879 -- 37,161,834 -- 40,029,397 -- Withhold 690,070 -- 449,119 -- 391,854 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 53,418,949 -- 37,610,953 -- 40,421,251 -- ==================================================================================================================================== Jack B. Evans For 52,742,453 -- 37,173,411 -- 40,016,645 -- Withhold 676,496 -- 437,542 -- 404,606 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 53,418,949 -- 37,610,953 -- 40,421,251 -- ==================================================================================================================================== William C. Hunter For 52,740,229 -- 37,157,034 -- 40,016,355 -- Withhold 678,720 -- 453,919 -- 404,896 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 53,418,949 -- 37,610,953 -- 40,421,251 -- ==================================================================================================================================== William J. Schneider For -- 17,378 -- 13,069 -- 14,662 Withhold -- 30 -- 24 -- 3 ------------------------------------------------------------------------------------------------------------------------------------ Total -- 17,408 -- 13,093 -- 14,665 ==================================================================================================================================== Timothy R. Schwertfeger For -- 17,382 -- 13,069 -- 14,663 Withhold -- 26 -- 24 -- 2 ------------------------------------------------------------------------------------------------------------------------------------ Total -- 17,408 -- 13,093 -- 14,665 ==================================================================================================================================== Judith M. Stockdale For 52,730,673 -- 37,167,105 -- 40,006,795 -- Withhold 688,276 -- 443,848 -- 414,456 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 53,418,949 -- 37,610,953 -- 40,421,251 -- ==================================================================================================================================== 15 Shareholder MEETING REPORT (continued) NAD NXZ NZF ------------------------------------------------------------------------------------------------------------------------------------ APPROVAL OF THE BOARD MEMBERS WAS REACHED AS FOLLOWS: Common and Common and Common and MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred MuniPreferred shares voting shares voting shares voting shares voting shares voting shares voting together together together together together together as a class as a class as a class as a class as a class as a class ==================================================================================================================================== Robert P. Bremner For 38,156,295 -- 28,637,978 -- 39,057,880 -- Withhold 337,975 -- 176,661 -- 356,674 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 38,494,270 -- 28,814,639 -- 39,414,554 -- ==================================================================================================================================== Lawrence H. Brown For 38,165,614 -- 28,635,958 -- 39,041,712 -- Withhold 328,656 -- 178,681 -- 372,842 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 38,494,270 -- 28,814,639 -- 39,414,554 -- ==================================================================================================================================== Jack B. Evans For 38,150,308 -- 28,635,211 -- 39,053,128 -- Withhold 343,962 -- 179,428 -- 361,426 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 38,494,270 -- 28,814,639 -- 39,414,554 -- ==================================================================================================================================== William C. Hunter For 38,155,774 -- 28,629,560 -- 39,036,120 -- Withhold 338,496 -- 185,079 -- 378,434 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 38,494,270 -- 28,814,639 -- 39,414,554 -- ==================================================================================================================================== William J. Schneider For -- 11,456 -- 8,725 -- 11,981 Withhold -- 65 -- 28 -- 67 ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,521 -- 8,753 -- 12,048 ==================================================================================================================================== Timothy R. Schwertfeger For -- 11,456 -- 8,725 -- 11,981 Withhold -- 65 -- 28 -- 67 ------------------------------------------------------------------------------------------------------------------------------------ Total -- 11,521 -- 8,753 -- 12,048 ==================================================================================================================================== Judith M. Stockdale For 38,184,952 -- 28,633,156 -- 39,059,481 -- Withhold 309,318 -- 181,483 -- 355,073 -- ------------------------------------------------------------------------------------------------------------------------------------ Total 38,494,270 -- 28,814,639 -- 39,414,554 -- ====================================================================================================================================
16 Report of INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM 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, 2004, and the related statements of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated therein. These financial statements and financial highlights are the responsibility of the Funds' management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. 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, 2004, 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, 2004, the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended, and the financial highlights for the periods indicated therein in conformity with U.S. generally accepted accounting principles. /s/Ernst & Young LLP Chicago, Illinois December 15, 2004 17 Nuveen Performance Plus Municipal Fund, Inc. (NPP) Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 1.6% (1.1% OF TOTAL INVESTMENTS) $ 3,615 Alabama Water Pollution Control Authority, Revolving Fund 8/05 at 100.00 AAA $ 3,756,419 Loan Bonds, Series 1994A, 6.750%, 8/15/17 (Pre-refunded to 8/15/05) - AMBAC Insured Jefferson County, Alabama, Sewer Revenue Refunding Warrants, Series 1997A: 3,640 5.625%, 2/01/22 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 101.00 AAA 3,960,138 1,435 5.625%, 2/01/22 - FGIC Insured 2/07 at 101.00 AAA 1,543,988 3,820 5.375%, 2/01/27 (Pre-refunded to 2/01/07) - FGIC Insured 2/07 at 100.00 AAA 4,098,516 1,505 5.375%, 2/01/27 - FGIC Insured 2/07 at 100.00 AAA 1,577,315 ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 1.3% (0.9% OF TOTAL INVESTMENTS) 1,000 Arizona State Transportation Board, Highway Revenue Bonds, 7/12 at 100.00 AAA 1,080,110 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 6,034,391 5,055 5.750%, 7/01/16 (Alternative Minimum Tax) - FGIC Insured 7/12 at 100.00 AAA 5,686,420 ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.5% (0.4% OF TOTAL INVESTMENTS) 5,080 Independence County, Arkansas, Hydroelectric Power Revenue 5/13 at 100.00 A 5,167,782 Bonds, Series 2003, 5.350%, 5/01/28 - ACA Insured ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 13.2% (9.0% OF TOTAL INVESTMENTS) 3,500 Alameda Corridor Transportation Authority, California, 10/17 at 100.00 AAA 2,434,705 Subordinate Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/25 - AMBAC Insured 11,000 Anaheim Public Finance Authority, California, Subordinate No Opt. Call AAA 5,217,520 Lease Revenue Bonds, Public Improvement Project, Series 1997C, 0.000%, 9/01/20 - FSA Insured 2,000 California Health Facilities Financing Authority, Health 3/13 at 100.00 A 2,005,960 Facility Revenue Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 6,435 California, General Obligation Refunding Bonds, No Opt. Call AAA 7,820,134 Series 2002, 6.000%, 4/01/16 - AMBAC Insured 4,500 California, General Obligation Bonds, Series 2004, 2/09 at 100.00 A 4,568,535 5.100%, 2/01/34 California Department of Water Resources, Power Supply Revenue Bonds, Series 2002A: 4,000 6.000%, 5/01/15 5/12 at 101.00 A2 4,682,720 2,750 5.375%, 5/01/22 5/12 at 101.00 A2 2,972,613 6,925 East Bay Municipal Utility District, Alameda and Contra 6/06 at 100.00 AAA 6,982,200 Costa Counties, California, Subordinated Water System 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 9,821,900 Tobacco Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39 1,000 Mt. Diablo Hospital District, California, Insured Hospital 12/04 at 101.00 AAA 1,055,320 Revenue Bonds, Series 1993A, 5.125%, 12/01/23 - AMBAC Insured 13,450 Ontario Redevelopment Financing Authority, San Bernardino No Opt. Call AAA 17,805,514 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 22,840,587 Residential Mortgage Revenue Refunding Bonds, Series 1991A, 7.150%, 2/01/10 2,325 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 3,242,724 Restructured Single Family Mortgage Revenue Bonds, Series 1986D, 8.000%, 4/01/16 (Alternative Minimum Tax) 10,000 San Bernardino County, California, Certificates of 8/05 at 102.00 AAA 10,480,300 Participation, Medical Center Financing Project, Series 1995, 5.500%, 8/01/15 (Pre-refunded to 8/01/05) - MBIA Insured 2,000 San Francisco Airports Commission, California, Revenue 5/09 at 101.00 AAA 2,060,640 Bonds, San Francisco International Airport, Second Series 1999, Issue 23B, 5.125%, 5/01/30 - FGIC Insured 18 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA (continued) $ 2,000 San Francisco Airports Commission, California, Revenue 5/11 at 100.00 AAA $ 2,077,240 Refunding Bonds, San Francisco International Airport, Second Series 2001, 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 19,846,730 California, General Obligation Refunding Bonds, Series 1997A, 7.200%, 2/01/16 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.5% (3.0% OF TOTAL INVESTMENTS) 3,000 Colorado Educational and Cultural Facilities Authority, 8/14 at 100.00 AAA 3,142,770 Charter School Revenue Bonds, Peak-to-Peak Charter School, Series 2004, 5.250%, 8/15/34 - XLCA Insured 3,760 Colorado Health Facilities Authority, Revenue Refunding 9/11 at 100.00 AA 3,963,792 Bonds, Catholic Health Initiatives, Series 2001, 5.250%, 9/01/21 7,575 Denver City and County, Colorado, Airport System Revenue 11/07 at 101.00 AAA 8,160,093 Bonds, Series 1997E, 5.250%, 11/15/23 - MBIA Insured 20,000 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 20,476,000 Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/33 - XLCA Insured 10,000 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 4,513,900 Bonds, Series 1997B, 0.000%, 9/01/21 - MBIA Insured 10,000 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 2,293,500 Bonds, Series 2000B, 0.000%, 9/01/32 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.3% (0.9% OF TOTAL INVESTMENTS) 5,590 District of Columbia, General Obligation Bonds, 6/09 at 101.00 AAA 6,229,720 Series 1999B, 5.500%, 6/01/13 - FSA Insured 6,720 District of Columbia Tobacco Settlement Corporation, 5/11 at 101.00 BBB 6,517,258 Tobacco Settlement Asset-Backed Bonds, Series 2001, 6.250%, 5/15/24 ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 4.4% (2.9% OF TOTAL INVESTMENTS) 1,700 Miami-Dade County, Florida, Beacon Tradeport Community 5/12 at 102.00 AA 1,832,957 Development District, Special Assessment Bonds, Commercial Project, Series 2002A, 5.625%, 5/01/32 - RAAI Insured Broward County Housing Finance Authority, Florida, Multifamily Housing Revenue Bonds, Venice Homes Apartments, Series 2001A: 1,545 5.700%, 1/01/32 (Alternative Minimum Tax) - FSA Insured 7/11 at 100.00 AAA 1,582,621 1,805 5.800%, 1/01/36 (Alternative Minimum Tax) - FSA Insured 7/11 at 100.00 AAA 1,856,136 3,530 Florida Housing Finance Corporation, Homeowner Mortgage 1/10 at 100.00 AAA 3,729,622 Revenue Bonds, Series 2000-11, 5.850%, 1/01/22 (Alternative Minimum Tax) - FSA Insured 10,050 Florida State Board of Education, Full Faith and Credit 6/10 at 101.00 AA+ 11,380,721 Public Education Capital Outlay Refunding Bonds, Series 1999D, 5.750%, 6/01/22 7,000 Hillsborough County Aviation Authority, Florida, Revenue 10/13 at 100.00 AAA 7,593,530 Bonds, Tampa International Airport, Series 2003A, 5.250%, 10/01/17 (Alternative Minimum Tax) - MBIA Insured 10,750 Martin County Industrial Development Authority, Florida, 12/04 at 102.00 BBB- 11,031,328 Industrial Development Revenue Bonds, Indiantown Cogeneration LP 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 2,695,185 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% (2.1% OF TOTAL INVESTMENTS) 4,920 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 5,625,282 Series 2000A, 5.600%, 1/01/30 (Pre-refunded to 1/01/10) - FGIC Insured 5,000 Atlanta, Georgia, Water and Wastewater Revenue Bonds, No Opt. Call AAA 5,846,650 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 2,181,640 Atlanta, Georgia, 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, 11/09 at 101.00 AA 16,418,850 Revenue Bonds, Emory University, Series 1999A, 5.500%, 11/01/25 19 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.2% (0.2% OF TOTAL INVESTMENTS) $ 965 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aa2 $ 1,021,375 Mortgage Bonds, Series 2000G-2, 5.950%, 7/01/25 (Alternative Minimum Tax) 1,075 Idaho Housing and Finance Association, Single Family 1/10 at 100.00 A1 1,145,606 Mortgage Bonds, Series 2000D, 6.200%, 7/01/14 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 19.5% (13.2% OF TOTAL INVESTMENTS) 3,000 Chicago, Illinois, General Obligation Bonds, Library Projects, 1/08 at 102.00 AAA 3,331,860 Series 1997, 5.750%, 1/01/17 - FGIC Insured 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 14,940,713 32,670 0.000%, 1/01/22 - FGIC Insured No Opt. Call AAA 14,282,344 10,000 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 4,997,700 Obligation Bonds, Dedicated Tax Revenues, Series 1998B-1, 0.000%, 12/01/19 - FGIC Insured 10,000 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 4,698,800 Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 0.000%, 12/01/20 - FGIC Insured 9,145 Chicago, Illinois, Revenue Bonds, Midway Airport, 1/07 at 101.00 AAA 9,699,644 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 4,289,520 15,285 0.000%, 11/01/19 No Opt. Call AAA 7,736,197 3,500 Illinois Development Finance Authority, Pollution Control 3/05 at 102.00 AAA 3,625,685 Revenue Refunding Bonds, Commonwealth Edison Company, Series 1994D, 6.750%, 3/01/15 - AMBAC Insured 3,085 Illinois Health Facilities Authority, Revenue Bonds, 8/09 at 101.00 A- 3,220,432 Silver Cross Hospital and Medical Centers, Series 1999, 5.250%, 8/15/15 4,580 Illinois Health Facilities Authority, Revenue Bonds, Midwest 8/10 at 102.00 Aaa 4,978,643 Care Center IX, Inc., Series 2000, 6.250%, 8/20/35 3,000 Illinois Health Facilities Authority, Revenue Bonds, 7/13 at 100.00 A- 3,192,480 Lake Forest Hospital, Series 2003, 6.000%, 7/01/33 4,000 Illinois Health Facilities Authority, FHA-Insured Mortgage 8/13 at 100.00 AAA 4,060,760 Revenue Refunding Bonds, Sinai Health System, Series 2003, 5.150%, 2/15/37 4,415 Illinois Health Facilities Authority, Revenue Refunding Bonds, 1/05 at 100.00 BB+ 4,416,280 Proctor Community Hospital, Series 1991, 7.375%, 1/01/23 5,000 Kane, McHenry, Cook and DeKalb Counties Community 12/11 at 100.00 AAA 5,639,550 Unit School District 300, Carpentersville, Illinois, General Obligation Bonds, Series 2000, 5.500%, 12/01/19 - MBIA Insured 3,700 Libertyville, Illinois, Affordable Housing Revenue Bonds, 11/09 at 100.00 A2 3,813,701 Liberty Towers Project, Series 1999A, 7.000%, 11/01/29 (Alternative Minimum Tax) 6,000 McHenry County Conservation District, Illinois, General 2/11 at 100.00 AAA 6,742,680 Obligation Bonds, Series 2001A, 5.625%, 2/01/21 - FGIC Insured Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding Bonds, McCormick Place Expansion Project, Series 1996A: 9,400 0.000%, 12/15/18 - MBIA Insured No Opt. Call AAA 5,007,286 16,570 0.000%, 12/15/20 - MBIA Insured No Opt. Call AAA 7,850,369 23,550 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 9,886,055 13,000 0.000%, 12/15/24 - MBIA Insured No Opt. Call AAA 4,811,170 Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding Bonds, McCormick Place Expansion Project, Series 1998A: 5,180 5.500%, 12/15/23 - FGIC Insured No Opt. Call AAA 6,040,346 5,100 5.500%, 12/15/23 - FGIC Insured No Opt. Call AAA 5,925,027 10,650 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 14,174,404 Bonds, McCormick Place Hospitality Facility, Series 1996A, 7.000%, 7/01/26 20 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 17,865 Regional Transportation Authority, Cook, DuPage, Kane, No Opt. Call AAA $ 21,374,043 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 6,623,971 Bonds, Villa Vianney, Series 1999A, 6.450%, 10/01/29 ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 5.9% (4.0% OF TOTAL INVESTMENTS) 2,465 Danville Multi-School Building Corporation, Indiana, First 7/11 at 100.00 AAA 2,723,998 Mortgage Refunding Bonds, Series 2001, 5.250%, 7/15/18 - AMBAC Insured 14,000 Indiana Health Facility Financing Authority, Hospital 8/10 at 101.50 AAA 14,970,620 Revenue Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/30 - MBIA Insured Indiana Health Facility Financing Authority, Revenue Bonds, Ancilla Systems Inc. Obligated Group, Series 1997: 15,380 5.250%, 7/01/17 - MBIA Insured 7/07 at 101.00 AAA 16,838,639 2,250 5.250%, 7/01/22 - MBIA Insured 7/07 at 101.00 AAA 2,463,390 4,320 5.250%, 7/01/22 - MBIA Insured 7/07 at 101.00 AAA 4,729,709 Indiana Transportation Finance Authority, Highway Revenue Bonds, Series 2000: 1,285 5.375%, 12/01/25 (Pre-refunded to 12/01/10) 12/10 at 100.00 Aa2*** 1,457,550 6,715 5.375%, 12/01/25 12/10 at 100.00 Aa2 7,268,182 5,730 Michigan City School Building Corporation, Indiana, First 12/04 at 102.00 AAA 5,876,115 Mortgage Bonds, Series 1994A, 6.125%, 12/15/09 (Pre-refunded to 12/15/04) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.4% (0.3% OF TOTAL INVESTMENTS) 5,000 Iowa Tobacco Settlement Authority, Tobacco Settlement 6/11 at 101.00 BBB 4,156,750 Asset-Backed Revenue Bonds, Series 2001B, 5.600%, 6/01/35 ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.3% (0.9% OF TOTAL INVESTMENTS) 3,790 Kansas Department of Transportation, Highway Revenue 3/14 at 100.00 AA+ 4,014,520 Bonds, Series 2004A, 5.000%, 3/01/23 5,790 Sedgwick County Unified School District 259, Wichita, 9/10 at 100.00 AA 5,554,752 Kansas, General Obligation Bonds, Series 2000, 3.500%, 9/01/17 3,200 Wyandotte County Unified School District 500, Kansas, 9/11 at 100.00 AAA 3,121,248 General Obligation Bonds, Series 2001, 4.000%, 9/01/21 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 0.4% (0.3% OF TOTAL INVESTMENTS) 3,700 Louisville and Jefferson County Metropolitan Sewer District, 5/07 at 101.00 AAA 4,057,605 Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997A, 6.250%, 5/15/26 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 6.2% (4.2% OF TOTAL INVESTMENTS) 1,750 East Baton Rouge Mortgage Finance Authority, Louisiana, 10/07 at 102.00 Aaa 1,832,075 GNMA/FNMA Mortgage-Backed Securities Program Single Family Mortgage Revenue Refunding Bonds, Series 1997B-1, 5.750%, 10/01/26 4,000 Lafayette City and Parish, Louisiana, Utilities Revenue Bonds, 11/14 at 100.00 AAA 4,321,560 Series 2004, 5.250%, 11/01/25 - MBIA Insured 35,700 Louisiana Stadium and Exposition District, Hotel Occupancy 7/06 at 102.00 AAA 38,645,607 Tax Bonds, Series 1996, 5.750%, 7/01/26 (Pre-refunded to 7/01/06) - FGIC Insured Tobacco Settlement Financing Corporation, Louisiana, Tobacco Settlement Asset-Backed Bonds, Series 2001B: 10,000 5.500%, 5/15/30 5/11 at 101.00 BBB 8,938,000 6,250 5.875%, 5/15/39 5/11 at 101.00 BBB 5,436,000 ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 0.6% (0.4% OF TOTAL INVESTMENTS) 5,680 Portland, Maine, General Airport Revenue Bonds, 7/13 at 100.00 AAA 5,836,541 Series 2003A, 5.000%, 7/01/32 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 2.7% (1.7% OF TOTAL INVESTMENTS) 1,130 Maryland Community Development Administration, 9/10 at 100.00 Aa2 1,154,781 Residential Revenue Bonds, Series 2000H, 5.800%, 9/01/32 (Alternative Minimum Tax) 21 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND (continued) $ 7,720 Maryland Transportation Authority, Airport Parking Revenue 3/12 at 101.00 AAA $ 8,150,776 Bonds, Baltimore-Washington International Airport Passenger Facility, Series 2002B, 5.125%, 3/01/20 (Alternative Minimum Tax) - AMBAC Insured 7,475 Montgomery County Housing Opportunities Commission, 1/05 at 102.00 Aa2 7,626,070 Maryland, GNMA/FHA-Insured Multifamily Housing Revenue Bonds, Series 1994A, 6.250%, 7/01/28 7,090 Takoma Park, Maryland, Hospital Facilities, Revenue No Opt. Call AAA 8,444,615 Refunding and Improvement Bonds, Washington Adventist Hospital Project, Series 1995, 6.500%, 9/01/12 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 3.7% (2.5% OF TOTAL INVESTMENTS) 1,630 Massachusetts Educational Finance Authority, Student Loan 12/09 at 101.00 AAA 1,688,403 Revenue Refunding Bonds, Series 2000G, 5.700%, 12/01/11 (Alternative Minimum Tax) - MBIA Insured Massachusetts Municipal Wholesale Electric Company, Power Supply System Revenue Bonds, Nuclear Project 6, Series 1987A: 35 8.750%, 7/01/18 (Pre-refunded to 1/01/05) 1/05 at 100.00 Aaa 35,417 35 8.750%, 7/01/18 (Pre-refunded to 7/01/05) 7/05 at 100.00 Aaa 36,614 Massachusetts, General Obligation Bonds, Consolidated Loan, Series 2002E: 1,255 5.250%, 1/01/22 - FGIC Insured 1/13 at 100.00 AAA 1,415,088 3,745 5.250%, 1/01/22 (Pre-refunded to 1/01/13) - FGIC Insured 1/13 at 100.00 AAA 4,222,712 890 Massachusetts, General Obligation Bonds, Consolidated Loan, 11/12 at 100.00 Aa2 1,002,024 Series 2002C, 5.250%, 11/01/30 (Pre-refunded to 11/01/12) Massachusetts Development Finance Authority, Revenue Bonds, 100 Cambridge Street Redevelopment, M/SRBC Project, Series 2002A: 4,000 5.125%, 8/01/28 - MBIA Insured 2/12 at 100.00 AAA 4,138,240 5,625 5.125%, 2/01/34 - MBIA Insured 2/12 at 100.00 AAA 5,800,500 1,420 Massachusetts Health and Educational Facilities Authority, 7/08 at 101.00 Aaa 1,421,661 Revenue Bonds, Southcoast Health System Obligated Group, Series 1998A, 4.750%, 7/01/27 - MBIA Insured 5,745 Massachusetts Industrial Finance Agency, Resource Recovery 12/08 at 102.00 BBB 5,741,208 Revenue Refunding Bonds, Ogden Haverhill Project, Series 1998A, 5.600%, 12/01/19 (Alternative Minimum Tax) 8,500 Route 3 North Transportation Improvements Association, 6/10 at 100.00 AAA 9,608,400 Massachusetts, Lease Revenue Bonds, Series 2000, 5.375%, 6/15/33 (Pre-refunded to 6/15/10) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 6.6% (4.4% OF TOTAL INVESTMENTS) 17,000 Birmingham City School District, Oakland County, Michigan, 11/07 at 100.00 AAA 17,149,090 School Building and Site Bonds, Series 1998, 4.750%, 11/01/24 - FSA Insured 3,000 Detroit, Michigan, Senior Lien Water Supply System Revenue 7/07 at 101.00 AAA 3,179,760 Bonds, Series 1997A, 5.000%, 7/01/21 - MBIA Insured 3,785 Grand Rapids Housing Corporation, Michigan, FHA-Insured 1/05 at 103.00 AAA 3,940,034 Mortgage Loan Section 8 Assisted Multifamily Revenue Refunding Bonds, Elderly Project Series 1992, 7.375%, 7/15/41 4,030 Hancock Hospital Finance Authority, Michigan, FHA-Insured 8/08 at 100.00 AAA 4,139,334 Mortgage Hospital Revenue Bonds, Portage Health System Inc., Series 1998, 5.450%, 8/01/47 - MBIA Insured 1,500 Michigan State Building Authority, Revenue Refunding 10/11 at 100.00 AA 1,562,100 Bonds, Facilities Program, Series 2001I, 5.000%, 10/15/24 5,000 Michigan State Building Authority, Revenue Refunding 10/13 at 100.00 AAA 5,158,400 Bonds, Facilities Program, Series 2003II, 5.000%, 10/15/29 - MBIA Insured 7,115 Michigan State Hospital Finance Authority, Hospital 3/13 at 100.00 A1 7,762,252 Revenue Refunding Bonds, Henry Ford Health System, Series 2003A, 5.500%, 3/01/16 5,000 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call AAA 5,619,150 Refunding Bonds, Sisters of Mercy Health Corporation, Series 1993P, 5.375%, 8/15/14 - MBIA Insured 3,000 Michigan Strategic Fund, Collateralized Limited Obligation 9/09 at 102.00 AAA 3,156,780 Pollution Control Revenue Refunding 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 10,693,500 Metropolitan Airport, Series 1998A, 5.375%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured 22 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 4.1% (2.8% OF TOTAL INVESTMENTS) $ 7,475 Dakota County Community Development Agency, Minnesota, 2/12 at 102.00 Aaa $ 7,858,468 GNMA Collateralized Mortgage Loan Multifamily Senior Housing Revenue Bonds, Wingate Project, Series 2002A, 5.625%, 8/20/43 160 Dakota County Housing and Redevelopment Authority, 4/05 at 101.00 AAA 163,394 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 3,177,210 Minnesota, Subordinate Airport Revenue Bonds, Series 2001C, 5.250%, 1/01/26 - FGIC Insured 21,335 St. Paul Housing and Redevelopment Authority, Minnesota, 11/15 at 103.00 AAA 26,932,024 Sales Tax Revenue Refunding Bonds, Civic Center Project, Series 1996, 7.100%, 11/01/23 - FSA Insured 1,175 St. Paul Housing and Redevelopment Authority, Minnesota, 3/05 at 102.60 Aaa 1,212,377 FNMA Mortgage-Backed Securities Middle Income Program Phase II Single Family Mortgage Revenue Refunding Bonds, Series 1995, 6.800%, 3/01/28 ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.3% (0.9% OF TOTAL INVESTMENTS) 9,750 Mississippi Business Finance Corporation, Pollution Control 4/05 at 101.00 BBB- 9,784,125 Revenue Refunding Bonds, System Energy Resources Inc. Project, Series 1998, 5.875%, 4/01/22 2,475 Mississippi Hospital Equipment and Facilities Authority, 9/14 at 100.00 N/R 2,495,518 Revenue Bonds, Baptist Memorial Health Care, Series 2004B-1, 5.000%, 9/01/24 ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.6% (1.0% OF TOTAL INVESTMENTS) 2,000 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 2,062,060 Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink Cross County Extension Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured 6,350 Kansas City, Missouri, General Improvement Airport Revenue 9/12 at 100.00 AAA 7,021,830 Bonds, Series 2003B, 5.250%, 9/01/17 - FGIC Insured 3,740 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 3,910,432 Bonds, SSM Healthcare System, Series 2001A, 5.250%, 6/01/28 - AMBAC Insured 1,845 Missouri Health and Educational Facilities Authority, Revenue 5/13 at 100.00 AA 1,995,220 Bonds, BJC Health System, Series 2003, 5.250%, 5/15/18 ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.8% (0.5% OF TOTAL INVESTMENTS) 1,175 Montana Board of Housing, Single Family Mortgage Bonds, 6/07 at 101.50 AA+ 1,195,398 Series 1997A, 6.150%, 6/01/30 (Alternative Minimum Tax) 1,330 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 1,373,970 Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax) 4,795 Montana Higher Education Student Assistance Corporation, 12/08 at 101.00 A2 4,924,369 Student Loan Revenue Bonds, Subordinate Series 1998B, 5.500%, 12/01/31 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.2% (0.2% OF TOTAL INVESTMENTS) 2,115 Nebraska Investment Finance Authority, Single Family 9/10 at 100.00 AAA 2,185,768 Housing Revenue Bonds, Series 2000E, 5.850%, 9/01/20 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 3.1% (2.1% OF TOTAL INVESTMENTS) 5,000 Clark County, Nevada, General Obligation Bank Bonds, 6/11 at 100.00 AAA 5,537,750 Southern Nevada Water Authority Loan, Series 2001, 5.300%, 6/01/19 - FGIC Insured 10,900 Clark County School District, Nevada, General Obligation 6/12 at 100.00 AAA 12,324,521 Bonds, Series 2002C, 5.500%, 6/15/19 - MBIA Insured 10,465 Nevada, General Obligation Bonds, Municipal Bond Bank 5/06 at 101.00 AAA 11,222,561 Project 52, Series 1996A, 6.000%, 5/15/21 (Pre-refunded to 5/15/06) ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 1.2% (0.8% OF TOTAL INVESTMENTS) New Hampshire Housing Finance Authority, FHLMC Multifamily Housing Revenue Remarketed Bonds, Countryside LP Project, Series 1994: 3,725 6.000%, 7/01/18 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 3,991,040 6,945 6.100%, 7/01/24 (Alternative Minimum Tax) 7/10 at 101.00 Aaa 7,373,368 23 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 7.0% (4.7% OF TOTAL INVESTMENTS) $ 3,360 New Jersey Higher Education Assistance Authority, Student 6/10 at 101.00 AAA $ 3,426,528 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 3,339,330 Sublease Revenue Bonds, Light Rail Transit System, 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 A+*** 9,616,513 Transportation System Bonds, Series 1996B, 5.250%, 6/15/16 (Pre-refunded to 6/15/07) 9,250 New Jersey Transportation Trust Fund Authority, 6/13 at 100.00 A+ 10,143,920 Transportation System Bonds, Series 2003C, 5.500%, 6/15/23 4,500 New Jersey Transportation Trust Fund Authority, No Opt. Call AAA 5,273,505 Transportation System Bonds, Series 2001C, 5.500%, 12/15/18 - FSA Insured 10,000 New Jersey Turnpike Authority, Revenue Bonds, 7/13 at 100.00 AAA 10,737,500 Series 2003A, 5.000%, 1/01/20 - FSA Insured 14,560 Tobacco Settlement Financing Corporation, New Jersey, 6/12 at 100.00 BBB 13,544,440 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 3,065,313 Tobacco Settlement Asset-Backed Bonds, Series 2003, 6.750%, 6/01/39 West Deptford Township, Gloucester County, New Jersey, General Obligation Bonds, Series 2000: 3,150 5.500%, 9/01/21 (Pre-refunded to 9/01/10) - FGIC Insured 9/10 at 100.00 Aaa 3,591,945 3,335 5.500%, 9/01/22 (Pre-refunded to 9/01/10) - FGIC Insured 9/10 at 100.00 Aaa 3,802,901 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 16.5% (11.2% OF TOTAL INVESTMENTS) 1,500 Hempstead Industrial Development Agency, New York, No Opt. Call A3 1,601,340 Resource Recovery Revenue Refunding Bonds, American Ref-Fuel Company of Hempstead, Series 2001, 5.000%, 12/01/10 (Mandatory put 6/01/10) 12,500 Metropolitan Transportation Authority, New York, 11/12 at 100.00 AAA 13,754,250 Dedicated Tax Fund Bonds, Series 2002A, 5.500%, 11/15/26 - FSA Insured 5 New York City, New York, General Obligation Bonds, 2/05 at 100.00 A 5,080 Fiscal Series 1987D, 8.500%, 8/01/08 12,500 New York City, New York, General Obligation Bonds, No Opt. Call A 12,965,000 Fiscal Series 1997A, 7.000%, 8/01/05 6,300 New York City, New York, General Obligation Bonds, 5/10 at 101.00 AAA 7,333,389 Fiscal Series 2000A, 6.250%, 5/15/26 - FSA Insured New York City, New York, General Obligation Bonds, Fiscal Series 1996F: 13,060 5.750%, 2/01/15 (Pre-refunded to 2/01/06) 2/06 at 101.50 A*** 13,894,665 3,235 5.750%, 2/01/15 2/06 at 101.50 A 3,404,838 4,875 New York City Municipal Water Finance Authority, New York, 6/06 at 101.00 AAA 5,160,626 Water and Sewerage System Revenue Bonds, Fiscal Series 1997A, 5.500%, 6/15/24 - MBIA Insured 10,000 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AA+ 11,039,200 Water and Sewerage System Revenue Bonds, Fiscal Series 2000A, 5.750%, 6/15/30 New York City Municipal Water Finance Authority, New York, Water and Sewerage System Revenue Bonds, Fiscal Series 1996B: 7,270 5.750%, 6/15/26 (Pre-refunded to 6/15/06) - MBIA Insured 6/06 at 101.00 AAA 7,800,492 13,380 5.750%, 6/15/26 - MBIA Insured 6/06 at 101.00 AAA 14,299,875 7,810 New York City Transitional Finance Authority, New York, 8/09 at 101.00 AA+*** 9,009,538 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 2,565,315 Revenue Bonds, State University Dormitory Facilities, Series 1999C, 5.500%, 7/01/29 (Pre-refunded to 7/01/09) - MBIA Insured 4,000 Dormitory Authority of the State of New York, Revenue 11/04 at 100.00 AA- 4,095,600 Bonds, State University Educational Facilities, Series 1990B, 6.000%, 5/15/17 1,500 Dormitory Authority of the State of New York, Revenue 8/07 at 101.00 AAA 1,604,595 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 2,297,307 Revenue Bonds, 853 Schools Program, Gateway-Longview Inc., Series 1998A, 5.500%, 7/01/18 - AMBAC Insured 5,500 Dormitory Authority of the State of New York, FHA-Insured 2/14 at 100.00 AAA 5,710,815 Mortgage Hospital Revenue Bonds, Kaleida Health, Series 2004, 5.050%, 2/15/25 24 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) Dormitory Authority of the State of New York, Improvement Revenue Bonds, Mental Health Services Facilities, Series 1996B: $ 1,930 5.375%, 2/15/26 (Pre-refunded to 2/15/06) - MBIA Insured 2/06 at 102.00 AAA $ 2,057,110 70 5.375%, 2/15/26 - MBIA Insured 2/06 at 102.00 AAA 73,606 17,000 Dormitory Authority of the State of New York, Third General 7/09 at 101.00 AAA 19,382,380 Resolution Consolidated Revenue Bonds, City University System, 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, Third General 1/08 at 102.00 AAA 3,353,580 Resolution Consolidated Revenue Bonds, City University System, Series 1997-1, 5.375%, 7/01/24 (Pre-refunded to 1/01/08) - FSA 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 1,779,917 9,235 6.125%, 7/01/21 - RAAI Insured 7/09 at 101.00 AA 10,152,313 3,000 New York State Energy Research and Development 9/08 at 102.00 AAA 3,288,150 Authority, Pollution Control Revenue Bonds, Rochester Gas and Electric Corporation, Series 1998A, 5.950%, 9/01/33 (Alternative Minimum Tax) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.2% (0.2% OF TOTAL INVESTMENTS) 2,000 North Carolina Municipal Power Agency 1, Catawba Electric 1/08 at 102.00 AAA 2,139,020 Revenue Bonds, Series 1998A, 5.000%, 1/01/20 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 4.7% (3.2% OF TOTAL INVESTMENTS) 7,500 Cleveland, Ohio, Airport System Revenue Bonds, 1/10 at 101.00 AAA 7,653,075 Series 2000A, 5.000%, 1/01/31 - FSA Insured 3,650 Montgomery County, Ohio, Revenue Bonds, Catholic 5/14 at 100.00 AA 3,707,962 Health Initiatives, Series 2004A, 5.000%, 5/01/30 (WI, settling 11/18/04) 11,870 Ohio Housing Finance Agency, GNMA Mortgage-Backed 7/09 at 100.00 Aaa 12,123,899 Securities Program Residential Mortgage Revenue Bonds, Series 1999C, 5.750%, 9/01/30 (Alternative Minimum Tax) 6,800 Ohio Water Development Authority, Solid Waste Disposal 9/08 at 102.00 N/R 6,701,604 Revenue Bonds, Bay Shore Power, Series 1998A, 5.875%, 9/01/20 (Alternative Minimum Tax) 13,900 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 14,260,010 Revenue Bonds, Bay Shore Power, Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.3% (0.2% OF TOTAL INVESTMENTS) 3,400 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B- 3,191,172 Bonds, American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 1.0% (0.7% OF TOTAL INVESTMENTS) 9,150 Port of St. Helens, Oregon, Pollution Control Revenue No Opt. Call BBB 9,170,038 Bonds, Portland General Electric Company, Series 1985B, 4.800%, 6/01/10 ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.9% (2.7% OF TOTAL INVESTMENTS) 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 1,355,969 3,125 0.000%, 5/15/23 - FSA Insured No Opt. Call AAA 1,276,656 3,135 0.000%, 5/15/24 - FSA Insured No Opt. Call AAA 1,199,169 3,155 0.000%, 5/15/26 - FSA Insured No Opt. Call AAA 1,071,028 4,145 0.000%, 11/15/26 - FSA Insured No Opt. Call AAA 1,372,244 2,800 0.000%, 5/15/28 - FSA Insured No Opt. Call AAA 841,456 3,000 0.000%, 11/15/28 - FSA Insured No Opt. Call AAA 878,820 4,355 Carbon County Industrial Development Authority, No Opt. Call BBB- 4,726,090 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 11,000 Delaware County Authority, Pennsylvania, Health System 11/08 at 102.00 AAA 11,440,110 Revenue Bonds, Catholic Health East Issue, Series 1998A, 4.875%, 11/15/18 - AMBAC Insured Pennsylvania Economic Development Financing Authority, Senior Lien Resource Recovery Revenue Bonds, Northampton Generating Project, Series 1994A: 2,100 6.400%, 1/01/09 (Alternative Minimum Tax) 1/05 at 101.00 BBB- 2,141,769 4,500 6.500%, 1/01/13 (Alternative Minimum Tax) 1/05 at 101.00 BBB- 4,561,200 25 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA (continued) $ 800 Pennsylvania Economic Development Financing Authority, 1/05 at 101.00 N/R $ 800,360 Subordinate Resource Recovery Revenue Bonds, Northampton Generating Project, Series 1994C, 6.875%, 1/01/11 (Alternative Minimum Tax) 5,275 Pennsylvania Economic Development Financing Authority, No Opt. Call N/R 5,459,467 Senior Lien Resource Recovery Revenue Bonds, Northampton Generating Project, Series 1994B, 6.750%, 1/01/07 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.2% (0.1% OF TOTAL INVESTMENTS) 1,250 Puerto Rico Highway and Transportation Authority, 7/10 at 101.00 AAA 1,433,275 Highway Revenue Bonds, Series 2000B, 5.875%, 7/01/21 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,000 Kent County Water Authority, Rhode Island, General Revenue 7/12 at 100.00 AAA 2,100,980 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 1,354,891 1,080 5.250%, 3/15/18 - RAAI Insured 3/12 at 101.00 AA 1,157,069 ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 3.5% (2.4% OF TOTAL INVESTMENTS) 22,855 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call AAA 5,681,296 Revenue Bonds, Series 2004A-2, 0.000%, 1/01/31 - AMBAC Insured 6,925 South Carolina, General Obligation Bonds, Series 1999A, 10/09 at 101.00 AAA 7,138,498 4.000%, 10/01/14 21,000 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 20,153,280 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.000%, 5/15/22 ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.7% (1.1% OF TOTAL INVESTMENTS) 2,260 Johnson City Health and Educational Facilities Board, 1/09 at 101.00 AAA 2,452,484 Tennessee, Hospital Revenue Refunding and Improvement Bonds, Johnson City Medical Center, Series 1998C, 5.125%, 7/01/25 - MBIA Insured 1,700 Memphis-Shelby County Airport Authority, Tennessee, 3/10 at 101.00 AAA 1,884,297 Airport Revenue Bonds, Series 1999D, 6.000%, 3/01/24 (Alternative Minimum Tax) - AMBAC Insured 6,000 Metropolitan Government of Nashville and Davidson 12/17 at 100.00 AAA 7,276,860 Counties, Tennessee, Revenue Refunding and Improvement Bonds, Meharry Medical College, Series 1996, 6.000%, 12/01/19 - AMBAC Insured 4,400 Tennessee Housing Development Agency, Homeownership 7/10 at 101.00 AA 4,571,864 Program Bonds, Series 2000-1, 6.375%, 7/01/25 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 5.5% (3.7% OF TOTAL INVESTMENTS) 3,740 Austin, Texas, Subordinate Lien Hotel Occupancy Tax 11/09 at 100.00 AAA 4,206,602 Revenue 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 4,532,971 Texas, Revenue Bonds, Scott and White Memorial Hospital and Scott, Sherwood and Brindley Foundation, Series 2000A, 6.125%, 8/15/23 - MBIA Insured 5,690 Dallas-Ft. Worth International Airport Facility Improvement 11/05 at 100.00 CCC 5,301,487 Corporation, Texas, Revenue Refunding Bonds, American Airlines Inc., Series 2000B, 6.050%, 5/01/29 (Alternative Minimum Tax) (Mandatory put 11/01/05) 220 Ft. Worth Housing Finance Corporation, Texas, Home 4/05 at 100.00 Aa2 220,724 Mortgage Revenue Refunding Bonds, Series 1991A, 8.500%, 10/01/11 1,000 Fort Worth, Texas, Water and Sewerage Revenue Bonds, 2/08 at 100.00 AA 1,074,430 Series 1998, 5.250%, 2/15/15 1,000 Harlingen Independent School District, Cameron County, 8/09 at 100.00 AAA 1,096,350 Texas, Unlimited Tax School Building Bonds, Series 1999, 5.650%, 8/15/29 1,625 Harris County Health Facilities Development Corporation, 7/09 at 101.00 AAA 1,706,998 Texas, Revenue Bonds, Christus Health, Series 1999A, 5.375%, 7/01/24 - MBIA Insured 140 Hidalgo County Housing Finance Corporation, Texas, 4/05 at 101.00 Aaa 140,976 GNMA/FNMA Collateralized Single Family Mortgage Revenue Bonds, Series 1994A, 6.750%, 10/01/15 (Alternative Minimum Tax) 4,000 Houston Community College, Texas, Limited Tax General 2/13 at 100.00 AAA 4,127,960 Obligation Bonds, Series 2003, 5.000%, 2/15/27 - AMBAC Insured 26 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 3,885 Houston Independent School District, Public Facility No Opt. Call AAA $ 1,963,401 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 1,712,359 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 2,103,532 3,705 0.000%, 8/15/22 8/06 at 41.33 AAA 1,401,750 540 Lubbock Housing Finance Corporation, Texas, GNMA 6/07 at 102.00 AAA 546,626 Mortgage-Backed Securities Program Single Family Mortgage Revenue Refunding Bonds, Series 1997A, 6.125%, 12/01/17 3,480 Pearland, Texas, General Obligation Bonds, Series 2002, 3/12 at 100.00 AAA 3,580,085 5.000%, 3/01/27 - FGIC Insured 6,290 San Antonio, Texas, Electric and Gas System Revenue 2/09 at 100.00 AA+ 6,349,063 Refunding Bonds, New Series 1998A, 4.500%, 2/01/21 6,000 Spring Branch Independent School District, Harris County, 2/11 at 100.00 AAA 6,201,420 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 4,221,520 Refunding and Improvement Bonds, Series 1999, 5.000%, 3/01/22 - FSA Insured 1,440 Texas, General Obligation Bonds, Water Financial Assistance, 8/09 at 100.00 AAA 1,560,557 State Participation Program, Series 1999C, 5.500%, 8/01/29 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 4.4% (3.0% OF TOTAL INVESTMENTS) 10,000 Intermountain Power Agency, Utah, Power Supply Revenue 7/07 at 102.00 AAA 11,053,500 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 13,407,625 3,900 5.250%, 8/15/26 - MBIA Insured 8/07 at 101.00 AAA 4,002,102 4,165 Utah Housing Corporation, Single Family Mortgage Bonds, 1/12 at 100.00 AA- 4,372,250 Series 2002A-1, 5.300%, 7/01/18 (Alternative Minimum Tax) 45 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/10 at 100.00 AA 45,056 Series 2000B, 6.250%, 7/01/22 (Alternative Minimum Tax) 2,555 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA- 2,699,536 Series 2000D-1, 6.050%, 7/01/14 (Alternative Minimum Tax) 2,910 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 Aa1 3,098,743 Series 2000E-1, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax) 685 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA 685,897 Series 2000E-1, Class II, 6.150%, 1/01/27 (Alternative Minimum Tax) 1,065 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/11 at 100.00 AA 1,096,055 Series 2001A-2, 5.650%, 7/01/27 (Alternative Minimum Tax) 900 Utah Housing Finance Agency, Single Family Mortgage Bonds, 1/11 at 100.00 Aa2 958,482 Series 2001B-1, 5.750%, 7/01/19 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ VERMONT - 0.4% (0.3% OF TOTAL INVESTMENTS) 3,510 Vermont Housing Finance Agency, Single Family Housing 11/04 at 102.00 A+ 3,554,612 Bonds, Series 1994-5, 7.000%, 11/01/27 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ VIRGIN ISLANDS - 0.8% (0.5% OF TOTAL INVESTMENTS) 2,500 Virgin Islands Public Finance Authority, Refinery Revenue 1/14 at 100.00 BBB- 2,689,250 Bonds, Hovensa LLC, Series 2003, 6.125%, 7/01/22 (Alternative Minimum Tax) 4,700 Virgin Islands Public Finance Authority, Gross Receipts Taxes 10/14 at 100.00 AA 4,803,118 Loan Notes, Series 2003, 5.000%, 10/01/33 - RAAI Insured 27 Nuveen Performance Plus Municipal Fund, Inc. (NPP) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 4.2% (2.9% OF TOTAL INVESTMENTS) $ 12,235 Chelan County Public Utility District 1, Washington, No Opt. Call AAA $ 4,005,250 Columbia River-Rock Island Hydro-Electric System Revenue Refunding Bonds, Series 1997A, 0.000%, 6/01/26 - MBIA Insured 3,100 Cowlitz County Public Utilities District 1, Washington, 9/14 at 100.00 AAA 3,187,172 Electric Production Revenue Bonds, Series 2004, 5.000%, 9/01/28 - FGIC Insured 5,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa 5,624,700 Bonds, Nuclear Project 1, Series 2003A, 5.500%, 7/01/16 1,815 Grant County Public Utility District 2, Washington, Revenue 1/06 at 102.00 AAA 1,914,226 Bonds, Master Lease Program, Wanapum Hydroelectric Development, Series 1997A, 5.625%, 1/01/26 - MBIA Insured 2,295 King County School District 414, Lake Washington, 12/10 at 100.00 Aa1*** 2,605,926 Washington, General Obligation Bonds, Series 2000, 5.375%, 12/01/16 (Pre-refunded to 12/01/10) 12,000 Washington, Motor Vehicle Fuel Tax General Obligation 1/11 at 100.00 Aa1 12,535,440 Bonds, Series 2001D, 5.250%, 1/01/26 5,000 Washington State Housing Finance Commission, 7/09 at 101.00 AA 5,440,350 Non-Profit Housing Revenue Bonds, Kline Galland Center, Series 1999, 6.000%, 7/01/29 - RAAI Insured 4,500 Washington State Healthcare Facilities Authority, Revenue 12/09 at 101.00 AAA 4,954,090 Bonds, Providence Services, Series 1999, 5.375%, 12/01/19 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.5% (0.4% OF TOTAL INVESTMENTS) 5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 5,107,900 Bonds, Appalachian Power Company, Series 2003L, 5.500%, 10/01/22 ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 2.1% (1.3% OF TOTAL INVESTMENTS) 11,620 Wisconsin Health and Educational Facilities Authority, 2/10 at 101.00 AA 13,063,320 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 6,837,242 Revenue Bonds, Millennium Housing Foundation Inc., Series 1998, 6.100%, 1/01/28 ------------------------------------------------------------------------------------------------------------------------------------ $ 1,469,515 Total Long-Term Investments (cost $1,297,975,376) - 147.2% 1,399,487,231 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.6% (0.4% OF TOTAL INVESTMENTS) 2,100 Chester County Industrial Development Authority, VMIG-1 2,100,000 Pennsylvania, Secured Revenue Bonds, Variable Rate Demand Obligations, Archdiocese of Philadelphia, Series 2001, 1.750%, 7/01/31+ 2,300 Fulton County Residential Care Facilities Authority, Georgia, A-1+ 2,300,000 Revenue Refunding Bonds, Lenbrook Square Foundation Inc., Variable Rate Demand Obligations, Series 1996, 1.790%, 1/01/18+ 1,000 Palm Beach County Health Facilities Authority, Florida, VMIG-1 1,000,000 Variable Revenue Bonds, Bethesda Healthcare System, Series 2001, 1.740%, 12/01/31+ ------------------------------------------------------------------------------------------------------------------------------------ $ 5,400 Total Short-Term Investments (cost $5,400,000) 5,400,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $1,303,375,376) - 147.8% 1,404,887,231 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.6% 25,106,076 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.4)% (479,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 950,993,307 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): 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. (WI) Security purchased on a when-issued basis. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 28 Nuveen Municipal Advantage Fund, Inc. (NMA) Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 3.2% (2.1% OF TOTAL INVESTMENTS) $ 10,000 Jefferson County, Alabama, Sewer Revenue Capital 2/09 at 101.00 AAA $ 11,219,600 Improvement Warrants, Series 1999A, 5.375%, 2/01/36 (Pre-refunded to 2/01/09) - FGIC Insured 5,075 Lauderdale County and Florence Healthcare Authority, 7/09 at 101.00 AAA 5,307,435 Alabama, Revenue Bonds, Coffee Health Group, Series 1999A, 5.250%, 7/01/24 - MBIA Insured 5,155 Phenix City Industrial Development Board, Alabama, 5/12 at 100.00 BBB 5,419,194 Environmental Improvement Revenue Bonds, MeadWestvaco Corporation, Series 2002A, 6.350%, 5/15/35 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.7% (0.5% OF TOTAL INVESTMENTS) 5,000 Maricopa County Pollution Control Corporation, Arizona, 5/06 at 101.00 BBB 5,143,350 Remarketed Revenue Refunding Bonds, Public Service Company of New Mexico, Series 1992A, 5.750%, 11/01/22 ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 9.5% (6.4% OF TOTAL INVESTMENTS) 2,500 Alameda Corridor Transportation Authority, California, 10/17 at 100.00 AAA 1,739,075 Subordinate Lien Revenue Bonds, Series 2004A, 0.000%, 10/01/25 - AMBAC Insured 3,000 California Health Facilities Financing Authority, Health 3/13 at 100.00 A 3,008,940 Facility Revenue Bonds, Adventist Health System/West, Series 2003A, 5.000%, 3/01/33 3,300 California Department of Water Resources, Power Supply 5/12 at 101.00 A2 3,567,135 Revenue Bonds, Series 2002A, 5.375%, 5/01/22 7,500 California State Public Works Board, Lease Revenue Bonds, 4/14 at 100.00 A- 7,717,200 Department of Mental Health, Coalinga State Hospital, Series 2004A, 5.125%, 6/01/29 7,535 Contra Costa County, California, GNMA Mortgage-Backed No Opt. Call AAA 10,267,492 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 6,982,200 Costa Counties, California, Subordinated Water System 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 2,554,775 California, Proposition C Second Senior Lien Sales Tax Revenue Bonds, Series 1995A, 5.000%, 7/01/25 (Pre-refunded to 7/01/05) - AMBAC Insured North Orange County Community College District, California, General Obligation Bonds, Series 2003B: 7,735 0.000%, 8/01/25 - FGIC Insured No Opt. Call AAA 2,684,122 4,000 0.000%, 8/01/26 - FGIC Insured No Opt. Call AAA 1,302,320 5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,147,350 Residential Mortgage Revenue Refunding Bonds, Series 1991B, 7.375%, 2/01/12 5,000 Palmdale Community Redevelopment Agency, California, No Opt. Call AAA 6,961,850 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 12,837,002 Program, Single Family Mortgage Revenue Bonds, Series 1989A, 7.600%, 1/01/23 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 3.5% (2.3% OF TOTAL INVESTMENTS) 8,350 Colorado Health Facilities Authority, Remarketed Revenue 7/06 at 102.00 AAA 8,949,029 Bonds, Kaiser Permanente, Series 1994A, 5.350%, 11/01/16 2,650 E-470 Public Highway Authority, Colorado, Senior Revenue No Opt. Call AAA 1,595,857 Bonds, Series 1997B, 0.000%, 9/01/16 - MBIA Insured 1,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 102.00 AAA 1,123,480 Bonds, Series 2000A, 5.750%, 9/01/35 - MBIA Insured 4,125 Municipal Subdistrict Northern Colorado Water District, 12/07 at 101.00 AAA 4,506,686 Revenue Bonds, Series 1997G, 5.250%, 12/01/15 - AMBAC Insured 29 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ COLORADO (continued) Platte River Power Authority, Colorado, Power Revenue Refunding Bonds, Series 2002EE: $ 2,000 5.375%, 6/01/17 6/12 at 100.00 AA- $ 2,252,220 5,000 5.375%, 6/01/18 6/12 at 100.00 AA- 5,621,700 ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 0.8% (0.5% OF TOTAL INVESTMENTS) 2,500 District of Columbia Housing Finance Agency, GNMA 12/04 at 103.00 AAA 2,577,525 Collateralized Single Family Mortgage Revenue Bonds, Series 1988F-1, 6.375%, 6/01/26 (Alternative Minimum Tax) 2,815 District of Columbia Housing Finance Agency, GNMA/FNMA 6/07 at 102.00 AAA 2,860,631 Single Family Mortgage Revenue Bonds, Series 1997B, 5.900%, 12/01/28 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 2.2% (1.4% OF TOTAL INVESTMENTS) 2,770 Florida Housing Finance Corporation, Housing Revenue 12/10 at 100.00 AAA 2,902,046 Bonds, Stratford Point Apartments, Series 2000O-1, 5.850%, 12/01/31 (Alternative Minimum Tax) - FSA Insured 1,075 Orange County, Florida, Tourist Development Tax Revenue 10/09 at 100.00 AAA 1,185,155 Bonds, Series 2000, 5.250%, 10/01/16 - AMBAC Insured 9,990 Tampa, Florida, Healthcare System Revenue Bonds, 12/04 at 101.00 AAA 10,842,047 Allegany Health System - St. Mary's Hospital, Series 1993, 5.125%, 12/01/23 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 0.7% (0.5% OF TOTAL INVESTMENTS) 2,290 Hawaii Housing Finance and Development Corporation, 7/07 at 102.00 AAA 2,316,404 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 2,342,806 GNMA Collateralized Multifamily Housing Revenue Bonds, Sunset Villas, Series 2000, 5.700%, 7/20/31 ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 14.3% (9.5% OF TOTAL INVESTMENTS) 5,865 Chicago, Illinois, General Obligation Bonds, Neighborhoods 7/10 at 101.00 AAA 7,026,857 Alive 21 Program, Series 2000A, 6.500%, 1/01/35 (Pre-refunded to 7/01/10) - FGIC Insured 4,000 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 4,503,040 Obligation Bonds, Dedicated Tax Revenues, Series 1997, 5.750%, 12/01/20 (Pre-refunded to 12/01/07) - AMBAC Insured 12,500 Chicago Board of Education, Illinois, Unlimited Tax General 12/07 at 102.00 AAA 13,094,125 Obligation Bonds, Dedicated Tax Revenues, Series 1997A, 5.250%, 12/01/27 - AMBAC Insured 5,000 Chicago, Illinois, Special Facility Revenue Bonds, O'Hare No Opt. Call N/R 1,800,000 International Airport, United Air Lines Inc. Project, Series 2001A, 6.375%, 11/01/35 (Alternative Minimum Tax) (Mandatory put 5/01/13) # 5,000 Chicago, Illinois, Second Lien Passenger Facility Charge 1/11 at 101.00 AAA 5,173,900 Revenue Bonds, O'Hare International Airport, Series 2001A, 5.375%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured 5,000 Chicago, Illinois, Second Lien Wastewater Transmission 1/08 at 102.00 AAA 5,553,850 Revenue Bonds, Series 1997, 5.250%, 1/01/28 (Pre-refunded to 1/01/08) - AMBAC Insured 10,115 Illinois Health Facilities Authority, Revenue Refunding Bonds, 11/06 at 102.00 AAA 11,125,691 Rush-Presbyterian-St. Luke's Medical Center Obligated Group, Series 1996A, 6.250%, 11/15/20 - MBIA Insured 6,165 Illinois Health Facilities Authority, Revenue Bonds, Sarah 2/07 at 102.00 A 6,373,685 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 Baa2 3,830,172 Health Services, Series 1997A, 5.375%, 8/15/16 6,000 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/12 at 100.00 Baa2 6,160,320 Medical Center, Series 2002, 5.750%, 5/15/22 Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, McCormick Place Expansion Project, Series 1999A: 13,455 5.500%, 12/15/24 - FGIC Insured 12/09 at 101.00 AAA 14,895,627 10,000 5.250%, 12/15/28 - FGIC Insured 12/09 at 101.00 AAA 10,515,700 4,600 Regional Transportation Authority, Cook, DuPage, Kane, Lake, No Opt. Call AAA 6,133,364 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 2,037,136 Bonds, Series 2003A, 5.000%, 4/01/23 - AMBAC Insured 30 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 4.6% (3.1% OF TOTAL INVESTMENTS) $ 7,425 Ft. Wayne International Airport Building Corporation, 1/05 at 100.00 Aa3 $ 7,443,414 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 5,565,863 Revenue Bonds, Clarian Health Obligated Group, Series 2000A, 5.500%, 2/15/30 - MBIA Insured 9,000 Indiana Health Facility Financing Authority, Hospital Revenue 5/06 at 102.00 AAA 9,621,630 Refunding and Improvement Bonds, Community Hospitals of Indiana, Series 1995, 5.700%, 5/15/22 - MBIA Insured 6,075 LaGrange County Jail Building Corporation, Indiana, First 10/09 at 101.00 A3 6,403,536 Mortgage Jail Bonds, Series 1998, 5.400%, 10/01/21 2,725 St. Joseph County Hospital Authority, Indiana, Revenue 2/09 at 102.00 BBB 2,823,618 Bonds, Madison Center Inc., Series 1999, 5.450%, 2/15/12 ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.7% (0.5% OF TOTAL INVESTMENTS) 1,135 Iowa Finance Authority, GNMA/FNMA Mortgage-Backed 1/05 at 102.00 AAA 1,160,685 Securities Program Single Family Mortgage Bonds, Series 1995C, 6.450%, 1/01/24 3,500 Marshalltown, Iowa, Pollution Control Revenue Refunding 11/04 at 101.00 AAA 3,544,170 Bonds, Iowa Electric Light and Power Company Project, Series 1993, 5.500%, 11/01/23 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 1.8% (1.2% OF TOTAL INVESTMENTS) 5,000 Burlington, Kansas, Environmental Improvement Revenue No Opt. Call A3 5,241,950 Bonds, Kansas City Power and Light Company Project, Series 1998A, 4.750%, 9/01/15 (Mandatory put 10/01/07) 4,935 Kansas Department of Transportation, Highway Revenue 3/14 at 100.00 AA+ 5,262,684 Bonds, Series 2004A, 5.000%, 3/01/22 1,750 Wamego, Kansas, Pollution Control Revenue Bonds, Kansas 6/14 at 100.00 AAA 1,860,373 Gas and Electric Company, Series 2004, 5.300%, 6/01/31 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.6% (1.1% OF TOTAL INVESTMENTS) 5,500 Louisville and Jefferson County Metropolitan Sewer 5/07 at 101.00 AAA 5,802,170 District, Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997A, 5.250%, 5/15/27 - MBIA Insured 4,950 Louisville and Jefferson County Metropolitan Sewer District, 11/07 at 101.00 AAA 5,120,230 Kentucky, Sewer and Drainage System Revenue Bonds, Series 1997B, 5.200%, 5/15/25 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 6.3% (4.2% OF TOTAL INVESTMENTS) 13,500 De Soto Parish, Louisiana, Pollution Control Revenue 9/09 at 102.00 AAA 15,251,355 Refunding Bonds, Cleco Utility Group Inc. Project, Series 1999, 5.875%, 9/01/29 - AMBAC Insured 10,000 Louisiana Public Facilities Authority, Extended Care No Opt. Call BBB 12,803,200 Facilities Revenue Bonds, Comm-Care Corporation Project, Series 1994, 11.000%, 2/01/14 Tobacco Settlement Financing Corporation, Louisiana, Tobacco Settlement Asset-Backed Bonds, Series 2001B: 6,000 5.500%, 5/15/30 5/11 at 101.00 BBB 5,362,800 11,750 5.875%, 5/15/39 5/11 at 101.00 BBB 10,219,680 ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.2% (0.8% OF TOTAL INVESTMENTS) 1,750 Massachusetts Health and Educational Facilities Authority, 1/09 at 101.00 AAA 1,787,328 Revenue Bonds, UMass Memorial Healthcare, Series 1998A, 5.000%, 7/01/28 - AMBAC Insured 5,870 Massachusetts Housing Finance Agency, Single Family 12/09 at 100.00 AAA 5,987,107 Housing Revenue Bonds, Series 77, 5.950%, 6/01/25 (Alternative Minimum Tax) - FSA Insured 515 Massachusetts Housing Finance Agency, Single Family 12/09 at 100.00 AAA 539,282 Housing Revenue Bonds, Series 79, 5.950%, 12/01/27 (Alternative Minimum Tax) - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.4% (0.9% OF TOTAL INVESTMENTS) 3,275 Michigan State Hospital Finance Authority, Revenue 2/05 at 101.00 Ba3 3,089,799 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 3,999,646 3,000 5.250%, 8/15/28 8/08 at 101.00 Ba3 2,338,140 31 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 2.1% (1.4% OF TOTAL INVESTMENTS) $ 5,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA $ 5,274,200 Minnesota, Subordinate Airport Revenue Bonds, Series 2001C, 5.250%, 1/01/32 - FGIC Insured 5,890 Minnesota Housing Finance Agency, Single Family Mortgage 7/09 at 100.00 AA+ 5,896,715 Revenue Bonds, Series 2000C, 5.550%, 7/01/24 (Alternative Minimum Tax) 3,040 Minnesota Housing Finance Agency, Single Family Mortgage 1/10 at 100.00 AA+ 3,159,259 Revenue Bonds, Series 2000J, 5.400%, 1/01/23 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.7% (0.5% OF TOTAL INVESTMENTS) 2,085 Coahoma-Clarksdale Housing Development Corporation, 2/05 at 100.00 AAA 2,089,233 Mississippi, FHA-Insured Section 8 Assisted Multifamily Mortgage Revenue Refunding Bonds, Gooden Estates and McLaurin Arms, Series 1990A, 8.000%, 8/01/24 2,595 Coahoma-Clarksdale Housing Development Corporation, 2/05 at 100.00 AAA 2,600,268 Mississippi, FHA-Insured Section 8 Assisted Multifamily Mortgage Revenue Refunding Bonds, Gooden Estates and McLaurin Arms, Series 1990B, 8.000%, 8/01/24 ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,500 Missouri-Illinois Metropolitan District Bi-State Development 10/13 at 100.00 AAA 1,546,545 Agency, Mass Transit Sales Tax Appropriation Bonds, Metrolink Cross County Extension Project, Series 2002B, 5.000%, 10/01/32 - FSA Insured 430 Missouri Housing Development Commission, Single 9/09 at 102.00 AAA 445,712 Family Mortgage Revenue Bonds, Homeownership Loan Program, Series 2000A-1, 7.500%, 3/01/31 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 1.9% (1.3% OF TOTAL INVESTMENTS) 6,025 Montana Board of Housing, Single Family Program Bonds, 12/05 at 102.00 AA+ 6,218,282 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+ 7,208,010 Series 1997A, 6.050%, 12/01/37 ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 3.8% (2.6% OF TOTAL INVESTMENTS) 7,310 Clark County, Nevada, Limited Tax General Obligation Bank 7/10 at 100.00 AA 8,161,396 Bonds, Series 2000, 5.500%, 7/01/19 7,500 Clark County, Nevada, Subordinate Lien Airport Revenue 7/10 at 101.00 AAA 8,782,050 Bonds, Series 1999A, 6.000%, 7/01/29 (Pre-refunded to 7/01/10) - MBIA Insured 7,910 Director of Nevada State Department of Business and 1/10 at 100.00 AAA 8,205,359 Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 1,085 Nevada Housing Division, Single Family Mortgage Bonds, 4/07 at 102.00 Aaa 1,112,342 Senior Series 1997C-2, 5.750%, 4/01/29 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.6% (0.4% OF TOTAL INVESTMENTS) 2,480 New Hampshire Business Finance Authority, Water Facility 12/04 at 102.00 AAA 2,538,454 Revenue Bonds, Pennichuck Water Works Inc., Series 1994A, 6.350%, 12/01/19 - AMBAC Insured 1,320 New Hampshire Business Finance Authority, Revenue Bonds, 12/04 at 102.00 AAA 1,351,244 Pennichuck Water Works Inc., Series 1994B, 6.450%, 12/01/16 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 3.3% (2.2% OF TOTAL INVESTMENTS) 3,000 New Jersey Turnpike Authority, Revenue Bonds, No Opt. Call A 3,450,030 Series 1991C, 6.500%, 1/01/09 Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: 15,735 5.750%, 6/01/32 6/12 at 100.00 BBB 14,637,484 5,000 6.125%, 6/01/42 6/12 at 100.00 BBB 4,442,600 ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.1% (0.7% OF TOTAL INVESTMENTS) 7,500 Farmington, New Mexico, Pollution Control Revenue 4/06 at 101.00 BBB 7,584,075 Refunding Bonds, Public Service Company of New Mexico - San Juan Project, Series 1997B, 5.800%, 4/01/22 32 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 15.0% (10.1% OF TOTAL INVESTMENTS) $ 7,000 Metropolitan Transportation Authority, New York, State 7/12 at 100.00 AA- $ 7,209,790 Service Contract Refunding Bonds, Series 2002A, 5.125%, 1/01/29 Nassau County, New York, General Obligation Improvement Bonds, Series 2000F: 3,980 7.000%, 3/01/11 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,765,214 4,070 7.000%, 3/01/12 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,872,970 3,925 7.000%, 3/01/15 (Pre-refunded to 3/01/10) - FSA Insured 3/10 at 100.00 AAA 4,699,363 New York City, New York, General Obligation Bonds, Fiscal Series 1997G: 2,750 6.000%, 10/15/26 (Pre-refunded to 10/15/07) 10/07 at 101.00 Aaa 3,088,690 7,250 6.000%, 10/15/26 10/07 at 101.00 A 7,940,708 7,435 New York City, New York, General Obligation Bonds, 5/10 at 101.00 A 8,327,869 Fiscal Series 2000E, 5.750%, 5/15/20 9,850 New York City Municipal Water Finance Authority, New York, 6/09 at 101.00 AAA 10,942,759 Water and Sewerage System Revenue Bonds, Fiscal Series 2000A, 5.750%, 6/15/31 - FGIC Insured 5,000 New York City Municipal Water Finance Authority, New York, 6/07 at 101.00 AAA 5,412,850 Water and Sewerage System Revenue Bonds, Fiscal Series 1997B, 5.750%, 6/15/29 - FGIC Insured 10,000 New York City Transitional Finance Authority, New York, 5/10 at 101.00 AA+*** 11,735,300 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 3,666,277 Special Facilities Revenue Bonds, British Airways PLC, 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 2,991,750 Special Facilities Revenue Bonds, British Airways PLC, Series 2002, 7.625%, 12/01/32 (Alternative Minimum Tax) 3,655 Dormitory Authority of the State of New York, Revenue 5/08 at 101.00 AA-*** 4,054,053 Bonds, State University Educational Facilities, Series 1997, 5.125%, 5/15/27 (Pre-refunded to 5/15/08) Dormitory Authority of the State of New York, Revenue Bonds, Mental Health Services Facilities Improvements, Series 1997B: 2,965 5.625%, 2/15/21 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** 3,264,613 4,395 5.625%, 2/15/21 2/07 at 102.00 AA- 4,738,118 9,495 New York State Mortgage Agency, Homeowner Mortgage 4/10 at 100.00 Aa1 10,116,068 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 5,745,950 Correctional Facilities Service Contract Revenue Bonds, Series 1999C, 6.000%, 1/01/29 (Pre-refunded to 1/01/09) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 3.5% (2.4% OF TOTAL INVESTMENTS) 8,450 North Carolina Housing Finance Agency, Home Ownership 7/09 at 100.00 AA 8,857,713 Revenue Bonds, 1998 Trust Agreement, Series 7A, 6.250%, 1/01/29 (Alternative Minimum Tax) 7,755 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 8,060,392 Revenue Bonds, 1998 Trust Agreement, Series 8A, 5.950%, 1/01/27 (Alternative Minimum Tax) 5,945 North Carolina Housing Finance Agency, Home Ownership 1/10 at 100.00 AA 6,194,155 Revenue Bonds, 1998 Trust Agreement, Series 9A, 5.875%, 7/01/31 (Alternative Minimum Tax) 1,320 North Carolina Housing Finance Agency, Home Ownership 7/10 at 100.00 AAA 1,351,390 Revenue Bonds, 1998 Trust Agreement, Series 10A, 5.400%, 7/01/32 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 0.5% (0.4% OF TOTAL INVESTMENTS) 3,490 North Dakota Housing Finance Agency, Home Mortgage 7/08 at 102.00 Aaa 3,586,254 Finance Program Bonds, Series 1998B, 5.500%, 7/01/29 (Alternative Minimum Tax) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 5.9% (4.0% OF TOTAL INVESTMENTS) 5,000 Akron, Bath and Copley Joint Township Hospital District, 11/09 at 101.00 Baa1 5,043,450 Ohio, Hospital Facilities Revenue Bonds, Summa Health System Project, Series 1998A, 5.375%, 11/15/18 6,000 Cuyahoga County, Ohio, Hospital Revenue Bonds, University 7/09 at 101.00 AAA 6,441,180 Hospitals Health System, 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 A3 8,715,650 5,000 6.750%, 4/01/22 4/10 at 101.00 A3 5,487,750 33 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ OHIO (continued) $ 2,355 Ohio Housing Finance Agency, GNMA Mortgage-Backed 8/10 at 100.00 Aaa $ 2,358,132 Securities Program Residential Mortgage Revenue Bonds, Series 2000D, 5.450%, 9/01/31 (Alternative Minimum Tax) 2,650 Ohio, General Obligation Bonds, Higher Education, 5/13 at 100.00 AA+ 2,816,871 Series 2003A, 5.000%, 5/01/22 10,000 Ohio Air Quality Development Authority, Pollution Control 12/04 at 100.00 Baa2 10,029,100 Revenue Refunding Bonds, Ohio Edison Company Project, Series 1999C, 5.800%, 6/01/16 (Mandatory put 12/01/04) ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 2.1% (1.4% OF TOTAL INVESTMENTS) 5,000 Oklahoma State Industries Authority, Health System Revenue 8/09 at 101.00 AAA 5,518,550 Refunding Bonds, Baptist Medical Center, Series 1999A, 5.750%, 8/15/29 - MBIA Insured 10,000 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 12/08 at 100.00 B- 9,257,400 Bonds, American Airlines Inc., Series 2001B, 5.650%, 12/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 2.9% (1.8% OF TOTAL INVESTMENTS) 2,460 Carbon County Industrial Development Authority, No Opt. Call BBB- 2,669,617 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 2,600 Pennsylvania Turnpike Commission, Turnpike Revenue Bonds, 12/14 at 100.00 AAA 2,838,628 Series 2004A, 5.500%, 12/01/31 - AMBAC Insured 2,500 Philadelphia School District, Pennsylvania, General Obligation 2/12 at 100.00 AAA 2,877,925 Bonds, Series 2002A, 5.500%, 2/01/31 (Pre-refunded to 2/01/12) - FSA Insured 4,195 Venango Housing Corporation, Pennsylvania, FHA-Insured 2/05 at 100.00 AAA 4,218,240 Multifamily Mortgage Revenue Bonds, Evergreen Arbors Project, Series 1990A, 8.000%, 2/01/24 6,750 Washington County Authority, Pennsylvania, Capital Funding No Opt. Call AAA 7,082,843 Revenue Bonds, Capital Projects and Equipment Acquisition Program, Series 1999, 6.150%, 12/01/29 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 0.7% (0.4% OF TOTAL INVESTMENTS) 4,000 Puerto Rico, General Obligation Bonds, Series 2000B, 7/10 at 100.00 AAA 4,538,160 5.625%, 7/01/19 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 1.9% (1.3% OF TOTAL INVESTMENTS) 12,250 Rhode Island Health and Educational Building Corporation, 5/07 at 102.00 AAA 13,365,975 Hospital Financing Revenue Bonds, Lifespan Obligated Group, Series 1996, 5.500%, 5/15/16 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 4.4% (2.9% OF TOTAL INVESTMENTS) 10,000 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 11,353,600 Purchase Revenue Bonds, Series 2002, 6.000%, 12/01/20 2,500 Lexington County Health Service District, South Carolina, 11/13 at 100.00 A 2,637,775 Hospital Revenue Refunding and Improvement Bonds, Series 2003, 5.750%, 11/01/28 3,000 Myrtle Beach, South Carolina, Hospitality and Accommodation 6/14 at 100.00 AAA 3,063,840 Fee Revenue Bonds, Series 2004A, 5.000%, 6/01/36 - FGIC Insured South Carolina Public Service Authority, Revenue Refunding Bonds, Santee Cooper Electric System, Series 2003A: 3,560 5.000%, 1/01/20 - AMBAC Insured 7/13 at 100.00 AAA 3,819,880 2,125 5.000%, 1/01/21 - AMBAC Insured 7/13 at 100.00 AAA 2,267,269 7,500 Tobacco Settlement Revenue Management Authority, 5/11 at 101.00 BBB 7,115,400 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 5.1% (3.5% OF TOTAL INVESTMENTS) 6,000 Knox County Health, Educational and Housing Facilities 4/12 at 101.00 Baa3 6,093,240 Board, Tennessee, Hospital Revenue Bonds, Baptist Health System of East Tennessee Inc., Series 2002, 6.500%, 4/15/31 20,415 Knox County Health, Educational and Housing Facilities Board, 1/13 at 75.87 AAA 10,672,145 Tennessee, Hospital Revenue Refunding Bonds, Covenant Health, Series 2002A, 0.000%, 1/01/18 - FSA Insured 1,750 Metropolitan Government of Nashville and Davidson County, 5/11 at 100.00 AA 1,818,198 Tennessee, Electric System Revenue Bonds, Series 2001A, 5.125%, 5/15/26 14,385 Metropolitan Government Nashville-Davidson County Health 11/09 at 101.00 AAA 16,613,956 and Educational Facilities Board, Tennessee, Revenue Bonds, Ascension Health Credit Group, Series 1999A, 5.875%, 11/15/28 (Pre-refunded to 11/15/09) - AMBAC Insured 34 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 16.3% (11.0% OF TOTAL INVESTMENTS) $ 11,810 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call BBB $ 12,814,086 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 6,585,960 Houston Lighting and Power Company, 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 8,498,532 Disposal Revenue Bonds, Valero Energy Corporation, Series 1999, 5.700%, 4/01/32 (Alternative Minimum Tax) 10,000 Harris County Health Facilities Development Corporation, 5/06 at 102.00 AAA 10,745,500 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 5,098,300 Texas, Thermal Utility Revenue Bonds, TECO Project, Series 2003, 5.000%, 11/15/30 - MBIA Insured 12,500 Houston, Texas, Subordinate Lien Airport System Revenue 7/10 at 100.00 AAA 13,543,875 Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured 5,000 Houston Community College, Texas, Limited Tax General 2/13 at 100.00 AAA 5,141,150 Obligation Bonds, Series 2003, 5.000%, 2/15/28 - AMBAC Insured Houston, Texas, Water Conveyance System Contract, Certificates of Participation, Series 1993A-J: 5,490 6.800%, 12/15/10 - AMBAC Insured No Opt. Call AAA 6,594,094 2,000 6.800%, 12/15/11 - AMBAC Insured No Opt. Call AAA 2,432,620 16,305 Matagorda County Navigation District 1, Texas, Revenue 5/09 at 101.00 BBB- 16,400,873 Bonds, Reliant Energy Inc., Series 1999B, 5.950%, 5/01/30 (Alternative Minimum Tax) 3,425 Sabine River Authority, Texas, Pollution Control Revenue No Opt. Call BBB 3,699,274 Refunding Bonds, TXU Electric Company, Series 2001A, 5.500%, 5/01/22 (Mandatory put 11/01/11) 4,700 Sam Rayburn Municipal Power Agency, Texas, Power Supply 10/12 at 100.00 Baa2 5,066,224 System Revenue Refunding Bonds, Series 2002A, 6.000%, 10/01/21 4,000 Texas, General Obligation Bonds, Water Financial 8/09 at 100.00 Aa1 4,338,520 Assistance, State Participation Program, Series 1999C, 5.500%, 8/01/35 6,840 Travis County Health Facilities Development Corporation, 11/09 at 101.00 AAA 7,889,393 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 2,582,300 Refunding Bonds, TXU Electric Company, Series 2001A, 5.000%, 5/01/27 (Alternative Minimum Tax) (Mandatory put 11/01/06) 245 Wood Glen Housing Finance Corporation, Texas, FHA-Insured 1/05 at 100.00 AAA 245,938 Section 8 Assisted Mortgage Revenue Bonds, Copperwood I Project, Series 1990A, 7.625%, 1/01/10 - MBIA Insured Wood Glen Housing Finance Corporation, Texas, FHA-Insured Section 8 Assisted Mortgage Revenue Refunding Bonds, Copperwood II Project, Series 1990C: 75 7.625%, 1/01/10 - MBIA Insured 1/05 at 100.00 AAA 75,218 1,250 7.650%, 7/01/23 - MBIA Insured 1/05 at 100.00 AAA 1,258,963 ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.4% (0.2% OF TOTAL INVESTMENTS) 2,200 Intermountain Power Agency, Utah, Power Supply Revenue 7/07 at 102.00 AAA 2,431,770 Refunding Bonds, Series 1997B, 5.750%, 7/01/19 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 1.0% (0.7% OF TOTAL INVESTMENTS) 6,380 Capital Region Airport Authority, Richmond, Virginia, Airport 7/05 at 102.00 AAA 6,647,450 Revenue Bonds, International Airport Projects, Series 1995A, 5.625%, 7/01/20 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 14.4% (9.6% OF TOTAL INVESTMENTS) 8,810 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 9,345,472 Consolidated System Revenue Bonds, Series 2001A, 5.600%, 1/01/36 (Alternative Minimum Tax) - MBIA Insured 10,730 Chelan County Public Utility District 1, Washington, Hydro 7/11 at 101.00 AAA 11,459,640 Consolidated System Revenue Refunding Bonds, Series 2001C, 5.650%, 7/01/32 (Alternative Minimum Tax) - MBIA Insured 5,665 Chelan County Public Utility District 1, Washington, Hydro 7/12 at 100.00 AAA 5,819,655 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 12,601,741 Unlimited Tax General Obligation Bonds, Series 2000, 6.250%, 12/01/17 - FSA Insured 35 Nuveen Municipal Advantage Fund, Inc. (NMA) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) $ 10,550 Port of Seattle, Washington, Limited Tax General Obligation 12/10 at 100.00 AA+ $ 11,443,691 Bonds, Series 2000B, 5.750%, 12/01/25 (Alternative Minimum Tax) 5,315 Port of Seattle, Washington, Revenue Bonds, Series 2000B, No Opt. Call AAA 5,997,287 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 21,895,773 Terminal 18, 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 5,584,850 Terminal 18, Series 1999B, 6.000%, 9/01/20 (Alternative Minimum Tax) - MBIA Insured 5,000 Washington State Healthcare Facilities Authority, Revenue 12/09 at 101.00 AAA 5,504,550 Bonds, Providence Services, Series 1999, 5.375%, 12/01/19 - MBIA Insured 8,750 Washington Public Power Supply System, Revenue Refunding 7/08 at 102.00 Aaa 9,250,937 Bonds, Nuclear Project 3, Series 1998A, 5.125%, 7/01/18 ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 0.7% (0.5% OF TOTAL INVESTMENTS) 5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB 5,107,900 Bonds, Appalachian Power Company, Series 2003L, 5.500%, 10/01/22 ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 7.8% (5.2% OF TOTAL INVESTMENTS) 7,515 Badger Tobacco Asset Securitization Corporation, Wisconsin, 6/12 at 100.00 BBB 7,299,921 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/27 2,250 Green Bay, Wisconsin, Water System Revenue Bonds, 11/14 at 100.00 Aaa 2,322,425 Series 2004, 5.000%, 11/01/29 - FSA Insured 5,000 Madison, Wisconsin, Industrial Development Revenue 4/12 at 100.00 AA- 5,372,100 Refunding Bonds, Madison Gas and 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 3,527,490 Sales Tax Revenue Refunding Bonds, Series 1998A, 5.500%, 12/15/19 - MBIA Insured 2,935 Wisconsin Housing and Economic Development Authority, 3/10 at 100.00 AA 3,030,001 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., Series 1996: 10,000 5.600%, 11/15/16 - FSA Insured 5/06 at 102.00 AAA 10,695,100 20,000 5.750%, 11/15/25 - FSA Insured 5/06 at 102.00 AAA 21,176,000 ------------------------------------------------------------------------------------------------------------------------------------ $ 981,280 Total Long-Term Investments (cost $948,216,119) - 148.9% 1,025,951,604 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 0.5% (0.3% OF TOTAL INVESTMENTS) 3,510 Montgomery County Public Building Authority, Tennessee, VMIG-1 3,510,000 Tennessee County Loan Pool Program Bonds, Variable Rate Demand Obligations, Series 2002, 1.750%, 4/01/32+ ------------------------------------------------------------------------------------------------------------------------------------ $ 3,510 Total Short-Term Investments (cost $3,510,000) 3,510,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $951,726,119) - 149.4% 1,029,461,604 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.5% 17,728,778 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (51.9)% (358,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 689,190,382 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): 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. # On December 9, 2002, UAL Corporation, 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. + 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. 36 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.5% (0.4% OF TOTAL INVESTMENTS) $ 3,000 Arizona State Transportation Board, Highway Revenue 7/11 at 100.00 AAA $ 3,297,300 Bonds, Series 2001, 5.250%, 7/01/20 400 Pima County Industrial Development Authority, Arizona, 5/07 at 105.85 AAA 400,868 FNMA/GNMA Single Family Mortgage Revenue Bonds, Series 1997A, 7.100%, 11/01/29 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 1.8% (1.2% OF TOTAL INVESTMENTS) 5,000 Arkansas Development Finance Authority, Hospital Revenue 2/10 at 100.00 BBB- 5,572,100 Bonds, Washington Regional Medical Center, Series 2000, 7.000%, 2/01/15 3,480 Cabot School District 4, Lonoke County, Arkansas, General 8/08 at 100.00 Aaa 3,596,093 Obligation Refunding Bonds, Series 2003, 5.000%, 2/01/27 - AMBAC Insured 2,865 University of Arkansas, Fayetteville, Various Facilities 12/12 at 100.00 Aaa 3,240,544 Revenue Bonds, Series 2002, 5.500%, 12/01/20 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 5.5% (3.7% OF TOTAL INVESTMENTS) 3,225 California Health Facilities Financing Authority, Revenue 3/13 at 100.00 A 3,234,611 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 A2 1,135,590 Revenue Bonds, Series 2002A, 5.750%, 5/01/17 5,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 AAA 5,099,500 Enhanced Tobacco Settlement Asset-Backed Bonds, Series 2003B, 5.000%, 6/01/38 - AMBAC Insured 2,500 Los Angeles Community Redevelopment Agency, California, 1/05 at 100.00 BBB*** 2,559,000 Tax Allocation Refunding Bonds, Central Business District Redevelopment Project, Series 1987G, 6.750%, 7/01/10 Los Angeles Department of Water and Power, California, Electric Plant Revenue Bonds, Second Series 1993: 490 4.750%, 10/15/20 4/05 at 101.00 AA-*** 500,574 5,510 4.750%, 10/15/20 4/05 at 101.00 Aaa 5,628,906 995 Los Angeles Department of Water and Power, California, 2/05 at 101.00 AA-*** 1,017,915 Electric Plant Revenue Bonds, Series 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 14,176,951 690 6.000%, 7/01/26 - MBIA Insured 7/06 at 102.00 AAA 745,442 5,000 San Joaquin Hills Transportation Corridor Agency, Orange 1/14 at 102.00 AAA 4,946,450 County, California, Toll Road Revenue Refunding Bonds, Series 1997A, 0.000%, 1/15/17 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 4.0% (2.6% OF TOTAL INVESTMENTS) 3,000 Broomfield, Colorado, Master Facilities Lease Purchase 12/09 at 100.00 AAA 3,374,820 Agreement, Certificates of Participation, Series 1999, 5.750%, 12/01/24 - AMBAC Insured 6,285 Broomfield, Colorado, Sales and Use Tax Revenue Refunding 12/12 at 100.00 Aaa 7,033,041 and Improvement Bonds, Series 2002A, 5.500%, 12/01/22 - AMBAC Insured 11,465 Denver City and County, Colorado, Airport System Revenue 11/10 at 100.00 AAA 12,809,615 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 5,001,600 Bonds, Series 2000A, 0.000%, 9/01/28 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 6.1% (4.0% OF TOTAL INVESTMENTS) 15,000 Atlanta, Georgia, Airport General Revenue Refunding Bonds, 1/10 at 101.00 AAA 17,150,250 Series 2000A, 5.600%, 1/01/30 (Pre-refunded to 1/01/10) - FGIC Insured 14,330 Fulton County Facilities Corporation, Georgia, Certificates 11/10 at 101.00 AAA 16,173,411 of Participation, Public Purpose Project, Series 1999, 5.500%, 11/01/18 - AMBAC Insured 37 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA (continued) $ 8,000 Georgia, General Obligation Bonds, Series 1995C, 7.250%, 7/01/08 No Opt. Call AAA $ 9,344,320 ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 10.6% (7.0% OF TOTAL INVESTMENTS) 6,500 Chicago, Illinois, Gas Supply Revenue Refunding Bonds, Peoples 6/05 at 102.00 Aa2 6,757,010 Gas Light and Coke Company Project, Series 1995A, 6.100%, 6/01/25 5,250 Chicago, Illinois, Revenue Bonds, Midway Airport, 1/09 at 101.00 AAA 5,369,910 Series 1998B, 5.000%, 1/01/28 - MBIA Insured 2,300 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, No Opt. Call AAA 2,621,218 Series 1993, 5.375%, 1/01/14 - AMBAC Insured 4,000 Chicago, Illinois, Motor Fuel Tax Revenue Bonds, Series 2003A, 7/13 at 100.00 AAA 4,094,440 5.000%, 1/01/33 - AMBAC Insured 5,210 Illinois Housing Development Authority, Section 8 Elderly 1/05 at 100.00 A- 5,224,171 Housing Revenue Bonds, Garden House of River Oaks West Development, Series 1992A, 6.875%, 1/01/20 38,645 Illinois, General Obligation Bonds, Illinois FIRST Program, 4/10 at 100.00 AAA 42,092,520 Series 2000, 5.500%, 4/01/25 - MBIA Insured 1,975 Lake County Community High School District 127, Grayslake, No Opt. Call AAA 2,752,656 Illinois, General Obligation Bonds, Series 2002A, 9.000%, 2/01/13 - FGIC Insured Metropolitan Pier and Exposition Authority, Illinois, Revenue Bonds, McCormick Place Expansion Project, Series 2002A: 3,250 0.000%, 6/15/25 - MBIA Insured 6/22 at 101.00 AAA 1,852,630 2,270 5.000%, 12/15/28 - MBIA Insured 6/12 at 101.00 AAA 2,330,359 10,000 0.000%, 12/15/38 - MBIA Insured No Opt. Call AAA 1,644,500 ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 1.2% (0.8% OF TOTAL INVESTMENTS) 4,695 Indiana Educational Facilities Authority, Revenue Bonds, Butler 2/11 at 100.00 AAA 5,121,729 University, Series 2001, 5.500%, 2/01/26 - MBIA Insured 13,949 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 N/R 1,534,437 Revenue Bonds, United Air Lines Inc., Indianapolis Maintenance Center Project, Series 1995A, 6.500%, 11/15/31 (Alternative Minimum Tax)# 2,000 Petersburg, Indiana, Pollution Control Revenue Refunding 8/11 at 102.00 Baa2 2,076,860 Bonds, Indianapolis Power and Light Company, Series 1991, 5.750%, 8/01/21 ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.6% (0.4% OF TOTAL INVESTMENTS) 4,215 Iowa Finance Authority, Solid Waste Disposal Revenue No Opt. Call N/R 4,159,320 Bonds, IPSCO Project, Series 1997, 6.000%, 6/01/27 (Alternative Minimum Tax) (Mandatory put 6/01/07) ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.6% (1.1% OF TOTAL INVESTMENTS) Jefferson County School District Finance Corporation, Kentucky, School Building Revenue Bonds, Series 2000A: 3,045 5.250%, 7/01/17 - FSA Insured 1/10 at 101.00 AAA 3,371,942 7,490 5.250%, 7/01/20 - FSA Insured 1/10 at 101.00 AAA 8,200,951 ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 1.1% (0.7% OF TOTAL INVESTMENTS) 7,415 Louisiana Local Government Environmental Facilities and 12/12 at 100.00 AAA 7,591,032 Community Development Authority, Revenue Bonds, Baton Rouge Community College Facilities Corporation, Series 2002, 5.000%, 12/01/32 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 1.6% (1.1% OF TOTAL INVESTMENTS) Frederick County, Maryland, General Obligation Public Facilities Bonds, Series 2002: 3,710 5.000%, 11/01/18 11/12 at 101.00 AA 4,054,362 3,890 5.000%, 11/01/19 11/12 at 101.00 AA 4,231,348 2,500 Maryland Department of Transportation, County Transportation No Opt. Call AA 2,940,050 Revenue Bonds, Series 2002, 5.500%, 2/01/16 ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 3.3% (2.2% OF TOTAL INVESTMENTS) 5,250 Massachusetts Bay Transportation Authority, Assessment 7/10 at 100.00 AAA 5,537,543 Bonds, Series 2000A, 5.250%, 7/01/30 10,000 Massachusetts Water Resources Authority, General Revenue 8/10 at 101.00 AAA 11,197,800 Bonds, Series 2000A, 5.750%, 8/01/39 - FGIC Insured 6,195 University of Massachusetts Building Authority, Facilities 11/10 at 100.00 AAA 6,542,168 Revenue Bonds, Senior Series 2000A, 5.125%, 11/01/25 - MBIA Insured 38 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.4% (0.9% OF TOTAL INVESTMENTS) $ 6,635 Detroit, Michigan, Senior Lien Water Supply System Revenue 7/11 at 101.00 AAA $ 7,765,206 Bonds, Series 2001A, 5.750%, 7/01/28 (Pre-refunded to 7/01/11) - FGIC Insured 2,090 Grand Rapids Building Authority, Kent County, Michigan, 8/10 at 100.00 AAA 2,317,267 Limited Tax General Obligation Bonds, Series 2000, 5.375%, 8/01/17 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 7.9% (5.2% OF TOTAL INVESTMENTS) 13,675 Minnesota, General Obligation Bonds, Series 2000, 11/10 at 100.00 AAA 15,193,609 5.125%, 11/01/16 3,705 Minnesota Housing Finance Agency, Single Family Remarketed 1/11 at 101.00 AA+ 3,905,737 Mortgage Bonds, Series 1998H-2, 6.050%, 7/01/31 (Alternative Minimum Tax) 30,000 Minnesota Agricultural and Economic Development Board, 11/10 at 101.00 A 32,653,200 Healthcare System Revenue Bonds, Fairview Hospital and Healthcare Services, Series 2000A, 6.375%, 11/15/29 3,310 St. Paul Housing and Redevelopment Authority, Minnesota, 11/15 at 103.00 AAA 4,178,345 Sales Tax Revenue Refunding Bonds, Civic Center Project, Series 1996, 7.100%, 11/01/23 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.1% (0.7% OF TOTAL INVESTMENTS) 5,900 Mississippi Business Finance Corporation, Pollution Control 4/05 at 101.00 BBB- 5,920,650 Revenue Refunding Bonds, System Energy Resources Inc. Project, Series 1998, 5.875%, 4/01/22 1,675 Mississippi Home Corporation, GNMA Mortgage-Backed 7/07 at 105.00 Aaa 1,726,774 Securities Program Single Family Mortgage Revenue Bonds, Series 1997D-5, 6.750%, 7/01/29 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 5.2% (3.5% OF TOTAL INVESTMENTS) 9,555 Clark County, Nevada, General Obligation Bank Bonds, 6/11 at 100.00 AAA 10,533,528 Southern Nevada Water Authority Loan, Series 2001, 5.300%, 6/01/20 - FGIC Insured Director of Nevada State Department of Business and Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000: 8,500 0.000%, 1/01/26 - AMBAC Insured No Opt. Call AAA 2,827,950 5,315 0.000%, 1/01/27 - AMBAC Insured No Opt. Call AAA 1,653,922 21,000 5.375%, 1/01/40 - AMBAC Insured 1/10 at 100.00 AAA 21,784,140 ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 3.9% (2.6% OF TOTAL INVESTMENTS) 400 Camden County Pollution Control Financing Authority, 12/04 at 100.00 B2 399,940 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, Transportation 6/10 at 100.00 AAA 24,156,930 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 2,812,166 Tobacco Settlement Asset-Backed Bonds, Series 2002, 6.125%, 6/01/42 ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 1.9% (1.2% OF TOTAL INVESTMENTS) 5,925 New Mexico Hospital Equipment Loan Council, Hospital 8/11 at 101.00 Aa3 6,329,915 Revenue Bonds, Presbyterian Healthcare Services, Series 2001A, 5.500%, 8/01/21 5,675 University of New Mexico, System Revenue Refunding No Opt. Call AA 6,805,347 Bonds, Series 1992A, 6.250%, 6/01/12 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 23.5% (15.5% OF TOTAL INVESTMENTS) 5,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA 5,321,700 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 BBB- 11,216,810 Tobacco Settlement Asset-Backed Bonds, Series 1999A, 6.400%, 7/15/33 New York City, New York, General Obligation Bonds, Fiscal Series 2002G: 1,000 5.000%, 8/01/17 8/12 at 100.00 A 1,063,650 10,500 5.750%, 8/01/18 8/12 at 100.00 A 11,717,895 5,000 New York City, New York, General Obligation Bonds, 8/12 at 100.00 A 5,611,800 Fiscal Series 2003A, 5.750%, 8/01/16 New York City, New York, General Obligation Bonds, Fiscal Series 1997H: 280 6.125%, 8/01/25 (Pre-refunded to 8/01/07) 8/07 at 101.00 A*** 313,552 9,720 6.125%, 8/01/25 8/07 at 101.00 A 10,642,136 39 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK (continued) New York City, New York, General Obligation Bonds, Fiscal Series 1996I: $ 3,980 5.875%, 3/15/18 3/06 at 101.50 A $ 4,211,596 17,735 5.750%, 3/15/18 (Pre-refunded to 3/15/06) 3/06 at 101.50 A*** 18,986,204 17,870 New York City Transitional Finance Authority, New York, Future 8/09 at 101.00 AA+*** 20,614,653 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, Improvement Revenue Bonds, Mental Health Services Facilities, Series 1997A: 19,290 5.750%, 2/15/27 (Pre-refunded to 2/15/07) 2/07 at 102.00 AA-*** 21,293,074 710 5.750%, 2/15/27 2/07 at 102.00 AA- 768,426 4,500 New York State Energy Research and Development Authority, 1/05 at 101.50 AAA 4,577,535 Gas Facilities Revenue Bonds, Brooklyn Union Gas Company, 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 3,104,790 Secured Hospital Revenue Bonds, Brookdale Hospital Medical Center, Series 1995A, 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 5,082,340 Secured Mortgage Revenue Bonds, Brookdale Family Care Centers Inc., Series 1995A, 6.375%, 11/15/19 7,805 New York State Power Authority, General Revenue Bonds, 11/12 at 100.00 Aa2 8,312,325 Series 2002A, 5.000%, 11/15/21 10,000 Port Authority of New York and New Jersey, Special Project 12/07 at 102.00 AAA 10,899,000 Bonds, JFK International Air Terminal LLC, Sixth Series 1997, 5.750%, 12/01/22 (Alternative Minimum Tax) - MBIA Insured 5,400 New York State Tobacco Settlement Financing Corporation, 6/10 at 100.00 AA- 5,890,806 Tobacco Settlement Asset-Backed and State Contingency Contract-Backed Bonds, Series 2003A-1, 5.500%, 6/01/16 7,000 Triborough Bridge and Tunnel Authority, New York, General 1/22 at 100.00 AAA 8,156,610 Purpose Revenue Bonds, Series 1999B, 5.500%, 1/01/30 (Pre-refunded to 1/01/22) 8,000 TSASC Inc., New York, Tobacco Flexible Amortization Bonds, 7/09 at 101.00 BBB 8,088,800 Series 1999-1, 6.250%, 7/15/34 ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.2% (0.8% OF TOTAL INVESTMENTS) 7,500 North Carolina Municipal Power Agency 1, Catawba Electric 1/13 at 100.00 AAA 8,188,575 Revenue Bonds, Series 2003A, 5.250%, 1/01/19 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 4.3% (2.8% OF TOTAL INVESTMENTS) 22,905 Fargo, North Dakota, Health System Revenue Bonds, 6/10 at 101.00 AAA 24,949,729 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 2,526,456 2,450 5.750%, 8/01/19 - MBIA Insured 8/10 at 100.00 AAA 2,784,866 ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 2.6% (1.7% OF TOTAL INVESTMENTS) 16,140 Montgomery County, Ohio, Hospital Facilities Revenue Bonds, No Opt. Call A3 18,384,106 Kettering Medical Center, Series 1999,6.300%, 4/01/12 ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.0% (0.0% OF TOTAL INVESTMENTS) 300 Tulsa Municipal Airport Trust, Oklahoma, Revenue Refunding 6/09 at 100.00 B- 281,574 Bonds, American Airlines Inc., Series 2000B, 6.000%, 6/01/35 (Alternative Minimum Tax) (Mandatory put 12/01/08) ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 2.4% (1.6% OF TOTAL INVESTMENTS) 5,000 Oregon Health Sciences University, Revenue Bonds, 1/13 at 100.00 AAA 5,404,600 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 7,502,273 3,880 5.500%, 8/01/20 8/10 at 100.00 Aa1 4,321,777 ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 6.3% (4.1% OF TOTAL INVESTMENTS) 5,000 Delaware County Industrial Development Authority, 1/08 at 102.00 BBB 5,283,100 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Series 1997A, 6.200%, 7/01/19 15,000 Delaware River Port Authority, New Jersey and Pennsylvania, No Opt. Call AAA 16,381,800 Revenue Refunding Bonds, Series 1998B, 5.250%, 1/01/08 - AMBAC Insured 40 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA (continued) $ 15,050 Pennsylvania, General Obligation Bonds, Second Series 2001, 9/11 at 101.00 AA $ 16,685,333 5.000%, 9/15/14 5,000 Pennsylvania Higher Education Assistance Agency, Capital 12/10 at 100.00 AAA 5,821,500 Acquisition Revenue Bonds, Series 2000, 5.875%, 12/15/30 (Pre-refunded to 12/15/10) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 2.8% (1.8% OF TOTAL INVESTMENTS) 7,940 Puerto Rico, The Children's Trust Fund, Tobacco Settlement 5/12 at 100.00 BBB 7,270,737 Asset-Backed Refunding Bonds, Series 2002, 5.375%, 5/15/33 12,500 Puerto Rico Housing Finance Authority, Capital Fund Program No Opt. Call AA*** 12,531,875 Revenue Bonds, Series 2003, 4.500%, 12/01/23 ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 6.2% (4.1% OF TOTAL INVESTMENTS) 24,730 Greenville County School District, South Carolina, Installment 12/12 at 101.00 AA- 26,545,429 Purchase Revenue Bonds, Series 2002, 5.500%, 12/01/22 21,570 Piedmont Municipal Power Agency, South Carolina, Electric No Opt. Call AAA 5,668,596 Revenue Bonds, Series 2004A-2, 0.000%, 1/01/30 - AMBAC Insured 1,640 Three Rivers Solid Waste Authority, South Carolina, Solid 1/07 at 102.00 AAA 1,771,708 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 9,487,200 South Carolina, Tobacco Settlement Asset-Backed Bonds, Series 2001B, 6.375%, 5/15/28 ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 0.9% (0.6% OF TOTAL INVESTMENTS) 5,000 Knox County Health, Educational and Housing Facilities Board, 7/13 at 100.00 AA 5,155,800 Tennessee, Hospital Revenue Bonds, East Tennessee Children's Hospital, Series 2003A, 5.000%, 7/01/23 - RAAI Insured 1,200 Metropolitan Government of Nashville-Davidson County 1/05 at 101.00 N/R 1,200,636 Health and Educational Facilities Board, Tennessee, Revenue Refunding Bonds, Blakeford at Green Hills, Series 1998, 5.650%, 7/01/16 ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 23.5% (15.5% OF TOTAL INVESTMENTS) 5,000 Alliance Airport Authority, Texas, Special Facilities Revenue 12/04 at 100.00 CCC 3,208,000 Bonds, American Airlines Inc., 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 (Pre-refunded to 2/15/05) 2/05 at 67.33 Aaa 2,484,958 3,710 0.000%, 2/15/13 (Pre-refunded to 2/15/05) 2/05 at 62.94 Aaa 2,323,091 12,250 Austin, Texas, Subordinate Lien Hotel Occupancy Tax Revenue 11/09 at 100.00 AAA 13,616,488 Refunding Bonds, Series 1999, 5.800%, 11/15/29 - AMBAC Insured 11,255 Brazos River Authority, Texas, Pollution Control Revenue No Opt. Call BBB 12,211,900 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 5,488,065 8,825 5.625%, 8/15/29 8/09 at 100.00 AAA 9,657,462 Clear Creek Independent School District, Galveston and Harris Counties, Texas, Unlimited Tax Schoolhouse and Refunding Bonds, Series 2000: 16,740 5.400%, 2/15/18 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 18,858,280 585 5.400%, 2/15/18 2/10 at 100.00 AAA 644,348 9,660 5.650%, 2/15/19 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 11,000,422 340 5.650%, 2/15/19 2/10 at 100.00 AAA 380,344 6,645 5.700%, 2/15/20 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 7,583,340 235 5.700%, 2/15/20 2/10 at 100.00 AAA 262,180 7,750 5.700%, 2/15/21 (Pre-refunded to 2/15/10) 2/10 at 100.00 AAA 8,844,378 270 5.700%, 2/15/21 2/10 at 100.00 AAA 301,228 6,000 Dallas-Ft. Worth International Airport Facility Improvement 11/09 at 101.00 CCC 3,339,840 Corporation, Texas, Revenue Bonds, American Airlines Inc., Series 1999, 6.375%, 5/01/35 (Alternative Minimum Tax) 41 Nuveen Municipal Market Opportunity Fund, Inc. (NMO) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 11,750 Dallas-Ft. Worth International Airport Facility Improvement 11/07 at 100.00 CCC $ 10,212,395 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 Houston, Texas, Subordinate Lien Airport System Revenue 7/10 at 100.00 AAA 23,295,465 Bonds, Series 2000B, 5.500%, 7/01/30 - FSA Insured 4,500 Houston, Texas, Junior Lien Water and Sewerage System 12/10 at 100.00 AAA 5,073,120 Revenue Refunding Bonds, Series 2000B, 5.250%, 12/01/30 (Pre-refunded to 12/01/10) - FGIC Insured 1,250 Houston, Texas, Junior Lien Water and Sewerage System 12/11 at 100.00 AAA 1,332,888 Revenue Refunding Bonds, Series 2001A, 5.000%, 12/01/20 - FSA Insured 15,000 San Antonio Independent School District, Bexar County, 8/09 at 100.00 AAA 17,109,900 Texas, General Obligation Bonds, Series 1999, 5.800%, 8/15/29 (Pre-refunded to 8/15/09) 4,150 Texas General Services Commission, Certificates of 3/05 at 100.50 A 4,217,064 Participation, Series 1992, 7.500%, 9/01/22 3,970 Wichita Falls, Wichita County, Texas, Priority Lien Water 8/11 at 100.00 AAA 4,177,512 and Sewerage System Revenue Bonds, Series 2001, 5.000%, 8/01/21 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 17.9% (11.8% OF TOTAL INVESTMENTS) 5,500 Clark County Public Utility District 1, Washington, Generating 1/11 at 100.00 AAA 5,927,295 System Revenue Refunding Bonds, Series 2000, 5.125%, 1/01/20 - FSA Insured 2,755 Cowlitz County, Washington, Special Sewerage Revenue No Opt. Call AAA 3,230,155 Refunding Bonds, CSOB Wastewater Treatment Facilities, Series 2002, 5.500%, 11/01/16 - FGIC Insured 10,000 Energy Northwest, Washington, Electric Revenue Refunding 7/11 at 101.00 AAA 11,240,700 Bonds, Nuclear Project 3, Series 2001A, 5.500%, 7/01/17 - FSA Insured 2,500 King County, Washington, Sewer Revenue Bonds, 1/12 at 100.00 AAA 2,606,100 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 36,813,213 5.625%, 2/01/30 - MBIA Insured 6,950 Port of Seattle, Washington, Revenue Bonds, Series 2000B, 8/10 at 100.00 AAA 7,545,893 5.625%, 2/01/24 (Alternative Minimum Tax) - MBIA Insured Seattle, Washington, General Obligation Refunding and Improvement Bonds, Series 2002: 6,165 4.400%, 12/01/19 12/12 at 100.00 AAA 6,301,678 6,445 4.500%, 12/01/20 12/12 at 100.00 AAA 6,596,200 Tacoma, Washington, Electric System Revenue Refunding Bonds, Series 2001A: 6,630 5.750%, 1/01/17 - FSA Insured 1/11 at 101.00 AAA 7,532,476 3,500 5.750%, 1/01/18 - FSA Insured 1/11 at 101.00 AAA 3,976,420 12,600 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 12,577,320 Settlement Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26 9,000 Washington, Motor Vehicle Fuel Tax General Obligation Bonds, 1/12 at 100.00 AAA 9,484,110 Series 2002C, 5.000%, 1/01/21 - FSA Insured 7,890 Washington State Higher Education Facilities Authority, 11/09 at 101.00 AA 8,540,767 Revenue Bonds, Pacific Lutheran University, Series 1999, 5.950%, 11/01/29 - RAAI Insured 3,520 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 Aaa 3,668,192 Bonds, Children's Hospital and Regional Medical Center, Series 2001, 5.000%, 10/01/21 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 0.2% (0.1% OF TOTAL INVESTMENTS) 1,250 Wisconsin Health and Educational Facilities Authority, 3/08 at 101.00 N/R 1,127,288 Revenue Bonds, United Lutheran Program for the Aging Inc., Series 1998, 5.700%, 3/01/28 42 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ WYOMING - 0.4% (0.3% OF TOTAL INVESTMENTS) $ 2,800 Jackson National Rural Utilities Cooperative Financing 5/07 at 101.00 A $ 2,907,403 Corporation, Wyoming, Guaranteed Gas Supply Revenue Bonds, Lower Valley Power and Light Inc., Series 1997B, 5.875%, 5/01/26 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ $ 1,057,109 Total Long-Term Investments (cost $991,461,689) - 151.5% 1,068,021,733 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.4% 16,737,892 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (53.9)% (380,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 704,759,625 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): 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, UAL Corporation, 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. 43 Nuveen Dividend Advantage Municipal Fund (NAD) Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.2% (0.2% OF TOTAL INVESTMENTS) $ 1,500 Alabama 21st Century Authority, Tobacco Settlement 6/10 at 102.00 A- $ 1,477,500 Revenue Bonds, Series 2000, 5.750%, 12/01/20 ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 2.5% (1.7% OF TOTAL INVESTMENTS) 15,000 Maricopa County Pollution Control Corporation, Arizona, No Opt. Call BBB- 15,382,500 Remarketed Revenue Bonds, El Paso Electric Company, Series 1994A, 6.375%, 7/01/14 (Mandatory put 8/01/05) ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 2.5% (1.7% OF TOTAL INVESTMENTS) 2,605 California, General Obligation Bonds, Series 1997, 10/07 at 101.00 AAA 2,802,251 5.000%, 10/01/18 - AMBAC Insured 2,475 Los Angeles Department of Water and Power, California, 7/06 at 100.00 AA- 2,580,584 Power System Revenue Bonds, Series 2001A-3, 5.375%, 7/01/20 9,375 Sacramento County Sanitation District Financing Authority, 12/05 at 101.00 AA 9,850,125 California, Revenue Bonds, Series 2000A, 5.875%, 12/01/27 ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 3.1% (2.1% OF TOTAL INVESTMENTS) 10,250 Denver City and County, Colorado, Airport System Revenue 11/06 at 101.00 AAA 10,907,435 Bonds, Series 1996D, 5.500%, 11/15/25 - MBIA Insured 2,950 Denver Convention Center Hotel Authority, Colorado, Senior 12/13 at 100.00 AAA 3,105,023 Revenue Bonds, Convention Center Hotel, Series 2003A, 5.000%, 12/01/22 - XLCA Insured 1,475 Denver City and County, Colorado, FHA-Insured Mortgage 10/07 at 102.00 AAA 1,523,646 Loan, Multifamily Housing Revenue Bonds, Boston Lofts Project, Series 1997A, 5.750%, 10/01/27 (Alternative Minimum Tax) 3,205 Denver City and County, Colorado, Airport Special Facilities 1/09 at 101.00 AAA 3,582,805 Revenue Bonds, Rental Car Projects, Series 1999A, 6.000%, 1/01/12 (Alternative Minimum Tax) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ CONNECTICUT - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,700 Connecticut Development Authority, Health Facilities Revenue 2/05 at 102.00 N/R 2,701,161 Refunding Bonds, Alzheimer's Resource Center of Connecticut Inc., Series 1994A, 7.125%, 8/15/14 ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 3.0% (2.0% OF TOTAL INVESTMENTS) 1,630 Florida Housing Finance Agency, Housing Revenue Bonds, 12/07 at 102.00 AAA 1,720,807 Mar Lago Village Apartments, Series 1997F, 5.800%, 12/01/17 (Alternative Minimum Tax) - AMBAC Insured 13,625 Martin County Industrial Development Authority, Florida, 12/04 at 102.00 BBB- 13,981,566 Industrial Development Revenue Bonds, Indiantown Cogeneration LP Project, Series 1994A, 7.875%, 12/15/25 (Alternative Minimum Tax) 2,405 Venice, Florida, Revenue Bonds, Bon Secours System, 8/06 at 102.00 AAA 2,594,442 Revenue Bonds, Series 1996, 5.600%, 8/15/16 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.4% (0.9% OF TOTAL INVESTMENTS) 4,000 Forsyth County Water and Sewerage Authority, Georgia, 4/10 at 102.00 AA*** 4,653,240 Revenue Bonds, Series 2000, 6.000%, 4/01/25 (Pre-refunded to 4/01/10) 3,500 Gainesville and Hall County Hospital Authority, Georgia, 5/09 at 101.00 AAA 3,759,070 Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 1999, 5.500%, 5/15/29 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ IDAHO - 0.4% (0.3% OF TOTAL INVESTMENTS) 710 Idaho Housing and Finance Association, Single Family 7/09 at 101.00 Aa2 722,198 Mortgage Bonds, Series 1999E, 5.750%, 1/01/21 (Alternative Minimum Tax) 865 Idaho Housing and Finance Association, Single Family 1/10 at 100.00 Aa2 922,557 Mortgage Bonds, Series 2000D, 6.350%, 7/01/22 (Alternative Minimum Tax) 850 Idaho Housing and Finance Association, Single Family 7/10 at 100.00 Aaa 854,743 Mortgage Bonds, Series 2000E, 5.950%, 7/01/20 (Alternative Minimum Tax) 44 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 35.3% (23.6% OF TOTAL INVESTMENTS) $ 3,635 Channahon, Illinois, Revenue Refunding Bonds, Morris 12/09 at 102.00 BBB+ $ 3,874,437 Hospital, Series 1999, 5.750%, 12/01/12 22,750 Chicago, Illinois, General Obligation Refunding Bonds, No Opt. Call AAA 26,402,513 Emergency Telephone System, Series 1999, 5.500%, 1/01/23 - FGIC Insured 7,250 Chicago Board of Education, Illinois, Unlimited Tax General No Opt. Call AAA 8,318,867 Obligation Bonds, Dedicated Tax Revenues, Series 1999A, 5.500%, 12/01/26 - FGIC Insured 2,300 Chicago, Illinois, Motor Fuel Tax Revenue Refunding Bonds, No Opt. Call AAA 2,621,218 Series 1993, 5.375%, 1/01/14 - AMBAC Insured Chicago, Illinois, FHA/GNMA Multifamily Housing Revenue Bonds, Archer Court Apartments, Series 1999A: 905 5.500%, 12/20/19 (Alternative Minimum Tax) 10/10 at 101.00 AAA 964,015 1,210 5.600%, 12/20/29 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,245,622 1,925 5.650%, 12/20/40 (Alternative Minimum Tax) 10/10 at 101.00 AAA 1,977,476 Chicago, Illinois, Wastewater Transmission Revenue Bonds, Series 1995: 3,795 5.125%, 1/01/25 (Pre-refunded to 1/01/06) - FGIC Insured 1/06 at 102.00 AAA 4,013,782 1,145 5.125%, 1/01/25 - FGIC Insured 1/06 at 102.00 AAA 1,194,453 5,100 Chicago, Illinois, Water Revenue Bonds, Series 1997, 11/07 at 102.00 AAA 5,656,257 5.250%, 11/01/27 (Pre-refunded to 11/01/07) - FGIC Insured 1,000 DuPage County Community School District 200, Wheaton, 11/13 at 100.00 Aaa 1,093,350 Illinois, General Obligation Bonds, Series 2003B, 5.250%, 11/01/20 - FSA Insured 24,835 Illinois Development Finance Authority, Revenue Bonds, 9/07 at 102.00 AAA 27,068,163 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 2,564,400 Program Revenue Bonds, Round Lake Community Unit School District 116 Project, Series 1999, 0.000%, 1/01/15 - MBIA Insured 5,570 Illinois Finance Authority, Revenue Bonds, University of 7/14 at 100.00 Aa1 5,700,059 Chicago, Series 2004A, 5.000%, 7/01/34 (WI, settling 11/10/04) 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 1,734,832 5,400 5.000%, 7/01/24 - MBIA Insured 7/07 at 101.00 AAA 5,525,010 5,490 Illinois Health Facilities Authority, Revenue Bonds, Sarah 2/07 at 102.00 A 5,724,807 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 19,481,472 Rate Revenue Bonds, Highland Park Hospital, Series 1991A, 6.000%, 10/01/15 (Pre-refunded to 10/01/07) - FGIC Insured 9,920 Illinois Health Facilities Authority, Remarketed Revenue 8/11 at 103.00 Aa1 10,979,654 Bonds, University of Chicago Project, Series 1985A, 5.500%, 8/01/20 7,245 Illinois Health Facilities Authority, Revenue Refunding Bonds, 1/05 at 100.00 BB+ 7,247,101 Proctor Community Hospital, Series 1991, 7.375%, 1/01/23 5,000 Kane, McHenry, Cook and DeKalb Counties Community 12/11 at 100.00 AAA 5,639,550 Unit School District 300, Carpentersville, Illinois, General Obligation Bonds, Series 2000, 5.500%, 12/01/19 - MBIA Insured Metropolitan Pier and Exposition Authority, Illinois, Revenue Refunding Bonds, McCormick Place Expansion Project, Series 1996A: 9,750 0.000%, 12/15/22 - MBIA Insured No Opt. Call AAA 4,092,953 13,000 0.000%, 12/15/23 - MBIA Insured No Opt. Call AAA 5,136,560 20,500 Metropolitan Pier and Exposition Authority, Illinois, Revenue 12/09 at 101.00 AAA 22,694,935 Bonds, McCormick Place Expansion Project, 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 27,263,352 3,500 5.750%, 6/01/23 - FSA Insured No Opt. Call AAA 4,187,470 1,300 Schaumburg, Illinois, General Obligation Bonds, 12/14 at 100.00 AAA 1,375,504 Series 2004B, 5.250%, 12/01/34 - FGIC Insured 4,500 Will County School District 122, New Lenox, Illinois, No Opt. Call Aaa 2,406,240 General Obligation Bonds, Series 2000B, 0.000%, 11/01/18 - FSA Insured 45 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 3.8% (2.5% OF TOTAL INVESTMENTS) $ 8,000 Indiana Health Facility Financing Authority, Hospital Revenue 8/10 at 101.50 AAA $ 8,593,760 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 9,949,094 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 Bonds, 6/09 at 101.00 Aa3 4,482,504 Park Tudor Foundation Inc., Project, Series 1999, 5.700%, 6/01/24 ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 1.9% (1.2% OF TOTAL INVESTMENTS) 11,095 Iowa Higher Education Loan Authority, Private College 10/10 at 102.00 N/R 11,353,957 Facility Revenue Bonds, Waldorf College, Series 1999, 7.375%, 10/01/19 ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 0.6% (0.4% OF TOTAL INVESTMENTS) 3,825 Wichita, Kansas, Water and Sewer Utility Revenue Bonds, 10/06 at 101.00 AAA 3,825,574 Series 1999, 4.000%, 10/01/18 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 1.6% (1.1% OF TOTAL INVESTMENTS) 3,030 Hardin County School District Finance Corporation, Kentucky, 2/10 at 101.00 Aa3 3,410,841 School Building Revenue Bonds, Series 2000, 5.750%, 2/01/20 Kentucky Economic Development Finance Authority, Hospital System Revenue Refunding and Improvement Bonds, Appalachian Regional Healthcare Inc. Project, Series 1997: 1,850 5.850%, 10/01/17 4/08 at 102.00 BB- 1,806,044 5,000 5.875%, 10/01/22 4/08 at 102.00 BB- 4,736,950 ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 2.1% (1.4% OF TOTAL INVESTMENTS) 2,245 Lafayette, Louisiana, Sales Tax Revenue Bonds, Public 5/10 at 101.50 AAA 2,501,469 Improvements, Series 2000B, 5.625%, 5/01/25 - FGIC Insured 1,750 Louisiana Local Government Environmental Facilities and 6/12 at 105.00 Aaa 1,948,555 Community Development Authority, GNMA Collateralized Mortgage Revenue Refunding Bonds, Sharlo Apartments Project, Series 2002A, 6.500%, 6/20/37 9,545 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 8,531,321 Tobacco Settlement Asset-Backed Bonds, Series 2001B, 5.500%, 5/15/30 ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 0.9% (0.6% OF TOTAL INVESTMENTS) 5,000 Maryland Community Development Administration, 9/09 at 100.00 Aa2 5,223,150 Residential Revenue Bonds, Series 2000G, 5.950%, 9/01/29 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 1.7% (1.1% OF TOTAL INVESTMENTS) 1,500 Boston Industrial Development Financing Authority, 9/12 at 102.00 N/R 1,550,460 Massachusetts, 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 813,872 Bonds, US Airways Group Inc., Series 1996A, 5.875%, 9/01/23 (Alternative Minimum Tax) - MBIA Insured 7,000 Massachusetts Port Authority, Special Facilities Revenue 7/07 at 102.00 AAA 7,508,480 Bonds, BOSFUEL Corporation, Series 1997, 5.500%, 7/01/18 (Alternative Minimum Tax) - MBIA Insured 555 Massachusetts Housing Finance Agency, Single Family 12/04 at 102.00 AA 566,733 Housing Revenue Bonds, Series 32, 6.600%, 12/01/26 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 1.6% (1.1% OF TOTAL INVESTMENTS) Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, Series 2001A: 2,565 5.250%, 7/01/33 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 2,904,067 2,435 5.250%, 7/01/33 - FGIC Insured 7/11 at 100.00 AAA 2,572,139 4,000 Wayne County, Michigan, Airport Revenue Bonds, Detroit 12/08 at 101.00 AAA 4,277,400 Metropolitan Airport, Series 1998A, 5.375%, 12/01/16 (Alternative Minimum Tax) - MBIA Insured 46 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.6% (0.4% OF TOTAL INVESTMENTS) $ 2,250 Minneapolis-St. Paul Metropolitan Airports Commission, 4/11 at 101.00 N/R $ 1,883,633 Minnesota, Special Facilities Revenue Bonds, Northwest Airlines Inc. Project, Series 2001A, 7.000%, 4/01/25 (Alternative Minimum Tax) 1,685 Minnesota Housing Finance Agency, Single Family Mortgage 1/10 at 101.00 AA+ 1,726,687 Bonds, Series 1998H-1, 5.650%, 7/01/31 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 1.4% (0.9% OF TOTAL INVESTMENTS) Missouri Health and Educational Facilities Authority, Revenue Bonds, SSM Healthcare System, Series 2001A: 4,370 5.250%, 6/01/21 - AMBAC Insured 6/11 at 101.00 AAA 4,679,134 3,670 5.250%, 6/01/28 - AMBAC Insured 6/11 at 101.00 AAA 3,837,242 ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.5% (0.3% OF TOTAL INVESTMENTS) 1,800 Montana Board of Housing, Single Family Mortgage Bonds, 12/09 at 100.00 AA+ 1,859,508 Series 2000A-2, 6.450%, 6/01/29 (Alternative Minimum Tax) 1,000 Montana Higher Education Student Assistance Corporation, 12/09 at 100.00 A2 1,048,850 Student Loan Revenue Bonds, Subordinate Series 1999B, 6.400%, 12/01/32 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,800 Nebraska Higher Education Loan Program Incorporated, Senior No Opt. Call AAA 1,892,898 Subordinate Bonds, Series 1993A-5A, 6.200%, 6/01/13 (Alternative Minimum Tax) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 0.9% (0.5% OF TOTAL INVESTMENTS) 2,115 Clark County, Nevada, General Obligation Bank Bonds, 6/11 at 100.00 AAA 2,342,468 Southern Nevada Water Authority Loan, Series 2001, 5.300%, 6/01/19 - FGIC Insured 6,000 Director of Nevada State Department of Business and No Opt. Call AAA 3,110,400 Industry, Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 0.000%, 1/01/19 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.3% (0.2% OF TOTAL INVESTMENTS) 2,105 New Hampshire Housing Finance Agency, Single Family 7/05 at 102.00 Aa2 2,112,094 Mortgage Acquisition Revenue Bonds, Series 1995D, 6.550%, 7/01/26 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 7.9% (5.3% OF TOTAL INVESTMENTS) 2,910 New Jersey Higher Education Assistance Authority, Student 6/10 at 101.00 AAA 2,967,618 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 2,042,320 FHA-Insured Mortgage Revenue Bonds, Jersey City Medical Center, Series 2001, 4.800%, 8/01/21 - AMBAC Insured 15,600 New Jersey Economic Development Authority, Solid Waste No Opt. Call N/R 9,313,200 Facilities Revenue Bonds, Bridgewater Resources Inc. Project, Series 1999B, 8.250%, 6/01/19 (Alternative Minimum Tax) # 675 New Jersey Economic Development Authority, Solid Waste No Opt. Call N/R 402,975 Revenue Bonds, Bridgewater Resources Inc. Project, Series 2003C, 0.000%, 6/30/05# 4,130 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA 4,737,812 Federal Transit Administration Grants, Series 2002A, 5.500%, 9/15/13 - AMBAC Insured 4,000 New Jersey Transportation Trust Fund Authority, No Opt. Call A+ 4,736,640 Transportation System Bonds, Series 1999A, 5.750%, 6/15/18 10,000 Port Authority of New York and New Jersey, Special Project 12/07 at 102.00 AAA 10,998,700 Bonds, JFK International Air Terminal LLC, Sixth Series 1997, 5.900%, 12/01/17 (Alternative Minimum Tax) - MBIA Insured Tobacco Settlement Financing Corporation, New Jersey, Tobacco Settlement Asset-Backed Bonds, Series 2002: 11,085 5.750%, 6/01/32 6/12 at 100.00 BBB 10,311,821 3,165 6.125%, 6/01/42 6/12 at 100.00 BBB 2,812,166 ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 0.7% (0.4% OF TOTAL INVESTMENTS) 4,000 University of New Mexico, FHA-Insured Mortgage Hospital Revenue Bonds, Series 2004, 5.000%, 7/01/32 (WI, settling 11/18/04) - 7/14 at 100.00 AAA 4,067,240 FSA Insured 47 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 19.5% (13.1% OF TOTAL INVESTMENTS) $ 5,000 Long Island Power Authority, New York, Electric System 6/08 at 101.00 AAA $ 5,321,700 General Revenue Bonds, Series 1998A, 5.250%, 12/01/26 - FSA Insured Nassau County, New York, General Obligation Improvement Bonds, Series 1999B: 4,005 5.250%, 6/01/19 (Pre-refunded to 6/01/09) - AMBAC Insured 6/09 at 102.00 AAA 4,552,003 7,005 5.250%, 6/01/20 (Pre-refunded to 6/01/09) - AMBAC Insured 6/09 at 102.00 AAA 7,961,743 7,005 5.250%, 6/01/21 - AMBAC Insured 6/09 at 102.00 AAA 7,841,397 2,000 New York City, New York, General Obligation Bonds, 2/08 at 101.00 AAA 2,183,900 Fiscal Series 1998E, 5.250%, 8/01/14 - AMBAC Insured 14,000 New York City, New York, General Obligation Bonds, 2/08 at 101.00 AAA 15,275,820 Fiscal Series 1998F, 5.375%, 8/01/19 - MBIA Insured 12,350 New York City Transitional Finance Authority, New York, 5/10 at 101.00 AA+*** 14,170,143 Future Tax 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+*** 11,535,900 Future Tax Secured Bonds, Fiscal Series 2000A, 5.750%, 8/15/24 (Pre-refunded to 8/15/09) 4,600 Dormitory Authority of the State of New York, Improvement 2/07 at 102.00 AAA 4,978,442 Revenue Bonds, Mental Health Services Facilities, Series 1996E, 5.250%, 2/15/18 - AMBAC Insured 2,170 Dormitory Authority of the State of New York, Insured Revenue 7/07 at 102.00 AA 2,369,206 Bonds, Franciscan Health Partnership Obligated Group - Frances Shervier Home and Hospital, Series 1997, 5.500%, 7/01/17 - RAAI Insured Dormitory Authority of the State of New York, Improvement Revenue Bonds, Mental Health Services Facilities, Series 1996B: 4,305 5.125%, 8/15/21 (Pre-refunded to 2/15/06) - MBIA Insured 2/06 at 100.00 AAA 4,573,072 165 5.125%, 8/15/21 - MBIA Insured 2/06 at 102.00 AAA 173,168 7,500 Dormitory Authority of the State of New York, Secured 2/08 at 101.50 AAA 8,140,875 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, Third General 7/09 at 101.00 AAA 11,401,400 Resolution Consolidated Revenue Bonds, City University System, Series 1999-1, 5.500%, 7/01/29 (Pre-refunded to 7/01/09) - FSA Insured 2,000 Dormitory Authority of the State of New York, Third General 1/08 at 102.00 AAA 2,235,720 Resolution Consolidated Revenue Bonds, City University System, Series 1997-1, 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 7,963,125 Facilities Revenue Bonds, Series 1995-6, 5.375%, 1/01/25 (Pre-refunded to 1/01/06) - AMBAC Insured 8,800 New York City Sales Tax Asset Receivable Corporation, 10/14 at 100.00 AAA 9,110,640 New York, Local Government Assistance Corporation Dedicated Revenue Bonds, Series 2004A, 5.000%, 10/15/32 (WI, settling 11/04/04) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.5% (0.4% OF TOTAL INVESTMENTS) 3,000 Wake County, North Carolina, General Obligation School 2/11 at 102.00 AAA 3,321,990 Bonds, Series 2001B, 5.250%, 2/01/17 ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 4.0% (2.7% OF TOTAL INVESTMENTS) 2,300 Amherst Exempted Village School District, Ohio, Unlimited 12/11 at 100.00 Aaa 2,487,312 Tax General Obligation 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 3,714,170 Mortgage Revenue Bonds, Hamilton Creek Apartments Project, Series 1994A, 5.550%, 7/01/24 (Alternative Minimum Tax) 3,650 Montgomery County, Ohio, Revenue Bonds, Catholic Health 5/14 at 100.00 AA 3,707,962 Initiatives, Series 2004A, 5.000%, 5/01/30 (WI, settling 11/18/04) 13,300 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 13,644,470 Revenue Bonds, Bay Shore Power, Series 1998B, 6.625%, 9/01/20 (Alternative Minimum Tax) 1,115 Warren County, Ohio, Special Assessment Bonds, Waterstone 12/07 at 101.00 Aa2 1,227,470 Boulevard Project, Series 1997, 5.500%, 12/01/17 ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,355 Portland, Oregon, Downtown Waterfront Urban Renewal 6/10 at 101.00 Aaa 2,637,317 and Redevelopment Revenue Bonds, Series 2000A, 5.500%, 6/15/20 - AMBAC Insured 48 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 4.9% (3.3% OF TOTAL INVESTMENTS) $ 3,480 Allegheny County Hospital Development Authority, 11/10 at 102.00 B1 $ 4,014,319 Pennsylvania, Revenue Bonds, West Penn Allegheny Health System, Series 2000B, 9.250%, 11/15/22 2,180 Carbon County Industrial Development Authority, No Opt. Call BBB- 2,365,758 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 18,900 Philadelphia Airport System, Pennsylvania, Revenue 6/08 at 102.00 AAA 20,368,341 Refunding Bonds, Series 1998A, 5.500%, 6/15/18 (Alternative Minimum Tax) - FGIC Insured 3,205 Philadelphia School District, Pennsylvania, General Obligation 8/12 at 100.00 AAA 3,607,099 Bonds, Series 2002B, 5.625%, 8/01/16 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ PUERTO RICO - 2.0% (1.4% OF TOTAL INVESTMENTS) 12,500 Puerto Rico Housing Finance Authority, Capital Fund Program No Opt. Call AA*** 12,531,875 Revenue Bonds, Series 2003, 4.500%, 12/01/23 ------------------------------------------------------------------------------------------------------------------------------------ RHODE ISLAND - 2.8% (1.8% OF TOTAL INVESTMENTS) 2,015 Central Falls, Rhode Island, General Obligation School Bonds, 5/09 at 102.00 AA 2,281,061 Series 1999, 6.250%, 5/15/20 - RAAI Insured 3,500 Providence Redevelopment Agency, Rhode Island, Revenue 4/10 at 101.00 Aaa 3,913,840 Bonds, Public Safety and Municipal Building Projects, Series 1999A, 5.750%, 4/01/29 - AMBAC Insured 12,000 Rhode Island Tobacco Settlement Financing Corporation, 6/12 at 100.00 BBB 10,989,240 Tobacco Settlement Asset-Backed Bonds, Series 2002A, 6.125%, 6/01/32 ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 2.2% (1.5% OF TOTAL INVESTMENTS) 6,400 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/10 at 101.00 AAA 7,093,824 Revenue Bonds, Series 1999D, 6.000%, 3/01/24 (Alternative Minimum Tax) - AMBAC Insured 2,425 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/11 at 100.00 AAA 2,512,785 Revenue Bonds, Series 2001B, 5.125%, 3/01/26 - FSA Insured 2,210 Tennessee Housing Development Agency, Homeownership 7/10 at 101.00 AA 2,296,323 Program Bonds, Series 2000-1, 6.375%, 7/01/25 (Alternative Minimum Tax) 1,335 Tennessee Housing Development Agency, Homeownership 7/10 at 100.00 AA 1,362,074 Program Bonds, Series 2000-2B, 6.250%, 1/01/20 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 14.7% (9.8% OF TOTAL INVESTMENTS) 1,000 Alliance Airport Authority, Texas, Special Facilities Revenue 12/04 at 100.00 CCC 641,600 Bonds, American Airlines Inc., Series 1990, 7.500%, 12/01/29 (Alternative Minimum Tax) Austin, Texas, Prior Lien Airport System Revenue Bonds, Series 1995A: 1,660 6.125%, 11/15/25 (Alternative Minimum Tax) 11/05 at 102.00 AAA 1,757,724 (Pre-refunded to 11/15/05) - MBIA Insured 8,340 6.125%, 11/15/25 (Alternative Minimum Tax) - MBIA Insured 11/05 at 102.00 AAA 8,817,131 2,560 Brazos River Authority, Texas, Pollution Control Revenue 4/13 at 101.00 BBB 3,043,226 Refunding Bonds, TXU Electric Company Project, Series 1999C, 7.700%, 3/01/32 (Alternative Minimum Tax) 4,675 Carrollton-Farmers Branch Independent School District, 2/09 at 100.00 AAA 5,318,748 Dallas County, Texas, Unlimited Tax School Building 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 2,242,682 7,000 0.000%, 8/15/21 8/09 at 49.48 AAA 2,885,960 7,345 0.000%, 8/15/23 8/09 at 44.01 AAA 2,693,118 7,000 0.000%, 8/15/24 8/09 at 41.50 AAA 2,420,460 7,350 0.000%, 8/15/25 8/09 at 39.14 AAA 2,249,100 7,000 0.000%, 8/15/26 8/09 at 36.91 AAA 2,011,520 2,000 Dallas-Ft. Worth International Airport Facility Improvement 11/05 at 100.00 CCC 1,863,440 Corporation, Texas, Revenue Refunding Bonds, American Airlines Inc., Series 2000B, 6.050%, 5/01/29 (Alternative Minimum Tax) (Mandatory put 11/01/05) 6,000 Dallas-Ft. Worth International Airport Facility Improvement 11/07 at 100.00 CCC 5,214,840 Corporation, Texas, Revenue Refunding Bonds, American Airlines Inc., Series 2000C, 6.150%, 5/01/29 (Alternative Minimum Tax) (Mandatory put 11/01/07) 49 Nuveen Dividend Advantage Municipal Fund (NAD) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 820 Dallas Area Rapid Transit, Texas, Senior Lien Sales Tax 12/11 at 100.00 AAA $ 836,884 Revenue Bonds, Series 2001A, 5.000%, 12/01/31 - AMBAC Insured Harris County Health Facilities Development Corporation, Texas, Revenue Bonds, Christus Health, Series 1999A: 12,240 5.375%, 7/01/24 - MBIA Insured 7/09 at 101.00 AAA 12,857,630 11,000 5.375%, 7/01/29 - MBIA Insured 7/09 at 101.00 AAA 11,437,360 2,205 Harris County-Houston Sports Authority, Texas, Senior No Opt. Call AAA 1,039,878 Lien Revenue Refunding Bonds, Series 2001A, 0.000%, 11/15/20 - MBIA Insured 2,500 Houston, Texas, Hotel Occupancy Tax and Special Revenue No Opt. Call AAA 638,950 Bonds, Convention and Entertainment Project, Series 2001B, 0.000%, 9/01/30 - AMBAC Insured 2,500 Jefferson County, Texas, Certificates of Obligation, 8/10 at 100.00 AAA 2,909,700 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 4,535,570 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 2,135,660 Series 2001, 5.300%, 3/15/26 - FGIC Insured 1,500 Port Arthur, Texas, Jefferson County, General Obligation 2/07 at 100.00 AAA 1,566,240 Bonds, Series 1997, 5.000%, 2/15/21 - MBIA Insured 10,000 Tarrant County Health Facilities Development Corporation, 2/08 at 102.00 AAA 10,873,400 Texas, Revenue Bonds, Texas Health Resources System, Series 1997A, 5.250%, 2/15/17 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 0.6% (0.4% OF TOTAL INVESTMENTS) 40 Utah Housing Finance Agency, FHA-Insured Single Family 1/05 at 102.00 AAA 40,430 Mortgage Senior Bonds, Series 1994F-2, 7.000%, 7/01/27 (Alternative Minimum Tax) Utah Housing Finance Agency, Single Family Mortgage Bonds, Series 1999C-2, Class II: 940 5.700%, 7/01/19 (Alternative Minimum Tax) 1/10 at 101.50 AAA 1,004,512 315 5.750%, 7/01/21 (Alternative Minimum Tax) 1/10 at 101.50 AA 334,845 345 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101.00 AA 350,699 Series 1999D, 5.850%, 7/01/21 (Alternative Minimum Tax) 150 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/09 at 101.50 Aa2 150,891 Series 1999F, 6.300%, 7/01/21 (Alternative Minimum Tax) 1,705 Utah Housing Finance Agency, Single Family Mortgage Bonds, 7/10 at 100.00 AA- 1,788,596 Series 2000F-2, Class III, 6.000%, 1/01/15 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.5% (0.4% OF TOTAL INVESTMENTS) 3,395 Virginia Small Business Financing Authority, Industrial 11/09 at 102.00 N/R 3,360,371 Development Water Revenue Bonds, S.I.L. Clean Water, LLC Project, Series 1999, 7.250%, 11/01/24 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 11.0% (7.3% OF TOTAL INVESTMENTS) 4,000 Energy Northwest, Washington, Electric Revenue Refunding 7/13 at 100.00 Aaa 4,480,920 Bonds, Nuclear Project 3, Series 2003A, 5.500%, 7/01/17 Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18, Series 1999B: 1,755 6.000%, 9/01/15 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 1,960,282 2,590 6.000%, 9/01/16 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 2,892,952 Port of Seattle, Washington, Special Facility Revenue Bonds, Terminal 18, Series 1999C: 875 6.000%, 9/01/15 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 977,349 1,260 6.000%, 9/01/16 (Alternative Minimum Tax) - MBIA Insured 3/10 at 101.00 AAA 1,407,382 9,760 Tacoma, Washington, Electric System Revenue Refunding 1/11 at 101.00 AAA 11,021,187 Bonds, Series 2001A, 5.625%, 1/01/21 - FSA Insured 7,530 Washington State Tobacco Settlement Authority, Tobacco 6/13 at 100.00 BBB 7,516,446 Settlement Asset-Backed Revenue Bonds, Series 2002, 6.500%, 6/01/26 11,605 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 12,700,512 Convention and Trade Center, Series 1999, 5.250%, 7/01/16 - MBIA Insured 3,350 Washington, General Obligation Compound Interest Bonds, No Opt. Call AAA 1,859,317 Series 1999S-2, 0.000%, 1/01/18 - FSA Insured 50 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON (continued) Washington, General Obligation Compound Interest Bonds, Series 1999S-3: $ 17,650 0.000%, 1/01/20 No Opt. Call Aa1 $ 8,670,739 18,470 0.000%, 1/01/21 No Opt. Call Aa1 8,549,578 4,800 Washington Public Power Supply System, Nuclear Project 3 7/07 at 102.00 AAA 5,224,224 Revenue Refunding Bonds, Series 1997A, 5.250%, 7/01/16 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 6.7% (4.5% OF TOTAL INVESTMENTS) 2,250 Green Bay, Wisconsin, Water System Revenue Bonds, 11/14 at 100.00 Aaa 2,322,427 Series 2004, 5.000%, 11/01/29 - FSA Insured 3,810 La Crosse, Wisconsin, Industrial Development Revenue 12/08 at 102.00 AAA 4,166,121 Refunding Bonds, Dairyland Power Cooperative, Series 1997C, 5.550%, 2/01/15 - AMBAC Insured 4,180 Wisconsin Health and Educational Facilities Authority, 5/09 at 101.00 A 4,251,436 Revenue Bonds, Kenosha Hospital and Medical Center Inc., Series 1999, 5.625%, 5/15/29 Wisconsin Health and Educational Facilities Authority, Revenue Bonds, FH Healthcare Development Inc., Series 1999: 8,375 6.250%, 11/15/20 11/09 at 101.00 N/R 9,040,729 5,000 6.250%, 11/15/28 11/09 at 101.00 N/R 5,304,350 12,700 Wisconsin Health and Educational Facilities Authority, 8/09 at 101.00 Aaa 13,683,234 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 2,204,467 Revenue Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33 ------------------------------------------------------------------------------------------------------------------------------------ $ 912,125 Total Long-Term Investments (cost $822,982,975) - 145.4% 891,865,782 =============----------------------------------------------------------------------------------------------------------------------- SHORT-TERM INVESTMENTS - 4.0% (2.7% OF TOTAL INVESTMENTS) 1,050 Carbon County, Utah, Pollution Control Revenue Refunding A-1 1,050,000 Bonds, Pacificorp Projects, Variable Rate Demand Obligations, Series 1994 1.750%, 11/01/24 - AMBAC Insured+ 12,000 Clark County School District, Nevada, General Obligation A-1+ 12,000,000 Bonds, Variable Rate Demand Obligations, Series 2001B, 1.630%, 6/15/21 - FSA Insured+ 2,500 Connecticut Health and Educational Facilities Authority, A-1+ 2,500,000 Revenue Bonds, Yale University, Variable Rate Demand Obligations, Series 1997, 1.630%, 7/01/29+ 1,850 Massachusetts Development Finance Authority, Revenue A-1+ 1,850,000 Bonds, Boston University, Variable Rate Demand Obligations, Series 2002R-4, 1.690%, 10/01/42 - XLCA Insured+ 3,000 New York City, New York, General Obligation Bonds, A-1+ 3,000,000 Variable Rate Demand Obligations, Fiscal Series 2002A-7, 1.660%, 11/01/24 - AMBAC Insured+ 2,000 New York City Municipal Water Finance Authority, New York, A-1+ 2,000,000 Water and Sewerage System Revenue Bonds, Variable Rate Demand Obligations, Fiscal Series 1993C, 1.700%, 6/15/22 - FGIC Insured+ 2,100 Power County, Idaho, Variable Rate Demand Pollution Control VMIG-1 2,100,000 Revenue Bonds, FMC Corporation Project, Variable Rate Demand Bonds, Series 1985, 1.750%, 12/01/10+ ------------------------------------------------------------------------------------------------------------------------------------ $ 24,500 Total Short-Term Investments (cost $24,500,000) 24,500,000 =============----------------------------------------------------------------------------------------------------------------------- Total Investments (cost $847,482,975) - 149.4% 916,365,782 -------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - (1.3)% (8,037,586) -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.1)% (295,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 613,328,196 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): 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. # 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 2004. 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. (WI) Security purchased on a when-issued basis. + Security has a maturity of more than one year, but has variable rate and demand features which qualify it as a short-term security. The rate disclosed is that currently in effect. This rate changes periodically based on market conditions or a specified market index. See accompanying notes to financial statements. 51 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 4.2% (2.9% OF TOTAL INVESTMENTS) $ 18,500 Huntsville Healthcare Authority, Alabama, Revenue Bonds, 6/11 at 101.00 A2 $ 19,312,890 Series 2001A, 5.750%, 6/01/31 ------------------------------------------------------------------------------------------------------------------------------------ ARIZONA - 0.6% (0.4% OF TOTAL INVESTMENTS) 2,500 Phoenix, Arizona, Civic Improvement Corporation, Senior 7/12 at 100.00 AAA 2,581,050 Lien Airport Revenue Bonds, Series 2002B, 5.250%, 7/01/32 (Alternative Minimum Tax) - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.6% (0.4% OF TOTAL INVESTMENTS) 2,470 Arkansas Development Finance Authority, Single Family 1/12 at 100.00 AAA 2,547,830 Mortgage Revenue Bonds, GNMA Mortgage-Backed Securities Program, Series 2002C, 5.400%, 1/01/34 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 11.1% (7.6% OF TOTAL INVESTMENTS) 6,000 California Educational Facilities Authority, Revenue Bonds, 6/11 at 101.00 AAA 6,328,140 Stanford University, Series 2001Q, 5.250%, 12/01/32 13,825 California, Department of Veterans Affairs, Home Purchase 6/06 at 101.00 AAA 14,614,407 Revenue Bonds, Series 2001A, 5.550%, 12/01/25 - AMBAC Insured 11,200 California, General Obligation Bonds, Series 2003, 8/13 at 100.00 A 11,776,688 5.250%, 2/01/28 1,500 California Statewide Community Development Authority, 10/15 at 103.00 N/R 1,649,160 Senior Lien Revenue Bonds, East Valley Tourist Authority, Series 2003B, 9.250%, 10/01/20 6,000 California Statewide Community Development Authority, No Opt. Call A 5,996,100 Revenue Bonds, Kaiser Permanente System, Series 2004G, 2.300%, 4/01/34 (Mandatory put 5/01/07) 5,000 Golden State Tobacco Securitization Corporation, California, 6/13 at 100.00 BBB 4,910,950 Tobacco Settlement Asset-Backed Bonds, Series 2003A-1, 6.750%, 6/01/39 6,000 Los Angeles Regional Airports Improvement Corporation, 12/12 at 102.00 B- 5,442,000 California, Sublease Revenue Bonds, Los Angeles International Airport, American Airlines Inc. Terminal 4 Project, Series 2002C, 7.500%, 12/01/24 (Alternative Minimum Tax) 220 Yuba County Water Agency, California, Yuba River 3/05 at 100.00 Baa3 219,991 Development Revenue Bonds, Pacific Gas and Electric Company, Series 1966A, 4.000%, 3/01/16 ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 5.9% (4.0% OF TOTAL INVESTMENTS) 3,000 Colorado Educational and Cultural Facilities Authority, 8/11 at 100.00 AAA 3,739,980 Charter School Revenue Bonds, Peak-to-Peak Charter School, Series 2001, 7.500%, 8/15/21 (Pre-refunded to 8/15/11) 2,500 Colorado Educational and Cultural Facilities Authority, 6/14 at 100.00 N/R 2,504,775 Revenue Bonds, Colorado Lutheran High School Association, Series 2004A, 7.625%, 6/01/34 10,000 E-470 Public Highway Authority, Colorado, Senior Revenue 9/10 at 31.42 AAA 2,500,800 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 1,824,077 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 5,187,550 Revenue Bonds, Senior Series 2001A, 5.250%, 6/15/41 - FSA Insured Northwest Parkway Public Highway Authority, Colorado, Senior Lien Revenue Bonds, Series 2001B: 22,000 0.000%, 6/15/28 - FSA Insured 6/11 at 35.65 AAA 5,837,920 17,650 0.000%, 6/15/29 - AMBAC Insured 6/11 at 33.45 AAA 4,395,909 1,000 Plaza Metropolitan District 1, Lakewood, Colorado, 6/14 at 101.00 N/R 1,048,880 Tax Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25 52 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 5.1% (3.5% OF TOTAL INVESTMENTS) $ 15,000 Jacksonville, Florida, Transportation Revenue Bonds, 10/11 at 100.00 AAA $ 15,857,700 Series 2001, 5.250%, 10/01/29 - MBIA Insured 3,000 Miami-Dade County, Florida, Aviation Revenue Bonds, 10/12 at 100.00 AAA 3,120,060 Miami International Airport, Series 2002, 5.375%, 10/01/32 (Alternative Minimum Tax) - FGIC Insured 4,000 Miami-Dade County Health Facility Authority, Florida, 8/11 at 101.00 AAA 4,161,240 Hospital Revenue Refunding Bonds, Miami Children's Hospital, Series 2001A, 5.125%, 8/15/26 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 1.3% (0.9% OF TOTAL INVESTMENTS) 5,940 DeKalb County, Georgia, General Obligation Bonds, No Opt. Call Aaa 5,953,365 Series 2003A, 3.000%, 1/01/05 ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 2.2% (1.4% OF TOTAL INVESTMENTS) Honolulu Board of Water Supply, Hawaii, Water System Revenue Bonds, Series 2001: 3,000 5.250%, 7/01/26 - FSA Insured 7/11 at 100.00 AAA 3,179,850 6,725 5.250%, 7/01/31 - FSA Insured 7/11 at 100.00 AAA 7,101,331 ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 11.1% (7.6% OF TOTAL INVESTMENTS) 15,270 Chicago, Illinois, General Obligation Refunding Bonds, 1/11 at 101.00 AAA 15,978,681 Series 2001A, 5.250%, 1/01/33 - MBIA Insured 3,690 Chicago, Illinois, FHA/GNMA Collateralized Multifamily 12/11 at 100.00 A+ 3,842,987 Housing Revenue Bonds, Stone Terrace Apartments, Series 2001A, 5.750%, 12/20/42 (Alternative Minimum Tax) 1,755 Chicago, Illinois, Special Facility Revenue Bonds, O'Hare No Opt. Call N/R 631,800 International Airport, United Air Lines Inc. Project, Series 2001A, 6.375%, 11/01/35 (Alternative Minimum Tax) (Mandatory put 5/01/13)# 2,330 Chicago, Illinois, FNMA/GNMA Collateralized Single Family 4/11 at 105.00 AAA 2,471,757 Mortgage 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 3,284,399 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 5,411,000 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 A- 3,306,987 Midwestern University, Series 2001B, 6.000%, 5/15/31 5,000 Illinois Health Facilities Authority, Revenue Bonds, Edward 2/11 at 101.00 AAA 5,183,100 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 3,084,660 Revenue Bonds, Educational Advancement Foundation Fund, University Center Project, Series 2002, 6.250%, 5/01/34 2,275 Illinois, Sales Tax Revenue Bonds, Series 2001, 5.500%, 6/15/16 6/11 at 100.00 AAA 2,549,115 4,980 Metropolitan Pier and Exposition Authority, Illinois, Revenue 6/06 at 102.00 AAA 5,211,122 Refunding Bonds, McCormick Place Expansion Project, Series 1996A, 5.250%, 6/15/27 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 4.8% (3.3% OF TOTAL INVESTMENTS) 2,000 Indiana Health Facility Financing Authority, Hospital Revenue 9/11 at 100.00 A+ 2,059,240 Bonds, Methodist Hospitals Inc., Series 2001, 5.500%, 9/15/31 2,500 Indiana Health Facility Financing Authority, Hospital Revenue No Opt. Call AAA 3,108,475 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 4,206,480 6,000 5.000%, 6/01/24 - FSA Insured 6/13 at 100.00 AAA 6,283,380 2,978 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 N/R 327,550 Revenue Bonds, United Air Lines Inc., Indianapolis Maintenance Center Project, Series 1995A, 6.500%, 11/15/31 (Alternative Minimum Tax)# 6,100 St. Joseph County Hospital Authority, Indiana, Revenue 2/09 at 102.00 BBB 6,056,019 Bonds, Madison Center Inc., Series 1999, 5.800%, 2/15/24 ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 0.2% (0.2% OF TOTAL INVESTMENTS) 1,000 Iowa Higher Education Loan Authority, Private College 10/12 at 100.00 A 1,039,960 Facility Revenue Bonds, Wartburg College, Series 2002, 5.500%, 10/01/28 - ACA Insured 53 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ KANSAS - 3.9% (2.7% OF TOTAL INVESTMENTS) $ 17,000 Wichita, Kansas, Hospital Facilities Revenue Refunding 11/11 at 101.00 A+ $ 17,828,070 and Improvement Bonds, Via Christi Health System Inc., Series 2001-III, 5.625%, 11/15/31 ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.2% (2.2% OF TOTAL INVESTMENTS) 17,060 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 14,838,106 Tobacco Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 4.0% (2.7% OF TOTAL INVESTMENTS) 2,875 Massachusetts Port Authority, Special Facilities Revenue 7/07 at 102.00 AAA 3,100,285 Bonds, BOSFUEL Corporation, 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 15,159,150 System Revenue Bonds, Senior Series 1997A, 5.000%, 1/01/37 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 14.5% (9.8% OF TOTAL INVESTMENTS) Detroit, Michigan, Senior Lien Water Supply System Revenue Bonds, Series 2001A: 20,000 5.500%, 7/01/33 - FGIC Insured 7/11 at 101.00 AAA 21,731,000 14,610 5.250%, 7/01/33 - FGIC Insured 7/11 at 100.00 AAA 15,432,835 15,390 5.250%, 7/01/33 (Pre-refunded to 7/01/11) - FGIC Insured 7/11 at 100.00 AAA 17,424,404 4,000 Michigan Municipal Bond Authority, Public School Academy 10/09 at 102.00 Ba1 4,161,760 Revenue Bonds, Detroit Academy of Arts and Sciences Charter School, Series 2001A, 8.000%, 10/01/31 Michigan State Hospital Finance Authority, Revenue Refunding Bonds, Detroit Medical Center Obligated Group, Series 1993A: 2,000 6.250%, 8/15/13 2/05 at 101.00 Ba3 1,889,940 4,000 6.500%, 8/15/18 2/05 at 101.00 Ba3 3,773,800 2,000 Michigan State Hospital Finance Authority, Hospital 8/08 at 101.00 Ba3 1,648,280 Revenue Bonds, Detroit Medical Center Obligated Group, Series 1998A, 5.125%, 8/15/18 ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 3.2% (2.2% OF TOTAL INVESTMENTS) 14,000 Minneapolis-St. Paul Metropolitan Airports Commission, 1/11 at 100.00 AAA 14,767,760 Minnesota, Airport Revenue Bonds, Series 2001A, 5.250%, 1/01/32 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 0.9% (0.6% OF TOTAL INVESTMENTS) 4,000 Mississippi, Highway Revenue Bonds, Series 1999, No Opt. Call AAA 4,081,640 5.250%, 6/01/05 ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 4.8% (3.3% OF TOTAL INVESTMENTS) 21,000 Missouri Health and Educational Facilities Authority, Revenue 6/11 at 101.00 AAA 21,956,970 Bonds, SSM Healthcare System, Series 2001A, 5.250%, 6/01/28 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 1.0% (0.7% OF TOTAL INVESTMENTS) 4,370 Montana Board of Housing, Single Family Program Bonds, 12/10 at 100.00 AA+ 4,523,780 Series 2001A-2, 5.700%, 6/01/32 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 4.5% (3.1% OF TOTAL INVESTMENTS) 12,275 Director of Nevada State Department of Business and Industry, 1/10 at 100.00 AAA 12,733,348 Revenue Bonds, Las Vegas Monorail Project, First Tier, Series 2000, 5.375%, 1/01/40 - AMBAC Insured 3,500 Director of Nevada State Department of Business and Industry, 1/10 at 102.00 N/R 3,543,470 Revenue Bonds, Las Vegas Monorail Project, Second Tier, Series 2000, 7.375%, 1/01/40 Henderson, Nevada, Healthcare Facility Revenue Bonds, Catholic Healthcare West, Series 1998A: 1,670 5.250%, 7/01/18 (Pre-refunded to 7/01/08) 7/08 at 101.00 BBB+*** 1,833,927 2,330 5.250%, 7/01/18 7/08 at 101.00 BBB+ 2,378,464 ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 2.4% (1.5% OF TOTAL INVESTMENTS) 8,000 New Hampshire Business Finance Authority, Pollution 10/08 at 102.00 A3 8,365,120 Control Remarketed Revenue Refunding Bonds, Connecticut Light and Power Company, Series 1992A, 5.850%, 12/01/22 2,360 New Hampshire Housing Finance Agency, Single Family 5/11 at 100.00 Aa2 2,401,512 Mortgage Acquisition Bonds, Series 2001A, 5.700%, 1/01/31 (Alternative Minimum Tax) 54 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 1.3% (0.8% OF TOTAL INVESTMENTS) $ 3,995 New Jersey Economic Development Authority, Special 11/10 at 101.00 B $ 3,163,641 Facilities Revenue Bonds, Continental Airlines Inc., 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 416,883 2,700 6.250%, 6/01/43 6/13 at 100.00 BBB 2,442,366 ------------------------------------------------------------------------------------------------------------------------------------ NEW MEXICO - 5.2% (3.6% OF TOTAL INVESTMENTS) 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 Aa3 12,636,840 10,800 5.500%, 8/01/30 8/11 at 101.00 Aa3 11,230,704 ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 6.0% (4.1% OF TOTAL INVESTMENTS) 6,000 Long Island Power Authority, New York, Electric System 5/11 at 100.00 A- 6,240,060 General Revenue Bonds, Series 2000L, 5.375%, 5/01/33 12,000 New York City Municipal Water Finance Authority, 6/11 at 101.00 AA+ 12,373,560 New York, Water and Sewerage 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 3,785,450 Special Facilities Revenue Bonds, JFK Airport - American Airlines Inc., 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 5,231,828 Bonds, Mount Sinai NYU Health Obligated Group, Series 2000A, 6.625%, 7/01/19 ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 1.7% (1.1% OF TOTAL INVESTMENTS) 2,950 North Carolina Capital Facilities Financing Agency, Revenue 4/13 at 100.00 AAA 3,018,057 Bonds, Johnson and Wales University, Series 2003A, 5.000%, 4/01/33 - XLCA Insured 4,500 North Carolina Eastern Municipal Power Agency, Power 1/09 at 102.00 BBB 4,824,045 System Revenue Refunding Bonds, Series 1999B, 5.600%, 1/01/15 ------------------------------------------------------------------------------------------------------------------------------------ NORTH DAKOTA - 0.7% (0.5% OF TOTAL INVESTMENTS) 3,255 North Dakota Housing Finance Agency, Home Mortgage 7/10 at 100.00 Aa2 3,324,657 Finance Program Refunding Bonds, Series 2001A, 5.550%, 1/01/32 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 0.4% (0.3% OF TOTAL INVESTMENTS) 1,845 Columbus City School District, Franklin County, Ohio, 6/13 at 100.00 AAA 1,907,379 General Obligation Bonds, Series 2003, 5.000%, 12/01/28 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.9% (0.6% OF TOTAL INVESTMENTS) Oklahoma Development Finance Authority, Revenue Refunding Bonds, Hillcrest Healthcare System, Series 1999A: 2,655 5.125%, 8/15/10 (Pre-refunded to 8/15/09) 8/09 at 101.00 AAA 2,950,103 1,000 5.200%, 8/15/11 (Pre-refunded to 8/15/09) 8/09 at 101.00 AAA 1,114,490 ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 3.9% (2.7% OF TOTAL INVESTMENTS) 8,000 Clackamas County Hospital Facility Authority, Oregon, 5/11 at 101.00 AA 8,472,560 Revenue Refunding Bonds, Legacy Health System, Series 2001, 5.250%, 5/01/21 9,000 Oregon Department of Administrative Services, Certificates 5/11 at 101.00 AAA 9,298,440 of Participation, Series 2001D, 5.000%, 5/01/26 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 3.7% (2.5% OF TOTAL INVESTMENTS) 5,000 Allegheny County Hospital Development Authority, 11/10 at 102.00 B1 5,767,700 Pennsylvania, Revenue Bonds, West Penn Allegheny Health System, Series 2000B, 9.250%, 11/15/30 2,460 Carbon County Industrial Development Authority, No Opt. Call BBB- 2,669,617 Pennsylvania, Resource Recovery Revenue Refunding Bonds, Panther Creek Partners Project, Series 2000, 6.650%, 5/01/10 (Alternative Minimum Tax) 8,000 Pennsylvania Higher Educational Facilities Authority, Revenue 1/11 at 101.00 A 8,553,680 Bonds, UPMC Health System, Series 2001A, 6.000%, 1/15/31 55 Nuveen Dividend Advantage Municipal Fund 2 (NXZ) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 0.1% (0.1% OF TOTAL INVESTMENTS) $ 630 South Carolina Public Service Authority, Revenue Refunding 1/06 at 102.00 AAA $ 668,915 Bonds, Santee Cooper Electric System, Series 1996A, 5.750%, 1/01/22 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ SOUTH DAKOTA - 1.1% (0.8% OF TOTAL INVESTMENTS) 4,820 South Dakota Housing Development Authority, Remarketed 5/09 at 102.00 AAA 5,124,624 Homeownership Mortgage Bonds, Series 1997E-4, 5.450%, 5/01/18 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 24.3% (16.5% OF TOTAL INVESTMENTS) 7,500 Austin, Texas, Electric Utility System Revenue Refunding 11/10 at 100.00 AAA 7,729,575 Bonds, Series 2001, 5.000%, 11/15/30 - FSA Insured (PLG1) Dallas-Fort Worth International Airport Public Facility Corporation, Texas, Airport Hotel Revenue Bonds, Series 2001: 15,000 5.250%, 1/15/26 - FSA Insured 1/09 at 100.00 AAA 15,841,200 1,750 5.200%, 1/15/31 - FSA Insured 1/09 at 100.00 AAA 1,834,140 6,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise 9/14 at 100.00 N/R 6,116,340 Regional Health System, Series 2004A, 7.125%, 9/01/34 10,000 Gulf Coast Industrial Development Authority, Texas, Solid 4/12 at 100.00 Ba3 11,114,900 Waste Disposal Revenue Bonds, Citgo Petroleum Corporation Project, Series 1998, 8.000%, 4/01/28 (Alternative Minimum Tax) 3,000 Harris County Health Facilities Development Corporation, 7/09 at 101.00 AAA 3,151,380 Texas, Revenue Bonds, Christus Health, Series 1999A, 5.375%, 7/01/24 - MBIA Insured 40,000 Harris County-Houston Sports Authority, Texas, Senior 11/30 at 54.04 AAA 5,221,200 Lien Revenue Refunding Bonds, Series 2001A, 0.000%, 11/15/40 - MBIA Insured (PLG2) 30,980 Harris County-Houston Sports Authority, Texas, Junior Lien 11/11 at 100.00 AAA 31,949,984 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 3,453,444 12,940 0.000%, 8/15/26 8/11 at 40.60 AAA 3,847,191 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 1,277,900 5,000 0.000%, 9/01/31 - AMBAC Insured No Opt. Call AAA 1,205,850 5,000 Metro Health Facilities Development Corporation, Texas, 1/11 at 100.00 B1 4,833,550 Hospital Revenue Bonds, Wilson N. Jones Memorial Hospital, Series 2001, 7.250%, 1/01/31 10,500 Texas, General Obligation Bonds, Water Financial 8/11 at 100.00 Aa1 10,936,905 Assistance Program, Series 2001, 5.250%, 8/01/35 2,000 Tom Green County Health Facilities Development 5/11 at 101.00 Baa3 2,153,800 Corporation, Texas, Hospital Revenue Bonds, Shannon Health System Project, Series 2001, 6.750%, 5/15/21 ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 0.2% (0.1% OF TOTAL INVESTMENTS) 5,000 Pocahontas Parkway Association, Virginia, Senior Lien 8/08 at 23.55 BB 755,900 Revenue Bonds, Route 895 Connector Toll Road, Series 1998B, 0.000%, 8/15/33 ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 5.9% (4.0% OF TOTAL INVESTMENTS) Seattle, Washington, Municipal Light and Power Revenue Refunding and Improvement Bonds, Series 2001: 4,820 5.500%, 3/01/19 - FSA Insured 3/11 at 100.00 AAA 5,360,659 7,250 5.125%, 3/01/26 - FSA Insured 3/11 at 100.00 AAA 7,496,210 3,500 Tacoma, Washington, Electric System Revenue Refunding 1/11 at 101.00 AAA 3,976,420 Bonds, Series 2001A, 5.750%, 1/01/18 - FSA Insured 2,000 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 2,192,600 Convention and Trade Center, Series 1999, 5.125%, 7/01/13 - MBIA Insured 7,500 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 AAA 8,022,900 Bonds, Sisters of Providence Health System, Series 2001A, 5.250%, 10/01/21 - MBIA Insured 56 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ WEST VIRGINIA - 1.1% (0.8% OF TOTAL INVESTMENTS) $ 5,000 Mason County, West Virginia, Pollution Control Revenue 10/11 at 100.00 BBB $ 5,107,900 Bonds, Appalachian Power Company, Series 2003L, 5.500%, 10/01/22 ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 0.7% (0.5% OF TOTAL INVESTMENTS) 1,000 Wisconsin Health and Educational Facilities Authority, 5/12 at 100.00 N/R 1,045,290 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 2,104,265 Revenue Bonds, Wheaton Franciscan Services Inc., Series 2003A, 5.125%, 8/15/33 ------------------------------------------------------------------------------------------------------------------------------------ $ 751,003 Total Long-Term Investments (cost $632,726,167) - 146.7% 671,348,078 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 1.8% 8,203,625 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (48.5)% (222,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 457,551,703 ====================================================================================================================
FORWARD SWAP CONTRACTS OUTSTANDING AT OCTOBER 31, 2004: SWAP UNREALIZED EFFECTIVE TERMINATION APPRECIATION NOTIONAL AMOUNT DATE(2) DATE (DEPRECIATION) ------------------------------------------------------------------------------------------------------------------------------------ Agreement with JPMorgan dated July 1, 2004, to pay semi-annually the notional amount multiplied by 5.805% (annualized) and receive quarterly the notional amount multiplied by the three-month USD-LIBOR (United States Dollar-London Inter-Bank Offered Rates). $20,000,000 2/02/05 2/02/25 $(1,774,484) Agreement with Morgan Stanley dated July 15, 2004, to pay semi-annually the notional amount multiplied by 5.717% (annualized) and receive quarterly the notional amount multiplied by the three-month USD-LIBOR (United States Dollar-London Inter-Bank Offered Rates). 21,000,000 1/14/05 1/14/35 (1,757,924) ------------------------------------------------------------------------------------------------------------------------------------ $(3,532,408) ------------------------------------------------------------------------------------------------------------------------------------
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. (2) Effective date represents the date on which both the Fund and counterparty commence interest payment accruals on each forward swap contract. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): 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. # On December 9, 2002, UAL Corporation, 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. (PLG1) Portion of security, with an aggregate market value of $1,772,649, has been pledged to collateralize the net payment obligations under forward swap contracts. (PLG2) Portion of security, with an aggregate market value of $2,268,882, has been pledged to collateralize the net payment obligations under forward swap contracts. See accompanying notes to financial statements. 57 Nuveen Dividend Advantage Municipal Fund 3 (NZF) Portfolio of INVESTMENTS October 31, 2004
PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ALABAMA - 0.9% (0.6% OF TOTAL INVESTMENTS) $ 5,655 Alabama State Port Authority, Revenue Bonds, State Docks 10/11 at 100.00 AAA $ 5,865,479 Department Facilities, Series 2001, 5.250%, 10/01/26 (Alternative Minimum Tax) - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ ALASKA - 0.7% (0.5% OF TOTAL INVESTMENTS) 4,000 Alaska Student Loan Corporation, Student Loan Revenue 7/08 at 100.00 AAA 4,192,640 Bonds, Series 1998A, 5.250%, 7/01/14 (Alternative Minimum Tax) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ ARKANSAS - 0.9% (0.6% OF TOTAL INVESTMENTS) Sebastian County Health Facilities Board, Arkansas, Hospital Revenue Improvement Bonds, Sparks Regional Medical Center, Series 2001A: 1,805 5.500%, 11/01/13 11/11 at 101.00 Baa1 1,942,884 1,900 5.500%, 11/01/14 11/11 at 101.00 Baa1 2,026,806 1,555 5.250%, 11/01/21 11/11 at 101.00 Baa1 1,577,827 ------------------------------------------------------------------------------------------------------------------------------------ CALIFORNIA - 10.3% (7.0% OF TOTAL INVESTMENTS) 5,000 California Infrastructure Economic Development Bank, 8/11 at 102.00 A 5,217,150 Revenue Bonds, Kaiser Hospital Assistance LLC, Series 2001A, 5.550%, 8/01/31 18,850 California, General Obligation Veterans Welfare Bonds, 6/07 at 101.00 AAA 19,401,740 Series 2001BZ, 5.350%, 12/01/21 (Alternative Minimum Tax) - MBIA Insured 1,500 California Statewide Community Development Authority, 10/15 at 103.00 N/R 1,649,160 Senior Lien Revenue Bonds, East Valley Tourist Authority, Series 2003B, 9.250%, 10/01/20 5,000 California Statewide Community Development Authority, No Opt. Call A 4,996,750 Revenue Bonds, Kaiser Permanente System, Series 2004G, 2.300%, 4/01/34 (Mandatory put 5/01/07) Los Angeles Regional Airports Improvement Corporation, California, 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 15,613,273 5,000 5.375%, 1/01/21 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 5,238,450 1,500 5.250%, 1/01/23 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 1,545,495 10,000 5.500%, 1/01/32 (Alternative Minimum Tax) - AMBAC Insured 1/12 at 100.00 AAA 10,337,100 ------------------------------------------------------------------------------------------------------------------------------------ COLORADO - 7.9% (5.3% OF TOTAL INVESTMENTS) 2,250 Canterberry Crossing Metropolitan District II, Parker, 12/12 at 100.00 N/R 2,300,535 Colorado, Limited Tax General Obligation Bonds, Series 2002, 7.375%, 12/01/32 1,775 Colorado Educational and Cultural Facilities Authority, 6/11 at 100.00 Ba1 1,843,089 Charter School Revenue Bonds, Weld County School District 6 - Frontier Academy, Series 2001, 7.375%, 6/01/31 3,250 Colorado Educational and Cultural Facilities Authority, 5/12 at 102.00 N/R 3,404,895 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 1,725,466 Charter School Revenue Bonds, Belle Creek Education Center, Series 2002A, 7.625%, 3/15/32 3,380 Colorado Housing Finance Authority, Multifamily Project 10/11 at 100.00 AAA 3,496,711 Bonds, Class I, Series 2001A-1, 5.500%, 4/01/31 (Alternative Minimum Tax) 10,100 Colorado Springs, Colorado, Utility System Revenue Refunding 11/07 at 100.00 AA 10,712,060 and Improvement Bonds, Series 1997A, 5.375%, 11/15/26 2,000 Denver City and County, Colorado, Airport System Revenue 11/11 at 100.00 AAA 2,203,820 Refunding Bonds, Series 2001A, 5.500%, 11/15/16 (Alternative Minimum Tax) - FGIC Insured Denver City and County, Colorado, Airport System Revenue Bonds, Series 1996A: 19,150 5.750%, 11/15/16 - MBIA Insured 11/06 at 101.00 AAA 20,721,258 1,105 5.500%, 11/15/25 - MBIA Insured 11/06 at 101.00 AAA 1,175,875 1,000 Plaza Metropolitan District 1, Lakewood, Colorado, Tax 6/14 at 101.00 N/R 1,048,880 Increment Revenue Bonds, Series 2003, 8.000%, 12/01/25 58 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ DELAWARE - 0.6% (0.4% OF TOTAL INVESTMENTS) $ 3,390 Delaware State Housing Authority, Multifamily Mortgage 7/12 at 100.00 Aa3 $ 3,448,274 Revenue Bonds, Series 2001A, 5.400%, 7/01/24 ------------------------------------------------------------------------------------------------------------------------------------ DISTRICT OF COLUMBIA - 1.1% (0.7% OF TOTAL INVESTMENTS) 6,000 District of Columbia, Revenue Bonds, Catholic University of 10/09 at 101.00 AAA 6,581,760 America, Series 1999, 5.625%, 10/01/29 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ FLORIDA - 2.0% (1.4% OF TOTAL INVESTMENTS) 2,000 Dade County, Florida, Water and Sewerage System Revenue 10/07 at 102.00 AAA 2,207,520 Bonds, Series 1997, 5.375%, 10/01/16 - FGIC Insured 2,230 Florida State Board of Education, Full Faith and Credit Public 6/05 at 101.00 AA+ 2,273,017 Education Capital Outlay Refunding Bonds, Series 1995D, 4.750%, 6/01/22 Orange County Housing Finance Authority, Florida, Multifamily Housing Revenue Bonds, Oak Glen Apartments, Series 2001G: 1,105 5.400%, 12/01/32 - FSA Insured 12/11 at 100.00 AAA 1,138,835 2,195 5.450%, 12/01/41 - FSA Insured 12/11 at 100.00 AAA 2,259,445 4,175 Pace Property Finance Authority Inc., Florida, Utility System 9/07 at 102.00 AAA 4,579,391 Improvement and Revenue Refunding Bonds, Series 1997, 5.250%, 9/01/17 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ GEORGIA - 2.3% (1.5% OF TOTAL INVESTMENTS) 5,000 Atlanta, Georgia, Airport General Revenue Bonds, 1/10 at 101.00 AAA 5,268,450 Series 2000B, 5.625%, 1/01/30 (Alternative Minimum Tax) - FGIC Insured 2,700 Atlanta, Georgia, Tax Allocation Bonds, Atlantic Station 12/11 at 101.00 N/R 2,932,929 Project, Series 2001, 7.900%, 12/01/24 3,600 Gainesville and Hall County Hospital Authority, Georgia, 5/11 at 100.00 A- 3,702,348 Revenue Anticipation Certificates, Northeast Georgia Health Services Inc., Series 2001, 5.500%, 5/15/31 2,000 Henry County Water and Sewerage Authority, Georgia, 2/10 at 101.00 AAA 2,207,500 Revenue Bonds, Series 2000, 5.625%, 2/01/30 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ HAWAII - 0.9% (0.6% OF TOTAL INVESTMENTS) 5,125 Hawaii, Highway Revenue Bonds, Series 2001, 7/11 at 100.00 AAA 5,665,790 5.375%, 7/01/21 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS - 16.3% (11.0% OF TOTAL INVESTMENTS) 3,000 Chicago, Illinois, General Obligation Bonds, Neighborhoods 1/11 at 100.00 AAA 3,253,020 Alive 21 Program, Series 2001A, 5.500%, 1/01/31 - FGIC Insured 8,375 Chicago, Illinois, Revenue Bonds, Midway Airport, 1/11 at 101.00 AAA 9,064,765 Series 2001A, 5.500%, 1/01/19 (Alternative Minimum Tax) - FSA Insured 4,950 Chicago, Illinois, Second Lien Passenger Facility Charge 1/11 at 101.00 AAA 5,122,161 Revenue Bonds, O'Hare International Airport, 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 1,830,990 5.250%, 1/01/28 - FGIC Insured 10,800 Chicago, Illinois, Sales Tax Revenue Bonds, Series 1999, 1/09 at 101.00 AAA 12,062,952 5.375%, 1/01/30 (Pre-refunded to 1/01/09) - FGIC Insured Chicago, Illinois, Second Lien Wastewater Transmission Revenue Bonds, Series 2001A: 2,220 5.500%, 1/01/16 - MBIA Insured No Opt. Call AAA 2,579,529 8,610 5.500%, 1/01/26 (Pre-refunded to 1/01/11) - AMBAC Insured 1/11 at 100.00 AAA 9,806,446 10,000 Chicago, Illinois, Senior Lien Water Revenue Bonds, 11/11 at 100.00 AAA 11,208,900 Series 2001, 5.000%, 11/01/26 (Pre-refunded to 11/01/11) - AMBAC Insured 1,100 Illinois Health Facilities Authority, Revenue Bonds, Condell 5/10 at 101.00 Baa2 1,156,969 Medical Center, Series 2000, 6.500%, 5/15/30 15,000 Illinois Health Facilities Authority, Revenue Bonds, Loyola 7/11 at 100.00 Baa1 15,444,600 University Health System, Series 2001A, 6.125%, 7/01/31 9,000 Illinois Health Facilities Authority, Revenue Bonds, Covenant 12/11 at 101.00 BBB+ 9,075,060 Retirement Communities Inc., Series 2001, 5.875%, 12/01/31 2,000 Metropolitan Pier and Exposition Authority, Illinois, Revenue No Opt. Call AAA 2,284,420 Refunding Bonds, McCormick Place Expansion Project, Series 1998A, 5.500%, 6/15/29 - FGIC Insured 59 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ ILLINOIS (continued) $ 16,900 Metropolitan Pier and Exposition Authority, Illinois, Revenue 12/09 at 101.00 AAA $ 17,771,533 Bonds, McCormick Place Expansion Project, Series 1999A, 5.250%, 12/15/28 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ INDIANA - 4.7% (3.2% OF TOTAL INVESTMENTS) 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 1,322,017 1,000 5.000%, 1/15/26 - AMBAC Insured 1/12 at 100.00 AAA 1,029,500 Evansville Vanderburgh Public Library Lease Corporation, Indiana, First Mortgage Bonds, Series 2001: 2,000 5.750%, 7/15/18 - MBIA Insured 7/12 at 100.00 AAA 2,237,160 2,750 5.125%, 1/15/24 - MBIA Insured 1/12 at 100.00 AAA 2,871,880 3,455 Gary, Indiana, GNMA/FHA Mortgage Revenue Bonds, 11/11 at 102.00 AAA 3,545,210 Windsor Square Project, Series 2001A, 5.375%, 10/20/41 (Alternative Minimum Tax) 1,250 Hamilton Southeastern Cumberland Campus School Building 1/12 at 100.00 AAA 1,313,838 Corporation, Indiana, First Mortgage Bonds, Series 2001, 5.125%, 1/15/23 - AMBAC Insured 9,500 Indiana Educational Facilities Authority, Revenue Bonds, 2/11 at 100.00 AAA 10,363,455 Butler University, Series 2001, 5.500%, 2/01/26 - MBIA Insured 2,650 Indianapolis Airport Authority, Indiana, Specialty Facility 11/05 at 102.00 N/R 291,509 Revenue Bonds, United Airlines 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 3,689,140 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 1,322,523 1,090 5.500%, 7/15/22 - AMBAC Insured 1/13 at 101.00 AAA 1,219,405 ------------------------------------------------------------------------------------------------------------------------------------ IOWA - 4.7% (3.2% OF TOTAL INVESTMENTS) 2,000 Iowa Finance Authority, Healthcare Revenue Bonds, 5/11 at 100.00 AAA 2,067,000 Great River Medical Center, Series 2001, 5.250%, 5/15/31 - FSA Insured Iowa Tobacco Settlement Authority, Tobacco Settlement Asset-Backed Revenue Bonds, Series 2001B: 28,000 5.300%, 6/01/25 6/11 at 101.00 BBB 23,723,000 3,950 5.600%, 6/01/35 6/11 at 101.00 BBB 3,283,833 ------------------------------------------------------------------------------------------------------------------------------------ KENTUCKY - 3.1% (2.1% OF TOTAL INVESTMENTS) 18,500 Louisville and Jefferson County Metropolitan Sewer 11/11 at 101.00 AAA 19,415,380 District, Kentucky, Sewer and Drainage System Revenue Bonds, Series 2001A, 5.125%, 5/15/27 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ LOUISIANA - 3.8% (2.6% OF TOTAL INVESTMENTS) 19,890 Tobacco Settlement Financing Corporation, Louisiana, 5/11 at 101.00 BBB 17,299,526 Tobacco Settlement Asset-Backed Bonds, Series 2001B, 5.875%, 5/15/39 6,000 West Feliciana Parish, Louisiana, Remarketed Pollution 11/04 at 101.00 BB+ 6,162,120 Control Revenue Bonds, Gulf States Utilities Company, Series 1985A, 7.500%, 5/01/15 ------------------------------------------------------------------------------------------------------------------------------------ MAINE - 1.2% (0.8% OF TOTAL INVESTMENTS) 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+ 4,833,539 2,285 5.500%, 11/15/32 (Alternative Minimum Tax) 11/10 at 100.00 AA+ 2,355,309 ------------------------------------------------------------------------------------------------------------------------------------ MARYLAND - 2.1% (1.4% OF TOTAL INVESTMENTS) Maryland Community Development Administration, Multifamily Housing Insured Mortgage Loans, Series 2001B: 715 5.250%, 5/15/21 (Alternative Minimum Tax) 5/11 at 100.00 Aa2 748,183 1,570 5.250%, 7/01/21 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 1,644,026 10,600 Maryland Energy Financing Administration, Revenue Bonds, 9/05 at 102.00 N/R 10,856,414 AES Warrior Run Project, Series 1995, 7.400%, 9/01/19 (Alternative Minimum Tax) 60 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ MASSACHUSETTS - 0.9% (0.6% OF TOTAL INVESTMENTS) $ 5,000 Massachusetts Port Authority, Special Facilities Revenue 1/11 at 101.00 AAA $ 5,223,450 Bonds, Delta Air Lines Inc., Series 2001A, 5.500%, 1/01/18 (Alternative Minimum Tax) - AMBAC Insured 405 Massachusetts Housing Finance Agency, Single Family 6/09 at 100.00 AAA 407,118 Housing Revenue Bonds, Series 71, 5.650%, 6/01/31 (Alternative Minimum Tax) - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ MICHIGAN - 8.6% (5.8% OF TOTAL INVESTMENTS) 15,000 Detroit City School District, Wayne County, Michigan, No Opt. Call AAA 18,281,550 Unlimited Tax School Building and Site Improvement 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 11,530,310 Spectrum Health, Series 2001A, 5.500%, 1/15/31 3,485 Michigan State Hospital Finance Authority, Hospital Revenue No Opt. Call AAA 3,916,548 Refunding Bonds, Sisters of Mercy Health Corporation, Series 1993P, 5.375%, 8/15/14 - MBIA Insured 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 1,485,344 2,500 5.625%, 11/15/31 11/11 at 101.00 A1 2,601,550 12,640 Royal Oak Hospital Finance Authority, Michigan, Hospital 11/11 at 100.00 AAA 13,113,874 Revenue Bonds, William Beaumont Hospital, Series 2001M, 5.250%, 11/15/31 - MBIA Insured 2,395 Ypsilanti Community Utilities Authority, Washtenaw County, 5/11 at 100.00 AAA 2,464,790 Michigan, General Obligation Bonds, Sanitary Sewerage System 3, Series 2001, 5.100%, 5/01/31 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ MINNESOTA - 0.4% (0.3% OF TOTAL INVESTMENTS) 2,370 Dakota County Community Development Agency, Minnesota, 10/11 at 105.00 Aaa 2,457,927 GNMA Collateralized Multifamily Housing Revenue Bonds, Rose Apartments Project, Series 2001, 6.350%, 10/20/37 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ MISSISSIPPI - 1.4% (1.0% OF TOTAL INVESTMENTS) 2,155 Mississippi Business Finance Corporation, GNMA Collateralized 5/09 at 103.00 AAA 2,256,759 Retirement Facility Mortgage Revenue Refunding Bonds, Aldersgate Retirement Community Inc. Project, Series 1999A, 5.450%, 5/20/34 6,420 Mississippi, Highway Revenue Bonds, Series 1999, No Opt. Call AAA 6,551,032 5.250%, 6/01/05 ------------------------------------------------------------------------------------------------------------------------------------ MISSOURI - 2.6% (1.6% OF TOTAL INVESTMENTS) 2,000 Fenton, Missouri, Tax Increment Refunding and Improvement 10/12 at 100.00 N/R 2,059,240 Revenue Bonds, Gravois Bluffs Redevelopment Project, Series 2002, 6.125%, 10/01/21 Missouri Development Finance Board, Cultural Facilities Revenue Bonds, Nelson Gallery Foundation, Series 2001A: 3,335 5.250%, 12/01/19 - MBIA Insured 12/11 at 100.00 AAA 3,696,047 3,510 5.250%, 12/01/20 - MBIA Insured 12/11 at 100.00 AAA 3,864,335 3,695 5.250%, 12/01/21 - MBIA Insured 12/11 at 100.00 AAA 4,046,247 2,040 5.250%, 12/01/22 - MBIA Insured 12/11 at 100.00 AAA 2,212,094 ------------------------------------------------------------------------------------------------------------------------------------ MONTANA - 0.9% (0.6% OF TOTAL INVESTMENTS) 5,000 Montana Board of Investments, Exempt Facility Revenue 7/10 at 101.00 Ba3 5,295,100 Bonds, Stillwater Mining Company Project, Series 2000, 8.000%, 7/01/20 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ NEBRASKA - 1.2% (0.8% OF TOTAL INVESTMENTS) Nebraska Investment Finance Authority, Single Family Housing Revenue Bonds, Series 2001D: 2,980 5.250%, 9/01/21 (Alternative Minimum Tax) 9/11 at 100.00 AAA 3,111,031 4,020 5.375%, 9/01/32 (Alternative Minimum Tax) 9/11 at 100.00 AAA 4,120,178 ------------------------------------------------------------------------------------------------------------------------------------ NEVADA - 7.6% (5.2% OF TOTAL INVESTMENTS) 35,000 Clark County, Nevada, Limited Tax General Obligation Bank 7/10 at 100.00 AAA 38,137,050 Bonds, Series 2000, 5.500%, 7/01/30 - MBIA Insured 4,000 Director of Nevada State Department of Business and 1/10 at 102.00 N/R 4,049,680 Industry, Revenue Bonds, Las Vegas Monorail Project, Second Tier, Series 2000, 7.375%, 1/01/40 570 Nevada Housing Division, Single Family Mortgage Senior 4/08 at 101.50 Aaa 595,684 Bonds, Series 1998A-1, 5.300%, 4/01/18 (Alternative Minimum Tax) 61 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ NEVADA (continued) $ 4,290 University of Nevada, Revenue Bonds, Community College 1/12 at 100.00 AAA $ 4,547,400 System, Series 2001A, 5.250%, 7/01/26 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW HAMPSHIRE - 0.4% (0.2% OF TOTAL INVESTMENTS) 2,000 New Hampshire Health and Education Authority, Hospital 10/11 at 101.00 Aaa 2,170,960 Revenue Bonds, Concord Hospital, Series 2001, 5.500%, 10/01/21 - FSA Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW JERSEY - 2.4% (1.7% OF TOTAL INVESTMENTS) 10,000 New Jersey Economic Development Authority, Water 11/12 at 101.00 Aaa 10,405,300 Facilities Revenue Bonds, American Water Company, Series 2002A, 5.250%, 11/01/32 (Alternative Minimum Tax) - AMBAC Insured 4,125 New Jersey Transit Corporation, Certificates of Participation, No Opt. Call AAA 4,732,076 Federal Transit Administration Grants, Series 2002A, 5.500%, 9/15/13 - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ NEW YORK - 5.3% (3.6% OF TOTAL INVESTMENTS) 1,780 East Rochester Housing Authority, New York, GNMA Secured 10/11 at 101.00 AAA 1,853,158 Revenue Bonds, Gates Senior Housing Inc. Project, Series 2001, 5.300%, 4/20/31 5,350 Metropolitan Transportation Authority, New York, Dedicated 11/11 at 100.00 AAA 5,488,726 Tax Fund Bonds, Series 2001A, 5.000%, 11/15/31 - FGIC Insured 4,155 Monroe County Airport Authority, New York, Revenue No Opt. Call AAA 4,730,343 Refunding Bonds, Greater Rochester International Airport, Series 1999, 5.750%, 1/01/13 (Alternative Minimum Tax) - MBIA Insured 2,500 New York City, New York, General Obligation Bonds, Fiscal 8/12 at 100.00 AAA 2,861,250 Series 2002G, 5.625%, 8/01/20 - MBIA Insured New York City Municipal Water Finance Authority, New York, Water and Sewerage System Revenue Bonds, Fiscal Series 2001A: 8,610 5.500%, 6/15/33 - MBIA Insured 6/10 at 101.00 AAA 9,325,319 5,710 5.500%, 6/15/33 - FGIC Insured 6/10 at 101.00 AAA 6,184,387 2,000 New York Tobacco Settlement Financing Corporation, 6/11 at 100.00 AA- 2,219,220 Tobacco Settlement Asset-Backed and State Contingency Contract-Backed Bonds, Series 2003B-1C, 5.500%, 6/01/16 ------------------------------------------------------------------------------------------------------------------------------------ NORTH CAROLINA - 0.3% (0.2% OF TOTAL INVESTMENTS) 1,800 North Carolina Municipal Power Agency 1, Catawba Electric No Opt. Call BBB+ 2,007,108 Revenue Bonds, Series 2003A, 5.500%, 1/01/13 ------------------------------------------------------------------------------------------------------------------------------------ OHIO - 2.8% (1.8% OF TOTAL INVESTMENTS) 5,265 Ohio Housing Finance Agency, GNMA Mortgage-Backed 3/08 at 101.50 AAA 5,488,131 Securities Program Residential Mortgage Revenue Bonds, Series 1998A-1, 5.300%, 9/01/19 (Alternative Minimum Tax) - FSA Insured 7,800 Ohio Water Development Authority, Solid Waste Disposal 9/09 at 102.00 N/R 8,002,020 Revenue Bonds, Bay Shore Power, 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 1,980,237 1,775 5.000%, 12/01/23 - FGIC Insured 12/11 at 100.00 AAA 1,860,661 ------------------------------------------------------------------------------------------------------------------------------------ OKLAHOMA - 0.5% (0.3% OF TOTAL INVESTMENTS) 2,500 Oklahoma Development Finance Authority, Revenue 8/09 at 101.00 AAA 2,822,750 Refunding Bonds, Hillcrest Healthcare System, Series 1999A, 5.625%, 8/15/29 (Pre-refunded to 8/15/09) ------------------------------------------------------------------------------------------------------------------------------------ OREGON - 2.5% (1.7% OF TOTAL INVESTMENTS) 4,700 Oregon Health, Housing, Educational and Cultural Facilities 11/11 at 101.00 AAA 5,033,230 Authority, Revenue Bonds, PeaceHealth Project, Series 2001, 5.250%, 11/15/21 - AMBAC Insured 10,000 Oregon Housing and Community Services Department, 7/10 at 100.00 Aa2 10,381,700 Multifamily Housing Revenue Bonds, Series 2000A, 6.050%, 7/01/42 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA - 1.9% (1.3% OF TOTAL INVESTMENTS) Allegheny County Hospital Development Authority, Pennsylvania, Revenue Bonds, West Penn Allegheny Health System, Series 2000B: 2,000 9.250%, 11/15/22 11/10 at 102.00 B1 2,307,080 2,000 9.250%, 11/15/30 11/10 at 102.00 B1 2,307,080 62 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ PENNSYLVANIA (continued) $ 3,500 Pennsylvania Economic Development Financing Authority, 1/05 at 101.00 BBB- $ 3,543,575 Senior Lien Resource Recovery Revenue Bonds, Northampton Generating Project, Series 1994A, 6.600%, 1/01/19 (Alternative Minimum Tax) 3,205 Philadelphia School District, Pennsylvania, General 8/12 at 100.00 AAA 3,607,099 Obligation Bonds, Series 2002B, 5.625%, 8/01/16 - FGIC Insured ------------------------------------------------------------------------------------------------------------------------------------ SOUTH CAROLINA - 1.7% (1.1% OF TOTAL INVESTMENTS) 2,185 Greenville County, South Carolina, Special Source Revenue 4/11 at 101.00 AAA 2,447,397 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 7,892,296 Bonds, Series 2001A, 5.500%, 10/01/22 (Pre-refunded to 10/01/11) - AMBAC Insured ------------------------------------------------------------------------------------------------------------------------------------ TENNESSEE - 1.5% (1.0% OF TOTAL INVESTMENTS) 5,210 Memphis-Shelby County Airport Authority, Tennessee, Airport 3/11 at 100.00 AAA 5,750,798 Revenue Bonds, Series 2001A, 5.500%, 3/01/14 (Alternative Minimum Tax) - FSA Insured 1,820 Tennessee Housing Development Agency, Homeownership 1/09 at 101.00 AA 1,884,028 Program Bonds, Series 1998-2, 5.350%, 7/01/23 (Alternative Minimum Tax) 1,870 Tennessee Housing Development Agency, Homeownership 7/11 at 100.00 AA 1,944,276 Program Bonds, Series 2001-3A, 5.200%, 7/01/22 (Alternative Minimum Tax) ------------------------------------------------------------------------------------------------------------------------------------ TEXAS - 18.1% (12.3% OF TOTAL INVESTMENTS) 1,125 Brushy Creek Municipal Utility District, Williamson County, 6/09 at 100.00 Aaa 1,179,371 Texas, Combination Unlimited Tax and Revenue Refunding Bonds, Series 2001, 5.125%, 6/01/26 - FSA Insured 3,850 Dallas-Ft. Worth International Airport, Texas, Joint Revenue 11/11 at 100.00 AAA 4,020,825 Refunding and Improvement Bonds, Series 2001A, 5.500%, 11/01/35 (Alternative Minimum Tax) - FGIC Insured 5,000 Decatur Hospital Authority, Texas, Revenue Bonds, Wise 9/14 at 100.00 N/R 5,073,850 Regional Health System, Series 2004A, 7.000%, 9/01/25 Collins and Denton Counties, Frisco, Texas, General Obligation Bonds, Series 2001: 1,910 5.000%, 2/15/20 - FGIC Insured 2/11 at 100.00 AAA 2,032,068 2,005 5.000%, 2/15/21 - FGIC Insured 2/11 at 100.00 AAA 2,103,526 4,040 Harris County, Texas, Tax and Revenue Certificates of 8/11 at 100.00 AA+ 4,137,364 Obligation, Series 2001, 5.000%, 8/15/27 7,000 Houston, Texas, Airport System Subordinate Lien Revenue 7/08 at 101.00 AAA 7,573,650 Bonds, Series 1998B, 5.250%, 7/01/14 (Alternative Minimum Tax) - FGIC Insured 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 2,782,979 2,905 5.500%, 7/01/14 (Alternative Minimum Tax) - FGIC Insured 1/12 at 100.00 AAA 3,199,887 6,000 Houston, Texas, Junior Lien Water and Sewerage System No Opt. Call AAA 6,832,620 Revenue Refunding Bonds, Series 2001B, 5.500%, 12/01/29 - MBIA Insured Jefferson County Health Facilities Development Corporation, Texas, 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 8,906,470 8,500 5.500%, 8/15/41 -AMBAC Insured 8/11 at 100.00 AAA 8,906,045 10,700 Laredo Independent School District, Webb County, Texas, 8/11 at 100.00 AAA 11,023,675 General Obligation Refunding Bonds, Series 2001, 5.000%, 8/01/25 2,500 Matagorda County Navigation District 1, Texas, Collateralized No Opt. Call AAA 2,640,425 Revenue Refunding Bonds, Houston Light and Power Company, 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 1,612,472 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 5,489,839 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 3,129,420 Corporation, Revenue Bonds, Texas Health Resources System, Series 1997B, 5.375%, 2/15/26 - MBIA Insured 3,045 Port of Houston Authority, Harris County, Texas, General 10/11 at 100.00 AAA 3,361,467 Obligation Port Improvement Bonds, Series 2001B, 5.500%, 10/01/17 (Alternative Minimum Tax) - FGIC Insured 63 Nuveen Dividend Advantage Municipal Fund 3 (NZF) (continued) Portfolio of INVESTMENTS October 31, 2004 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ TEXAS (continued) $ 11,985 Texas Department of Housing and Community Affairs, 7/11 at 100.00 AAA $ 12,276,236 Residential Mortgage Revenue Bonds, Series 2001A, 5.350%, 7/01/33 (Alternative Minimum Tax) 15,700 Texas Water Development Board, Senior Lien State 1/07 at 100.00 AAA 16,554,551 Revolving Fund Revenue Bonds, Series 1996B, 5.125%, 7/15/18 ------------------------------------------------------------------------------------------------------------------------------------ UTAH - 1.1% (0.7% OF TOTAL INVESTMENTS) Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001E: 2,235 5.200%, 1/01/18 (Alternative Minimum Tax) 7/11 at 100.00 AA- 2,331,887 695 5.500%, 1/01/23 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 720,235 Utah Housing Corporation, Single Family Mortgage Bonds, Series 2001F-1: 2,765 4.950%, 7/01/18 (Alternative Minimum Tax) 7/11 at 100.00 Aa2 2,841,480 690 5.300%, 7/01/23 (Alternative Minimum Tax) 7/11 at 100.00 AA- 705,145 ------------------------------------------------------------------------------------------------------------------------------------ VIRGINIA - 1.4% (1.0% OF TOTAL INVESTMENTS) 7,000 Pocahontas Parkway Association, Virginia, Senior Lien 8/08 at 77.58 BB 3,831,940 Revenue Bonds, Route 895 Connector Toll Road, Series 1998B, 0.000%, 8/15/13 4,945 Virginia Housing Development Authority, Commonwealth 7/11 at 100.00 AAA 5,142,553 Mortgage Bonds, Series 2001J-1, 5.200%, 7/01/19 - MBIA Insured ------------------------------------------------------------------------------------------------------------------------------------ WASHINGTON - 16.1% (10.9% OF TOTAL INVESTMENTS) 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 1,092,400 2,000 5.600%, 12/01/36 - MBIA Insured 12/11 at 100.00 Aaa 2,210,160 2,090 Public Utility District 1, Benton County, Washington, Electric 11/11 at 100.00 AAA 2,380,510 Revenue Refunding Bonds, Series 2001A, 5.625%, 11/01/15 - FSA Insured 1,500 Grays Harbor County Public Utility District 1, Washington, 1/11 at 100.00 AAA 1,576,905 Electric System Revenue Bonds, Series 2001, 5.125%, 1/01/22 - AMBAC Insured 2,475 Klickitat County Public Utility District 1, Washington, 12/11 at 100.00 AAA 2,542,493 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 13,791,634 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 2,799,755 16,000 5.100%, 4/01/24 (Alternative Minimum Tax) - FGIC Insured 10/08 at 100.00 AAA 16,245,120 5,680 Seattle, Washington, Municipal Light and Power Revenue 3/11 at 100.00 AAA 6,317,126 Refunding and Improvement Bonds, Series 2001, 5.500%, 3/01/18 - FSA Insured 4,530 Tacoma, Washington, Solid Waste Utility Revenue Refunding 12/11 at 100.00 AAA 4,915,050 Bonds, Series 2001, 5.250%, 12/01/21 - AMBAC Insured 2,250 Washington, Certificates of Participation, Washington 7/09 at 100.00 AAA 2,475,765 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 3,284,315 2,915 5.375%, 12/01/18 - AMBAC Insured 12/11 at 101.00 AAA 3,174,639 3,720 Washington State Healthcare Facilities Authority, Revenue 10/11 at 100.00 Aaa 4,107,364 Bonds, Children's Hospital and Regional Medical Center, Series 2001, 5.375%, 10/01/18 - AMBAC Insured Washington State Healthcare Facilities Authority, Revenue Bonds, Good Samaritan Hospital, Series 2001: 5,480 5.500%, 10/01/21 - RAAI Insured 10/11 at 101.00 AA 5,866,559 25,435 5.625%, 10/01/31 - RAAI Insured 10/11 at 101.00 AA 27,079,118 64 PRINCIPAL OPTIONAL CALL MARKET AMOUNT (000) DESCRIPTION(1) PROVISIONS* RATINGS** VALUE ------------------------------------------------------------------------------------------------------------------------------------ WISCONSIN - 5.1% (3.4% OF TOTAL INVESTMENTS) Appleton, Wisconsin, Waterworks Revenue Refunding Bonds, Series 2001: $ 3,705 5.375%, 1/01/20 - FGIC Insured 1/12 at 100.00 Aaa $ 4,035,375 1,850 5.000%, 1/01/21 - FGIC Insured 1/12 at 100.00 Aaa 1,956,579 1,735 Evansville Community School District, Dane, Green and Rock 4/11 at 100.00 AAA 1,940,389 Counties, Wisconsin, General Obligation Refunding Bonds, Series 2001, 5.500%, 4/01/20 - FGIC Insured 12,250 La Crosse, Wisconsin, Pollution Control Revenue 12/08 at 102.00 AAA 13,395,007 Refunding Bonds, Dairyland Power Cooperative, Series 1997B, 5.550%, 2/01/15 - AMBAC Insured 3,180 Wisconsin, Clean Water Revenue Bonds, Series 1999-1, 6/09 at 100.00 AA+ 3,516,221 5.500%, 6/01/17 4,000 Wisconsin Health and Educational Facilities Authority, 10/11 at 101.00 A+ 4,103,520 Revenue Bonds, Froedtert 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+ 2,595,922 Revenue Bonds, Marshfield Clinic, Series 2001B, 6.000%, 2/15/25 ------------------------------------------------------------------------------------------------------------------------------------ $ 876,545 Total Long-Term Investments (cost $877,468,248) - 148.2% 917,824,363 =============----------------------------------------------------------------------------------------------------------------------- Other Assets Less Liabilities - 2.2% 13,293,827 -------------------------------------------------------------------------------------------------------------------- Preferred Shares, at Liquidation Value - (50.4)% (312,000,000) -------------------------------------------------------------------------------------------------------------------- Net Assets Applicable to Common Shares - 100% $ 619,118,190 ====================================================================================================================
(1) All percentages shown in the Portfolio of Investments are based on net assets applicable to Common shares unless otherwise noted. * Optional Call Provisions (not covered by the report of independent registered public accounting firm): Dates (month and year) and prices of the earliest optional call or redemption. There may be other call provisions at varying prices at later dates. ** Ratings (not covered by the report of independent registered public accounting firm): Using the higher of Standard & Poor's or Moody's rating. N/R Investment is not rated. # On December 9, 2002, UAL Corporation, 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. See accompanying notes to financial statements. 65 Statement of ASSETS AND LIABILITIES October 31, 2004
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 $1,303,375,376, $951,726,119, $991,461,689, $847,482,975, $632,726,167 and $877,468,248, respectively) $1,404,887,231 $1,029,461,604 $1,068,021,733 $916,365,782 $671,348,078 $917,824,363 Cash 3,660,074 -- -- 1,005,900 370,960 -- Receivables: Interest 22,415,885 19,054,156 17,614,333 13,925,385 11,543,490 15,541,438 Investments sold 3,815,906 105,738 675,820 2,066,440 126,780 162,252 Other assets 67,752 59,034 62,801 57,062 36,823 21,397 ------------------------------------------------------------------------------------------------------------------------------------ Total assets 1,434,846,848 1,048,680,532 1,086,374,687 933,420,569 683,426,131 933,549,450 ------------------------------------------------------------------------------------------------------------------------------------ LIABILITIES Cash overdraft -- 657,569 732,910 -- -- 1,951,433 Payable for investments purchased 3,702,086 -- -- 24,582,900 -- -- Forward swaps, at value -- -- -- -- 3,532,408 -- Accrued expenses: Management fees 737,096 544,982 564,005 283,074 184,954 250,100 Other 325,170 214,187 241,482 179,837 110,067 174,482 Preferred share dividends payable 89,189 73,412 76,665 46,562 46,999 55,245 ------------------------------------------------------------------------------------------------------------------------------------ Total liabilities 4,853,541 1,490,150 1,615,062 25,092,373 3,874,428 2,431,260 ------------------------------------------------------------------------------------------------------------------------------------ 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 $ 950,993,307 $ 689,190,382 $ 704,759,625 $613,328,196 $457,551,703 $619,118,190 ==================================================================================================================================== Common shares outstanding 59,914,073 43,025,594 45,540,872 39,267,491 29,282,000 40,310,119 ==================================================================================================================================== Net asset value per Common share outstanding (net assets applicable to Common shares, divided by Common shares outstanding) $ 15.87 $ 16.02 $ 15.48 $ 15.62 $ 15.63 $ 15.36 ==================================================================================================================================== NET ASSETS APPLICABLE TO COMMON SHARES CONSIST OF: ------------------------------------------------------------------------------------------------------------------------------------ Common shares, $.01 par value per share $ 599,141 $ 430,256 $ 455,409 $ 392,675 $ 292,820 $ 403,101 Paid-in surplus 836,423,631 601,030,545 635,502,550 558,053,977 416,101,525 572,812,048 Undistributed net investment income 11,485,116 9,357,409 6,496,073 6,910,277 6,314,546 6,237,051 Accumulated net realized gain (loss) from investments 973,564 636,687 (14,254,451) (20,911,540) (246,691) (690,125) Net unrealized appreciation of investments and forward swap transactions 101,511,855 77,735,485 76,560,044 68,882,807 35,089,503 40,356,115 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares $ 950,993,307 $ 689,190,382 $ 704,759,625 $613,328,196 $457,551,703 $619,118,190 ==================================================================================================================================== 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. 66 Statement of OPERATIONS Year Ended October 31, 2004
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) ------------------------------------------------------------------------------------------------------------------------------------ INVESTMENT INCOME $73,552,668 $55,588,787 $55,311,914 $47,201,652 $36,014,168 $47,162,641 ------------------------------------------------------------------------------------------------------------------------------------ EXPENSES Management fees 8,700,777 6,441,514 6,670,810 5,597,581 4,214,666 5,714,225 Preferred shares - auction fees 1,200,780 897,450 952,603 739,521 556,521 782,138 Preferred shares - dividend disbursing agent fees 50,138 50,138 40,110 30,082 30,082 30,082 Shareholders' servicing agent fees and expenses 204,827 121,894 134,571 16,496 6,713 7,996 Custodian's fees and expenses 288,564 202,911 202,048 176,234 127,486 181,520 Directors'/Trustees' fees and expenses 31,402 24,017 25,228 18,903 15,817 21,259 Professional fees 97,222 59,742 109,946 60,431 24,389 45,153 Shareholders' reports - printing and mailing expenses 146,944 95,818 106,904 83,335 57,694 72,996 Stock exchange listing fees 24,100 17,323 18,348 15,946 4,242 3,480 Investor relations expense 124,174 84,185 93,509 79,770 59,414 81,897 Other expenses 78,480 56,192 57,694 31,315 31,197 31,008 ------------------------------------------------------------------------------------------------------------------------------------ Total expenses before custodian fee credit, and expense reimbursement and legal fee refund 10,947,408 8,051,184 8,411,771 6,849,614 5,128,221 6,971,754 Custodian fee credit (30,955) (20,251) (20,616) (23,733) (22,254) (25,055) Expense reimbursement -- -- -- (2,580,489) (2,015,102) (2,751,194) Legal fee refund -- -- (121,443) -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net expenses 10,916,453 8,030,933 8,269,712 4,245,392 3,090,865 4,195,505 ------------------------------------------------------------------------------------------------------------------------------------ Net investment income 62,636,215 47,557,854 47,042,202 42,956,260 32,923,303 42,967,136 ------------------------------------------------------------------------------------------------------------------------------------ REALIZED AND UNREALIZED GAIN (LOSS) FROM INVESTMENTS Net realized gain (loss) from investments 6,618,657 687,024 (1,201,262) 1,200,358 (470,534) 530,482 Change in net unrealized appreciation (depreciation) of investments 18,902,259 17,410,047 17,743,454 16,389,360 18,712,940 23,226,246 Change in net unrealized appreciation (depreciation) of forward swap transactions -- -- -- -- (3,532,408) -- ------------------------------------------------------------------------------------------------------------------------------------ Net gain from investments 25,520,916 18,097,071 16,542,192 17,589,718 14,709,998 23,756,728 ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO PREFERRED SHAREHOLDERS From net investment income (4,452,180) (3,307,419) (3,607,167) (2,680,807) (2,061,411) (2,880,639) From accumulated net realized gains from investments -- (42,016) -- -- (52,111) -- ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Preferred shareholders (4,452,180) (3,349,435) (3,607,167) (2,680,807) (2,113,522) (2,880,639) ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations $83,704,951 $62,305,490 $59,977,227 $57,865,171 $45,519,779 $63,843,225 ====================================================================================================================================
See accompanying notes to financial statements. 67 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 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 62,636,215 $ 64,017,626 $ 47,557,854 $ 48,689,939 $ 47,042,202 $ 47,123,892 Net realized gain (loss) from investments 6,618,657 (5,880,620) 687,024 634,285 (1,201,262) (11,663,137) Change in net unrealized appreciation (depreciation) of investments 18,902,259 8,871,335 17,410,047 9,982,884 17,743,454 34,046,066 Change in net unrealized appreciation (depreciation) of forward swap transactions -- -- -- -- -- -- Distributions to Preferred shareholders: From net investment income (4,452,180) (4,280,974) (3,307,419) (3,175,596) (3,607,167) (3,474,652) From accumulated net realized gains from investments -- (139,879) (42,016) (242,543) -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 83,704,951 62,587,488 62,305,490 55,888,969 59,977,227 66,032,169 ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (58,236,491) (56,921,521) (44,397,396) (44,027,554) (43,172,754) (42,990,586) From accumulated net realized gains from investments -- (1,515,794) (599,790) (2,984,339) -- -- ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (58,236,491) (58,437,315) (44,997,186) (47,011,893) (43,172,754) (42,990,586) ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions -- -- 734,804 -- -- -- Preferred shares offering costs -- (1,000) -- -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions -- (1,000) 734,804 -- -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares 25,468,460 4,149,173 18,043,108 8,877,076 16,804,473 23,041,583 Net assets applicable to Common shares at the beginning of year 925,524,847 921,375,674 671,147,274 662,270,198 687,955,152 664,913,569 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $950,993,307 $925,524,847 $689,190,382 $671,147,274 $704,759,625 $687,955,152 ==================================================================================================================================== Undistributed net investment income at the end of year $ 11,485,116 $ 11,883,367 $ 9,357,409 $ 9,507,298 $ 6,496,073 $ 6,566,696 ====================================================================================================================================
See accompanying notes to financial statements. 68
DIVIDEND ADVANTAGE (NAD) DIVIDEND ADVANTAGE 2 (NXZ) DIVIDEND ADVANTAGE 3 (NZF) ----------------------------- ------------------------------ ----------------------------- YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED YEAR ENDED 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 ------------------------------------------------------------------------------------------------------------------------------------ OPERATIONS Net investment income $ 42,956,260 $ 42,988,353 $ 32,923,303 $ 33,824,202 $ 42,967,136 $ 43,147,335 Net realized gain (loss) from investments 1,200,358 (4,617,432) (470,534) 890,827 530,482 202,373 Change in net unrealized appreciation (depreciation) of investments 16,389,360 12,311,762 18,712,940 4,294,735 23,226,246 3,920,609 Change in net unrealized appreciation (depreciation) of forward swap transactions -- -- (3,532,408) -- -- -- Distributions to Preferred shareholders: From net investment income (2,680,807) (2,660,192) (2,061,411) (2,029,376) (2,880,639) (2,863,822) From accumulated net realized gains from investments -- -- (52,111) (28,710) -- -- ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares from operations 57,865,171 48,022,491 45,519,779 36,951,678 63,843,225 44,406,495 ------------------------------------------------------------------------------------------------------------------------------------ DISTRIBUTIONS TO COMMON SHAREHOLDERS From net investment income (40,278,262) (38,956,575) (30,219,035) (29,486,976) (38,879,112) (37,528,721) From accumulated net realized gains from investments -- -- (850,299) (272,342) -- -- ------------------------------------------------------------------------------------------------------------------------------------ Decrease in net assets applicable to Common shares from distributions to Common shareholders (40,278,262) (38,956,575) (31,069,334) (29,759,318) (38,879,112) (37,528,721) ------------------------------------------------------------------------------------------------------------------------------------ CAPITAL SHARE TRANSACTIONS Net proceeds from Common shares issued to shareholders due to reinvestment of distributions 475,057 155,266 -- -- -- 476,145 Preferred shares offering costs -- -- -- 2,137 -- 1,199 ------------------------------------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets applicable to Common shares from capital share transactions 475,057 155,266 -- 2,137 -- 477,344 ------------------------------------------------------------------------------------------------------------------------------------ Net increase in net assets applicable to Common shares 18,061,966 9,221,182 14,450,445 7,194,497 24,964,113 7,355,118 Net assets applicable to Common shares at the beginning of year 595,266,230 586,045,048 443,101,258 435,906,761 594,154,077 586,798,959 ------------------------------------------------------------------------------------------------------------------------------------ Net assets applicable to Common shares at the end of year $613,328,196 $595,266,230 $457,551,703 $443,101,258 $619,118,190 $594,154,077 ==================================================================================================================================== Undistributed net investment income at the end of year $ 6,910,277 $ 6,991,496 $ 6,314,546 $ 5,895,336 $ 6,237,051 $ 5,124,505 ====================================================================================================================================
See accompanying notes to financial statements. 69 Notes to FINANCIAL STATEMENTS 1. GENERAL INFORMATION AND SIGNIFICANT ACCOUNTING POLICIES The funds (the "Funds") covered in this report and their corresponding Common share stock exchange symbols are Nuveen 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 U.S. generally accepted accounting principles. 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, 2004, Performance Plus (NPP)and Dividend Advantage (NAD) had outstanding when-issued purchase commitments of $3,702,086 and $24,582,900, respectively. There were no such outstanding purchase commitments in any of the other Funds. Investment Income Interest income, which includes the amortization of premiums and accretion of discounts for financial reporting purposes, is recorded on an accrual basis. Investment income also includes paydown gains and losses, if any. Professional Fees Professional fees presented in the Statement of Operations consist of legal fees incurred in the normal course of operations, audit fees, tax consulting fees and, in some cases, workout expenditures. Workout expenditures are incurred in an attempt to protect or enhance an investment, or to pursue other claims or legal actions on behalf of the Fund's shareholders. Legal fee refund presented on the Statement of Operations for Market Opportunity (NMO) reflects a refund of workout expenditures paid in a prior reporting period. Federal Income Taxes Each Fund is a separate taxpayer for federal income tax purposes. Each Fund intends to distribute all net investment income and net capital gains to shareholders and to otherwise comply with the requirements of Subchapter M of the Internal Revenue Code applicable to regulated investment companies. Therefore, no federal income tax provision is required. Furthermore, each Fund intends to satisfy conditions which will enable interest from municipal securities, which is exempt from regular federal income tax, to retain such tax-exempt status when distributed to shareholders of the Funds. All monthly tax-exempt income dividends paid during the fiscal year ended October 31, 2004, have been designated Exempt Interest Dividends. Net realized capital gains and ordinary income distributions made by the Funds are subject to federal taxation. Dividends and Distributions to Common Shareholders Dividends from tax-exempt net investment income are declared monthly. Net realized capital gains and/or market discount from investment transactions, if any, are distributed to shareholders not less frequently than annually. Furthermore, capital gains are distributed only to the extent they exceed available capital loss carryforwards. 70 Distributions to Common shareholders of tax-exempt net investment income, net realized capital gains and/or market discount, if any, are recorded on the ex-dividend date. The amount and timing of distributions are determined in accordance with federal income tax regulations, which may differ from U.S. generally accepted accounting principles. Preferred Shares The Funds have issued and outstanding Preferred shares, $25,000 stated value per share, as a means of effecting financial leverage. Each Fund's Preferred shares are issued in more than one Series. The dividend rate on each Series is determined every seven days, pursuant to a dutch auction process overseen by the auction agent, and is payable weekly at 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 =========================================================================================================
Forward Swap Transactions The Funds may invest in certain derivative financial instruments. The Funds' use of forward interest rate swap transactions is intended to mitigate the negative impact that an increase in long-term interest rates could have on Common share net earnings. Forward interest rate swap transactions involve each Fund's agreement with the counterparty to pay, in the future, a fixed rate payment in exchange for the counterparty paying the Fund a variable rate payment. The amount of the payment obligation is based on the notional or nominal amount of the forward swap contract. The Funds may close out a contract prior to the effective date. When a forward swap is terminated, it does not involve the delivery of securities of other underlying assets or principal, but rather is settled in cash. Each Fund intends to, but is not obligated to, terminate its forward swaps before the effective date. Accordingly, the risk of loss with respect to the swap counterparty on such transactions is limited to the credit risk associated with a counterparty failing to honor its commitment. To minimize such credit risk, all counterparties are required to segregate collateral daily (based on the daily valuation of each swap) on behalf of each Fund with a value approximately equal to the amount of any unrealized gain. Reciprocally, when any of the Funds have an unrealized loss on a swap contract, the Funds have instructed the custodian to segregate assets of the Funds as collateral with a value approximately equal to the amount of the unrealized loss. The Funds help reduce the credit risks associated with forward swap transactions by entering into agreements only with counterparties the Adviser believes have the financial resources to honor their obligations and by having the Adviser monitor the financial stability of the swap counterparties. 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. Indemnifications Under the Funds' organizational documents, its Officers and Director/Trustees are indemnified against certain liabilities arising out of the performance of their duties to the Funds. In addition, in the normal course of business, the Funds enter into contracts that provide general indemnifications to other parties. The Funds' maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the Funds that have not yet occurred. However, the Funds have not had prior claims or losses pursuant to these contracts and expect the risk of loss to be remote. Use of Estimates The preparation of financial statements in conformity with U.S. generally accepted accounting principles, requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of increases and decreases in net assets applicable to Common shares from operations during the reporting period. Actual results may differ from those estimates. 2. FUND SHARES 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 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 ========================================================================================================= Common shares issued to shareholders due to reinvestment of distributions -- -- 45,261 -- -- -- =========================================================================================================
71 Notes to FINANCIAL STATEMENTS (continued)
DIVIDEND DIVIDEND DIVIDEND ADVANTAGE (NAD) ADVANTAGE 2 (NXZ) ADVANTAGE 3 (NZF) ------------------- ------------------ ------------------- YEAR YEAR YEAR YEAR YEAR YEAR ENDED ENDED ENDED ENDED ENDED ENDED 10/31/04 10/31/03 10/31/04 10/31/03 10/31/04 10/31/03 --------------------------------------------------------------------------------------------------------- Common shares issued to shareholders due to reinvestment of distributions 29,786 9,858 -- -- -- -- =========================================================================================================
3. SECURITIES TRANSACTIONS Purchases and sales (including maturities) of investments in long-term municipal securities during the fiscal year ended October 31, 2004, were as follows:
PERFORMANCE MUNICIPAL MARKET DIVIDEND DIVIDEND DIVIDEND PLUS ADVANTAGE OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) --------------------------------------------------------------------------------------------------------- Purchases $148,627,283 $54,482,751 $56,709,045 $71,281,971 $35,554,626 $30,737,825 Sales and maturities 146,856,280 43,479,650 42,114,856 62,099,848 17,194,087 23,872,970 =========================================================================================================
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 the treatment of paydown gains and losses on investments, 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, 2004, the cost of investments was 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 $1,302,767,500 $950,806,597 $990,993,656 $846,818,150 $632,409,204 $877,386,524 ==================================================================================================================
Gross unrealized appreciation and gross unrealized depreciation of investments at October 31, 2004, 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 $107,113,828 $86,517,447 $95,358,716 $78,768,538 $46,170,823 $48,381,358 Depreciation (4,994,097) (7,862,440) (18,330,639) (9,220,906) (7,231,949) (7,943,519) -------------------------------------------------------------------------------------------------------------- Net unrealized appreciation of investments $102,119,731 $78,655,007 $77,028,077 $69,547,632 $38,938,874 $40,437,839 ==============================================================================================================
The tax components of undistributed net investment income and net realized gains at October 31, 2004, 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 * $15,580,820 $12,161,503 $9,702,437 $9,380,605 $8,540,409 $9,414,844 Undistributed net ordinary income ** 238,651 -- -- 138,779 22,426 40,697 Undistributed net long-term capital gains 973,564 686,687 -- -- -- -- ==============================================================================================================
* Undistributed net tax-exempt income (on a tax basis) has not been reduced for the dividend declared on October 1, 2004, paid on November 1, 2004. ** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. 72 The tax character of distributions paid during the fiscal years ended October 31, 2004 and October 31, 2003, 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 2004 (NPP) (NMA) (NMO) (NAD) (NXZ) (NZF) --------------------------------------------------------------------------------------------------------- Distributions from net tax-exempt income $62,627,198 $47,642,154 $46,733,618 $42,925,745 $32,249,670 $41,658,844 Distributions from net ordinary income ** -- 11,261 -- -- 11 -- Distributions from net long-term capital gains -- 641,806 -- -- 902,410 -- ========================================================================================================= 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 -- =========================================================================================================
** Net ordinary income consists of taxable market discount income and net short-term capital gains, if any. At October 31, 2004, 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: MARKET DIVIDEND DIVIDEND DIVIDEND OPPORTUNITY ADVANTAGE ADVANTAGE 2 ADVANTAGE 3 (NMO) (NAD) (NXZ) (NZF) -------------------------------------------------------------------------------- Expiration year: 2007 $ -- $ 1,724,693 $ -- $ -- 2008 -- 14,462,547 -- -- 2009 -- -- -- -- 2010 1,622,794 -- -- 690,125 2011 11,657,833 4,594,300 -- -- 2012 973,824 -- 246,691 -- -------------------------------------------------------------------------------- Total $14,254,451 $20,781,540 $246,691 $690,125 ================================================================================ 5. MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES As approved by the Board of Directors/Trustees, effective August 1, 2004, a complex-wide management fee structure was adopted for all funds sponsored by Nuveen Advisory Corp. (the "Adviser"), a wholly owned subsidiary of Nuveen Investments, Inc. and its affiliates. This fee structure separates each fund's management fee into two components - a complex-level component, based on the aggregate amount of all funds assets managed by the Adviser and its affiliates, and a specific fund-level component, based only on the amount of assets within each individual fund. This pricing structure enables Nuveen fund shareholders to benefit from growth in the assets within each individual fund as well as from growth in the amount of complex-wide assets managed by the Adviser and its affiliates. Under no circumstances will this pricing structure result in a fund paying management fees at a rate higher than would otherwise have been applicable had the complex-wide management fee structure not been implemented. As a consequence of this new management fee structure, the funds' effective management fees were reduced by approximately .006% as of November 30, 2004. Effective August 1, 2004, the annual fund-level fee, payable monthly, for each of the Funds is based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: PERFORMANCE PLUS (NPP) AVERAGE DAILY NET ASSETS MUNICIPAL ADVANTAGE (NMA) (INCLUDING NET ASSETS ATTRIBUTABLE MARKET OPPORTUNITY (NMO) TO PREFERRED SHARES) FUND-LEVEL FEE RATE -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For the next $3 billion .3875 For net assets over $5 billion .3750 ================================================================================ 73 Notes to FINANCIAL STATEMENTS (continued) DIVIDEND ADVANTAGE (NAD) AVERAGE DAILY NET ASSETS DIVIDEND ADVANTAGE 2 (NXZ) (INCLUDING NET ASSETS ATTRIBUTABLE DIVIDEND ADVANTAGE 3 (NZF) TO PREFERRED SHARES) FUND-LEVEL FEE RATE -------------------------------------------------------------------------------- For the first $125 million .4500% For the next $125 million .4375 For the next $250 million .4250 For the next $500 million .4125 For the next $1 billion .4000 For net assets over $2 billion .3750 ================================================================================ Effective August 1, 2004, the annual complex-level fee, payable monthly, which is additive to the fund-level fee, for all Nuveen sponsored funds in the U.S., is based on the aggregate amount of total fund assets managed as follows: COMPLEX-LEVEL ASSETS(1) COMPLEX-LEVEL FEE RATE -------------------------------------------------------------------------------- For the first $55 billion .2000% For the next $1 billion .1800 For the next $1 billion .1600 For the next $3 billion .1425 For the next $3 billion .1325 For the next $3 billion .1250 For the next $5 billion .1200 For the next $5 billion .1175 For the next $15 billion .1150 For Managed Assets over $91 billion (2) .1400 ================================================================================ (1) The complex-level fee component of the management fee for the funds is calculated based upon the aggregate Managed Assets ("Managed Assets" means the average daily net assets of each fund including assets attributable to all types of leverage used by the Nuveen funds) of Nuveen-sponsored funds in the U.S. (2) With respect to the complex-wide Managed Assets over $91 billion, the fee rate or rates that will apply to such assets will be determined at a later date. In the unlikely event that complex-wide Managed Assets reach $91 billion prior to a determination of the complex-level fee rate or rates to be applied to Managed Assets in excess of $91 billion, the complex-level fee rate for such complex-wide Managed Assets shall be .1400% until such time as a different rate or rates is determined. Each Fund paid through July 31, 2004, an annual management fee, payable monthly, at the rates set forth below, which were based upon the average daily net assets (including net assets attributable to Preferred shares) of each Fund as follows: PERFORMANCE PLUS (NPP) AVERAGE DAILY NET ASSETS MUNICIPAL ADVANTAGE (NMA) (INCLUDING NET ASSETS ATTRIBUTABLE MARKET OPPORTUNITY (NMO) TO PREFERRED SHARES) MANAGEMENT FEE RATE -------------------------------------------------------------------------------- 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 ================================================================================ DIVIDEND ADVANTAGE (NAD) AVERAGE DAILY NET ASSETS DIVIDEND ADVANTAGE 2 (NXZ) (INCLUDING NET ASSETS ATTRIBUTABLE DIVIDEND ADVANTAGE 3 (NZF) TO PREFERRED SHARES) MANAGEMENT FEE RATE -------------------------------------------------------------------------------- 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 ================================================================================ 74 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. The Board of Directors/Trustees has adopted a deferred compensation plan for independent Directors/Trustees that enables Directors/Trustees to elect to defer receipt of all or a portion of the annual compensation they are entitled to receive from certain Nuveen advised Funds. Under the plan, deferred amounts are treated as though equal dollar amounts had been invested in shares of select Nuveen advised Funds. For the first ten years of 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. 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. 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, 2004, to shareholders of record on November 15, 2004, 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 $.0805 =========================================================================================================
75 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: 2004 $15.45 $1.04 $ .42 $(.07) $ -- $1.39 $ (.97) $ -- $ (.97) 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) MUNICIPAL ADVANTAGE (NMA) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 15.62 1.11 .41 (.08) -- 1.44 (1.03) (.01) (1.04) 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) MARKET OPPORTUNITY (NMO) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 15.11 1.03 .37 (.08) -- 1.32 (.95) -- (.95) 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) DIVIDEND ADVANTAGE (NAD) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 15.17 1.09 .46 (.07) -- 1.48 (1.03) -- (1.03) 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) DIVIDEND ADVANTAGE 2 (NXZ) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 15.13 1.12 .51 (.07) -- 1.56 (1.03) (.03) (1.06) 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(a) 14.33 .52 .88 (.09) -- 1.31 (.45) -- (.45) DIVIDEND ADVANTAGE 3 (NZF) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 14.74 1.06 .59 (.07) -- 1.58 (.96) -- (.96) 2003 14.56 1.07 .10 (.07) -- 1.10 (.93) -- (.93) 2002 14.47 1.03 .16 (.10) -- 1.09 (.91) -- (.91) 2001(b) 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: 2004 $ -- $15.87 $14.9500 9.10% 9.30% 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 MUNICIPAL ADVANTAGE (NMA) --------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 -- 16.02 15.7000 8.82 9.57 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 MARKET OPPORTUNITY (NMO) --------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 -- 15.48 14.4400 7.97 9.00 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 DIVIDEND ADVANTAGE (NAD) --------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 -- 15.62 15.3100 8.37 10.06 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 DIVIDEND ADVANTAGE 2 (NXZ) --------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 -- 15.63 15.3800 11.16 10.67 2003 -- 15.13 14.8500 14.39 8.67 2002 .01 14.89 13.9100 (.81) 5.16 2001(a) (.12) 15.07 14.9600 2.75 8.39 DIVIDEND ADVANTAGE 3 (NZF) --------------------------------------------------------------------------------------------- Year Ended 10/31: 2004 -- 15.36 14.5000 12.45 11.10 2003 .01 14.74 13.8000 9.04 7.82 2002 (.09) 14.56 13.5300 (4.26) 7.20 2001(b) (.03) 14.47 15.0700 .47 .98 ============================================================================================= Ratios/Supplemental Data ------------------------------------------------------------------------------------------------------ Before Credit/Reimbursement/Refund After Credit/Reimbursement/Refund*** ---------------------------------- ------------------------------------ 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: 2004 $950,993 1.17% 6.69% 1.17% 6.70% 11% 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 MUNICIPAL ADVANTAGE (NMA) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 689,190 1.19 7.00 1.18 7.00 4 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 MARKET OPPORTUNITY (NMO) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 704,760 1.21 6.75 1.19 6.77 4 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 DIVIDEND ADVANTAGE (NAD) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 613,328 1.14 6.69 .70 7.12 7 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 DIVIDEND ADVANTAGE 2 (NXZ) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 457,552 1.14 6.87 .69 7.32 3 2003 443,101 1.17 7.20 .71 7.66 11 2002 435,907 1.17 7.32 .70 7.79 9 2001(a) 441,308 1.13* 5.56* .63* 6.06* 5 DIVIDEND ADVANTAGE 3 (NZF) ------------------------------------------------------------------------------------------------------------------------------------ Year Ended 10/31: 2004 619,118 1.15 6.64 .69 7.10 3 2003 594,154 1.17 6.80 .71 7.26 3 2002 586,799 1.17 6.78 .70 7.25 7 2001(b) 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: 2004 $479,000 $25,000 $74,634 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 MUNICIPAL ADVANTAGE (NMA) ------------------------------------------------------------------------- Year Ended 10/31: 2004 358,000 25,000 73,128 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 MARKET OPPORTUNITY (NMO) ------------------------------------------------------------------------- Year Ended 10/31: 2004 380,000 25,000 71,366 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 DIVIDEND ADVANTAGE (NAD) ------------------------------------------------------------------------- Year Ended 10/31: 2004 295,000 25,000 76,977 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 DIVIDEND ADVANTAGE 2 (NXZ) ------------------------------------------------------------------------- Year Ended 10/31: 2004 222,000 25,000 76,526 2003 222,000 25,000 74,899 2002 222,000 25,000 74,089 2001(a) 222,000 25,000 74,697 DIVIDEND ADVANTAGE 3 (NZF) ------------------------------------------------------------------------- Year Ended 10/31: 2004 312,000 25,000 74,609 2003 312,000 25,000 72,608 2002 312,000 25,000 72,019 2001(b) -- -- -- =========================================================================
* Annualized. ** Total Investment Return on Market Value is the combination of changes in the market price per share and the effect of reinvested dividend income and reinvested capital gains distributions, if any, at the average price paid per share at the time of reinvestment. Total Return on Common Share Net Asset Value is the combination of changes in Common Share net asset value, reinvested dividend income at net asset value and reinvested capital gains distributions at net asset value, if any. Total returns are not annualized. *** After custodian fee credit, expense reimbursement and legal fee refund, where applicable. + The amounts shown are based on Common share equivalents. ++ Ratios do not reflect the effect of dividend payments to Preferred shareholders; income ratios reflect income earned on assets attributable to Preferred shares, where applicable. (a) For the period March 27, 2001 (commencement of operations) through October 31, 2001. (b) For the period September 25, 2001 (commencement of operations) through October 31, 2001. See accompanying notes to financial statements. 76-77 SREAD Board Members 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 Members of the Funds. The number of board members of the Funds is currently set at seven. None of the board members who are not "interested" persons of the Funds has ever been a director or employee of, or consultant to, Nuveen or its affiliates. The names and business addresses of the board members and officers of the Funds, their principal occupations and other affiliations during the past five years, the number of portfolios each oversees and other directorships they hold are set forth below.
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 BOARD MEMBER ------------------------------------------------------------------------------------------------------------------------------------ BOARD MEMBER WHO IS AN INTERESTED PERSON OF THE FUNDS: ------------------------------------------------------------------------------------------------------------------------------------ Timothy R. Schwertfeger (1) Chairman of 1994 Chairman and Director (since 1996) of Nuveen Investments, 152 3/28/49 the Board Inc. and Nuveen Investments, LLC; Director (since 1992) and 333 W. Wacker Drive and Trustee Chairman (since 1996) of Nuveen Advisory Corp. and Nuveen Chicago, IL 60606 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). BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS: ------------------------------------------------------------------------------------------------------------------------------------ Robert P. Bremner Board member 1997 Private Investor and Management Consultant. 152 8/22/40 333 W. Wacker Drive Chicago, IL 60606 ------------------------------------------------------------------------------------------------------------------------------------ Lawrence H. Brown Board member 1993 Retired (1989) as Senior Vice President of The Northern 152 7/29/34 Trust Company; Director, Community Advisory Board for 333 W. Wacker Drive Highland Park and Highwood, United Way of the North Chicago, IL 60606 Shore (since 2002). ------------------------------------------------------------------------------------------------------------------------------------ Jack B. Evans Board member 1999 President, The Hall-Perrine Foundation, a private philanthropic 152 10/22/48 corporation (since 1996); Director and Vice Chairman, United 333 W. Wacker Drive Fire & Casualty Company; formerly Director, Federal Reserve Chicago, IL 60606 Bank of Chicago; formerly, President and Chief Operating Officer, SCI Financial Group, Inc., a regional financial services firm. ------------------------------------------------------------------------------------------------------------------------------------ William C. Hunter Board member 2004 Dean and Distinguished Professor of Finance, School of 152 3/6/48 Business at the University of Connecticut (since 2003); 333 W. Wacker Drive previously Senior Vice President and Director of Research Chicago, IL 60606 at the Federal Reserve Bank of Chicago (1995-2003); Director, Credit Research Center at Georgetown University; Director of Xerox Corporation (since 2004). 78 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 BOARD MEMBER ------------------------------------------------------------------------------------------------------------------------------------ BOARD MEMBERS WHO ARE NOT INTERESTED PERSONS OF THE FUNDS (CONTINUED): ------------------------------------------------------------------------------------------------------------------------------------ William J. Schneider Board member 1997 Senior Partner and Chief Operating Officer, Miller-Valentine 152 9/24/44 Group, Vice President, Miller-Valentine Realty, a construction 333 W. Wacker Drive company; Chair, Miami Valley 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 Board member 1997 Executive Director, Gaylord and Dorothy Donnelley 152 12/29/47 Foundation (since 1994); prior thereto, Executive Director, 333 W. Wacker Drive Great Lakes Protection Fund (from 1990 to 1994) Chicago, IL 60606 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OFFICER ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS: ------------------------------------------------------------------------------------------------------------------------------------ Gifford R. Zimmerman Chief 1988 Managing Director (since 2002), Assistant Secretary and 152 9/9/56 Administrative Associate General Counsel, formerly, Vice President and 333 W. Wacker Drive Officer 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.; Managing Director (since 2004) and Assistant Secretary (since 1994) of Nuveen Investments Inc.; 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 2003); Chartered Financial Analyst. ------------------------------------------------------------------------------------------------------------------------------------ Julia L. Antonatos Vice President 2004 Vice President (since 2002), formerly, Assistant Vice President 152 9/22/63 (since 1999) of Nuveen Investments, LLC; Chartered 333 W. Wacker Drive Financial Analyst. Chicago, IL 60606 ------------------------------------------------------------------------------------------------------------------------------------ Michael T. Atkinson Vice President 2000 Vice President (since 2002), formerly, Assistant Vice 152 2/3/66 and Assistant President (since 2000), previously, Associate of Nuveen 333 W. Wacker Drive Secretary Investments, LLC. Chicago, IL 60606 79 Board Members AND OFFICERS (CONTINUED) NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OFFICER ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): ------------------------------------------------------------------------------------------------------------------------------------ Peter H. D'Arrigo Vice President 1999 Vice President of Nuveen Investments, LLC (since 1999), 152 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); Vice President and Treasurer of Nuveen Rittenhouse Asset Management, Inc. (since 2003); Chartered Financial Analyst. ------------------------------------------------------------------------------------------------------------------------------------ Jessica R. Droeger Vice President 2000 Vice President (since 2002) and Assistant General Counsel 152 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 Managing Director (since 2004) formerly, Vice President of 152 10/24/45 Nuveen Investments, LLC; Managing Director (since 2004) 333 W. Wacker Drive formerly, Vice President (since 1998) of Nuveen Advisory Chicago, IL 60606 Corp. and Nuveen Institutional Advisory Corp. ------------------------------------------------------------------------------------------------------------------------------------ William M. Fitzgerald Vice President 1995 Managing Director (since 2002) of Nuveen Investments, 152 3/2/64 LLC; Managing Director (since 2001), formerly Vice President 333 W. Wacker Drive of Nuveen Advisory Corp. and Nuveen Institutional Advisory Chicago, IL 60606 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 1998) 152 5/31/54 and Controller of Nuveen Investments, LLC; formerly, Vice President and 333 W. Wacker Drive Funds Controller (1998-2003) of Nuveen Investments, Inc.; Chicago, IL 60606 Certified Public Accountant. 80 NUMBER OF PORTFOLIOS IN POSITION(S) YEAR FIRST FUND COMPLEX NAME, BIRTHDATE HELD WITH ELECTED OR PRINCIPAL OCCUPATION(S) OVERSEEN BY AND ADDRESS THE FUNDS APPOINTED(3) DURING PAST 5 YEARS OFFICER ------------------------------------------------------------------------------------------------------------------------------------ OFFICERS OF THE FUNDS (CONTINUED): ------------------------------------------------------------------------------------------------------------------------------------ James D. Grassi Vice President 2004 Vice President and Deputy Director of Compliance 152 4/13/56 and Chief (since August 2004) of Nuveen Investments, LLC, 333 W. Wacker Drive Compliance Nuveen Investments Advisers Inc., Nuveen Asset Chicago, IL 60606 Officer Management Inc., Nuveen Advisory Corp., Nuveen Institutional Advisory Corp. and Rittenhouse Asset Management, Inc.; formerly, Senior Attorney (1994-July 2004), The Northern Trust Company. ------------------------------------------------------------------------------------------------------------------------------------ David J. Lamb Vice President 2000 Vice President (since 2000) of Nuveen Investments, 152 3/22/63 LLC, previously Assistant Vice President (since 1999); 333 W. Wacker Drive prior thereto, Associate of Nuveen Investments, LLC; Chicago, IL 60606 Certified Public Accountant. ------------------------------------------------------------------------------------------------------------------------------------ Tina M. Lazar Vice President 2002 Vice President (since 1999), previously, Assistant Vice 152 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 152 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). ------------------------------------------------------------------------------------------------------------------------------------ Edward F. Neild, IV Vice President 1996 Managing Director (since 2002) of Nuveen Investments, LLC; 152 7/7/65 Managing Director (since 1997), formerly Vice President 333 W. Wacker Drive (since 1996) of Nuveen Advisory Corp. and Nuveen Institutional Chicago, IL 60606 Advisory Corp.; Managing Director of Nuveen Asset Management Inc. (since 1999). Chartered Financial Analyst.
(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 board member of the Adviser. (2) Board members serve an indefinite term until his/her successor is elected. The year first elected or appointed represents the year in which the board member was first elected or appointed to any fund in the Nuveen Complex. (3) Officers serve one year terms through July of each year. The year first elected or appointed represents the year in which the Officer was first elected or appointed to any fund in the Nuveen Complex. 81 Reinvest Automatically EASILY AND CONVENIENTLY 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 the dividends or distributions awaiting reinvestment. Because the market price 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. FLEXIBLE You may change your distribution option or withdraw from the Plan at any time, should your needs or situation change. Should you withdraw, you can receive a certificate for all whole shares credited to your reinvestment account and cash payment for fractional shares, or cash payment for all reinvestment account shares, less brokerage commissions and a $2.50 service fee. You can reinvest whether your shares are registered in your name, or in the name of a brokerage firm, bank, or other nominee. Ask your investment advisor if his or her firm will participate on your behalf. Participants whose shares are registered in the name of one firm may not be able to transfer the shares to another firm and continue to participate in the Plan. The Fund reserves the right to amend or terminate the Plan at any time. Although the Fund reserves the right to amend the Plan to include a service charge payable by the participants, there is no direct service charge to participants in the Plan at this time. 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. 82 Other Useful INFORMATION QUARTERLY PORTFOLIO OF INVESTMENTS AND PROXY VOTING INFORMATION Each Fund's (i) quarterly portfolio of investments and (ii) information regarding how the Funds voted proxies relating to portfolio securities held during the most recent 12-month period ended June 30, 2004, are available without charge, upon request, by calling Nuveen Investments toll-free at (800) 257-8787 or on Nuveen's web site at www.nuveen.com. You may also obtain this and other Fund information directly from the Securities and Exchange Commission ("SEC"). The SEC may charge a copying fee for this information. Visit the SEC on-line at http://www.sec.gov or in person at the SEC's Public Reference Room in Washington, D.C. Call the SEC at 1-202-942-8090 for room hours and operation. You may also request Fund information by sending an e-mail request to publicinfo@sec.gov or by writing to the SEC's Public References Section at 450 Fifth Street NW, Washington, D.C. 20549. GLOSSARY OF TERMS USED IN THIS REPORT AVERAGE ANNUAL TOTAL RETURN: This is a commonly used method to express an investment's performance over a particular, usually multi-year time period. It expresses the return that would have been necessary each year to equal the investment's actual cumulative performance (including change in NAV or market price and reinvested dividends and capital gains distributions, if any) over the time period being considered. AVERAGE EFFECTIVE MATURITY: The average of 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 the sensitivity of a bond or bond fund's value to changes when interest rates change. 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 longer than the duration of the Fund's portfolio of bonds. MARKET YIELD (ALSO KNOWN AS DIVIDEND YIELD OR CURRENT YIELD): An investment's current annualized dividend divided by its current market price. NET ASSET VALUE (NAV): A Fund's common share NAV per share is calculated by subtracting the liabilities of the Fund (including any MuniPreferred shares issued in order to leverage the Fund) from its total assets and then dividing the remainder by the number of shares outstanding. Fund NAVs are calculated at the end of each business day. TAXABLE-EQUIVALENT YIELD: The yield necessary from a fully taxable investment to equal, on an after-tax basis, the yield of a municipal bond investment. BOARD OF DIRECTORS/TRUSTEES Robert P. Bremner Lawrence H. Brown Jack B. Evans William C. Hunter William J. Schneider Timothy R. Schwertfeger Judith M. Stockdale FUND MANAGER Nuveen Advisory Corp. 333 West Wacker Drive Chicago, IL 60606 CUSTODIAN State Street Bank & Trust Boston, MA TRANSFER AGENT AND SHAREHOLDER SERVICES State Street Bank & Trust Nuveen Funds P.O. Box 43071 Providence, RI 02940-3071 (800) 257-8787 LEGAL COUNSEL Chapman and Cutler LLP Chicago, IL INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Ernst & Young LLP Chicago, IL 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 purchased during the period ended October 31, 2004. Any future repurchases will be reported to shareholders in the next annual or semiannual report. 83 Nuveen Investments: SERVING Investors For Generations Photo of: 2 women looking at a photo album. Since 1898, financial advisors and their clients have relied on Nuveen Investments to provide dependable investment solutions. For the past century, Nuveen Investments has adhered to the belief that the best approach to investing is to apply conservative risk-management principles to help minimize volatility. Building on this tradition, we today offer a range of high quality equity and fixed-income solutions that are integral to a well-diversified core portfolio. Our clients have come to appreciate this diversity, as well as our continued adherence to proven, long-term investing principles. WE OFFER MANY DIFFERENT INVESTING SOLUTIONS FOR OUR CLIENTS' DIFFERENT NEEDS. Managing $100 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. FIND OUT HOW WE CAN HELP YOU REACH YOUR FINANCIAL GOALS. 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. o Share prices Learn more o Fund details about Nuveen Funds at o Daily financial news WWW.NUVEEN.COM/ETF o Investor education o Interactive planning tools Logo: NUVEEN Investments EAN-B-1004D 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 or Trustees determined that the registrant has at least one "audit committee financial expert" (as defined in Item 3 of Form N-CSR) serving on its Audit Committee. The registrant's audit committee financial expert is Jack B. Evans, Chairman of the Audit Committee, who is "independent" for purposes of Item 3 of Form N-CSR. Mr. Evans has served as the registrant's audit committee financial expert from July 26, 2004 to the end of the reporting period on October 31, 2004. Prior to July 26, 2004, William E. Bennett, who was "independent" for purposes of Item 3 of Form N-CSR, served as the audit committee financial expert. Although Mr. Bennett served as the audit committee financial expert during the reporting period, he unexpectedly resigned from the Board effective April 30, 2004. Accordingly for this reporting period, the registrant did not have a designated "audit committee financial expert" from May 1, 2004 to July 26, 2004. Mr. Evans was formerly President and Chief Operating Officer of SCI Financial Group, Inc., a full service registered broker-dealer and registered investment adviser ("SCI"). As part of his role as President and Chief Operating Officer, Mr. Evans actively supervised the Chief Financial Officer (the "CFO") and actively supervised the CFO's preparation of financial statements and other filings with various regulatory authorities. In such capacity, Mr. Evans was actively involved in the preparation of SCI's financial statements and the resolution of issues raised in connection therewith. Mr. Evans has also served on the audit committee of various reporting companies. At such companies, Mr. Evans was involved in the oversight of audits, audit plans, and the preparation of financial statements. Mr. Evans also formerly chaired the audit committee of the Federal Reserve Bank of Chicago. Mr. Bennett was formerly Executive Vice President and Chief Credit Officer of First Chicago Corporation and its principal subsidiary, 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. NUVEEN MUNICIPAL MARKET OPPORTUNITY FUND, INC. The following tables show the amount of fees that Ernst & Young LLP, the Fund's auditor, billed to the Fund during the Fund's last two full fiscal years. For engagements with Ernst & Young LLP entered into on or after May 6, 2003, the Audit Committee approved in advance all audit services and non-audit services that Ernst & Young LLP provided to the Fund, except for those non-audit services that were subject to the pre-approval exception under Rule 2-01 of Regulation S-X (the "pre-approval exception"). The pre-approval exception for services provided directly to the Fund waives the pre-approval requirement for services other than audit, review or attest services if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid by the Fund to its accountant during the fiscal year in which the services are provided; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the audit is completed. The Audit Committee has delegated certain pre-approval responsibilities to its Chairman (or, in his absence, any other member of the Audit Committee). SERVICES THAT THE FUND'S AUDITOR BILLED TO THE FUND
AUDIT FEES BILLED AUDIT-RELATED FEES TAX FEES ALL OTHER FEES FISCAL YEAR ENDED TO FUND BILLED TO FUND BILLED TO FUND BILLED TO FUND ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2004 $ 29,423 $ 0 $ 364 $ 2,550 ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved N/A 0% 0% 0% pursuant to pre-approval exception ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2003 $ 24,892 $ 0 $ 559 $ 2,350 ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved N/A 0% 0% 0% pursuant to pre-approval exception ------------------------------------------------------------------------------------------------------------------------------------
The above "Tax Fees" were billed for professional services for tax advice, tax compliance and tax planning. SERVICES THAT THE FUND'S AUDITOR BILLED TO THE ADVISER AND AFFILIATED FUND SERVICE PROVIDERS The following tables show the amount of fees billed by Ernst & Young LLP to Nuveen Advisory Corp. ("NAC" or the "Adviser"), and any entity controlling, controlled by or under common control with NAC ("Control Affiliate") that provides ongoing services to the Fund ("Affiliated Fund Service Provider"), for engagements directly related to the Fund's operations and financial reporting, during the Fund's last two full fiscal years. The table also shows the percentage of fees subject to the pre-approval exception. The pre-approval exception for services provided to the Adviser and any Affiliated Fund Service Provider (other than audit, review or attest services) waives the pre-approval requirement if: (A) the aggregate amount of all such services provided constitutes no more than 5% of the total amount of revenues paid to Ernst & Young LLP by the Fund, the Adviser and Affiliated Fund Service Providers during the fiscal year in which the services are provided that would have to be pre-approved by the Audit Committee; (B) the Fund did not recognize the services as non-audit services at the time of the engagement; and (C) the services are promptly brought to the Audit Committee's attention, and the Committee (or its delegate) approves the services before the Fund's audit is completed.
FISCAL YEAR ENDED AUDIT-RELATED FEES TAX FEES BILLED TO ALL OTHER FEES BILLED TO ADVISER AND ADVISER AND BILLED TO ADVISER AFFILIATED FUND AFFILIATED FUND AND AFFILIATED FUND SERVICE PROVIDERS SERVICE PROVIDERS SERVICE PROVIDERS ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2004 $ 0 $ 0 $ 0 ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved 0% 0% 0% pursuant to pre-approval exception ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2003 $ 0 $ 0 $ 0 ------------------------------------------------------------------------------------------------------------------------------------ Percentage approved N/A N/A N/A pursuant to pre-approval exception ------------------------------------------------------------------------------------------------------------------------------------
NON-AUDIT SERVICES The following table shows the amount of fees that Ernst & Young LLP billed during the Fund's last two full fiscal years for non-audit services. For engagements entered into on or after May 6, 2003, the Audit Committee is required to pre-approve non-audit services that Ernst & Young LLP provides to the Adviser and any Affiliated Fund Services Provider, if the engagement related directly to the Fund's operations and financial reporting (except for those subject to the de minimis exception described above). The Audit Committee requested and received information from Ernst & Young LLP about any non-audit services that Ernst & Young LLP rendered during the Fund's last fiscal year to the Adviser and any Affiliated Fund Service Provider. The Committee considered this information in evaluating Ernst & Young LLP independence.
FISCAL YEAR ENDED TOTAL NON-AUDIT FEES BILLED TO ADVISER AND AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES PROVIDERS (ENGAGEMENTS BILLED TO ADVISER AND RELATED DIRECTLY TO THE AFFILIATED FUND SERVICE TOTAL NON-AUDIT FEES OPERATIONS AND FINANCIAL PROVIDERS (ALL OTHER BILLED TO FUND REPORTING OF THE FUND) ENGAGEMENTS) TOTAL ------------------------------------------------------------------------------------------------------------------------------------ October 31, 2004 $ 2,914 $ 0 $ 0 $ 2,914 October 31, 2003 $ 2,909 $ 0 $ 0 $ 2,909
Audit Committee Pre-Approval Policies and Procedures. Generally, the audit committee must approve (i) all non-audit services to be performed for the Fund by the Fund's independent accountants and (ii) all audit and non-audit services to be performed by the Fund's independent accountants for the Affiliated Fund Service Providers with respect to operations and financial reporting of the Fund. Regarding tax and research projects conducted by the independent accountants for the Fund and Affiliated Fund Service Providers (with respect to operations and financial reports of the Fund) such engagements will be (i) pre-approved by the audit committee if they are expected to be for amounts greater than $10,000; (ii) reported to the audit committee chairman for his verbal approval prior to engagement if they are expected to be for amounts under $10,000 but greater than $5,000; and (iii) reported to the audit committee at the next audit committee meeting if they are expected to be for an amount under $5,000. ITEM 5. AUDIT COMMITTEE OF LISTED REGISTRANTS. The registrant's Board of Directors or Trustees has a separately designated audit committee established in accordance with Section 3(a)(58)(A) of the Securities Exchange Act of 1934, as amended (the "Exchange Act") (15 U.S.C. 78c(a)(58)(A)). The members of the audit committee are Robert P. Bremner, Lawrence H. Brown, Jack B. Evans and William J. Schneider. ITEM 6. SCHEDULE OF INVESTMENTS. See Schedule I in Item 1. 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, 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. PORTFOLIO MANAGERS OF CLOSED-END MANAGEMENT INVESTMENT COMPANIES. Not applicable at this time. ITEM 9. PURCHASES OF EQUITY SECURITIES BY CLOSED-END MANAGEMENT INVESTMENT COMPANY AND AFFILIATED PURCHASERS. Not applicable. ITEM 10. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. In the event of a vacancy on the Board, the nominating and governance committee receives suggestions from various sources, including shareholders, as to suitable candidates. Suggestions should be sent in writing to Lorna Ferguson, Vice President for Board Relations, Nuveen Investments, 333 West Wacker Drive, Chicago, IL 60606. The nominating and governance committee sets appropriate standards and requirements for nominations for new directors or trustees and reserves the right to interview all candidates and to make the final selection of any new directors or trustees. ITEM 11. CONTROLS AND PROCEDURES. (a) The registrant's principal executive and principal financial officers, or persons performing similar functions, have concluded that the registrant's disclosure controls and procedures (as defined in Rule 30a-3(c) under the Investment Company Act of 1940, as amended (the "1940 Act") (17 CFR 270.30a-3(c))) are effective, as of a date within 90 days of the filing date of this report that includes the disclosure required by this paragraph, based on their evaluation of the controls and procedures required by Rule 30a-3(b) under the 1940 Act (17 CFR 270.30a-3(b)) and Rules 13a-15(b) or 15d-15(b) under the Exchange Act (17 CFR 240.13a-15(b) or 240.15d-15(b)). (b) There were no changes in the registrant's internal control over financial reporting (as defined in Rule 30a-3(d) under the 1940 Act (17 CFR 270.30a-3(d)) that occurred during the second fiscal quarter of the period covered by this report that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting. ITEM 12. EXHIBITS. File the exhibits listed below as part of this Form. Letter or number the exhibits in the sequence indicated. (a)(1) Any code of ethics, or amendment thereto, that is the subject of the disclosure required by Item 2, to the extent that the registrant intends to satisfy the Item 2 requirements through filing of an exhibit: Not applicable because 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 1940 Act (17 CFR 270.30a-2(a)) in the exact form set forth below: Ex-99.CERT Attached hereto. (a)(3) Any written solicitation to purchase securities under Rule 23c-1 under the 1940 Act (17 CFR 270.23c-1) sent or given during the period covered by the report by or on behalf of the registrant to 10 or more persons. Not applicable. (b) If the report is filed under Section 13(a) or 15(d) of the Exchange Act, provide the certifications required by Rule 30a-2(b) under the 1940 Act (17 CFR 270.30a-2(b)); Rule 13a-14(b) or Rule 15d-14(b) under the Exchange Act (17 CFR 240.13a-14(b) or 240.15d-14(b)), and Section 1350 of Chapter 63 of Title 18 of the United States Code (18 U.S.C. 1350) as an exhibit. A certification furnished pursuant to this paragraph will not be deemed "filed" for purposes of Section 18 of the Exchange Act (15 U.S.C. 78r), or otherwise subject to the liability of that section. Such certification will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Exchange Act, except to the extent that the registrant specifically incorporates it by reference. Ex-99.906 CERT attached hereto. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. (Registrant) Nuveen Municipal Market Opportunity Fund, Inc. ----------------------------------------------------------- By (Signature and Title)* /s/ Jessica R. Droeger ---------------------------------------------- Jessica R. Droeger Vice President and Secretary Date: January 6, 2005 ------------------------------------------------------------------- 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 6, 2005 ------------------------------------------------------------------- By (Signature and Title)* /s/ Stephen D. Foy ---------------------------------------------- Stephen D. Foy Vice President and Controller (Principal Financial Officer) Date: January 6, 2005 ------------------------------------------------------------------- * Print the name and title of each signing officer under his or her signature.